Cerro-Blanco-43-101-Estructura Anastomasada Argentina

COPPER HILL PROJECT, SAN JUAN PROVINCE, ARGENTINA
NI 43-101 TECHNICAL REPORT
Prepared For:
Entropy Resources S.A. (originally for Argentina Mining Limited ASX:AVK) *
Prepared By:
Orlando Alvarez Campos, MS Geologist
Geoscanex S.A.
February 27, 2012
* Updated by Entropy Resources S.A. In July 2014 after AVK withdrew from Argentina
. ENTROPY RESOURCES SA
TECHNICAL REPORT - COPPER HILL PROJECT,
SAN JUAN, ARGENTINA
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GeoScanEx S.A. 2 Page

Augusto Leguía Norte 100. Oficina 401. Santiago – Chile Tel. (56-2)6577840
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Contents
EXECUTIVE SUMMARY ...................................................................................................... 7
1.0 INTRODUCTION ...................................................................................................... 11
2.0 RELIANCE ON OTHER EXPERTS .......................................................................... 12
3.0 GEOGRAPHY .......................................................................................................... 13
3.1 Location ................................................................................................................ 13
3.2 Project Access ...................................................................................................... 14
3.3 Country Economic and Geological Setting ............................................................ 15
3.4 Local resources and Infrastructure ........................................................................ 16
4.0 TENURE .................................................................................................................. 17
4.1 Mineral Tenure ...................................................................................................... 17
4.2 Current Ownership................................................................................................. 18
4.4 Royalties ............................................................................................................... 21
4.5 Property and Mineral Tenure in Argentina ............................................................. 21
4.5.1 Exploration Concessions (Cateos) ................................................................. 22
4.5.2 Mining Concessions: ...................................................................................... 22
4.5.3 Maintenance of Concessions. ........................................................................ 23
5.0 PHYSIOGRAPHY & CLIMATE ................................................................................. 25
5.1 Physiography ........................................................................................................ 25
5.2 Climate ................................................................................................................. 25
6.0 PROJECT HISTORY ................................................................................................ 26
6.1 Exploration History ................................................................................................ 26
6.2 Resource Development History ............................................................................. 33
7.0 GEOLOGY ............................................................................................................... 33
7.1 Regional Geological Setting .................................................................................. 33
7.1.1 Introduction .................................................................................................... 33
7.1.2 Regional Geology .......................................................................................... 33
7.1.3 Regional Structure ......................................................................................... 34
7.1.4 Metallogenic Setting....................................................................................... 36
7.2 Project Geology .................................................................................................... 37
7.2.1 Lithology ........................................................................................................ 37
7.2.2 Structure ........................................................................................................ 41
7.2.3 Alteration ....................................................................................................... 45
7.2.4 Mineralization ...................................................................................................... 51
8.0 OBJECTIVES & METHODOLOGY ........................................................................... 53

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8.1 Objectives ............................................................................................................. 53

8.2 Specific Objectives ................................................................................................ 53
8.3 Methodology ......................................................................................................... 53
9.0 EXPLORATION PROGRAMS .................................................................................. 54
9.1 Geophysics ........................................................................................................... 54
9.1.1 Ground Magnetics ......................................................................................... 54
9.1.2 Induced Polarisation and Resistivity ............................................................... 55
9.2 Geochemistry ........................................................................................................ 56
10.0 SAMPLING METHODS AND DATA VERIFICATION ................................................ 58
10.1 Sample Preparation, Analysis and Security........................................................... 58
10.1.1 Sampling and Cutting ..................................................................................... 58
10.1.2 Storage .......................................................................................................... 58
10.1.3 Laboratories and Analysis .............................................................................. 59
10.1.4 Analytical Procedures .................................................................................... 59
10.2 Data Verification ................................................................................................... 59
10.2.1 Sample QA/QC .............................................................................................. 60
11.0 CONCLUSIONS .......................................................................................................... 64
12.0 RECOMMENDATIONS ............................................................................................ 66
13.0 REFERENCES ......................................................................................................... 69
14.0 DATE & SIGNATURE PAGE .................................................................................... 70
15.0 CERTIFICATE OF AUTHOR .................................................................................... 71

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LIST OF FIGURES AND TABLES
Figure 1.1 - Location - Copper Hill Prospect on Google Earth image Cerro Blanco Project area, San
Juan Province, Argentina ...................................................................................................................... 14
Table 4.1 – Cerro Blanco Project - Tenement Details* ......................................................................... 17
Figure 4.1 - Cerro Blanco Project Tenement Plan. ............................................................................... 18
Table 4.2 - Summary of Option Agreement Terms ............................................................................... 19
Figure 4.2 - Location of Copper Hill and other prospects in the Cerro Blanco Project area ................. 20
Figure 6.1 - Ruins of Colonial-era Jesuit silver mines near Uspallata .................................................. 27
Figure 6.2 - Schematic Cross-section of Diamond Drill-hole CB3 ........................................................ 30
Table 6.1 – Copper Hill Diamond Drill-hole Collar Summary ................................................................ 32
Figure 7.1 – South American Plate Tectonics ....................................................................................... 34
Figure 7.2 – Southwestern Copper Hill, view to southwest,showing lower dacitic altered tuffs (yellow)
overlain by a sequence of later gray tuffs with no alteration or mineralization, which almost completely
cover the Copper Hill mineralized porphyric complex. .......................................................................... 38
Figure 7.3 - Copper Hill on Google Earth image vertical view, showing alteration colour anomaly ..... 39
Figure 7.4 - Cerro Blanco Project area – view to southwest from main access, showing distinctive
pallid alteration colour anomaly of Copper Hill Prospect in photo centre, contrasting with surrounding
Permo-Triassic volcanic rocks .............................................................................................................. 39
Figure 7.5 – Copper Hill – Oxide copper mineralisation at drill pad of hole MC-4 ................................ 40
Figure 7.6 – Cerro Blanco Project – Copper Hill Geological Plan ........................................................ 41
Figure 7.7 Location map depicting San Juan Province, ERSA’s Cerro Blanco project and other major
projects .................................................................................................................................................. 42
Figure 7.8 - Modified from map of Porphyry Copper Tracts coloured by age of known Andean deposits
and prospects, South America .............................................................................................................. 43
Figure 7.9 – Western flank of Copper Hill, view to NE. The gorge in the middle distance traces a
regional fault with a N10°E course which forms the western boundary of the porphyritic system.
Roads access the drilling pads. ............................................................................................................ 44
Figure 7.10 – Copper Hill - a normal fault in andesitic tuff where the down-thrown left block exhibits a
higher degree of alteration than the up-thrown right block. .................................................................. 44
Figure 7.11 - HQ diameter diamond core sample from Hole MC-4 exhibiting Permo-Triassic
porphyritic andesite invaded by veins and veinlets with quartz at the center and potassium feldspar on
the borders. In addition, biotite is noted as a hornblende alteration product, with some alteration to
chlorite. Iron oxides are also observed. ................................................................................................ 45
Figure 7.12 - HQ diamond core sample from Hole MC-4 exhibiting coarse-grained graniodioritic(?)
porphyry invaded by at least by three generations of veins and veinlets, with central quartz and
potassium feldspar and some silicification, and gypsum on the margins. Opaque minerals are biotite
from hornblende alteration and further derived iron minerals. .............................................................. 46
Figure 7.13 – Hand specimen of dacitic porphyry with some phyllic alteration and vein and
disseminated chalcopyrite and pyrite mineralization ............................................................................ 46
Figure 7.14 Porphyry Copper deposits zonation from Lowell and Guilbert (1970) ............................... 47
Figure 7.15 - Supergene effect zonation in a porphyry copper deposit. Modified from Giggenback
(1997) .................................................................................................................................................... 48
Figure 7.16 - East-West model section demonstrating the zonation of hydrothermal and supergene
alteration in Copper Hill porphyry copper .............................................................................................. 50
Figure 7.17 - NNE profile showing the hydrothermal and supergene alteration zonation in Copper Hill
porhyry copper ...................................................................................................................................... 50
Figure 7.18 - Dacitic porphyry with potassium alteration, especially in fractures and abundant copper
pitch and wad. ....................................................................................................................................... 51
Figure 7.19 - Dacític porphyry core (Hole MC-4) with some potassic alteration showing secondary
biotite derived from alteration of hornblende......................................................................................... 52

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Figure 7.20 - HQ diamond core sample (Hole MC-4) showing pseudo-breccia of recrystallized dacitic
porphyry with later metallic mineralization especially chalcopyrite and disseminated pyrite, with some
magnetite and less intense phyllic and potassic alteration ................................................................... 52
Figure 9.1 – Copper Hill ground magnetometry, reduced to pole, showing main faults and drill-hole
locations. ............................................................................................................................................... 54
Figure 9.2 – Copper Hill IP survey grid lines on Google Earth image with Chargeability section on Line
6460200N where hole MC-5 was drilled, showing the anomaly to be relatively closer to the west side.
.............................................................................................................................................................. 55
Figure 9.3 - IP Copper Hill IP survey grid lines on Google Earth image with Resistivity section on Line
6460200N .............................................................................................................................................. 55
Figure 9.4 – Copper Hill – thematic geochemical plot on Google Earth image showing surface copper
distribution ............................................................................................................................................. 56
Figure 9.5 – Copper Hill – thematic geochemical plot on Google Earth image showing surface
molybdenum distribution ....................................................................................................................... 57
Figure 9.6 – Copper Hill – thematic geochemical plot on Google Earth image showing surface gold
distribution ............................................................................................................................................. 57
Table 10.1 Certified Standards ............................................................................................................. 61
Table 10.2 Frequency of Certified Standards ....................................................................................... 61
Figure 10.1 - Sample sequence chart - Standard GBM 910-16 Cu ppm .............................................. 61
Figure 10.2 - Sample sequence chart - Standard GLG 908-4 Au ppb ................................................. 61
Figure 10.3 - Sample sequence chart - Standard GMO-10 Mo ppm .................................................... 61
Figure 10.4 - Sample sequence chart - Standard GMO-10 Cu ppm .................................................... 61
Figure 10-5 Scatter plot Original vs. Duplicate Au ppb ......................................................................... 63
Figure 10-5 Scatter plot Original vs. Duplicate Cu ppm ........................................................................ 63
Figure 10-5 Scatter plot Original vs. Duplicate Mo ppm ....................................................................... 63
Table 12.1 – Recommended Future Drill-hole Locations ..................................................................... 68
Figure 12.1 - Copper Hill - Recommended drill-hole locations to test the Central and Eastern
mineralized zones. ................................................................................................................................ 68

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EXECUTIVE SUMMARY
GeoScanEx was engaged in 2012 by Argentinean-based mineral explorer Entropy Resources

SA (“ERSA” or “The Company”) to provide expert opinion on the Company’s
exploration of the Copper Hill Copper-Gold-Molybdenum Prospect, one of several prospects
within its Cerro Blanco Project (“Cerro Blanco” or “the Project”) in San Juan Province,
Argentina. ERSA holds beneficial entitlement to 100% of the Project.
This opinion takes into account results obtained from all previous exploration, assesses the
potential of the prospect and recommends other work in addition to that already carried out,
and has been prepared under the guidelines of National Instrument 43-101 and
accompanying documents 43-101.F1 and 43-101.CP (NI43-101).
The Cerro Blanco Project embraces an area of almost 13,000Ha in the Andean Cordillera,
35km south-southwest of the nearest township of Barreal in San Juan Province in the
Republic of Argentina. Most of the project area is accessible all year round. The Copper
2
Hill Prospect occupies an area of approximately 10km in the north-eastern part of the Cerro
Blanco Project area, centred on Latitude 32° 00’ Longitude 69° 34’, at an elevation of
3,250m.
This part of the province is regarded as one of the classic Argentine silver and gold mining
localities. Cerro Blanco is an established and well-recognized porphyry copper-gold-
molybdenum exploration target area. The geology of the area is characterized by
Carboniferous shales, schists and sedimentary rocks which are generally folded and have
been affected by the presence of Permo-Triassic intrusive and volcanic rocks, subsequently
intruded by a number Tertiary porphyritic dacites which have contributed to widespread
hydrothermal mineralization, leaching and intense alteration such as that observed in
Copper Hill. These are in turn overlain by more recent dacitic tuffs.
Copper Hill is the most imposing of these intrusive edifices, topographically and visually as a
colour anomaly, being a near-circular, probably multiple-intrusive, dacitic porphyry of around
1,200m diameter, where pervasive hydrothermal alteration is evidenced by bleaching,
extensive silicification and leaching, with abundant secondary copper mineralisation evident
at surface due to various combinations of weathering, supergene and near-vertical structural
displacement influences.

