CAscabel PEA 2019

SolGold Plc and Cornerstone Capital Resources Inc
Cascabel Project, Northern Ecuador

Alpala Copper-Gold-Silver Deposit
NI 43-101 Technical Report on

Preliminary Economic Assessment
Document No. 653060-0000-BA00-RPT-0003 Effective Date: 25-Mar-2019

Original Date: 7-May-2019
Amended Date: 6-Nov-2019
Cascabel Project, Northern Ecuador, Alpala Copper-Gold-Silver Deposit
NI 43-101 Technical Report on Preliminary Economic Assessment
Certificates/Disclaimer
653060-0000-BA00-RPT-0003rK
653060-0000-BA00-RPT-0003rK
CERTIFICATE OF QUALIFIED PERSON
653060-0000-BA00-RPT-0003rK
653060-0000-BA00-RPT-0003rK
653060-0000-BA00-RPT-0003rK
Important Notice
This report was prepared as a National Instrument 43-101 Technical Report for SolGold Plc (SolGold) by Amec
Foster Wheeler Australia Pty Ltd (trading as Wood) (Wood), SRK Consulting (UK) Ltd, SRK Exploration Services
Ltd, Mining Plus Pty Ltd and Knight Piésold Ltd (Canada) collectively the Report Authors. The quality of
information, conclusions, and estimates contained herein is consistent with the level of effort involved in the
Report Authors’ services, based on i) information available at the time of preparation, ii) data supplied by
outside sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This report is
intended for use by SolGold subject to the respective terms and conditions of its contracts with the individual
Report Authors. Except for the purposes legislated under Canadian provincial securities law, any other uses
of this report by any third party is at that party’s sole risk.
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1. Summary ................................................................................................................... 30
1.1 Background ................................................................................................................................ 30
1.2 Introduction and Terms of Reference..................................................................................... 30
1.3 Reliance on Other Experts ........................................................................................................ 31
1.4 Property Description and Location ......................................................................................... 31
1.5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ........................ 31
1.6 History ......................................................................................................................................... 32
1.7 Geological Setting and Mineralisation ................................................................................... 33
1.8 Deposit Types ............................................................................................................................. 33
1.9 Exploration ................................................................................................................................. 34
1.10 Drilling ........................................................................................................................................ 35
1.10.1 Introduction................................................................................................................................................................................ 35
1.10.2 Phase 1 Drilling: Exploration and Reconnaissance Drilling ..................................................................................... 35
1.10.3 Phase 2 Drilling: Maiden Resource Drilling (MRE#1) ................................................................................................. 35
1.10.4 Phase 3 Drilling: Resource Update Drilling (MRE#2).................................................................................................. 35
1.11 Sample Preparation, Analysis and Security ........................................................................... 35

1.12 Data Verification ........................................................................................................................ 36
1.13 Mineral Processing and Metallurgical Testing ...................................................................... 36
1.14 Mineral Resource Estimates ..................................................................................................... 41
1.15 Mineral Reserve Estimates ....................................................................................................... 43
1.16 Mining Methods ........................................................................................................................ 43
1.17 Recovery Methods ..................................................................................................................... 44
1.18 Project Infrastructure ................................................................................................................ 47
1.19 Market Studies and Contracts ................................................................................................. 47
1.20 Environmental Studies, Permitting and Social or Community Impact .............................. 47
1.21 Capital and Operating Costs .................................................................................................... 48
1.22 Economic Analysis ..................................................................................................................... 50
1.23 Adjacent Properties ................................................................................................................... 51
1.24 Other Relevant Data and Information .................................................................................... 51
1.24.1 Project Execution ...................................................................................................................................................................... 51
1.25 Interpretation and Conclusions ............................................................................................... 52

1.25.1 Risk and Opportunity Management ................................................................................................................................. 52
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1.26 Recommendations..................................................................................................................... 54
2. Introduction .............................................................................................................. 55
2.1 Terms of Reference ................................................................................................................... 55
2.2 Qualified Persons ....................................................................................................................... 55
2.3 Contributors to this Report ...................................................................................................... 55
2.4 Site Visits and Scope of Personal Inspections ....................................................................... 56
2.5 Effective Date ............................................................................................................................. 57
2.6 Information Sources and References ...................................................................................... 57
3. Reliance on Other Experts ....................................................................................... 59

3.1 Market Studies amd Eonomic Analysis .................................................................................. 59
4. Property Description and Location ........................................................................ 60

4.1 Summary ..................................................................................................................................... 60
4.2 Location ...................................................................................................................................... 60
4.3 Mineral Tenure ........................................................................................................................... 61
4.4 Underlying Agreements............................................................................................................ 64
4.5 Licences and Authorisations .................................................................................................... 64
4.6 Environmental Considerations................................................................................................. 64
4.7 Mineral Rights in Ecuador ........................................................................................................ 65
4.8 Comments on Section 4 ............................................................................................................ 67
5. Accessibility, Climate, Local Resources, Infrastructure and Physiography ....... 68

5.1 Summary ..................................................................................................................................... 68
5.2 Accessibility ................................................................................................................................ 68
5.3 Local Resources and Infrastructure ......................................................................................... 70
5.4 Climate ........................................................................................................................................ 72
5.5 Physiography ............................................................................................................................. 72
5.6 Location of Mine Facilities........................................................................................................ 73
5.7 Comments on Section 5 ............................................................................................................ 73
6. History ....................................................................................................................... 74
6.1 Summary ..................................................................................................................................... 74
6.2 Introduction ............................................................................................................................... 74
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6.3 Noroccidente Project (1980-1984) .......................................................................................... 76

6.4 Belgian Cooperation Project (1984-1985) ............................................................................. 76
6.5 Western Cordillera I (1986) ...................................................................................................... 76
6.6 Lumina Gold Corp (Formally Odin Mining and Exploration Ltd). (1988-1991) ................ 77
6.7 Japan International Cooperation Agency (1991-1997) ........................................................ 77
6.8 Western Cordillera II (1998-2000) ........................................................................................... 77
6.9 Santa Barbara Copper and Gold SA (2008-2011).................................................................. 77
6.10 Cornerstone Capital Resource (2011-2012) ........................................................................... 78
7. Geological Setting and Mineralisation .................................................................. 79

7.1 Summary ..................................................................................................................................... 79
7.2 Regional Geology ...................................................................................................................... 80
7.3 Local Geology – Cascabel Licence............................................................................................ 83
7.4 Alpala Deposit Geology ............................................................................................................ 85
7.4.1 Introduction................................................................................................................................................................................ 85
7.4.2 Lithologies and Faults ............................................................................................................................................................ 85
7.4.3 Porphyry-Related Vein Stages ............................................................................................................................................ 87
7.4.4 Mineralisation ............................................................................................................................................................................ 89
7.4.5 Petrographic Studies .............................................................................................................................................................. 90
7.4.6 Hydrothermal Alteration ....................................................................................................................................................... 91
7.4.7 Intrusive Genetic Model ........................................................................................................................................................ 93
7.4.8 Structural Geology ................................................................................................................................................................... 94
8. Deposit Types ........................................................................................................... 96

8.1 Summary ..................................................................................................................................... 96
8.2 Porphyry Copper Systems ........................................................................................................ 96
9. Exploration .............................................................................................................. 104

9.1 Summary ................................................................................................................................... 104
9.2 Introduction ............................................................................................................................. 105
9.3 Grids and Surveys .................................................................................................................... 105
9.3.1 Ground Control Points ........................................................................................................................................................ 106
9.3.2 LiDAR Surveys ......................................................................................................................................................................... 106
9.3.3 Database Re-projection ...................................................................................................................................................... 107
9.4 Geological Mapping ................................................................................................................ 109

9.5 Geochemical Sampling ........................................................................................................... 109
9.5.1 Soil Orientation Survey ....................................................................................................................................................... 109
9.5.2 Soil Geochemical Sampling............................................................................................................................................... 109
9.5.3 Rock Chip Sampling ............................................................................................................................................................. 110
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9.6 Geophysics ................................................................................................................................ 110

9.6.1 Licence-wide Magnetics ..................................................................................................................................................... 110
9.6.2 Orion – IP / 3DMT Survey (2014) .................................................................................................................................... 111
9.6.3 Ground Magnetics Survey and Spartan – IP / 3DMT survey (2017).................................................................. 111
9.6.4 Rock Saw Channel Sampling ............................................................................................................................................ 112
9.7 Petrology, Mineralogy, and Research Studies ..................................................................... 113

9.7.1 Petrographic Studies ........................................................................................................................................................... 113
9.7.2 Mineralogy ............................................................................................................................................................................... 114
10. Drilling ..................................................................................................................... 116

10.1 Summary ................................................................................................................................... 116
10.2 Introduction ............................................................................................................................. 116
10.2.1 Phase 1 Drilling: Exploration and Reconnaissance Drilling .................................................................................. 116
10.2.2 Phase 2 Drilling: Maiden Resource Drilling (MRE#1) .............................................................................................. 117
10.2.3 Phase 3 Drilling: Resource Update Drilling (MRE#2)............................................................................................... 117
10.3 Collar Surveys ........................................................................................................................... 118

10.4 Downhole Surveys ................................................................................................................... 119
10.5 Diamond Drilling Procedures ................................................................................................ 119
10.6 Core Recovery .......................................................................................................................... 121
10.7 Core Storage............................................................................................................................. 121
10.8 SRK Comments......................................................................................................................... 122
11. Sample Preparation, Analyses and Security ........................................................ 123

11.1 Summary ................................................................................................................................... 123
11.2 Introduction ............................................................................................................................. 123
11.3 Sampling Methods .................................................................................................................. 123
11.3.1 Core Sample Selection and Mark-up ............................................................................................................................ 123
11.3.2 Core Sawing ............................................................................................................................................................................ 123
11.3.3 Sample Collection ................................................................................................................................................................. 124
11.3.4 Magnetic Susceptibility Analysis ..................................................................................................................................... 124
11.3.5 Channel Sampling ................................................................................................................................................................. 125
11.4 Metallurgical Sampling........................................................................................................... 125

11.5 Density Determinations .......................................................................................................... 126
11.6 Analytical and Test Laboratories ........................................................................................... 126
11.7 Sample Preparation and Analysis .......................................................................................... 127
11.7.1 ACME Laboratory .................................................................................................................................................................. 127
11.7.2 ALS Laboratories.................................................................................................................................................................... 128
11.7.3 Met-Solve Laboratories ...................................................................................................................................................... 128
11.7.4 Bureau Veritas (Peru) ........................................................................................................................................................... 129
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11.8 Databases.................................................................................................................................. 129

11.9 Sample Security ....................................................................................................................... 130
11.10 Sample Storage ........................................................................................................................ 130
11.11 SRK Comments......................................................................................................................... 132
12. Data Verification .................................................................................................... 133

12.1 Summary ................................................................................................................................... 133
12.1.1 Certified Reference Materials ........................................................................................................................................... 133
12.2 Verifications by SolGold ......................................................................................................... 133

12.2.1 Sample Quality Assurance and Quality Control Programmes............................................................................. 137
12.2.2 Certified Reference Materials ........................................................................................................................................... 137
12.2.3 Blanks ......................................................................................................................................................................................... 146
12.2.4 Field Duplicates ...................................................................................................................................................................... 149
12.2.5 Pulp Duplicates ...................................................................................................................................................................... 150
12.2.6 Inter-Laboratory Comparisons......................................................................................................................................... 150
12.3 Verifications by SRK ................................................................................................................ 153

12.3.1 Site Visit – Resource Estimate Studies .......................................................................................................................... 153
12.4 Verifications by Wood ............................................................................................................ 154

12.4.1 Site Visit - PEA ........................................................................................................................................................................ 154
12.5 Verifications by Knight Piésold ............................................................................................. 155

12.5.1 Site Visit .................................................................................................................................................................................... 155
12.6 Verifications by Mining Plus .................................................................................................. 155

12.6.1 Site Visit .................................................................................................................................................................................... 155
12.7 Comments................................................................................................................................. 156

12.7.1 SRK .............................................................................................................................................................................................. 156
12.7.2 Wood ......................................................................................................................................................................................... 156
12.7.3 Knight Piésold......................................................................................................................................................................... 156
12.7.4 Mining Plus .............................................................................................................................................................................. 156
13. Mineral Processing and Metallurgical Testing ................................................... 157

13.1 Summary ................................................................................................................................... 157
13.2 Historical Metallurgical Testwork ......................................................................................... 162
13.3 Historical Mineralogy.............................................................................................................. 162
13.4 Testwork ................................................................................................................................... 163
13.4.1 Introduction............................................................................................................................................................................. 163
13.4.2 Metallurgical Testwork Program ..................................................................................................................................... 163
13.4.3 Sample Selection ................................................................................................................................................................... 164
13.4.4 Head Characterisation ......................................................................................................................................................... 165
13.4.5 Mineralogy ............................................................................................................................................................................... 165
13.4.6 Grinding .................................................................................................................................................................................... 165
13.4.7 Gravity Recoverable Gold .................................................................................................................................................. 166
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13.4.8 Flotation .................................................................................................................................................................................... 166

13.4.9 Leaching .................................................................................................................................................................................... 172
13.4.10 Possible Pyrite Concentrate Production....................................................................................................................... 172
13.4.11 Ore Sorting / Pre-concentration Options .................................................................................................................... 178
13.4.12 Supplementary Testwork ................................................................................................................................................... 178
13.5 Recovery Estimates.................................................................................................................. 178

13.6 Metallurgical Variability ......................................................................................................... 179
13.7 Deleterious Elements .............................................................................................................. 179
13.8 Comments on Section 13........................................................................................................ 179
14. Mineral Resource Estimate .................................................................................... 182

14.1 Summary ................................................................................................................................... 182
14.2 Introduction ............................................................................................................................. 183
14.3 Resource Estimation Procedures ........................................................................................... 184
14.4 Resource Database .................................................................................................................. 184
14.5 3D Lithological and Mineralisation Modelling .................................................................... 185
14.5.1 Lithological Model ................................................................................................................................................................ 185
14.5.2 Mineralisation Model........................................................................................................................................................... 190
14.5.3 Domain Coding ...................................................................................................................................................................... 195
14.6 Statistical Analysis ................................................................................................................... 196

14.6.1 Domain Evaluation ............................................................................................................................................................... 196
14.6.2 Final Estimation Domain Coding .................................................................................................................................... 204
14.6.3 Evaluation of Outliers .......................................................................................................................................................... 208
14.7 Geostatistical Analysis ............................................................................................................ 208

14.8 Block Model and Estimation .................................................................................................. 211
14.8.1 Grade Estimation ................................................................................................................................................................... 211
14.8.2 Density Estimation ................................................................................................................................................................ 215
14.9 Model Validation and Sensitivity .......................................................................................... 216

14.9.1 Visual Validation .................................................................................................................................................................... 216
14.9.2 Sectional Validation ............................................................................................................................................................. 222
14.9.3 Statistical Validation............................................................................................................................................................. 224
14.9.4 Datamine Check Estimate .................................................................................................................................................. 225
14.10 Mineral Resource Classification ............................................................................................. 227

14.10.1 Indicated Mineral Resources ............................................................................................................................................ 227
14.10.2 Inferred Mineral Resources ............................................................................................................................................... 227
14.10.3 Classification Summary ....................................................................................................................................................... 227
14.10.4 Unclassified Exploration Potential of the Model ...................................................................................................... 231
14.11 Cut-off Grade ........................................................................................................................... 231