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The Prospect lies within one of a number of well-recognized north-northwest-trending

structural corridors related to South American plate tectonics and which are commonly
associated with significant Andean zones of mineralization and major mineral projects. The
corridor containing Copper Hill also includes the projects North and South Paramillos, San
Jorge, Yalguaraz, and Alcaparrosa at its eastern extremities and at lower altitudes, the more
centrally located Los Azules and Altar in the foothills of the Cordillera, and the large copper
porphyries of El Pachón (Argentina) and Los Pelambres (Chile) at higher altitude on the
divide, at its more westerly extremities.
Previous exploration by the Argentine Government and other companies, including a limited
amount of drilling, has identified a number of areas within the Cerro Blanco Project with
discovery potential for large-tonnage mineralised Andean-style porphyry copper-gold-
molybdenum and epithermal vein gold targets.
From 1965 to 1968, the Argentine Government agency Fabricaciones Militares (FM) initiated
several exploration programs at the project, including geochemical soil and rock chip
sampling, IP geophysics and drilling of three shallow diamond drill-holes at Copper Hill,
which identified widespread copper and molybdenum mineralisation within the leached zone.
No assaying was undertaken for gold.
During 2011, ERSA commenced exploration at Copper Hill, involving a first phase of two
“proof-of-concept” diamond drill-holes to 400m depth, ground magnetics and IP geophysics,
followed by a second phase of three diamond drill-holes targeting depths of the order of
700m. The drilling program was completed in late 2011.
GeoScanEx review of all previous work at Copper Hill, combined with a number of field
traverses, drill-core studies and sampling concludes that:
• Copper porphyry-type mineralization has developed as a result of intrusion of Tertiary

dacitic porphyries into a Permo-Triassic volcanic and intrusive complex.
• Deep primary mineralization is basically abundant pyrite and chalcopyrite.
• A copper-gold mineralized leached cap has developed at surface with an average

thickness of about 20m.

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• At greater depth and of similar thickness to the leached cap, a zone of copper oxides
has developed, composed mainly of malachite, chrysocolla, turquoise and azurite
which at greater depth shows supergene sulphide enrichment which, if persistent,
may prove economically significant.
• Phyllic quartz-sericite alteration is the most abundant alteration process and is of

greatest distribution; this style interfaces with abundant potassic alteration,
expressed mainly as veins and veinlets which often forms stock-works of veins with
either quartz at the centre or with gypsum.
• This interface between phyllic and potassium alteration styles noted in drill-core
indicates a point of transition between these two alteration styles in the area tested to
date that has great significance for determining the location of areas of possible
higher grade mineralization.
• Generally disseminated bornite and some chalcocite and covellite occur in some
places, in addition to pyrite and chalcopyrite, especially at the phyllic/potassic
alteration interface referred to in the foregoing. These zones probably result from
hypogene alteration of pyrite and chalcopyrite respectively and are often of higher
grade, attaining copper grades of 0.7% Cu, with molybdenite concentrations up to
600ppm Mo or higher. An increase in copper, molybdenum and gold values is noted
in a 75m interval between 240m and 315m depth in diamond drill-hole MC-3,
apparently related to this alteration interface.
• Kaolin, combined with alunite in places, might represent hydrothermal alteration of

late veins or may result from supergene alteration.
• The hydrothermal alteration and mineralization system of Copper Hill is influenced by

NNW to NW-trending structures on which normal faults have displaced mineralized
blocks, especially in a vertical direction, such that in some cases primary
mineralization may be observed at surface.
• Geophysical survey results confirm rather than significantly add to the understanding
of the distribution of mineralization obtained from geological mapping, geochemistry
and review of diamond core drilling.

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• Geostatistical analysis of the results of three separate geochemical surveys shows

higher levels of copper anomalism in the western sector of Copper Hill with a ring of
relatively high values in the vicinity of the mineralized body.
• Principal molybdenum anomalism coincides with that of copper, although other

interesting molybdenum anomalism appears to be controlled by important structural
trends in the eastern sector of Copper Hill which has not yet been tested by drilling.
• Given the generally strong copper-molybdenum association, anomalous

molybdenum in the eastern zone may be a useful indicator of copper potential in that
area.
From the foregoing conclusions, the following recommendations are made to advance
exploration and mineral discovery potential Copper Hill:
• Undertake additional geological and structural mapping, with emphasis on

understanding the effects of local faulting and relative block displacement on the
distribution of hydrothermal and supergene alteration processes and mineralization.
• Undertake additional 1,650m of shallow drilling to penetrate below the recent tuff
layers and the base of the near-surface leached cap to determine continuity and
extent of supergene copper oxide and sulphide zones, and to determine the
economic potential of the leached cap.
• Undertake a campaign of 2,500m of vertical and east-west inclined diamond drill-

holes in the untested eastern sector of Copper Hill, to locate higher grade and
especially primary mineralized zones.
• Develop an understanding of the occurrence of anomalous molybdenum with respect

to the distribution of hydrothermal alteration, which may assist with identifying zones
of higher copper grade.
• Undertake a trial program of analysis for rhenium in geochemical samples exhibiting

higher molybdenum contents, due to the high value of rhenium which is commonly
associated with molybdenum.

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1.0 INTRODUCTION
Entropy Resources SA, an Argentinean-based junior exploration company (ERSA) entered
into contractual agreements in 2009 to acquire 100% ownership of 36 tenements comprising
a portfolio of five prospective copper, gold and base metal exploration projects in Argentina’s
multi-million ounce mineral province of San Juan, the country’s leading mining and
exploration province in the Republic of Argentina.
These five exploration projects are held by ERSA in Entropy Resources SA, a private
Argentinean Company. This report deals specifically with ERSA’s Cerro Blanco copper-gold-
molybdenum project, (“Cerro Blanco” or “the Project”) the southernmost of the Company’s
five projects.
In early 2012, GeoScanEx was engaged by ERSA to provide an opinion on the potential of
and directions for future work at the Company’s Copper Hill (“El Leoncito”) copper-gold-
molybdenum prospect, one of several prospects within and currently the principal exploration
focus at their Cerro Blanco Project, in the Calingasta Department of San Juan Province.
To fulfil part of this commission, GeoScanEx visited the Copper Hill Prospect and undertook
detailed geological work in the field, including traverses and profiles over distances of
approximately 1.5km north-south and 1.0km east-west across the prospect, covering an
2
area of approximately 10km considered to have the greatest potential for mineralization.
A detailed review of all information provided by ERSA was also undertaken, which included
examination of surface geological mapping, results of historical and recent geochemical
sampling and analysis, geophysical exploration by magnetometer and induced polarization
and the drilling of a total of approximately 2,680m in five exploratory diamond drill-holes,
drilled by ERSA in 2011.
This report has been prepared by GeoScanEx for the exclusive use of Entropy Resources SA
and may not be used by any other party without the written consent of GeoScanEx.
The unauthorised use of any information contained in this report by a third party is at their
own risk and is deemed to constitute an agreement to release, defend and indemnify
GeoScanEx from or against all and any liability associated with this report, howsoever it may
occur, whether by negligence or otherwise.

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This report takes into account results obtained from all previous exploration, and provides an
opinion, prepared under the guidelines of National Instrument 43-101 and accompanying
documents 43-101.F1 and 43-101.CP (NI43-101), on the potential of the prospect and
makes recommendations for future work.
2.0 RELIANCE ON OTHER EXPERTS

ERSA commissioned GeoScanEx to prepare a technical report to provide an opinion on and
future exploration directions for the Copper Hill Prospect based on a review of all information
available to and provided by ERSA and from independent field work undertaken by
GeoScanEx.
This review encompasses data on geological and structural characteristics, alteration and
mineralization determined by different explorers, geologists and professionals over a
considerable period.
It includes an estimation of the potential for Copper Hill to contain a certain type of deposit.
GeoScanEx assigned to this purpose their geologist, Mr. Orlando Alvarez, a Competent
Person duly qualified in Estimation of Mining Resources and Reserves (Record No. 0006
from the Examination Board of Competences in Mining Resources and Reserves of Chile,
Law 20.235, subscribed to the Committee for Mineral Reserves International Reporting
Standards (CRIRSCO).
A review of all the data provided by ERSA was undertaken, with in-field confirmation and
additional mapping and sampling, and a detailed examination of five diamond HQ-NQ BTW
cores drilled by ERSA (2,380m), including comparisons of grade distributions, especially that
of copper.
In order to check and confirm the quality and findings of work carried out, in January 2012,
GeoScanEx through its geologist Mr. Orlando Alvarez, performed a review of the geology
and geochemical sampling in-field as well as of all core drilled by ERSA during the year 2011,
verifying the quality of the geological mapping as well as the core logging, all of which was
used as a reference and basis for further work undertaken by GeoScanEx at Copper Hill.
The information used for this review was drawn from a variety of sources and from different
exploration campaigns, starting from 1964. Section 13.0 “References” in this report lists the

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main reports referred to. The authors are not certified as Competent Persons, since such
certification did not exist in the early years and still does not exist in Argentina:
This report has been prepared by GeoScanEx for the exclusive use of Entropy Resources SA
and may not be used by any other party. The use of any information contained in this
report by a third party is at their own risk and is deemed to constitute an agreement to
release, defend and indemnify GeoScanEx from or against all and any liability associated
with this report, howsoever it may occur, whether by negligence or otherwise.
Conclusions and recommendations contained in this report are based mainly on information
from sources beyond the control of GeoScanEx. Although we have applied all due care
necessary in the acceptance and use of information provided to us, GeoScanEx can neither
warrant nor guarantee its accuracy.
3.0 GEOGRAPHY
3.1 Location
The Cerro Blanco Project tenement suite is located in the north-eastern corner of Mining
Exploration Reserve No. 49, between the Quebradas of Rojas and Los Acerillos which flow
onto the Ureta Pampa, in the Ureta Range in the Cordillera Principal, Calingasta
Department, San Juan Province, in the Republic of Argentina. Reserve No. 49 covers a total
2
area of 357km .
o o
The Project is centred on Latitude 32 03’S Longitude 69 35’W and is approximately 113
kilometres in a straight line west-south-west of the provincial capital city of San Juan, and 42
kilometres south-west of the local and nearest township of Barreal in the Calingasta Valley.
The southern boundary of the Project tenement suite is only 1 kilometre north of the
southern border of San Juan Province with neighbouring Mendoza Province, while its
eastern boundary is only 60 kilometres east of the country’s border with Chile.
The Copper Hill Prospect is located in the northern part of the Cerro Blanco Project area,
centred at Latitude 32° Longitude 69°34’.
While elevations in Cerro Blanco Project may attain 4,200m in the southern extremities of
the tenement suite, the summit of Copper Hill is at 3,250m elevation.

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For convenience, and in general use throughout this report, the name “Copper Hill” will be
applied to the entire intrusive complex which forms a distinctive colour anomaly in aerial
imagery, for although it was originally applied specifically to the smaller area which was the
subject of initial exploration, further work shows that structures and geochemistry significant
to mineralization potential extend beyond the original “Copper Hill” into a greater part of the
complex.
Figure 1.1 - Location - Copper Hill Prospect on Google Earth image Cerro Blanco Project area, San Juan
Province, Argentina
3.2 Project Access

The Project lies 42 kilometres south-west of and is easily accessed from the nearest
township of Barreal, which is in turn accessed from either:
the provincial capital of San Juan by approximately 120 kilometres of generally good sealed
but often sinuous road west from the city (Route 149), through the Sierra del Tontal to the
department centre of Calingasta and thence a further 35 kilometres of good sealed but
moderately winding road (Route 149) south to Barreal, or the provincial capital of Mendoza
by 130 kilometres of mostly well-surfaced but often sinuous sealed road (Route 13 north to

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Uspallata) to a point 12 road-kilometres north of the town of Uspallata (Route 39 north from
Uspallata), followed by 50 kilometres of unsealed but relatively wide, straight and level road
to the border between Mendoza and San Juan Provinces, thence a further 50 kilometres of
good sealed road on Route 149 to Barreal, a total of approximately 230 kilometres.
From Barreal, the route south to the project is initially via 20 kilometres of excellent sealed
main road to an elevation of approximately 1,900m before turning southwest onto a mix of
old seismic lines and bulldozed gravel tracks recently upgraded by ERSA and which ascend
the gravel and sheet-wash pediment on the western side of the Calingasta Valley for 24
kilometres up to 2,460 metres elevation at the upper limit of the pediment. Here the track
narrows as it is forced into a generally narrow defile through steep-sided hills and gorges for
the remaining 12 kilometres southwards to the saddle entry at the Copper Hill Prospect at
3,200 metres elevation.
3.3 Country Economic and Geological Setting

The provincial capital of San Juan Province is San Juan City, with an urban population of
approximately 500,000. The Cerro Blanco Project is readily accessible from the city the
majority of the routes to the projects having a sealed surface.
San Juan Province lies in the north-western part of Argentina, on the country’s western
border with Chile. The Province straddles the Andean Cordillera Frontal and subordinate
Pre-Cordillera physiographic regions on the eastern flanks of the Andean mountain chain.
The Province attracts approximately one third of all of the exploration and mining
development expenditure in Argentina, including the development of the Veladero and
Pascua-Lama copper-gold projects by Barrick Gold Corporation and the Pachón and
Gualcamayo deposits owned by Xstrata and Yamana respectively.
Argentina is the eighth largest country in the world, with a land area of 2.8 million square
kilometres. It is situated along the temperate Atlantic coast of South America and extends
from the Tropic at 22°S to the Province of Tierra del Fuego at 55°S – a distance of 3,900km.
The mainland Argentine territory includes three large physical regions with widely varying
relief and geology, these being the Cordillera, the Plains (“Pampa”) and the Patagonian
Plateau.

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Argentina’s immediate neighbours, Chile and Bolivia, and Peru further to the north along the
chain, all have long-established mining histories. Chile has numerous world-class base-
metal and gold projects along its common montane border with Argentina, and produces
about one third of the world’s copper.
In contrast, Argentina’s economy has historically been reliant on agriculture and the country
has only in recent decades been recognized and is now emerging as a globally-competitive
mining nation, with increasing focus on the prospectivity of the resource-rich Andes.
The Andes are a major structural component of the eastern Pacific volcanic “Ring-of-Fire”. It
extends over 4,500km along the western margin of South America, with more than 3,500km
of the chain forming the western border of Argentina, and is widely recognized as having one
of the world’s most significant mineral endowments.
3.4 Local resources and Infrastructure

The town of Barreal offers the following services:
• 240v power.
• Potable tap water.
• Telephone, facsimile, TV, Internet, with Wi-Fi connectivity
• Emergency Services, Ambulance and Hospitals
• Local airstrip(s) for medivac
• Closest domestic airports – Mendoza and San Juan cities
• Earthmoving contractors.
• Horse-handlers and horse-trekking and exploration services with experienced locals.

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4.0 TENURE
4.1 Mineral Tenure
The Cerro Blanco Project consists of seven contiguous mineral tenements (the Tenements),
made up of six (6) exploitation concessions and one (1) exploration concession, with a total
area of 12,829.40 Ha., Figure 4.1. Tenement details, including name, file reference number,
type of concession, date of registration and area, are provided in Table 4.1
Table 4.1 – Cerro Blanco Project - Tenement Details*
1 Investment
Name File N° Owner Type Registration EIA Legal Status Area (Ha)
Program
Granted by Res. Approved by Res.

108-DM-08 under N° 122/MM/11-
546.700-B- Bastías, Jorge Exploitation
1 LEON I N° 15, file 89/93 of 03/05/2011- 980
94 Alfredo Concession Filed in due time
the Mining Registry File N° 100.0436- In good standing
N° 20 -08/08/08- E-10
Granted by Res.
140-DM-08 under Approved by Res.
N° 24, file 135/140 N° 122/MM/11
546.701-B- Bastías, Jorge Exploitation
2 LEON II of the Mining -03/05/2011- Filed in due time In good standing 2,400
94 Alfredo Concession
Registry N° 20 File N° 100.0436-
-20/11/08- E-10
546.702-B- Entropy Exploitation In due process for No pending No pending

3 LEON III Resources SA In good standing 2,925
94 Concession granting obligation obligation
546.703-B- Bastías, Jorge Exploitation In due process for No pending No pending

4 LEON IV In good standing 513.77
94 Alfredo Concession granting obligation obligation
Granted by Res. Approved by Res.

114-DM-08 under N° 122/MM/11 In good standing
546.704-B- Bastías, Jorge Exploitation Filed in due time
5 LEON V N° 19, file 100/110 -03/05/2011- 1,468
94 Alfredo Concession
of the Mining File N° 100.0436-
Registry N° 20 E-10
-10/09/08-
Granted by Res.
78-DM-98 under N° In due process
In good standing
SERAFINA Bastías, Jorge Exploitation 170, file 680/683 of for approval
6 1413-T-95 Filed in due time 2,820
II Alfredo Concession the Mining Registry File N° 100.0436-
N° 10-11/11/98- E-10
1124.030- Entropy Exploration No pending No pending In good standing

7 CATEO Pending Resolution 1,722.63
B-08 Resources SA Concession obligation obligation

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1
Environmental Impact Assessment
Figure 4.1 - Cerro Blanco Project Tenement Plan.

(Latitude and Longitude coordinates shown are derived from the Universal Transverse Mercator (UTM)
coordinate system)
4.2 Current Ownership

Entropy Resources SA (registered number 30-71113611-4) (ERSA), is private company
Registered in San Juan Province, Argentina
The directors of ERSA are Eduardo Videla and Jorge Bastías.
ERSA has completed a Purchase Agreement (the Purchase Agreement) with the tenement holder
trust, headed by Jorge Alfredo Bastías, to acquire 100% of the mining rights embodied in the
seven (7) mineral tenements which comprise the Cerro Blanco Project, as set out in Figure 4.1
and Table 4.1, above.

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Figure 4.2 - Location of Copper Hill and other prospects in the Cerro Blanco Project area
4.3 Tenement Status & Environmental Impact Assessments

From time to time, ERSA requests independent lawyers to review the status of the Tenements
in the files held by the regulatory authority, the Secretaria de Mineria de la Provincia de San
Juan (the Mining Authority). The most recent report, by lawyers B & F of San
Juan, refer Table 4.1 above,, is dated 13 February 2012. For the majority of the Tenements,
no material change to their status has occurred since the 13 February 2012
With respect to lodgement of statutory Environmental Impact Assessments (EIA’s), an (EIA)

is required as part of the process of maintaining exploration and mining concessions in good
standing with the Mining Ministry. An initial EIA is required before field work is permitted on
a concession and updates to the EIA are required every two years.

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The Environmental Impact Assessment (File N° 100.0436-E-10) was approved on by the

Provincial Environmental Authority (PEA) for exploration stage by Resolution N° 122/MM/11
on May 5th, 2011. This EIA comprised the following exploitation concessions: LEON I, LEON
II, LEON V and SERAFINA II.
The remainder of the properties: LEON III and LEON IV will be included in this EIA after they
are granted. The EIA update shall be filed before May 5th, 2013.
An individual EIA will be filed for the Exploration Concession (Cateo) N° 1124.030-B-08 after
it is granted.
Additional permits that must be filed in order to drill at the Cerro Blanco Project include:
• water use authorization permit from the local authority; and

• A permit registering to have Entropy Resources S.A. with the Dangerous and
Hazardous waste Provincial Register.
Both of these needed permits are in due process with the respectively granting local
authorities.
4.4 Royalties
According to Argentinean federal legislation (Law No. 24. 196 “Mining Investment Law”),
provinces may not demand a net smelter royalty (“NSR”) in excess of 3%.
The NSR applicable in San Juan Province is 3%. However, San Juan mining royalty differs
from other mining provinces in the way it is calculated. Producing mining companies in San
Juan pay a 3% royalty, similar to a 3% gross royalty.
4.5 Property and Mineral Tenure in Argentina

The mining and exploration industry in Argentina is governed under a body of national and
provincial legislation, the principal of which is the Argentinean Mining Code (El Código de
Mineria). The provincial authorities administer mining and exploration titles. An explanation
on the different types of tenements, which are referred to in the attached schedules, is set
out below:
There are three principal types of mineral concessions in Argentina:

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“Cateos” – are exploration concessions

There are two types of mining concessions:
“Minas”and
“Manifestación de Descubrimiento” (“MD” - literally “notice of discovery”).
4.5.1 Exploration Concessions (Cateos)

The principal type of exploration tenement is the Concesion de Exploracion y Cateo (‘Cateo’)
which provides the title holder with the exclusive right to explore for specified minerals within
a defined area for up to a maximum of three years. If a mine is discovered during the
exploration period, then the holder of the right is entitled to an exclusive right to apply for an
exploitation concession. All exploration concessions are granted for a fixed period of time,
based on the area applied.
No renewals or extensions of the term originally granted are allowed. The maximum size
allowed for a Cateo is 10,000Ha, made up of units that cannot exceed 500Ha.
Cateos must be reduced by 50% of their original size in the second and third years of their
term. The term cannot be extended or renewed and the title holder cannot reapply for the
same area within one year of its expiry. Prior to or within this three-year term, the
concession holder may apply for the conversion of the Cateo into a “Mina”.
Property boundaries are defined in the exploration concession application or title and are not
required to be physically marked in the field.
4.5.2 Mining Concessions:

Mina
A Mina is a mining concession that evolves from a Cateo, and can have a maximum size of
3,500Ha. The conversion of a Cateo to a Mina requires proof of discovery of mineralization
and must be legally surveyed by the Province within one year of the date on which the
application was made for registration of the Mina.
This type of tenement grants the holder the exclusive right to extract and dispose of
specified minerals from the land covered by the tenement, subject to an approved working
plan and royalties payable to the provincial government.
All minerals are the property of the relevant province, which grants an exclusive right to
extract the minerals specified by the tenement conditions. The licence is maintained subject

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to the holder paying the Canon (q.v) and the fulfilment of certain conditions as described
hereunder in this report.
In order to access the land of a mining concession, the applicant must reach an agreement
with the land owners.
A Mina may be applied for directly if a mineral discovery is made, without necessarily going
through the Cateo and MD stages.
Manifestacion de descubrimiento (‘MD’)

The MD is the status of a tenement in respect of which a mineral discovery has been
reported to the relevant provincial authority during the exploration stage. It is effectively a
procedural stage between exploration rights being converted to mining rights. At this stage,
the tenement boundaries are redefined to encompass the specific area of the mineral
discovery and the proposed mining area.
A mining concession granted by the Provincial Mining Ministry (“PMM”) confers on the title
holder the right to mine specific minerals for an indefinite term provided that the concession
is kept in good standing with the authorities. Legislation allows for mining concessions to be
acquired in three ways:
• By discovering an area of potentially significant mineralization as a consequence of

an exploration program in an exploration concession;
• When significant mineralization is discovered by chance; that is, without an
exploration process. This means that a mining concession can be applied for directly,
without applying for an exploration concession first; or
• When a mining permit has been declared and registered as having expired due to
non-compliance with the PMM’s requirements.
4.5.3 Maintenance of Concessions.

Obligations by the holder of a Cateo or Mina
The holder of a Cateo or Mina must fulfil a series of obligations to maintain its full force and
effect. The non-compliance of such obligations may lead to the revocation of the tenement.
Canon
A canon must be paid along with the filing of the permit request. The amount of the canon is
$AR400 per unit of exploration (500Ha). The semester fee for an MD is $AR 400 per 100Ha

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unit (disseminated) and $AR80 per tenement of 200m wide x 300m length (veins). It must be
paid twice a year (June 30th and December 31st). Failure to make payment results in
revocation of the permit, unless the title holder pays the canon within the 45 following days,
with an additional 20% penalty. A 3 year period free of canon payment takes place if a mine
is discovered.
Legal Mining Work and Legal Survey

Work to establish the mineralized zone must be performed within 100 days from the date of
registration of the mining right. Within 30 days after compliance with the work, an application
must be lodged requesting legal survey, whereupon the PMM has to set a date and the
professional that will carry out the survey. Once the latter is completed the concession is
registered with the Mining Survey Department.
Work and Investment Plan

A work and proposed expenditure plan must be filed for each concession at the time the
application is made, setting out basic data related to the proposed exploration activity. This
must set out a plan to achieve a minimum production equivalent to 300 times the annual
canon paid within five years following the year in which the application of the legal survey is
submitted.
During each of the first two years the amount of the investment shall not be less than 20%,
while the rest of the investment (60%) can be freely distributed during the remaining three
years.
Every year, an affidavit describing the investment made must be submitted to the PMM. If
the affidavit is not submitted or does not correspond with actual investment, the license will
lapse and the mine will be declared vacant, unless the holder amends any mistake or
omission within the 30 days following receipt of the notification from the PMM by the holder.
The PMM has the right to verify that the work commitment has been met.
Environmental Impact Assessment (EIA)

Once a permit is granted for a mining concession, an EIA must be completed and filed with
the PMM. Field work may not start until the EIA has been submitted and approved by the
authorities. The EIA must be updated every two years.