14.12 Mineral Resource Statement.................................................................................................. 232
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14.13 Grade Sensitivity Analysis ...................................................................................................... 233

14.14 Comparison to Previous Mineral Resource Estimates ........................................................ 234
14.15 Resource Extension and Exploration Potential ................................................................... 238
14.15.1 Alpala Northwest................................................................................................................................................................... 241
14.15.2 Drilling Gap.............................................................................................................................................................................. 242
14.15.3 Western Limb.......................................................................................................................................................................... 244
14.15.4 Alpala Southeast.................................................................................................................................................................... 245
14.15.5 Other Satellite Deposits ...................................................................................................................................................... 245
15. Mineral Reserve Estimate ...................................................................................... 248
16. Mining Method ....................................................................................................... 249

16.1 Summary ................................................................................................................................... 249
16.2 Geotechnical Considerations.................................................................................................. 249
16.2.1 Geotechnical Database ....................................................................................................................................................... 249
16.2.2 Geotechnical Domains ........................................................................................................................................................ 250
16.2.3 Geotechnical Risks ................................................................................................................................................................ 251
16.3 Hydrology Considerations...................................................................................................... 252

16.3.1 Site Characterisation ............................................................................................................................................................ 252
16.3.2 Surface Water Management Strategies ....................................................................................................................... 254
16.4 Hydrogeological Considerations ........................................................................................... 254

16.4.1 Site Characterisation ............................................................................................................................................................ 254
16.4.2 Block Cave Inflow Components....................................................................................................................................... 255
16.4.3 Conceptual Estimates of Underground Inflow .......................................................................................................... 258
16.4.4 Groundwater Management Strategies ......................................................................................................................... 259
16.5 Design Parameters .................................................................................................................. 259

16.5.1 Geotechnical Parameters ................................................................................................................................................... 259
16.5.2 Geological Parameters ........................................................................................................................................................ 263
16.5.3 Hydrological/Hydrogeological Parameters ................................................................................................................ 263
16.5.4 Dilution and Recovery Parameters ................................................................................................................................. 263
16.5.5 Mining Parameters ............................................................................................................................................................... 266
16.5.6 Economic Parameters .......................................................................................................................................................... 266
16.5.7 Design Method ...................................................................................................................................................................... 268
16.5.8 Design Summary ................................................................................................................................................................... 269
16.6 Production Schedule ............................................................................................................... 270

16.6.1 Mine Production Scenarios ............................................................................................................................................... 270
16.6.2 Pre-production and Production Ramp-up Activity Sequence............................................................................. 271
16.6.3 Production Schedule............................................................................................................................................................ 271
16.7 Mine Design ............................................................................................................................. 281

16.7.1 Footprint Layout .................................................................................................................................................................... 283
16.7.2 Materials Handling Layout ................................................................................................................................................ 284
16.7.3 Ventilation Layout ................................................................................................................................................................. 284
16.7.4 Mining Physicals .................................................................................................................................................................... 284
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16.8 Mining Equipment ................................................................................................................... 285

16.8.1 Mobile Fleet............................................................................................................................................................................. 285
16.8.2 Materials Handling ............................................................................................................................................................... 286
16.8.3 Ventilation ................................................................................................................................................................................ 286
16.8.4 Dewatering .............................................................................................................................................................................. 286
16.9 Manning Levels ........................................................................................................................ 286

16.10 Mine Capital and Operating Costs ........................................................................................ 287
16.10.1 Mine Operating Costs ......................................................................................................................................................... 288
16.10.2 Basis of Estimate .................................................................................................................................................................... 289
16.11 Comments on Section 16 (Including Discussion on Opportunity and Risk) ................... 289
16.11.1 Opportunities.......................................................................................................................................................................... 289
16.11.2 Mining Risks ............................................................................................................................................................................ 290
17. Recovery Method ................................................................................................... 292

17.1 Summary ................................................................................................................................... 292
17.2 Mineral Characterisation ........................................................................................................ 297
17.3 Comminution ........................................................................................................................... 297
17.3.1 Ore Storage and Reclaim ................................................................................................................................................... 297
17.3.2 Grinding Circuit ...................................................................................................................................................................... 297
17.4 Flotation .................................................................................................................................... 298

17.4.1 Rougher Flotation ................................................................................................................................................................. 298
17.4.2 Concentrate Regrind Circuit ............................................................................................................................................. 299
17.4.3 Cleaner and Cleaner Scavenger Flotation ................................................................................................................... 299
17.5 Flotation Concentrate Thickening and Pumping ................................................................ 300

17.6 Concentrate Filtration ............................................................................................................. 300
17.7 Tailing Disposal ........................................................................................................................ 301
17.8 On-Stream Analysis ................................................................................................................. 301
17.9 Reagents and Consumables ................................................................................................... 302
17.9.1 Primary Collector ................................................................................................................................................................... 302
17.9.2 Secondary Collector ............................................................................................................................................................. 302
17.9.3 Frother ....................................................................................................................................................................................... 302
17.9.4 Lime ............................................................................................................................................................................................ 303
17.9.5 Concentrate Flocculant ....................................................................................................................................................... 303
17.9.6 Tailing Flocculant .................................................................................................................................................................. 303
17.9.7 Grinding Media ...................................................................................................................................................................... 303
17.10 Water Services.......................................................................................................................... 304

17.10.1 Raw Water ................................................................................................................................................................................ 304
17.10.2 Process Water ......................................................................................................................................................................... 304
17.11 Air Services ............................................................................................................................... 304

17.11.1 High Pressure Air................................................................................................................................................................... 304
17.11.2 Low Pressure Air .................................................................................................................................................................... 305
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17.12 Process Design Criteria ........................................................................................................... 305

17.12.1 General Processing and Ore Characteristics............................................................................................................... 305
17.12.2 Crushed Ore Stockpile and Reclaim .............................................................................................................................. 306
17.12.3 Grinding Circuit ...................................................................................................................................................................... 308
17.12.4 Copper Flotation and Regrind ......................................................................................................................................... 310
17.12.5 Copper Concentrate Thickening and Filtration ......................................................................................................... 313
17.12.6 Tailing ........................................................................................................................................................................................ 314
17.12.7 Reagents and Process Consumables ............................................................................................................................. 314
17.12.8 Air Services............................................................................................................................................................................... 316
17.12.9 Water Services ........................................................................................................................................................................ 316
17.13 Process Flow Sheet and Mass Balance .................................................................................. 317

17.14 Site Plot Plans .......................................................................................................................... 324
17.15 Design Margins ........................................................................................................................ 328
17.16 Major Equipment Summary ................................................................................................... 328
17.17 Production Summary .............................................................................................................. 329
18. Project Infrastructure............................................................................................. 336

18.1 Summary ................................................................................................................................... 336
18.1.1 Roads and Logistics.............................................................................................................................................................. 336
18.1.2 Concentrate Transport ........................................................................................................................................................ 336
18.1.3 Waste Storage Facilities...................................................................................................................................................... 337
18.1.4 Tailings Storage Facilities ................................................................................................................................................... 337
18.1.5 Surface Facilities .................................................................................................................................................................... 337
18.1.6 Underground Mine Infrastructure Facilities................................................................................................................ 338
18.1.7 Port ............................................................................................................................................................................................. 338
18.1.8 Security Considerations ...................................................................................................................................................... 338
18.1.9 Water Supply System and Water Management ....................................................................................................... 339
18.1.10 Power Supply System .......................................................................................................................................................... 339
18.1.11 Communication, Process Control and Instrumentation System......................................................................... 340
18.1.12 Other Services......................................................................................................................................................................... 340
18.2 Roads and Logistics ................................................................................................................. 340

18.2.1 Assumptions............................................................................................................................................................................ 340
18.2.2 Roads ......................................................................................................................................................................................... 340
18.3 Mill Feed ................................................................................................................................... 341