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5.0 PHYSIOGRAPHY & CLIMATE

5.1 Physiography
The Cerro Blanco Project is situated in the foothills of the Andean Cordillera, on the western
margins of the Calingasta Valley which is also the name of the local administrative
Department of Calingasta.
This long fertile valley lies 100 kilometres west of San Juan City, between the stark jagged
ranges of the Sierra del Tontal, immediately west of San Juan city, and the higher peaks of
the snow-capped Cordillera on its western side.
At the small township of Barreal, 42km north-east of the project in the Calingasta Valley
where ERSA has its field office, the elevation is 1,650m.
At the Cerro Blanco Project, the summit of Copper Hill is at 3,250m, while in the southern
extremities of the project tenement suite, south of the La Fortuna Prospect, elevations rise to
nominally 4,200 metres.
Each of the biomes represented within the area has its typical plant species. Thus the lower
areas which correspond to the “monte” are scrubby bushes and a creosote bush with
resinous, long-lasting, stiff and shiny leaves.
The fauna includes species such as the guanaco, here found in large herds.
5.2 Climate
The climate of the Calingasta Valley and project area is mostly that of an arid rain-shadow
desert with little precipitation and marked variation between night and day temperatures,
reflected by the typical desert vegetation of dominantly scrubby grasses on the pediments,
rock and scree slopes, with the exception of the more fertile areas on river valley margins
and terraces.
Although Andean winter weather at altitudes above 3,000m can often be harsh between May
to September, access to the Copper Hill field camp, just below 3000m elevation, has been
opened for field activity throughout the entire year.

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Temperature
Summer temperatures recorded over the last 20 years in the Calingasta Valley range from a
o o o
maximum of 26.8 C and minimum of 11.4 C (mean 18.9 C) in January while winter
o o o
temperatures range from a maximum of 12.9C and minimum of 1.6 C (mean 5.6 C) in July.
Frost days range from a maximum of 30 days in July to a minimum of 17 days in February.
Daily sunshine hours reach a maximum of 83% in March and a minimum of 61% in June.
The moderate elevation of the project and only occasional, short-lived snowfalls generally
enables the Cerro Blanco Project to be accessed all year round, although temperatures can
o
drop to as low as -10 C or occasionally lower in severe winter weather on nearby summits
around 3,200 – 4,200 metres altitude, with extreme chill factors in strong winds.
Precipitation
Precipitation ranges from a maximum of 120mm in May to a minimum of 5mm in November,
although rainy days range from a maximum of 11 days in March to a minimum of only one
day in May, indicating that it is possible for the maximum rainfall for May to occur in as little
as a single day.
Wind
The area is occasionally influenced by a local powerful wind phenomenon known as the
Zonda (viento zonda), a regional term for the foehn-style of montane wind that often occurs
on the eastern slope of the Argentine Andes. It is a hot dry wind, often carrying dust, which
comes from north-eastward flowing polar maritime air, warmed by descent from the high
crests of the Cordillera and which often exceeds 50 km/h.
6.0 PROJECT HISTORY

6.1 Exploration History
According to information provided by ERSA to GeoScanEx, the first general references to the
existence of mineralization in the Cerro Blanco Project area showed up in the records of
silver and gold exploitation by the Spanish in colonial times (from 1683) in the district of
Paramillos, southeast of Cerro Blanco.

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The first geological studies of the mineral economics of the region were made by Ave
Lallemant (1890) followed by studies undertaken by geographer Trewartha G.T. (1929)
“Argentine Oasis. "The Economic Geography of Northern Mendoza”.
From a regional perspective, the Calingasta Valley region, from Calingasta in the north to
Uspallata in neighbouring Mendoza Province to the south, is regarded as one of the classic
Argentine silver and gold mining districts, with historical mining including the Carmen Alto
silver district and in the Paramillos district near Uspallata (Figure 6.1), where 15 million
ounces of silver is reported to have been mined over 300 hundred year period
Figure 6.1 - Ruins of Colonial-era Jesuit silver mines near Uspallata
In the post-World War II period, the right to undertake mineral exploration and development
in Argentina was restricted to government agencies.
Many porphyry copper prospects were investigated by the General Department of Military
Manufacturing, (Fabricaciones Militares or “FM”), resulting in the discovery of dozens of
copper porphyry prospects and deposits, including Bajo de la Alumbrera, Paramillos Sur (30
holes drilled in the 1970s), San Jorge II, Mi Vida, Campana Mahuida, San Bartolo and other
locations, including Copper Hill at Cerro Blanco.

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Of these projects, Bajo de la Alumbrera in Catamarca Province proved to be the stand-out

success of that era and is currently the only operating porphyry copper-gold mine in
Argentina.
In the 1970s, work focussed on the northern part of the country due to the discovery of high-
grade gold at El Indio in Chile. Precious metal exploration spread to other volcanic
environments in the 1980s, although it was not until 1993 that any significant “foreign-
sourced” exploration took place in Argentina after foreign investment and mining regulations
and mineral resources investment policies were overhauled and liberalised in 1989, leading
to a wave of exploration throughout the Argentinean Andes during the 1990’s.
Exploration in the Argentine Andes in the past two decades has focussed primarily on young
rocks of Tertiary age, and on projected extensions of known mineral-rich districts from Chile
into Argentina. More recently, exploration by junior exploration companies has focused on
the precious metal potential of older Permo-Triassic rocks which extend the length of the
Cordillera.
Major recent developments include the Veladero and Pascua-Lama copper-gold projects by
Barrick Gold Corporation and the El Pachón and Gualcamayo deposits owned by Xstrata
and Yamana respectively.
The potential for the discovery of an economically mineable porphyry copper-molybdenum

deposit at the Copper Hill Prospect within the Cerro Blanco Project area has been
recognised at least since the 1960’s. Following Paul Eimon’s observations in 1964 that the
Copper Hill area within the current Cerro Blanco Project appeared to be a favourable target
for copper porphyry exploration, the Argentinean government commenced exploration of the
area through Fabricaciones Militares (“FM”), under the auspices of the United Nations’
Development Program.
Exploration at Copper Hill and surrounding areas was undertaken by FM in the period 1965
to 1968. This consisted of a regional geological survey at 1:50,000 scale, IP geophysics and
a local survey at 1:3,125 scale over the Copper Hill area which included geochemical soil
and rock chip sampling at 1:12,500 scale with analyses for Cu-Mo and Pb-Zn, and three
shallow diamond holes drilled at Copper Hill.
The work is summarized as follows:

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Geochemical sampling – for copper and molybdenum

279 soil samples
249 rock-chip systematic grid samples
263 rock-chip regional samples
191 stream sediment samples
The soil geochemical program identified a 400m by 400m copper – molybdenum anomaly
with copper values ranging from 250ppm to 1% Cu.
Of 263 surface rock-chip samples, 31 returned anomalous copper results equal to or above
200ppm Cu, with three samples peaking at 1% Cu, while 25 samples returned anomalous
molybdenum results equal to or above 10ppm Mo, including a peak response of 136ppm
and two results of 100ppm Mo.
Of 249 rock-chip samples taken in a regular 35 metre grid pattern, 34 returned anomalous
copper equal to or above 200ppm Cu with two peak values of 0.28% and 0.43% Cu, and 95
samples returned anomalous molybdenum equal to or above 10ppm Mo, including one peak
of 130ppm and two peaks of 80ppm Mo.
Induced Polarisation Geophysics (IP)

8 line kilometres completed by McPhar Geophysics Limited in 1966
Diamond Core Drilling – 3 holes

Drill-rigs: Acker (1 hole) and Winkie GW10 (2 holes)
Holes CB1 (85m); CB2 (39.5m) and CB3 (179m).
While none of these holes went to their design depths, the program concluded in 1968 with a
total of 299.5m drilled which identified widespread copper and molybdenum mineralisation
within the leached zone.
Most notably, diamond drill-hole CB3 was drilled into the south-western flank of Copper Hill
o
for 179m on a north-easterly azimuth, at a shallow inclination of 10 from the horizontal
(Figure 6.2). It intersected highly anomalous copper and molybdenum in both the near
surface and deep zones, with reported intersections of 38m @ 59ppm Mo from surface
(maximum 96ppm Mo), 30m @ 41ppm Mo from 149m (maximum 106ppm Mo) and 70m @

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572ppm Cu (maximum 1,750ppm Cu) from 190m. The anomalous copper is associated with
reported disseminated chalcopyrite.
Figure 6.2 - Schematic Cross-section of Diamond Drill-hole CB3
No gold assaying was undertaken by FM, as was typical of most exploration around that
time, when the gold price was fixed by the Post-WWII International Gold-Dollar Standard
(1946–1971) at US$35 per ounce, and before the potential economic significance of gold in
porphyry copper deposits was yet to be fully appreciated.
A final report prepared by Luis A. Barrionuevo and Oscar Reverberi, concluded:
“…the area studied shows characteristics of a complex intrusive body with disseminated
sulphides and influenced by medium intensity hydrothermal alteration”, and
“…the limited information obtained so far through this study precludes a definitive
assessment on the possible existence and/or volume of economic mineralization at Copper
Hill”.
Copper Hill did not receive much attention in the 1990’s because the tenements were not
released from ‘reserve’ status until 1994.
After a hiatus of approximately 13 years, the private company Entropy Resources S.A.,
(“ERSA”) (q.v Section 4.0 - Tenure) based in Argentina and Australia, started exploration
after appreciating the significance of the previously reported prospectivity of the Copper Hill
area.

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ERSA undertook further geological studies with emphasis on hydrothermal alteration,

mineralization, structure and geochemical sampling to better define the characteristics and
distribution of anomalies. The company visited the area during 2006 and took 10 rock-chip
samples from an area of argillic alteration which were assayed by ICP for 40 elements
including gold and silver. Three samples returned anomalies higher or equal than 0.05g/t
gold, with peaks of 0.19g/t, 0.14g/t and 0.05g/t gold.
During 2007, Pan Pacific Copper took two rock-chip samples east of Copper Hill. No
anomalous results were returned. JOGMEC (a Japanese Company) visited the property at
the same time but did not take any samples.
Vale Rio Dolce (CVRD) visited the property during February 2009 and took 20 rock-chip
samples. Results were not disclosed but led to signing a letter of intent to joint venture into
the project with ERSA. The joint venture did not proceed, due to Vale changing their focus
to industrial minerals.
Geological consultant Mike Parr (Lithotech) took 186 rock-chip samples for PIMA
(alteration) studies. No wet assays were undertaken. From this study, Parr concluded that
the Copper Hill pluton is a metaluminous calc-alkalic weakly hydrous (iron–titanium poor)
and highly oxidised (magnetite–sphene stable). This petrochemistry is empirically tied to
porphyry copper–molybdenum metal systems. This pluton appears to be of stage three
hydrolysis which indicates that it has potential to contain or be associated with porphyry
systems.
An option over the property was taken up in September 2009 by ERSA which, shortly
afterwards, was optioned to London-based U3O8 Limited who undertook a study of the
alteration minerals at Copper Hill but could not progress exploration due to funding
constraints, eventually relinquishing the option in late 2009.
Argentina Mining Limited (AVK) entered into an agreement on 30th April 2010 to acquire a
100% interest in ERSA, conditional on AVK listing on ASX. This condition was fulfilled on 9
March 2011 and AVK immediately commenced a major exploration campaign at Copper Hill
with further geological reconnaissance, detailed geological and alteration mapping, rock-chip
geochemical sampling, ground magnetometry and surface-induced polarization-resistivity
geophysical surveys, and diamond drilling. This work continued throughout 2011.
By June 2014, AVK withdrew from the agreement with ERSA.