18.4 Concentrate Transport ............................................................................................................ 342
18.4.1 Concentrate Pipeline............................................................................................................................................................ 342
18.4.2 Conclusions about the Concentrate Pipeline ............................................................................................................. 344
18.5 Waste Storage Facilities .......................................................................................................... 344

18.6 Tailings Storage Facilities ....................................................................................................... 344
18.6.1 Site Selection .......................................................................................................................................................................... 344
18.6.2 Design Considerations ........................................................................................................................................................ 345
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18.6.3 Conceptual Geotechnical Analyses ................................................................................................................................ 346

18.6.4 Rockfill Material for Dams Construction ...................................................................................................................... 347
18.6.5 Water Diversion ..................................................................................................................................................................... 347
18.6.6 Water Reclaim ........................................................................................................................................................................ 347
18.6.7 Closure Considerations ....................................................................................................................................................... 348
18.7 Surface Facilities ...................................................................................................................... 348

18.7.1 Maintenance Facilities ......................................................................................................................................................... 348
18.7.2 Warehouse ............................................................................................................................................................................... 348
18.7.3 Ancilliary Site Building and Facilities ............................................................................................................................. 348
18.7.4 Accomodation Camp ........................................................................................................................................................... 349
18.8 Underground Mine Infrastructure Facilities ........................................................................ 349

18.9 Port ............................................................................................................................................ 350
18.9.1 Port Locations ......................................................................................................................................................................... 350
18.9.2 Project Port Requirements ................................................................................................................................................ 352
18.9.3 Concentrate Receiving and Storage Facilities at the Port ..................................................................................... 355
18.9.4 Concentrate Stacking, Reclaim and Storage .............................................................................................................. 355
18.9.5 Recommended Option ....................................................................................................................................................... 359
18.10 Site Security Considerations .................................................................................................. 359

18.11 Water Supply System and Water Management .................................................................. 360
18.11.1 Assessment of Water Supply Alternatives................................................................................................................... 360
18.11.2 Surface Water ......................................................................................................................................................................... 361
18.11.3 Groundwater ........................................................................................................................................................................... 362
18.11.4 Reclaim Water ........................................................................................................................................................................ 362
18.11.5 Diversions ................................................................................................................................................................................. 363
18.12 Power and Electrical ................................................................................................................ 363

18.12.1 Power Demand....................................................................................................................................................................... 363
18.12.2 Power Supply Options......................................................................................................................................................... 364
18.12.3 Power Supply and Distribution ........................................................................................................................................ 367
18.13 Transport, Storage and Handling of Explosives .................................................................. 374

18.14 Other Services .......................................................................................................................... 375
18.14.1 Fuel ............................................................................................................................................................................................. 375
18.14.2 Waste Treatment ................................................................................................................................................................... 375
18.15 Summary and Comments on Section 18 .............................................................................. 375
19. Marketing Studies and Contracts ......................................................................... 377

19.1 Summary ................................................................................................................................... 377
19.2 Market Studies ......................................................................................................................... 377
19.3 Alpala Concentrate Products and Sales ................................................................................ 377
19.4 Commodity Price Projections ................................................................................................ 378
19.5 Contracts ................................................................................................................................... 380
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20. Environmental Studies, Permitting and Social or Community Impact ............ 381
20.1 Summary ................................................................................................................................... 381
20.2 Project Permitting ................................................................................................................... 381
20.2.1 Legal Framework ................................................................................................................................................................... 381
20.2.2 Environmental Impact Assessment ................................................................................................................................ 382
20.2.3 Current Permitting ................................................................................................................................................................ 382
20.3 Environmental Studies ............................................................................................................ 383

20.3.1 Current Environmental Program ..................................................................................................................................... 383
20.3.2 Environmental Program Development ......................................................................................................................... 385
20.4 Social and Community Requirements .................................................................................. 386

20.4.1 Local Socio-Economy .......................................................................................................................................................... 386
20.4.2 Outreach Activities................................................................................................................................................................ 387
20.4.3 Indigenous Communities ................................................................................................................................................... 390
20.4.4 Archaeology and Culture ................................................................................................................................................... 391
20.5 Mine Closure ............................................................................................................................ 391

20.5.1 Closure and Bonding Requirements.............................................................................................................................. 391
20.5.2 Closure Planning ................................................................................................................................................................... 391
20.5.3 Closure Cost ............................................................................................................................................................................ 392
21. Capital and Operating Cost Estimate ................................................................... 394

21.1 Summary ................................................................................................................................... 394
21.2 Capital Cost Estimate .............................................................................................................. 394
21.2.1 Basis of Estimate .................................................................................................................................................................... 394
21.2.2 Mining Capital Cost .............................................................................................................................................................. 395
21.2.3 Process Plant Capital Cost ................................................................................................................................................. 397
21.2.4 Infrastructure Capital Cost ................................................................................................................................................. 398
21.2.5 Contingency ............................................................................................................................................................................ 398
21.2.6 Owners Costs .......................................................................................................................................................................... 398
21.2.7 Pre-Production Capital Cost ............................................................................................................................................. 399
21.2.8 Post Establishment Capital Cost...................................................................................................................................... 399
21.3 Operating Cost Estimate ......................................................................................................... 400

21.3.1 Basis of Mine Operating Costs......................................................................................................................................... 400
21.3.2 Basis of Process Plant Operating Costs ........................................................................................................................ 401
21.3.3 Process Plant Operating Costs ......................................................................................................................................... 401
21.3.4 Infrastructure Operating Costs ........................................................................................................................................ 401
21.3.5 General and Administrative Operating Costs ............................................................................................................ 402
21.3.6 Operating Cost Summary .................................................................................................................................................. 402
22. Economic Analysis .................................................................................................. 403

22.1 Introduction ............................................................................................................................. 403
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22.2 Summary ................................................................................................................................... 404

22.3 Basic Assumptions ................................................................................................................... 406
22.3.1 Metal Prices ............................................................................................................................................................................. 406
22.3.2 Recoveries ................................................................................................................................................................................ 406
22.3.3 Smelter Return Factors........................................................................................................................................................ 406
22.3.4 Operating Costs ..................................................................................................................................................................... 407
22.3.5 Capital Costs ........................................................................................................................................................................... 407
22.3.6 Depreciation and Amortisation ....................................................................................................................................... 407
22.3.7 Corporate Tax and Other Government Payments.................................................................................................... 407
22.3.8 Royalties.................................................................................................................................................................................... 408
22.4 Cash Flow Summary ................................................................................................................ 408

22.5 Sensitivity Analyses ................................................................................................................. 410
22.5.1 Commodity Prices and Discount Analysis ................................................................................................................... 410
22.5.2 Commodity Grade Analysis ............................................................................................................................................... 410
22.5.3 TC/RC Analysis ....................................................................................................................................................................... 411
22.5.4 OPEX and CAPEX Analysis ................................................................................................................................................. 411
22.6 Economic Results ..................................................................................................................... 412
23. Adjacent Properties................................................................................................ 413

23.1 Summary ................................................................................................................................... 413
23.2 Use of Information .................................................................................................................. 413
23.3 Concessions .............................................................................................................................. 413
24. Other Relevant Data and Information ................................................................. 415

24.1 Summary of Project Execution .............................................................................................. 415
24.2 Project Execution Strategy ..................................................................................................... 415
24.2.1 Prefeasibility and Feasibility Studies.............................................................................................................................. 416
24.2.2 Environmental and Social Impact Assessment .......................................................................................................... 417
24.2.3 Project Delivery ...................................................................................................................................................................... 418
24.3 Project Execution Schedule .................................................................................................... 418

24.4 Workforce Considerations...................................................................................................... 419
24.4.1 Personnel Requirements and Training ......................................................................................................................... 420
25. Interpretation and Conclusions ............................................................................ 421

25.1 Geology and Mineralisation ................................................................................................... 421
25.2 Exploration, Drilling and Analytical Data Collection .......................................................... 421
25.3 Mine Planning .......................................................................................................................... 421
25.4 Metallurgical Testwork ........................................................................................................... 422
25.5 Mineral Resource Estimate ..................................................................................................... 422
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25.6 Mineral Reserve Estimate ....................................................................................................... 422

25.7 Mineral Recovery Plan ............................................................................................................ 422
25.8 Infrastructure ........................................................................................................................... 423
25.9 Environmental, Permitting and Social Considerations....................................................... 423
25.10 Markets and Contracts ............................................................................................................ 423
25.11 Financial Analysis ..................................................................................................................... 423
25.12 Risk and Opportunity .............................................................................................................. 424
25.12.1 Mineral Resource Estimate ................................................................................................................................................ 424
25.12.2 Mining ....................................................................................................................................................................................... 424
25.12.3 Mining Risks ............................................................................................................................................................................ 425
25.12.4 Infrastructure .......................................................................................................................................................................... 426
25.12.5 Mineral Recovery Methods ............................................................................................................................................... 426
25.12.6 Capital and Operating Cost Estimates .......................................................................................................................... 427
25.13 Conclusions............................................................................................................................... 427
26. Recommendations ................................................................................................. 428

26.1 Pre-Feasibility Study ............................................................................................................... 428
26.1.1 Exploration ............................................................................................................................................................................... 428
26.1.2 Survey ........................................................................................................................................................................................ 428
26.1.3 Geotechnical ........................................................................................................................................................................... 428
26.1.4 Hydrogeology......................................................................................................................................................................... 429
26.1.5 Hydrogeology Components ............................................................................................................................................. 430
26.1.6 Mining ....................................................................................................................................................................................... 431
26.1.7 Infrastructure .......................................................................................................................................................................... 431
26.1.8 Metallurgical Testwork ........................................................................................................................................................ 432
26.1.9 Environmental......................................................................................................................................................................... 432
26.2 Definitive Feasibility Study .................................................................................................... 433

26.2.1 Geotechnical ........................................................................................................................................................................... 433
26.2.2 Hydrogeology......................................................................................................................................................................... 433
26.2.3 Mining ....................................................................................................................................................................................... 433
26.2.4 Infrastructure .......................................................................................................................................................................... 433
26.2.5 Metallurgical Testwork and Process Design ............................................................................................................... 433
26.2.6 Concentrate Samples for Smelter Evaluation ............................................................................................................ 433
26.2.7 Environmental......................................................................................................................................................................... 434
27. References ............................................................................................................... 435
List of Tables
Table 1.13.1: Head Assay Summary – Master Composites ......................................................................................................37
Table 1.13.2 Locked Cycle Test Conditions ....................................................................................................................................39
Table 1.13.3 Locked Cycle Results .....................................................................................................................................................39
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Table 1.14.1: Alpala Mineral Resource Statement Effective 07 November 2018*...........................................................41

Table 1.14.2: Alpala Mineral Resource Statement Effective 07 November 2018, Expressed by a Range in
Copper Equivalent Cut-off Grades*...................................................................................................................................................42
Table 1.21.1: Exchange Rates ...............................................................................................................................................................48
Table 1.21.2: Life of Mine Expenditure Estimate Summary (US$ Millions) ........................................................................48
Table 1.21.3: Pre-Production Capital Cost Estimate Summary US$ Millions ....................................................................48
Table 1.21.4: Post Establishment Capital Cost Estimate Summary US$ Millions .............................................................49
Table 1.21.5 Unit Operating Cost Estimate Summary (US$/tonne milled) ........................................................................50
Table 1.22.1: Economic Results ...........................................................................................................................................................50
Table 1.24.1: Preliminary Project Dates............................................................................................................................................52
Table 2.3.1: Work Split between Contributors to this Report .................................................................................................55
Table 4.3.1: Cascabel Licence Boundary Coordinates ................................................................................................................62
Table 6.2.1: Summary of Ownership History and Key Activities ............................................................................................75
Table 7.4.1: Relative Timing of the Volcanic Rocks and Six Main Intrusive Phases Identified at Alpala ................86
Table 8.2.1: Descriptive Summary of the Characteristics of Copper-(Gold) Porphyry Deposits ...............................99
Table 9.3.1: Ground Control Points – First Order Stations .................................................................................................... 106
Table 9.3.2: Ground Control Points – Lidar Survey, First Order Stations ......................................................................... 107
Table 9.5.1: Geochemical Samples Taken from the Cascabel Project by Type ............................................................. 109
Table 10.2.1: Total Drilling Completed at Alpala as of 30 October 2018* ...................................................................... 116
Table 11.6.1: Historic Lab Usage ...................................................................................................................................................... 127
Table 12.2.1: Summary of QAQC Samples................................................................................................................................... 134
Table 12.2.2: Certified Reference Material Summary Details ............................................................................................... 137
Table 12.2.3: Certified Blank Summary Details .......................................................................................................................... 146
Table 13.1.1: Assays for Three Composites ................................................................................................................................. 157
Table 13.1.2: Locked Cycle Test Conditions ................................................................................................................................ 159
Table 13.1.3: Locked Cycle Results ................................................................................................................................................. 160
Table 13.2.1: Samples Tested in Bureau Veritas, 2014 Test Program ............................................................................... 162
Table 13.4.1: Sample Selection for 2018 Test Program .......................................................................................................... 164
Table 13.4.2: Comminution Results ................................................................................................................................................ 166
Table 13.4.3: Rougher Grind Size Optimisation Results ......................................................................................................... 167
Table 13.4.4: Cleaner Feed Grind Size Optimisation Results ................................................................................................ 169
Table 13.4.5: Locked Cycle Test Conditions ................................................................................................................................ 169
Table 13.4.6: Locked Cycle Results ................................................................................................................................................. 171
Table 13.4.7: Simulated Mass Balance - Pyrite Concentrate Recovery and Grade ...................................................... 175
Table 13.4.8: Pyrite Concentrate - Copper and Gold Recovery ........................................................................................... 176
Table 13.4.9: 50 Mtpa Case - Fast Production Ramp Up: Recoveries to Copper Cathode and to Dore Based on
Conceptual Production of Pyrite Concentrate ........................................................................................................................... 177
Table 14.1.1: Alpala Mineral Resource Statement Effective 07 November 2018*........................................................ 182
Table 14.1.2: Alpala Mineral Resource Statement Effective 07 November 2018, Expressed by a Range in
Copper Equivalent Cut-Off Grades* ............................................................................................................................................... 182
Table 14.5.1: Model Domains and Codes .................................................................................................................................... 195
Table 14.6.1: Statistics of Composited Drill Holes by Combined Domain ...................................................................... 201
Table 14.6.2: Grouped Lithological and Mineralisation and KZONE Values .................................................................. 204
Table 14.6.3: Statistics of Rotated Declustered* Composited Drill Holes by Kriging Domain (KZONE) ............. 205
Table 14.7.1: Variogram Parameters .............................................................................................................................................. 210
Table 14.8.1: Details of Block Model Dimensions ..................................................................................................................... 211
Table 14.8.2: Search Ellipse Dimensions and Parameters ...................................................................................................... 213
Table 14.8.3: Statistics of Density Samples by Lithology (Uncomposited) ..................................................................... 215
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Table 14.9.1: Differences Between Estimated Block Model and Declustered Composite Sample Mean Grades*
...................................................................................................................................................................................................................... 225
Table 14.12.1: SRK Alpala Mineral Resource, 07 November 2018 ..................................................................................... 233
Table 14.13.1: Block Model Grade-Tonnage Sensitivity Data .............................................................................................. 233
Table 14.14.1: Comparison of Mineral Resource Statements from Maiden MRE to MRE#2* ................................. 237
Table 16.2.1: Summary of Geotechnical Database by Lithology*....................................................................................... 250
Table 16.3.1: Catchments and Sub-Catchments Associated with the Site ...................................................................... 252
Table 16.3.2: Flow Measurements for Catchments and Sub-catchments in Study Area........................................... 253
Table 16.3.3: Surface Water Management Strategies ............................................................................................................. 254
Table 16.4.1: Description and Estimate of the Flow Components that will Reach Block Cave Operating Levels
...................................................................................................................................................................................................................... 258
Table 16.4.2: Groundwater Management Strategies ............................................................................................................... 259
Table 16.5.1: Hydraulic Radius by Footprint ............................................................................................................................... 260
Table 16.5.2: Concept Design Parameters ................................................................................................................................... 266
Table 16.5.3: NSR Model Parameters ............................................................................................................................................ 267
Table 16.5.4: Design Costs ................................................................................................................................................................. 267
Table 16.5.5: Production Design Summary (Mill feed tonnes and grade for mine schedule) ................................ 270
Table 16.6.1: Scheduled Activity Rates .......................................................................................................................................... 270
Table 16.6.2: Pre-Production and Production Ramp up Activity Sequence ................................................................... 271
Table 16.6.3: Tonnes and Grades Schedule by Resource Category for 50 Mt per Annum Case ........................... 272
Table 16.6.4: Tonnes and Grades Schedule by Resource Category for 25 Mt then 50 Mt per Annum Staged
Case............................................................................................................................................................................................................. 274
Table 16.7.1: Mining Physicals .......................................................................................................................................................... 284
Table 16.8.1: Major Development Mobile Fleet ........................................................................................................................ 285
Table 16.8.2: Major Production Mobile Fleet ............................................................................................................................. 285
Table 16.8.3: Ventilation Requirements ........................................................................................................................................ 286
Table 16.9.1: Mining Personnel Numbers .................................................................................................................................... 287
Table 16.10.1: Mining Capital Cost Estimate Summary US$ Millions ............................................................................... 288
Table 16.10.2: Mining Operating Cost Estimate Summary (US$ Millions) ...................................................................... 289
Table 17.12.1: Operating Days and Throughput ....................................................................................................................... 305
Table 17.12.2: ROM Grade ................................................................................................................................................................. 305
Table 17.12.3: Comminution Characteristic................................................................................................................................. 306
Table 17.12.4: Crushed Ore Stockpile ............................................................................................................................................ 306
Table 17.12.5: Stockpile Reclaim ..................................................................................................................................................... 306
Table 17.12.6: Secondary Crushing Plant (Future) Availability Note 1................................................................................... 307
Table 17.12.7: Secondary Crusher Circuit Design Criteria at 50 Mt/a Design Capacity ............................................. 307
Table 17.12.8: Milling Availability and Circuit Arrangement ................................................................................................ 308
Table 17.12.9: SAG Mill Design Criteria ........................................................................................................................................ 308
Table 17.12.10: Pebble Crusher Design Criteria ........................................................................................................................ 309
Table 17.12.11: Ball Mill Design Criteria ....................................................................................................................................... 310
Table 17.12.12: Classification Cyclone Design Criteria............................................................................................................ 310
Table 17.12.13: Rougher Flotation .................................................................................................................................................. 310
Table 17.12.14: Regrind Circuit ........................................................................................................................................................ 311
Table 17.12.15: First Cleaner Flotation .......................................................................................................................................... 311
Table 17.12.16: Cleaner Scavenger Flotation .............................................................................................................................. 312
Table 17.12.17: Second Cleaner Flotation.................................................................................................................................... 312
Table 17.12.18: Third Cleaner Flotation ........................................................................................................................................ 313
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Table 17.12.19: Concentrate Thickener ......................................................................................................................................... 313