Augusto Leguía Norte 100. Oficina 401. Santiago – Chile Tel. (56-2)6577840 A
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The diamond drilling program was undertaken in two phases, with an initial two “proof-of-
concept” 400m deep holes, followed immediately by three more holes targeting depths in the
range 700–750m, all on the western flanks of Copper Hill.
While the two Phase 1 holes achieved design depths and were the catalyst for the Phase 2
round of three deeper holes, the target depths for the Phase 2 holes were not achieved due
to equipment breakdowns and difficult ground conditions. The five holes comprised one
vertical hole with the remaining four holes being inclined with easterly azimuths, for a total of
2,380m, refer following Table 6.1.
Table 6.1 – Copper Hill Diamond Drill-hole Collar Summary

1 1
Collar Azimuth
Drill hole Northing Easting Dip Depth
RL (Deg
No (mN) (mE) (Deg) (m)
(m) Mag)
2
MC-1 6460404 2445926 3022 130 -50 400.0
3
MC-2 6460100 2446050 3135 112.5 -60 487.0
2
MC-3 6459975 2445940 3095 40 -45 400.8
3
MC-4 6459962 2446109 3159 90 -80 421.0
3
MC-5 6460184 2446165 3175 Vertical -90 671.0
Total Advance 2,379.9
NOTES:
1 Coordinate System: Gauss Kruger, Zone 2, Campo Inchauspe, as used in Argentina
2 Phase 1 Program
3 Phase 2 Program
Despite the shortcomings, the program successfully defined pervasive disseminated copper-
molybdenum mineralization, with gold in places in both primary core material and in a
surface leached cap. ERSA interpreted the drilled environment as the transitional zone of a
hydrothermally-altered copper-molybdenum-gold porphyry system, with positive indications
for potentially economic copper-gold-molybdenum mineralization, but that further work is
required to identify higher grade zones.
At this point, GeoScanEx was commissioned by ERSA To provide an opinion on the
prospectivity of Copper Hill, mineralization models, the most likely zones of higher
prospectivity indicated by those models, and to recommend new studies and programs to
locate these zones.

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6.2 Resource Development History

While exploration of the Copper Hill mineralized zone is approaching an advanced stage, no
resource has yet been defined.
7.0 GEOLOGY
This Section of the report has been developed principally from reference to previous
exploration reported by Barrionuevo, L. and Reverberi, O. (1968); King, A., (1965); Parr, M.
(2009); Entropy Resources S.A. and Entropy Resources Pty Ltd (2011) and Argentina
Mining Limited. Further commentary on local geology is developed from field observations
by GeoScanEx.
7.1 Regional Geological Setting

7.1.1 Introduction
Argentina’s structural evolution has generated a complex distribution of mineral domains. As
a result the country hosts a broad spectrum of mineralised geological environments, from
Proterozoic to Recent age, including eastward extensions of Chile’s important El Indio and
Maricunga gold belts, and terranes similar to those of the western United States and Mexico
which have undergone continental compression and extension.
7.1.2 Regional Geology

San Juan Province straddles Argentina’s Andean Cordillera Frontal, the Pre-Cordillera
Ranges and the Pampean physiographic regions. These are described further as follows:
The Cordillera Frontal is a 1,110km long mountain chain whose crest forms the
physiographic divide with Chile. This feature occupies an area equal to almost one-quarter
of the country. It was formed by magmatism and uplift along a margin of subduction, where
its western component, the Nazca Plate, plunges beneath the eastern South American
Continental plate.
The Nazca Plate, named after the Nazca region of southern Peru, is an oceanic tectonic
plate in the eastern Pacific Ocean basin off the west coast of South America. Ongoing
subduction along the Peru-Chile Trench of the Nazca Plate under the South American Plate
is largely responsible for the Andean orogenic uplift, and related compressional and
extensional tectonics. Figure 7.1.

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Figure 7.1 – South American Plate Tectonics
The intrusive and coeval Permian to Triassic Choiyoi Group volcanic rocks underlie the
Andean Cordillera from Argentina and Chile through to Ecuador. This igneous basement
complex consists of calc-alkaline felsic and monzonitic intrusive rocks and rhyolitic
ignimbrite, with thickening by compression and numerous thrust faults from Triassic through
to Holocene age. It hosts Tertiary copper-porphyry and precious metal systems such as the
Collahuasi (Chile), Chita and El Salado porphyry copper (± gold) deposits and Lama and
Nevada (Chile) gold-enargite high-sulphidation systems.
The Pre-Cordillera is a belt about 1,000km long and more than 250km wide that has
undergone large-scale tectonic compression since the Jurassic and has been subsequently
modified by extension since the mid-Miocene. It is similar to the Basin-and-Range
extensional regime in the western United States. Extension-related Cenozoic volcanism is
manifested as numerous calc-alkaline to alkaline volcanic centres.
The Pampean Ranges are almost entirely composed of Precambrian and Paleozoic granitic
and metamorphic rocks, sparsely covered by Paleozoic and Triassic continental sedimentary
rocks. These mountains host most of the notable Proterozoic-age base and precious metal
deposits and were formed by uplift along Laramide-style high-angle reverse faults.
7.1.3 Regional Structure

Three main litho-tectonic domains are distinguished as major elements in the structural
framework of the region:

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• the "Andean basement" represented by the Agua Negra Formation;

• the volcanics of the “Choiyoi Group” and the granitoids of the “Colangüil Batholith”;
• rocks associated with the intrusive event of the “Olivares-Doña Ana Group”.
The first domain is associated with the San Rafael Gondwanan orogenic cycle of tectonism
which tilted, folded and fractured the sedimentary rocks of the Agua Negra Formation, and is
considered to be Cordilleran basement. The net compressive domain is characterized by a
greater density of NE-SW and NW-SE trending faults.
A second tectonic domain is the Eastern Andean, represented by units of the Frontal
Cordillera mountain range, transected by fractures of N-S orientation associated with an
expansive rifting phase. It is associated with the waning San Rafael tectonic phase and
commencement of the Araucánica tectonic phase and the emplacement of the plutonic
Colanguil-Los Puentes complexes. It is followed by the Agua Blanca, Bauchazeta and Chita
emplacements in response to ongoing expansive rifting.
Jurassic and Cretaceous rocks are absent in the Frontal Cordillera. While erosion and
sculpting of the mountain range took place, the Frontal Cordillera is non-depositional and
only filling of river basins marginal to the geologic province is widely known.
The third and final phase of tectonism in the Andean cycle involved shortening in the Frontal
Cordillera and the resultant elevation of the Frontal Cordillera range, a continuous process
accompanied by simultaneous erosion of the progressively rising high areas and deposition
of the resulting sediments into lower areas. Vast amounts of detritus are constantly being
eroded from the mountains and are deposited, often as spectacular coalescing fan deposits
to form pediments hundreds of metres thick along their flanks.
Towards the end of the Palaeogene, interactions between step-faulting and ongoing dextral
transpressive (oblique compression) movement resulted in the development of suites of
faults to the northwest and the northeast and their corresponding complementary structural
directions.
In the Neogene, the Miocene-Pliocene Quechuicos transpressive tectonic phase generated

sigmoidal structural patterns with a principal N-S axis of elongation, and corresponding
complementary NW-SE fault sets with dextral transcurrent movements giving rise to suites of

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en echelon faults and consequent opening and reactivation of NE-SW and the E-W
structures.
Partial shortening and partial extension, associated with an oblique flat subduction direction,
generated openings in the Frontal Cordillera for intrusives of dacitic, monzo-dioritic
porphyries, diorites, andesites, acid, meso-silicic volcanics, intrusive sub-volcanics,
agglomerate breccias and tuffs.
This final phase of exhalative and intrusive igneous tectonism is the principal source of the
important primary mineralising hydrothermalism, as well as remobilization enrichment, these
being the key mechanisms resulting in most of the economically exploitable gold, copper and
silver deposits in this geologic province, as well as in Chile and Peru.
7.1.4 Metallogenic Setting

The Andes have been known as a source for copper for more than 100 years and have been
the inspiration for many innovative metallogenic concepts and models directly applicable to
copper deposits worldwide. The central Andes currently produce 44 percent of world-mined
copper. During the last 13 years, more than half of the discoveries in the central Andes have
been made beneath pre- or post-mineral cover, a trend that is likely to continue.
During the Miocene, active volcanism resulted in a geographically broad distribution of

porphyry-type copper gold and epithermal gold-silver deposits over a 250km wide zone from
the Andean Cordillera through the Pampean ranges. In Chile, the famed Maricunga and El
Indio gold belts were formed during the same time.
The El Indio Belt of Central Chile, some 500 km north of Santiago, and 180 km to the east of
the coastal town of La Serena contains the three significant deposits, El Indio Au-Cu, Tambo
(5km south of El Indio) and Pascua-Lama (50km north of El Indio).
The host sequence at El Indio-Tambo comprises Oligocene to Miocene andesitic to rhyolitic

tuffs and volcanics preserved in a fault bounded depression. The rhyolitic and dacitic host
rocks have been strongly-altered and bleached over considerable areas. Mineralisation in
the belt is related to both an early porphyry-type event at 12 to 10Ma, and a later high
sulphidation overprint at 7 to 6.5Ma. Pascua-Lama is a structurally-controlled high
sulphidation system hosted by intrusive and volcanic rock sequences of Upper Paleozoic to
Middle Tertiary ages.

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Middle to late Tertiary volcanism was extensive and episodic. Tertiary metal deposits are
considered to be associated either with subduction-related crustal shortening and resultant
magmatic activity, or more likely, with a back-arc crustal extension tectonic regime which
culminated in the development of multiple, superimposed volcanic calderas and related
epithermal gold-silver-copper deposits.
7.2 Project Geology

7.2.1 Lithology
The greater part of the surface of Cerro Blanco is covered by a suite of intrusive and
volcanic rocks, most probably of Permo-Triassic age, and which also contains shales and
schists and, to the southeast, Carboniferous sedimentary rocks showing incipient
metamorphism. In the northern part these sediments are covered by recent erosional
detritus.
The Carboniferous shales, schists and sedimentary rocks have been affected by the Permo-
Triassic intrusive and volcanic rocks and are generally folded and subsequently intruded by
a number Tertiary porphyritic dacites which have contributed to widespread hydrothermal
mineralization, leaching and intense alteration such as that observed in Copper Hill. These
are in turn overlain by more recent dacitic tuffs.
The Cerro Blanco Project encloses a number of visually distinctive, circular, leached and
intensely hydrothermally-altered Miocene andesitic or dacitic porphyritic intrusive centres,
including those at the centre of the Copper Hill, La Fortuna, Despoblados and Los Gemelos
Prospects.
Five kilometres northwest of Copper Hill, the Los Gemelos zone consists of two small bodies
of trachytic porphyry, each of approximately 300m radius, which intruded Permo-Triassic
tuffaceous andesitic porphyries during the Lower Tertiary. These rocks exhibit intense
sericitisation, strong argillisation and kaolinisation.
There are other similar geochemically anomalous altered zones in the area which, together
with aeromagnetic evidence, suggest that these features, possibly including Copper Hill,
might be the collective surface expression or apophyses of a large partially-unroofed dacitic
pluton, or possibly of multiple bodies.
A number of exploration target types appear to be related to these features, only one of
which, Copper Hill, has been drilled on a limited basis. Exploration results serve only to

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indicate that more detailed evaluation attention is justified. In general, exploration of the
area has been limited but has obtained encouraging indications for a number of target styles,
including bulk tonnage types.
Previous exploration within the project area, including a limited amount of drilling at Copper
Hill, has defined several typical Andean-style, potentially large-tonnage, porphyry (copper-
molybdenum +/- gold) and epithermal vein gold targets.
The Copper Hill zone consists of a suite of Permo-Triassic acidic volcanic rocks, including
porphyritic andesites which correspond to the acidic andesites of the Choiyoi Group, along
with dacitic Permo-Triassic porphyry intrusives, intruded in turn by generally Tertiary
porphyries, with all of the foregoing covered with layers of more modern dacitic tuffs,
following Figure 7.2
Figure 7.2 – Southwestern Copper Hill, view to southwest,showing lower dacitic altered tuffs (yellow)
overlain by a sequence of later gray tuffs with no alteration or mineralization, which almost completely
cover the Copper Hill mineralized porphyric complex.
The multiple intrusive porphyries of mainly dacitic composition at Copper Hill are associated
with significant and pervasive hydrothermal alteration, evidenced by extensive bleaching,
silicification, leaching and abundant secondary copper mineralisation at surface, which has
affected the oldest rocks of the immediate area. It is the most imposing of the known
prospects in the Cerro Blanco Project, being an almost circular intrusive edifice which is
topographically distinctive on the ground as well as a notable colour anomaly in aerial
imagery, following Figures 7.3 and 7.4.