Table 17.12.20: Copper Concentrate Filtration .......................................................................................................................... 313
Table 17.12.21: Tailing Thickener .................................................................................................................................................... 314
Table 17.12.22: Primary Collector.................................................................................................................................................... 314
Table 17.12.23: Secondary Collector .............................................................................................................................................. 314
Table 17.12.24: Frother ........................................................................................................................................................................ 314
Table 17.12.25: Lime ............................................................................................................................................................................. 315
Table 17.12.26: Flocculant - Copper Concentrate Thickener ............................................................................................... 315
Table 17.12.27: Flocculant - Tailings Thickener ......................................................................................................................... 315
Table 17.12.28: Low Pressure Blower Air ...................................................................................................................................... 316
Table 17.12.29: Compressed Air ...................................................................................................................................................... 316
Table 17.12.30: Process Water, Storage and Distribution ..................................................................................................... 316
Table 17.12.31: Raw Water Storage................................................................................................................................................ 317
Table 17.13.1: Overall Concentrator Water Balance - 40 Mt/a Design Case.................................................................. 317
Table 17.15.1: Design Margins and Consideration................................................................................................................... 328
Table 17.16.1: Major Equipment Summary ................................................................................................................................. 328
Table 17.17.1: Estimated Production Performance .................................................................................................................. 331
Table 18.4.1: Main Components of the Concentrate and Return Water Pipelines ...................................................... 343
Table 18.6.1: Conceptual Geotechnical Design Criteria of Tailings Storage Facility ................................................... 345
Table 18.6.2: Conceptual Geotechnical Properties ................................................................................................................... 346
Table 18.6.3: Conceptual Stability Analyses Results – Safety Factors ............................................................................... 347
Table 18.9.1: Ship Parameters........................................................................................................................................................... 352
Table 18.9.2: Key Metrics for the Copper Concentrate, Concentrate Stockpile and Shipping ............................... 352
Table 18.9.3: Maximum Annual Concentrate Production (Mt/y) ........................................................................................ 353
Table 18.11.1: Hydrostratigraphy (Cardno), 2013 ..................................................................................................................... 362
Table 18.12.1: On-site Power Requirements ............................................................................................................................... 364
Table 19.3.1: Alpala Cu-Au-Ag Concentrate Grade Estimate ............................................................................................... 377
Table 19.3.2: Preliminary Estimate of TC/RC Terms ................................................................................................................. 377
Table 19.4.1: Assumed Copper, Gold and Silver Prices .......................................................................................................... 380
Table 20.5.1: Preliminary Closure Cost Estimate ....................................................................................................................... 393
Table 21.1.1: Life of Mine Estimate Summary US$ Millions .................................................................................................. 394
Table 21.2.1: Exchange Rates ............................................................................................................................................................ 394
Table 21.2.2: Estimate Responsibility ............................................................................................................................................. 394
Table 21.2.3: Mining Capital Cost Estimate Summary US$ Millions .................................................................................. 396
Table 21.2.4: Process Plant Capital Cost Estimate Summary US$ Millions ..................................................................... 397
Table 21.2.5: Infrastructure Capital Cost Estimate Summary US$ Millions ..................................................................... 398
Table 21.2.6: Pre-Production Capital Cost Estimate Summary US$ Millions ................................................................. 399
Table 21.2.7: Post Establishment Capital Cost Estimate Summary US$ Millions .......................................................... 400
Table 21.3.1: Mine Operating Cost Estimate Summary .......................................................................................................... 400
Table 21.3.2: Concentrator Operating Cost Source Data....................................................................................................... 401
Table 21.3.3: Process Plant Operating Cost Summary – US$ per Tonne ......................................................................... 401
Table 21.3.4: Infrastructure Unit Operating Cost Estimate Summary (US$/t)................................................................ 402
Table 21.3.5: Operating Cost Estimate Summary (US$/t) ...................................................................................................... 402
Table 22.1.1: Alpala Mineral Reserve ............................................................................................................................................. 403
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Table 22.2.1: Project Economic Summary and Sensitivity Analysis of the Project (100% ownership basis) ...... 405
Table 22.3.1: Metal Prices ................................................................................................................................................................... 406
Table 22.3.2: Mill Recovery ................................................................................................................................................................ 406
Table 22.3.3: Life of Mine Capital and Operating Cost ........................................................................................................... 407
Table 22.3.4: Royalty Payments........................................................................................................................................................ 408
Table 22.5.1: Metal Price and Discount Rate Sensitivity Analysis ....................................................................................... 410
Table 22.5.2: Copper Grade and Gold Grade Sensitivity Analysis ...................................................................................... 410
Table 22.5.3: TC/RC Sensitivity Analysis – Case 2b (50 Mt/a fast ramp-up) ................................................................... 411
Table 22.5.4: OPEX and CAPEX Sensitivity Analysis ................................................................................................................. 411
Table 22.6.1: Economic Results ........................................................................................................................................................ 412
Table 23.3.1: Major Holders Surrounding Cascabel ................................................................................................................. 413
Table 24.3.1: Preliminary Project Dates......................................................................................................................................... 419
Table 25.11.1: Economic Results ...................................................................................................................................................... 424
List of Figures
Figure 1.5.1: Location Map....................................................................................................................................................................32
Figure 1.13.1: Locked Cycle Flotation Circuit .................................................................................................................................38
Figure 1.13.2: Future Locked Cycle Test Circuit ............................................................................................................................41
Figure 1.17.1: Cascabel Simplified Flowsheet ................................................................................................................................45
Figure 1.17.2: Concentrator Plot Plan (GA), 50 Mt/a ..................................................................................................................46
Figure 4.2.1: Location Map (Source: SolGold, 2018) ...................................................................................................................61
Figure 4.3.1: Location and Vertices of the Cascabel Tenement (ID 402288) (Source: SolGold, 2018) ....................63
Figure 5.2.1: Major Access Roads (black) and Tracks (grey) for the Cascabel Project (Source: SolGold, 2016) ..69
Figure 5.3.1: Local Infrastructure in the Vicinity of the Cascabel Project (Source: SolGold, 2016) ...........................71
Figure 5.5.1: Typical Landscape in the Cascabel Project Area (Source: SRK, 2017) ........................................................73
Figure 7.2.1: Regional Tectonic Elements of Northern Ecuador and Colombia (Source: Cedial et al., 2003) ......81
Figure 7.2.2: Regional Tectonic Elements of Colombia and Northern Ecuador Showing the Subducting
Carnegie Ridge (Source: SolGold 2017)...........................................................................................................................................82
Figure 7.3.1: Regional Geology Around and Southwest of the Cascabel Licence (Source: Rohrlach 2012)* .......84
Figure 7.4.1: Paragenesis of the Porphyry-Related Vein Types at Alpala (Source: SolGold, 2017)* ........................88
Figure 7.4.2: Example Cross Cutting Relationships Observed in Alpala Core (Source: SolGold, 2014)* ................88
Figure 7.4.3: Magnetite-Bearing B1 Quartz Vein Stockwork with Clots of Chalcopyrite (cp)
(Source: Garwin et al., 2017) ...............................................................................................................................................................89
Figure 7.4.4: Correlation Statistics between B-Vein Abundance and Final Cu Assay Grade (Gilbertson &
Pittuck, A technical report on an updated mineral resource estimate for the Alpala deposit, Cascabel Project,
Northern Ecuador, 2018) .......................................................................................................................................................................90
Figure 7.4.5: Surface Expression of Hydrothermal Alteration Across the Cascabel Licence (Source: Garwin et
al., 2017) .......................................................................................................................................................................................................92
Figure 7.4.6: Schematic Evolution of Alpala Intrusive Stages and Relative Vein Paragenesis (Source: SRK, 2017)
.........................................................................................................................................................................................................................93
Figure 7.4.7: Cascabel Tenement Distribution of Intrusions, Mineralised Corridors and Copper-Gold Target
Areas (Source: Garwin et al., 2017) ....................................................................................................................................................94
Figure 7.4.8: Surface B-Vein Intensities across Alpala Central Illustrating the Intersection between the NW and
NE Trending Structures (Source: SolGold, 2017)*........................................................................................................................95
Figure 8.2.1: Location of the Alpala Porphyry Copper-Gold Deposit, Cascabel Project in the Eocene Porphyry
Belt of Northern Ecuador ................................................................................................................................................................... 100
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Figure 8.2.2: Schematic of an Idealised Copper Porphyry Deposit Illustrating the Classic Generic Model and
Possible Related Deposit Types (Source: Sillitoe, 2010) ......................................................................................................... 101
Figure 8.2.3: Distribution of Copper Porphyry Deposits and their Documented Ages (Source: Sillitoe, 2010) 102
Figure 8.2.4: Distribution of World Porphyry Deposits and their Documented Size by Tonnage (Mt) (Source:
USGS, 2008, after Singer, Berger & Moring, 2008) .................................................................................................................. 103
Figure 9.3.1: Example of Ground Control Point JW001 Installed at Rocafuerte ........................................................... 106
Figure 9.3.2: Example Section Showing Corrected DTM Following Re-Projection of -60 m RL, Resulting in
Close Fit to Drill Hole Collars and Rock-Saw Channel Collars Obtained Using DGPS ............................................... 108
Figure 9.5.1: Summary of Soil Geochemical Results for the Cascabel Tenement, Showing Molybdenum,
Manganese and Cu/Zn (Source: SolGold, 2017) ....................................................................................................................... 110
Figure 9.6.1: Magnetic (MVI) Model for the Alpala Area (Source: Rohrlach et al., 2015).......................................... 111
Figure 9.6.2: Alpala Creek Discovery Outcrop of Porphyry-Style Quartz Veins Showing Copper-Gold Rock-
Channel Sample Results (Source: Garwin et al., 2017) ............................................................................................................ 113
Figure 9.7.1: Scanning electron microscope - back scattered electron images showing the distribution of
electrum contained within sulphide- and gangue-minerals. A) Electrum in chalcopyrite adjacent to pyrite,
contained in quartz; B) Electrum along a fracture in pyrite and as discrete grains within and adjacent to pyrite
in the presence of chalcopyrite, anhydrite and quartz; C) Electrum in anhydrite adjacent to chalcopyrite,
magnetite and quartz; and D) Electrum along a grain boundary between chalcopyrite and bornite. * ............ 115
Figure 10.2.1: Plan of all Drill Holes and Rock-Saw Channels Showing Copper Equivalent Assay Results,
Intervals Awaiting Assay Results are Coloured Blue (SolGold, 2018) ............................................................................... 118
Figure 10.3.1: Example Final Collar Position – CSD-13-001 .................................................................................................. 119
Figure 10.5.1: Diamond Drill Hole Location CSD-17-031 ...................................................................................................... 120
Figure 10.7.1: Core Storage at the Rocafuerte Facility ............................................................................................................ 121
Figure 11.3.1: Core Cutting Facilities at Rocafuerte (SolGold, 2018) ................................................................................. 124
Figure 11.3.2: Magnetic Susceptibility Analysis (SolGold, 2018) ......................................................................................... 125
Figure 11.4.1: Metallurgical Sampling (SolGold, 2018) ........................................................................................................... 126
Figure 11.10.1: Core Storage (SolGold, 2018) ............................................................................................................................ 131
Figure 11.10.2: Geotech and Sampling Area (SolGold, 2018) .............................................................................................. 131
Figure 11.10.3: Pulp Storage (SolGold, 2018) ............................................................................................................................. 132
Figure 12.2.1: Summary of CRM Copper Results by Lab and Date.................................................................................... 135
Figure 12.2.2: Summary of Au CRM Results by Laboratory and Date .............................................................................. 136
Figure 12.2.3: OREAS 501b Plot for Au (ppm) by Sample Number* ................................................................................. 138
Figure 12.2.4: OREAS 501b Plot for Au (ppm) by Date Sampled........................................................................................ 139
Figure 12.2.5: OREAS 501b Plot for Cu (ppm) by Sample Number ................................................................................... 139
Figure 12.2.6: OREAS 501c Plot for Au (ppm) by Date and Cu (ppm) by Sample Batch ........................................... 140
Figure 12.2.7: OREAS 502b Plot for Au (ppm) and Cu (ppm) by Sample Batch ........................................................... 141
Figure 12.2.8: OREAS 502c Plot of Au (ppm) by Sample Batch* ......................................................................................... 142
Figure 12.2.9: OREAS 504b Plot of Au (ppm) and Cu (ppm) by Sample Batch* ........................................................... 143
Figure 12.2.10: Above – Copper Results from CRM CDN-ME-19. Below – Copper Results from CDN-CM-17144
Figure 12.2.11: Above – Gold Results from CRM CDN-ME-19. Below – Gold Results from CDN-CM-17.......... 145
Figure 12.2.12: Gold Blank Results (ppm) by Batch Number (capped at 0.1 ppm Au) .............................................. 147