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Figure 7.3 - Copper Hill on Google Earth image vertical view, showing alteration colour anomaly
Figure 7.4 - Cerro Blanco Project area – view to south west from main access, showing distinctive pallid
alteration colour anomaly of Copper Hill Prospect in photo centre, contrasting with surrounding Permo-
Triassic volcanic rocks
Results from recent and arguably the most significant work by ERSA show that the
Copper Hill Prospect has the potential to host a mineralised porphyry system. A siliceous
cap and argillic alteration noted in outcrops beneath the cap support this view.
To date, targets defined for exploration within the greater Cerro Blanco Project area
• Large-tonnage copper-gold-molybdenum
copper porphyry and epithermal vein
exploration target styles throughout the project area;

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• Widespread secondary copper-gold-molybdenum, and possible copper-iron

oxide style targets at Copper Hill;
• Possible near-surface leached zone “gold-cap” mineralization at Copper Hill
As the distribution of gold throughout these target types is as yet undefined, all zones
warrant careful analysis for gold, as well as for base metals.
Figure 7.5 – Copper Hill – Oxide copper mineralisation at drill pad of hole MC-4

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Figure 7.6 – Cerro Blanco Project – Copper Hill Geological Plan
7.2.2 Structure
The main structural characteristic noted within the Cerro Blanco area is a major anticlinal
axis, a prominent structure identifiable in the southern sector of the reserve and which
extends to the NNW, transecting the project area and crossing the Los Patos River at a point
approximately 10km NW of the NW corner of the Cerro Blanco Project boundary.
The general structural configuration of the Cerro Blanco Project and surrounding area is
o
centred on a dominant NNE and NNW trending fault system (generally in the range 320 -
o
345 ) which is part of the major structural system developed in the Andes and which is
related to South American plate tectonics.
This trend is often associated with and is a controlling factor in a number of parallel to sub-
parallel Andean structural corridors, refer Figure 7.7, which contain large copper-gold
porphyry deposits, although at the prospect level, mineralization may often be oriented along
N-S trends.
Copper Hill lies within one such corridor which also includes North and South Paramillos,
San Jorge, Yalguaraz and Alcaparrosa at its eastern extremities in Argentina while the

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copper porphyries of El Pachón (Argentina) and Pelambres (Chile) are situated further to the
west high on the divide but within the same corridor.
Figure 7.7 Location map depicting San Juan Province, ERSA’s Cerro Blanco project and other major
projects
Further to the north and in a separate but parallel NNW trend lie the mineralized zones of the
El Indio Belt which includes Veladero, the dual project of Pascua (Chile)-Lama (Argentina)
and Tambo.
Still further to the north and east of the El Indio trend, the Bajo la Alumbrera deposit
occupies a similar but separate NW-trending structural corridor Figure 7.8.

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Figure 7.8 - Modified from map of Porphyry Copper Tracts coloured by age of known Andean deposits
and prospects, South America
The alteration and mineralization system of the Copper Hill area is confined within a principal
NNW-oriented structural trend, although it is not yet clear whether the origin of this trend is
pre- or post-mineralization. Fracture sets indicate a dominant sub-regional system of NNW-
SSE striking faults, upon which a second north-south fault system is superimposed, in
addition to local E-W fracture sets.

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Lesser NW trends probably relate to normal fault movements that have divided and moved
mineralized blocks, especially in the vertical direction, with the result that, in places, primary
rock and mineralization may be observed in outcrop adjacent to other highly-altered rocks,
Figures 7.9 and 7.10.
The area appears to be a complex of faulted blocks which apparently descend from east to
west, a characteristic that is particularly pronounced to the north of the Copper Hill structure.
Figure 7.9 – Western flank of Copper Hill, view to NE. The gorge in the middle distance traces a regional
fault with a N10°E course which forms the western boundary of the porphyritic system. Roads access
the drilling pads.
Figure 7.10 – Copper Hill - a normal fault in andesitic tuff where the down-thrown left block exhibits a
higher degree of alteration than the up-thrown right block.

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7.2.3 Alteration
Extensive hydrothermal alteration is observed at Copper Hill, with outcrops along the access
track leading to Copper Hill showing pervasive silicification and argillic alteration. From field
examinations and a detailed review of the core, phyllic, quartz and sericite alteration is the
most abundant and widespread style of hydrothermal alteration.
This is associated with potassium alteration characterized by the presence of secondary

biotite derived from the alteration of hornblende and which is partly altered to chlorite without
itself representing propylitic alteration and subsequently to iron oxides, especially magnetite
and hematite, Figure 7.11.
Figure 7.11 - HQ diameter diamond core sample from Hole MC-4 exhibiting Permo-Triassic porphyritic
andesite invaded by veins and veinlets with quartz at the center and potassium feldspar on the borders.
In addition, biotite is noted as a hornblende alteration product, with some alteration to chlorite. Iron
oxides are also observed.
This potassium alteration is represented by veins and veinlets, often in lattices comprising
stock-works. These veins feature quartz at the centre and occasionally gypsum resulting
from the hydration of primary anhydrite, with abundant potassic feldspar towards the vein
margins as well as a penetrative dissemination into the rock groundmass, especially in
porphyritic-textured andesites. Figure 7.12.

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Figure 7.12 - HQ diamond core sample from Hole MC-4 exhibiting coarse-grained graniodioritic(?)
porphyry invaded by at least by three generations of veins and veinlets, with central quartz and
potassium feldspar and some silicification, and gypsum on the margins. Opaque minerals are biotite
from hornblende alteration and further derived iron minerals.
Figure 7.13 – Hand specimen of dacitic porphyry with some phyllic alteration and vein and disseminated
chalcopyrite and pyrite mineralization
It is thought that this particular alteration association may reflect a critical interface, transition
boundary or limit between quartz-sericite and potassium alteration styles and which is
coincident with the increase in mineralization, such as observed in diamond drill-holes MC-2
and MC-3, Figure 7.13.
The presence of kaolin might represent part of a late-vein argillic hydrothermal process, in
combination with some alunite; however, a significant part of this style may also be the result
of supergene alteration.

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The observed characteristics of the lithological, hydrothermal and supergene alteration

processes, mineralization and structures obtained from surface geological mapping and drill-
core at Copper Hill are well-suited to porphyry copper alteration and mineralization models
such as the following model by Lowell and Guilbert (1970), Figure 7.14
Figure 7.14 Porphyry Copper deposits zonation from Lowell and Guilbert (1970)
As shown in Figure 7.14, this is applicable to porphyry copper- molybdenum +/- gold
deposits. When the additional processes of secondary leaching and supergene enrichment
are applied, the Giggenbach Model (1997) provides the following useful representation
Figure 7.15.

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Figure 7.15 - Supergene effect zonation in a porphyry copper deposit. Modified from Giggenback (1997)
The following important features are noted in the application of such models to Copper Hill:
The observed mineralization, especially primary, is scattered and in small veinlets; no

mineralization has been observed in larger veins (greater than 0.5m). This is typical of the
upper and marginal zones of the Lowell and Guilbert model, which in the case of Copper Hill
has been eroded. This phenomenon is very well observed in the upper parts of
Chuquicamata, the largest porphyry copper in the world.
The holes drilled deep into the western side of Copper Hill, as represented in Figures 7.16
and 7.17 below, transect a leached zone in excess of 20m deep, below which a leached
zone of phyllic alteration with occasionally abundant pyrite has been identified. With further
advance in depth and to the east, a transition zone between phyllic and potassic alteration
was intersected. This zone is consistent with that part of the Lowell and Guilbert Model
which indicates the highest mineralization potential, in this case for copper, molybdenum and
gold.
It appears therefore that, at depth and to the east, drill-holes MC2 and MC4 would be at the
core of potassic alteration, where mineralization is less intense and grades are lower

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It is noteworthy the significance of the presence of bornite and chalcopyrite in the primary
zone at Copper Hill. These minerals, are significant in other porphyry copper deposits such
as the notable Chuquicamata, Cerro Colorado and Zaldivar, all currently in production in
Chile, whit the presence of frequent pockets of about 1% Cu of high grade primary
mineralization.
Supergene enrichment processes result from groundwater circulation and water table
fluctuations or reductions in the upper parts of the rock profile and in which aqueous
solutions selectively dissolve and re-precipitate parts of the mineral assemblage.
In the case of Copper Hill, gold mineralization has remained in the upper part of the rock
profile as a gold-rich leached cap while, at greater depth, copper minerals which have been
oxidized by acidic reactions of groundwater with pyrite are transported downwards in mobile
forms to a point of accumulation at or near the water table. Similar processes further leach
and transport copper downwards which, especially with fluctuating or declining water table,
is transported to and concentrated immediately below the water table to form a horizon of
secondary enrichment of copper sulphides.
Although recent tuffs obscure many of the surface indications, there are a few places at
Copper Hill where evidence of this entire supergene process is exposed at surface or
intercepted in drilling.
Drill-holes MC-2 and MC-4 exhibit a 10m and 20m intercept of oxidized and leached
material, with supergene enrichment and copper oxidized and sulphides close to the surface.
Given the proximity to surface, and that economically important minerals can be relatively
readily liberated from soft oxidized material, it is important to develop and understanding of
the characteristics and extent of the leaching and concentration processes and the extent of
any mineralization formed by them, Figures 7.16 and 7.17.

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Figure 7.16 - East-West model section demonstrating the zonation of hydrothermal and supergene
alteration in Copper Hill porphyry copper
Figure 7.17 - NNE profile showing the hydrothermal and supergene alteration zonation in Copper Hill
porhyry copper

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7.2.4 Mineralization
At Copper Hill, a leached capping has developed at surface, with an average
thickness of around 20m. It features iron hydroxides and oxides such as hematite,
goethite, jarosite, which most likely originate from the leaching of primary minerals
such as pyrite, chalcopyrite, bornite and covellite-chalcocite at greater depth in the
deposit. In drill hole MC-4 it exhibits anomalous gold concentrations.
In the drill-holes, and occasionally on the surface below the leached-cap, it is

possible to observe layers of various copper oxides such as malachite (Co
3Cu2(OH)2,
chrysocolla (SiO3Cu.2H2O), turquoise (PO4)4CuAl6(OH)8.4H2O) and azurite

(CO3)2Cu3(OH)3, as well as large amounts of copper wad (a mixture of manganese
and copper), which often contains gold and copper pitch, a mixture of chrysocolla,
goethite, malachite, tenorite and wad, Figure 7.18
Figure 7.18 - Dacitic porphyry with potassium alteration, especially in fractures and abundant copper
pitch and wad.
Beneath the leached-cap, this layer of copper oxides is developed to a thickness recorded in
drill-core in excess of 20m, with copper grades of up to 0.4% Cu. At greater depth, a layer
of approximately 5m of average thickness is developed containing sulphides resulting from
supergene enrichment of primary ore containing essentially covellite and chalcocite, with
some azurite.
A transition zone between phyllic and potassium alteration is clearly observed in drill-holes
MC-2 and MC-3 at Copper Hill. It is believed that this might represent the typical transition

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between these styles which is commonly noted in porphyry-type copper deposits where
there is a transition to higher grade mineralization.
This is reflected in this example by an increase in pyrite, chalcopyrite, bornite (Figure 7.19),
as well as disseminated and vein or veinlet (probably hypogene) chalcocite and covellite,
generally resulting from hypogene alteration of pyrite and chalcopyrite respectively, with
copper grades of up to 0.7%.
Associated molybdenite concentrations attain molybdenum grades up to 380ppm Mo and

zinc up to 700ppm Zn or higher. Drill-hole MC-3 shows increase copper, molybdenum and
gold content over 75m, between 240m and 315m down-hole depth, Figure 7.20.
Figure 7.19 - Dacític porphyry core (Hole MC-4) with some potassic alteration showing secondary biotite
derived from alteration of hornblende.
Figure 7.20 - HQ diamond core sample (Hole MC-4) showing pseudo-breccia of recrystallized dacitic
porphyry with later metallic mineralization especially chalcopyrite and disseminated pyrite, with some
magnetite and less intense phyllic and potassic alteration

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8.0 OBJECTIVES & METHODOLOGY

8.1 Objectives
Using information provided by Entropy Resources SA, field observations and review by
GeoScanEx of the Copper Hill drill core, the objective of this commission is to provide an
opinion on the geological understandings obtained from exploration of the Copper Hill
Prospect to date and its mineralization potential and to make recommendations on the
direction and scope of future exploration to advance the understanding of that potential.
8.2 Specific Objectives

Specific objectives to be fulfilled are:
• Identify and characterize the different lithologies in the study area.
• Estimate the spatial and temporal relationships of the different rock units, stages
of formation, and their relationships with mineralization.
• Distinguish in the area the different mineralization processes, alteration,

lithologies, the genetic conditions of each mineral association and the
mineralization-controlling tectonics and structures, and to determine a probable
model for deposit formation.
• Set forth the economic potential of Copper Hill as well as adjacent areas.
8.3 Methodology
This study was undertaken in four principal stages, as follow:
• Study and review all information supplied by ERSA, consisting of geological,

geochemical and geophysical surveys and studies, chemical and microscopic
analysis.
• Visits the Copper Hill Prospect and surrounding area with ERSA geologists.
• Undertake a field review and analysis of the different phases of geological and
alteration mapping, including two geological traverses consisting of one 1,500m
north south traverse and one 1,000m east-west traverse, and an examination of
the 2,380m of core drilled by ERSA in five diamond holes.