Figure 12.2.13: Gold Blank Results (ppm) by Batch Date....................................................................................................... 147
Figure 12.2.14: Copper Blank Results (ppm) by Sample Number ...................................................................................... 148
Figure 12.2.15: Copper Blank Results (ppm) by Batch Date ................................................................................................. 148
Figure 12.2.16: Comparison of Field Duplicate Results for Copper (ppm) ..................................................................... 149
Figure 12.2.17: Comparison of Field Duplicate Results for Gold (ppm) ........................................................................... 150
Figure 12.2.18: Copper (ppm) Assay Comparison between Met-Solve and ACME Laboratories through
Drillhole ..................................................................................................................................................................................................... 151
Figure 12.2.19: Plot of Copper (ppm) Assay Results; ACME vs. Met-Solve Laboratories .......................................... 151
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Figure 12.2.20: Gold (ppm) Assay Comparison between Met-Solve and ACME Laboratories through Drillhole
CSD 16-016 .............................................................................................................................................................................................. 152
Figure 12.2.21: Plot of Gold (ppm) Assay Results; ACME vs. Met-Solve Laboratories ............................................... 152
Figure 13.1.1: Locked Cycle Floatation Circuit ........................................................................................................................... 158
Figure 13.1.2: Future Locked Cycle Test Circuit ......................................................................................................................... 161
Figure 13.4.1: Rougher Kinetic Curves........................................................................................................................................... 168
Figure 13.4.2: Locked Cycle Flotation Circuit .............................................................................................................................. 170
Figure 13.4.3: Proposed Pyrite Recovery Circuit........................................................................................................................ 173
Figure 13.8.1: Locked Cycle Circuit ................................................................................................................................................. 180
Figure 14.5.1: Level Plan (500 masl) Through the Alpala Deposit Showing Lithology Mand Cross-section
Locations ................................................................................................................................................................................................... 186
Figure 14.5.2: Cross-section A-A’ Looking Northwest ............................................................................................................ 187
Figure 14.5.3: Cross-section B-B’ Looking Northwest ............................................................................................................. 188
Figure 14.5.4: Cross-section C-C’ Looking Northwest ............................................................................................................ 189
Figure 14.5.5: Level Plan (500 masl) Through the Alpala Deposit Showing Grade Domains .................................. 191
Figure 14.5.6: Section A-A’ Through the Alpala Deposit Showing Grade Domains .................................................... 192
Figure 14.5.7: Section B-B’ Through the Alpala Deposit Showing Grade Domains .................................................... 193
Figure 14.5.8: Section C-C’ Through the Alpala Deposit Showing Grade Domains .................................................... 194
Figure 14.5.9: 3D Image of the Mineralisation Model Looking Northeast ..................................................................... 195
Figure 14.6.1: Histogram of Copper (%) for All Composited Drill Hole Intervals ......................................................... 196
Figure 14.6.2: Histogram of Gold (g/t or ppm) for All Composited Drill Hole Intervals ........................................... 197
Figure 14.6.3: Histogram of Cu (%) for Composites Split by Mineralisation Code (MINCODE) ............................. 197
Figure 14.6.4: Box-and-Whisker Plots of Cu (%) for Composites Split by Mineralisation Code (MINCODE).... 198
Figure 14.6.5: Histogram of Au (g/t or ppm) for Composites Split by Mineralisation Code (MINCODE) .......... 198
Figure 14.6.6: Box-and-Whisker Plots of Au (g/t or ppm) Composites Split by Mineralisation Code (MINCODE)
...................................................................................................................................................................................................................... 199
Figure 14.6.7: Scatter Plot Gold (g/t or ppm) and Copper (%) Values in Composites Coloured by
Mineralisation Code (MINCODE)..................................................................................................................................................... 199
Figure 14.6.8: Box-and-Whisker Plots of Cu (%) for Composites Split by Lithology Code (LITHCODE) ............. 200
Figure 14.6.9: Box-and-Whisker Plots of Au (g/t or ppm) for Composites Split by Lithology Code (LITHCODE)
...................................................................................................................................................................................................................... 200
Figure 14.6.10: Box-and-Whisker Plots of Copper (%) for Composites Split by Combined Domain ................... 203
Figure 14.6.11: Box-and-Whisker Plots of Gold (g/t) for Composites Split by Combined Domain ...................... 204
Figure 14.6.12: Box-and-Whisker Plots of Cu (%) for Composites Split by KZONE .................................................... 206
Figure 14.6.13: Log Probability Plots of Cu (%) for Composites Split by KZONE ......................................................... 206
Figure 14.6.14: Box-and-Whisker Plots of Au (g/t) for Composites Split by KZONE .................................................. 207
Figure 14.6.15: Log Probability Plots of Au (g/t) for Composites Split by KZONE ...................................................... 207
Figure 14.6.16: Drill Hole CSD-18-25 (848-850 m) Showing High-Grade Copper (Source: SolGold, 2018) ...... 208
Figure 14.7.1: Variogram Map and Modelled Semi-Variograms for KZONE 1 for Copper ...................................... 209
Figure 14.7.2: Variogram Map and Modelled Semi-Variograms for KZONE 1 for Gold ........................................... 210
Figure 14.8.1: Histogram Plot of Density Values per Lithology........................................................................................... 216
Figure 14.9.1: Plan View at 600 m RL, Showing Composites and Block Model Grade Estimates Coloured by
CuEq (%) and Cross-section Locations (below) ......................................................................................................................... 217
Figure 14.9.2: Cross-section 1 Looking Northwest Showing Composites and Block Model Grade Estimates
Coloured by CuEq (%).......................................................................................................................................................................... 221
Coloured by CuEq (%).......................................................................................................................................................................... 222
Figure 14.9.4: Swath Plots and Histogram Comparing Block Model and Composite Mean Cu (%) Grades for
KZONE 3 .................................................................................................................................................................................................... 223
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KZONE 7 .................................................................................................................................................................................................... 224
Figure 14.9.6: Grade-Tonnage Curve Comparing Cu (%) Estimates in Leapfrog (CU_SOL) and Datamine
(CU_PCT) for KZONE 3 ......................................................................................................................................................................... 226
Figure 14.9.7: Grade-Tonnage Curve Comparing Cu (%) Estimates in Leapfrog (CU_SOL) and Datamine
(CU_PCT) for KZONE 7 ......................................................................................................................................................................... 226
Figure 14.10.1: 2D Level Plan (550 masl) Showing Block Model Coloured by CuEq (%) and Mineral Resource
Classification Outlines.......................................................................................................................................................................... 229
Figure 14.10.2: Cross-section 1 Showing Bmodel Coloured by CuEq (%) and Mineral Resource Classification
Outlines (40 m clipping) ..................................................................................................................................................................... 230
Figure 14.10.3: 3D View Looking North Showing Classification Wireframes and Drill Holes ................................. 231
Figure 14.13.1: Grade