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• Undertake rock-chip sampling for initial chemical analysis of Total Cu, Soluble
Cu, Mo and Au to provide an indication of the possibility of copper oxide
mineralization beneath the leached zone, as well as for the potential for a
significant gold credit within the leach.
9.0 EXPLORATION PROGRAMS

9.1 Geophysics
9.1.1 Ground Magnetics
A review of the ground magnetics surveys performed in 2011 on the prospect area; reinforce
the idea that in Copper Hill can host a large porphyry copper ore body by not displaying a
significant magnetic high. The magnetic highs are limited the south west area of Copper Hill
aligned in NNW-SSE trend. Such magnetic highs are characteristically associated with the
margins of mineralized porphyries in the region.
Figure 9.1 – Copper Hill ground magnetometry, reduced to pole, showing main faults and drill-hole
locations.

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9.1.2 Induced Polarisation and Resistivity

Generally with the application of this type of geophysics survey to the identification of copper
porphyry-type deposits, zones with higher potential for copper porphyries occur where there
is coincidence between zones of high chargeability and low resistivity.
In the case of Copper Hill, the mineralized zone identified to date appears to correlate only
with a rather broad distribution of high chargeability values, Figures 9.2 and 9.3.
Figure 9.2 – Copper Hill IP survey grid lines on Google Earth image with Chargeability section on Line
6460200N where hole MC-5 was drilled, showing the anomaly to be relatively closer to the west side.
Figure 9.3 - IP Copper Hill IP survey grid lines on Google Earth image with Resistivity section on Line
6460200N

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9.2 Geochemistry
Prior to the recent sampling by GeoScanEx (shown in the following graphics as ITTL), at
least three major programs of geochemical sampling and analysis have been undertaken in
the exploration life of the project, all of which confirm copper and molybdenum anomalism.
Three thematic maps have been prepared by GeoScanEx based on statistical analysis of the
results of these combined programs, as follow:
The main surface copper anomalism is shown in Figure 9.4, mainly in the western sector of
the project. A further 50m grid geochemical sampling that covers the northern and eastern
sector was under way at the time of writing this report. The results are likely to increase the
anomalous zone at Copper Hill.
The surface distribution of molybdenum anomalism, Figure 9.5, coincides with that of copper
but is also reflected in the eastern sector, suggesting the possibility of finding additional
copper mineralization east of the zone already drilled.
The surface distribution of gold anomalism, Figure 9.6, coincides with that of both copper
and molybdenum, as well as in the southwest of the Copper Hill area. The distribution
appears to reflect a number of recognized structural controls.
Figure 9.4 – Copper Hill – thematic geochemical plot on Google Earth image showing surface copper
distribution

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Figure 9.5 – Copper Hill – thematic geochemical plot on Google Earth image showing surface
molybdenum distribution
Figure 9.6 – Copper Hill – thematic geochemical plot on Google Earth image showing surface gold
distribution

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10.0 SAMPLING METHODS AND DATA VERIFICATION

10.1 Sample Preparation, Analysis and Security
10.1.1 Sampling and Cutting
The majority of the diamond core drilled by ERSA is HQ diameter, particularly in the last three
holes drilled (Phase 2). The previous two Phase 1 holes stepped down from HQ through
NTW to BTW.
On retrieval from the core barrel, core samples were placed in wooden core trays of
appropriate size to suit the core diameter in use, properly marked off with wooden block
spacers to indicate cut intervals and to assist core recovery calculations.
The core trays were sealed off on the drill-site with wooden (“masonite”) lids wired down at
each end, and were then transported by light vehicle to the core-processing warehouse
which ERSA retains in Barreal township.
In the Barreal core-shed, the core was set up in long runs on suitable inclined logging racks,
logged and marked off by the geologist into 1m intervals for sample cutting. Core was then
sawn in half longitudinally, with one half packed in calico bags with sample number tags and
again in plastic and bulk poly-weave outer bags for shipping for analysis by recognized and
appropriately certified laboratories in the cities of San Juan or Mendoza.
The remaining half-core is retained for reference and future study. Immediate post-drilling
work involved detailed geological logging with emphasis on lithology, hydrothermal and
supergene alteration, mineralization and most significant structures. Once analytical data
was returned, core-logs were updated with copper, molybdenum, gold and equivalent copper
grades
In the case of geochemical samples, rock-chip samples were taken in various rocks outcrops
or fresh-cut access track embankments or bulldozer costeans. Generally, samples weighing
approximately 5kg each were taken every 2m and were transported by light vehicle in
appropriately referenced calico and plastic bags to laboratories for analysis.
10.1.2 Storage
Once logging was completed, core trays were re-sealed, appropriately marked-up and
stacked in numerical sequence on pallets for storage in a lockable, weatherproof, roofed
warehouse to protect core from damage and vandalism. Separate record sheets enable

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half-cores and their requisite trays to be to be easily located in case of future reference
needs.
At present, the coarse rejects and pulps are in secured undercover storage in the facilities of
the two laboratories Alex Stewart Assayers in Mendoza and SGS in San Juan.
It is envisaged that ERSA will store all coarse rejects and pulps at its own facilities in San
Juan during 2012.
10.1.3 Laboratories and Analysis

Laboratories used by ERSA for both the core and geochemical analysis are as follows:
ALEX STEWART ASSAYERS, Argentina S.A. (“ASA”)

SGS, Argentina (“SGS”)
For Phase 1 drilling in April-May 2011 (drill holes MC-1 and MC-3), sample preparation and
analysis were performed by SGS in their sample preparation facility in San Juan city.
Following sample preparation all pulps were sent to SGS’s main facility in Lima, Peru.
For Phase 2 drilling in September-December (drill holes MC-2-4-5), sample preparation and
analysis were performed by SGS (MC-4) and ASA (MC-2 and MC-5) in their sample
preparation facility in Mendoza city. Following sample preparation all pulps were assayed at
the same facility by the mass spectrometer ICP technique.
Both laboratories are registered to ISO9001:2000 for the "provision of assay and
geochemical analytical services". Both have their own internal QA/QC program and an
excellent reputation.
10.1.4 Analytical Procedures

In both cases the samples submitted for analysis were routinely analysed by ASA and SGS
using multi-acid digestion geochemical procedure and ICP-MA-39. For gold, Fire Assay to
Au-30 (ppb) was used.
10.2 Data Verification

Since drilling started, comparison of check assays against originals and blank monitoring
occurs immediately after assays are received from the commercial labs. Certified Standards

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confidence levels for check sample vs. original and blank sample assay variability are
confirmed before news releases containing drill-hole assay data are released to the public.
10.2.1 Sample QA/QC

For the first diamond drilling campaign (Phase 1) in April-May 2011, no standards were
inserted in the sample submissions for drill holes MC-1 and MC-3, although blanks were
inserted at a rate of 1 blank for every twenty samples.
A full quality control program at Cerro Blanco was implemented by ERSA in September 2011
for all of Phase 2 drilling. This included regular insertion of standards, blanks and duplicates
into the sample stream.
The standards and blank samples are submitted with a correlative description. The
standards are identified as pulps in a sequence of core and coarse rock chips. After normal
sample preparation, the pulps are “blind’ when they arrive at the analysing station at the
laboratory.
The blanks are considered “blind” since coarse rock chip are similar to core samples
In both cases hard copy sample submission sheets are prepared and submitted with each
shipment.
Standards
ERSA purchased three Certified Reference Standards from Goestats Pty Ltd in Perth,
Western Australia and transported directly to ERSA office in San Juan, Argentina, by the
company secretary.
Standard GLG908-4 is for low level gold analyses; GBM910-16 is for ore grade base metal
analyses and GMO-10 for Mo-Cu ore. The recommended value and the “Between Lab” Two
Standard Deviations for each standard is shown in Table 10.1

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Table 10.1 Certified Standards

Au ppb Mean & Cu ppm Mean & Mo ppm Mean &
Certified Standard range range range
GLG908-4 65.88 +/-
+/ 8.28
GBM910-16 10,069 +/- 735
GMO-10 69.8 +/- 17.6 953 +/-
+/ 250
These standards have been inserted at an overall frequency of one commercial standard
every 34 samples for total 42 standards in the 1,430 samples (Table 10.2)
)
Table 10.2 Frequency of Certified Standards

HOLE-ID Samples GBM910-16
GBM910 GLG908-4 GMO-10
MC-5 588 6 5 6
MC-4 303 4 1 4
MC-2 539 5 6 5
1430 15 12 15

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The recommended range for standards should be the Mean Certified value plus or minus
two standard deviations. Although fewer than 5% of the results from the submitted standard
material should fall outside these limits, from the graphics above, results received to date
indicate that the laboratory results are acceptable for Mo, while there is a case for reviewing
the procedures of the laboratories when reporting Au and Cu.
In the case of the later results for ore grade copper standard GBM910-16, the results show a
bias to underestimate the copper assays in eight out of fourteen assays.
In the case of Au, one result reports above the upper limit and two below the lower limit, for
standard GLG908-4, while three results were discarded because the reports were sent in
ppm and could not be compared with the sensitivity of the standard in ppb.
For the initial Phases 1 & 2 of drilling, no “round-robin” testing of the Goestats Pty Ltd
standards was carried, however based on the “round-robin” test certificates accompanying
the standards and the availability of certified analyses for all the standards by other
laboratories, it is concluded that the Certified Control Values were prepared according to
industry standards and that these standards can be used for QA/QC purposes
Blanks
Blank material was selected from unaltered and visibly un-mineralized volcanic tuff outcrops
located north of the town of Barreal. Five kilogram samples of coarse rock chips were
inserted at periodic intervals, and following mineralized or potential higher grade mineralized
intervals.
Blanks were inserted for all 5 drill-holes since drilling started in April 2011. To date results
have been received for 2,237 samples from holes MC-1 to MC-5 with 86 blanks or one blank
every 26 samples. No “round-robin” testing of the blank material was carried out, although a
long term quality control program was performed on these volcanic tuffs by companies
mining these rocks. The historic average of the blanks is 20 ppm Cu, 2 ppm Mo and <2 ppb
Au.
Analyses of the 86 blanks returned average grades of 19 ppm Cu, 2.4 ppm Mo and <2 ppb
Au. Since none of these samples exhibited elevated Cu, Mo and Au values, it is concluded
that the results are acceptable for monitoring of contamination in sample preparation for this
stage of drilling.

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Quarter core duplicates

Seventy duplicate samples, or one every 32nd sample from drill holes MC-2, MC-4 and MC-
5, were quartered by diamond saw and the duplicate samples inserted into the sample batch
analysed at ASA for Au and other elements by ICP-39.
Scatter plots of the correlation between original and duplicates are illustrated in Figures 10.5
to 10-7. The data exhibits a scattered distribution especially for Mo, which is not considered
unusual in core duplicates for porphyry Cu-Mo mineralization.
350
300
Core Duplicates -Au ppb
250
R² = 0.9095
200
150
100
50
0
0 50 100 150 200 250 300
Figure 10-5 Scatter plot Original vs. Duplicate Au ppb

5000
Core Duplicates -Cu ppm
4000
R² = 0.9021
3000
2000
1000
0
0 1000 2000 3000 4000 5000 6000
Figure 10-5 Scatter plot Original vs. Duplicate Cu ppm
200.0
Core Duplicates Mo ppm
150.0 R² = 0.9145
100.0
50.0
0.0
-50.0 0.0 50.0 100.0 150.0 200.0
Figure 10-5 Scatter plot Original vs. Duplicate Mo ppm
Pulps duplicates
No second laboratory pulp checks had been carried out.

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11.0 CONCLUSIONS
In general, the known world porphyry copper and molybdenum with gold deposits are
characterized by a low grade primary Cu and Mo mineralization, with copper grades not
exceeding 0.5% Cu.
Exceptions are the few porphyry deposits with copper grades up to 1% Cu, such as in the
world-class Chilean deposits of Chuquicamata, Cerro Colorado and Zaldivar, currently
subject to very large-scale exploitation.
It is noteworthy that over 50% of global copper production comes from such large tonnage
but relatively low grade deposits, as the higher copper grades in copper in these deposits lie
in the zones of supergene enrichment which are now not so easily located.
Given the scarcity of large-scale high-grade deposits, breakthrough developments in the

field of metallurgical treatment processing of low grade ores are currently under way in Chile.
This new phase of development commenced with Barrick’s Cerro Casale mine, a deposit in
the Andean Cordillera east of Copiapo, with Resources in the Measured and Indicated
category of 217Mt at 0.18% Cu and 0.39g/t Au and Proven and Probable mining reserves of
1.2Bt at 0.22% Cu and 0.59 g/t Au.
Another example is the Antucoya deposit, located north of the city of Antofagasta and
currently in the feasibility stage, which has large tonnages of low grade copper
mineralization where the average copper grade does not exceed 0.35% Cu.
Following our detailed review of geological, alteration, mineralization, structural and drilling
information to date, including a field trip to the project and review of core drilled in 2011
(diamond drill-holes MC-1 to MC-5 with 2,380m drilled), it is our opinion that the Copper Hill
prospect within the Cerro Blanco Project, corresponds to a typical porphyry copper and
molybdenum deposit with significant gold anomalies, located on the fringe of a structural belt
well-endowed with porphyry copper-gold deposits.
The Cerro Blanco-Copper Hill discovery is, to date, the most easterly known within the belt
of porphyry copper deposits in the Andean Cordillera of San Juan. The Copper Hill
mineralised porphyry system has a diameter of 1.2km in surface outcrop, and has potential
for mineralization to depths exceeding 1,000 m.

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The geological characterisation of the deposit and its location in a well-defined belt of
continental porphyry copper deposits, makes it possible to anticipate potential for a large
volume of mineralization, which can be corroborated from the results of geophysics studies
of induced polarization, especially the high chargeability.
The Copper Hill Project is located near known porphyry copper deposits in the province of
San Juan and bordering Chile such as Xstrata’s El Pachon and Antofagasta Minerals Los
Pelambres, McEwen Mining’s Los Azules, Aminsa’s Calderon-Calderoncito and Stillwater’s
Altar, among others that are currently in various stages ranging from pre-feasibility
assessment, feasibility and budget approved for exploitation.
From its characteristics and origins which it shares with other major deposits, such as its
evolution from and relationships with intrusive Tertiary dacitic porphyry in tuffs, dacitic
intrusions and andesitic volcanic rocks of the Permo-Triassic age, Copper Hill has the
potential to attain the status of world class deposit. At least two generations of modern tuffs
cover the older rocks and alteration zones.
The zonation of hydrothermal alteration and the primary mineralization correspond very
precisely with the model of hypogene and hydrothermal alteration and mineralization
distribution by Lowell and Gilbert (1970), while the distribution of supergene mineralization
fits the Giggenback (1997) model.
The results of the geochemical distribution of copper, molybdenum and gold grades at
surface enable significant inferences to be made with respect to the potential to discover
other areas of greater prospectivity and mineralized volume potential.
The continuity of the mineralised zones with copper oxides with some supergene enrichment
observed at the upper portion of drill holes MC-2 and MC4, especially on the eastern sector
of Copper Hill, as well as the continuity of the Cu-Mo-Au mineralization developed at the
interface of the phyllic and potassic alterations (intersected at 222m by drill hole MC-4 with a
thickness of> 120m and maximum grades of 1% Cu, 0.42 g/t Au and 470g/t Mo) represent a
highly valuable exploration potential for the project.
The investigation of other elements such as the association of rhenium with molybdenum,
silver with gold and other metal associations, will further enhance the potential value of any

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mineralization located; although these are usually relatively small credits recovered from the
principal ore recovery process, they have the potential to represent an often unexpected but
welcome additional revenue stream.
From the studies undertaken, only a minor portion of the main mineralized body is known,
principally on the western edge of Copper Hill, while the potential of the eastern and northern
parts of Copper Hill inferred from alteration and geochemistry remain untested by work to
date.
12.0 RECOMMENDATIONS
To advance understanding of the Copper Hill porphyry copper-molybdenum-gold
mineralization and to enable estimation of the resource potential of the zone, we
recommend:
• Undertake additional geological mapping with emphasis on factors such as:

a. the distribution of hydrothermal and supergene alteration.
b. more detailed characterization of structural systems already identified, to
understand the relative movements of blocks of mineralized zones and
country rock.
• Undertake a study on the surface limonite distribution and its various origins
to assist understanding of the distribution of potentially economic minerals.
• Prepare updated maps of surface molybdenum distribution to locate possible

areas of copper and molybdenum concentration. The common affinity
between molybdenum and the commercially valuable element rhenium
indicates that analysis should be undertaken for rhenium in existing samples
which report higher molybdenum content.
• Schedule a campaign of eight short, vertical and inclined drill-holes

penetrating below the modern non-mineralized tuffs, to test the leached cap
and better identify its characteristics as well as testing for:
a. potentially-economic near-surface supergene-enriched copper oxides and
sulphides and
b. gold mineralization.

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• Design and schedule a campaign of inclined diamond drill-holes arrayed

along the eastern margins of the known “western” mineralized zone, to test
for potentially economic inferred bodies in as yet untested “central” and
“eastern” zones.
• If the result of this exploratory work is satisfactory, the next stage is drilling on
a wide spaced grid and then, according to results, to a finer grid space to
reveal more features of the ore body under study. This would lead to the
estimation of a mineral resource, which cannot be estimated yet, followed by
metallurgical tests designed to determine the quality of the mineralization.
Further exploration drilling of the more attractive adjacent areas is also
recommended.
Thirteen preliminary drill-holes are suggested (Table 12.1), which could be supplemented
with other holes subject to results from the initial program. Their proposed locations are
indicated graphically in following Figure 12.1.

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Table 12.1 – Recommended Future Drill-hole Locations

HOLE-ID RATIONALE E N Azimut Dip EOH
MC-6 Ox/Ore Shell 2446230 6460360 60 -60 500
MC-7 Ox/Ore Shell 2446280 6460700 210 -60 500
MC-8 Ox/Ore Shell 2446520 6460570 225 -60 500
MC-9 Ox/Ore Shell 2446610 6460330 225 -60 500
MC-10 Ox/Ore Shell 2446490 6460020 280 -60 500
MC-11 Supergene 2446150 6460570 120 -70 200
MC-12 Supergene 2446260 6460260 120 -70 200
MC-13 Supergene 2446080 6460310 90 -70 200
MC-14 Supergene 2446620 6460170 270 -60 250
MC-15 Supergene 2446120 6460410 135 -70 200
MC-16 Supergene 2446300 6459910 330 -70 200
MC-17 Supergene 2446170 6460120 90 -70 200
MC-18 Supergene 2446500 6460120 225 -60 200
TOTAL 4,150
Figure 12.1 - Copper Hill - Recommended drill-hole locations to test the Central and Eastern mineralized
zones.
It is believed that the results of the foregoing program will best enable the company to
determine the existence of potentially economic mineralization, from which new work could
then be scheduled to further evaluate this potential, or otherwise.

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13.0 REFERENCES
Barrionuevo. Luis A. and Reverberi Oscar V., ‘Final Report, Leoncito Zone, Reserve
Area N° 49, San Juan Province, Republic Of Argentina’ Andean Plan, Government of
Argentina, Fabricaciones Militares, United Nations Development Program, May 1968.
Figueroa, José Guillermo, ‘Cerro Blanco Project, Preliminary Geological Exploration

Assessment’, August 2011..
Flores, Martin F., ‘Geological Mapping of Copper Hill and Logging of five new
diamond drill holes, with a total of 2,300m drilled’, November 2011.
Flores, Martin F., ‘Cerro Blanco Project, Preliminary Geological Exploration

Assessment for the July-December season’, December 2011.
Entropy Resources S.A “Reserve area No 49 El Leoncito-Los Gemelos-Cerro

Fortuna, exploration area for mineral prospection of copper, molybdenum in the
southwest of San Juan province – Argentina”, August 2008.
Giggenbach, W.E. 1997, The origin and evolution of fluids in magmatic-hydrothermal

systems
Lowell, JD., and Guilbert, J.M. 1970, Lateral and vertical alteration-mineralization
zoning in porphyry copper ore deposits. Ec. Geology, v. 65 p 373-408, in Maksaev,
Victor, 2004
Sanchez, Armando, “Environmental Impact Assessment of the Cerro Blanco project:

Exploration Phase” March 2011

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14.0 DATE & SIGNATURE PAGE
The effective date of this Technical Report, entitled “COPPER HILL PROJECT, SAN
JUAN PROVINCE, ARGENTINA”, is February 27, 2012
_____________________________
Orlando Alvarez
GeoScanEx S.A.

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15.0 CERTIFICATE OF AUTHOR
As author of this report entitled entitled “Copper Hill Project, San Juan Province, Argentina -
Technical Report” and dated 27 February 2012, I, Orlando Alvarez, do hereby certify that:
• I graduated as M.S. Geologist from the Universidad de Chile in 1972.
• I am a professional geoscientist registered in the Chilean Association of Professional

Geologists. I am a Fellow Member of the Geological Chilean Society and honorary
member of the Institute of Mining Engineers.
• I have worked in the mining industry as geologist for 45 years on a variety of mine
production and exploration projects with Junior and Senior companies and as a
Consultant. I have held senior management roles.
• I have visited the property on January 3 to 10 January, 2012.
• I am responsible for the preparation of sections 2.0, 7.0, 8.0, 9.0, 11.0 and 12.0 of
this report
• I am independent of the issuer applying all of the tests in section 1.4 of National
Instrument 43 101 and 43 101 F1 and the Technical Report has been prepared in
compliance with that instrument and form.
• I have had no prior involvement with the property that is the subject of the Technical
Report.
• As of the date of this certificate, to the best of my knowledge, information and belief,
the technical report contains all scientific and technical information that is required to
be disclosed to make the technical report not misleading.
• I consent to the filing of the Technical Report with any stock exchange and other
regulatory authority and any publication by them, including electronic publication in
the public company files on their websites accessible by the public, of the Technical
Report.
Dated this 27th day of February, 2012.
Signed by Orlando Alvarez, Geologist

GeoScanEx S.A.

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Cerro-Blanco-43-101-Estructura Anastomasada Argentina

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COPPER HILL PROJECT, SAN JUAN PROVINCE, ARGENTINA

NI 43-101 TECHNICAL REPORT

February 27, 2012

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8.1 Objectives ............................................................................................................. 53

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LIST OF FIGURES AND TABLES

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GeoScanEx was engaged in 2012 by Argentinean-based mineral explorer Entropy Resources

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The Prospect lies within one of a number of well-recognized north-northwest-trending

• Copper porphyry-type mineralization has developed as a result of intrusion of Tertiary

• Deep primary mineralization is basically abundant pyrite and chalcopyrite.

• A copper-gold mineralized leached cap has developed at surface with an average

GeoScanEx S.A. 8 Page

• Phyllic quartz-sericite alteration is the most abundant alteration process and is of

• Kaolin, combined with alunite in places, might represent hydrothermal alteration of

• The hydrothermal alteration and mineralization system of Copper Hill is influenced by

GeoScanEx S.A. 9 Page

• Geostatistical analysis of the results of three separate geochemical surveys shows

• Principal molybdenum anomalism coincides with that of copper, although other

• Given the generally strong copper-molybdenum association, anomalous

• Undertake additional geological and structural mapping, with emphasis on

• Undertake a campaign of 2,500m of vertical and east-west inclined diamond drill-

• Develop an understanding of the occurrence of anomalous molybdenum with respect

• Undertake a trial program of analysis for rhenium in geochemical samples exhibiting

GeoScanEx S.A. 10 Page

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2.0 RELIANCE ON OTHER EXPERTS

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GeoScanEx S.A. 13 Page

3.2 Project Access

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3.3 Country Economic and Geological Setting

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3.4 Local resources and Infrastructure

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Granted by Res. Approved by Res.

546.702-B- Entropy Exploitation In due process for No pending No pending

546.703-B- Bastías, Jorge Exploitation In due process for No pending No pending

Granted by Res. Approved by Res.

1124.030- Entropy Exploration No pending No pending In good standing

GeoScanEx S.A. 17 Page

Figure 4.1 - Cerro Blanco Project Tenement Plan.

4.2 Current Ownership

The directors of ERSA are Eduardo Videla and Jorge Bastías.

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4.3 Tenement Status & Environmental Impact Assessments

With respect to lodgement of statutory Environmental Impact Assessments (EIA’s), an (EIA)

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The Environmental Impact Assessment (File N° 100.0436-E-10) was approved on by the

• water use authorization permit from the local authority; and

4.5 Property and Mineral Tenure in Argentina

There are three principal types of mineral concessions in Argentina:

GeoScanEx S.A. 21 Page

“Cateos” – are exploration concessions

4.5.1 Exploration Concessions (Cateos)

4.5.2 Mining Concessions: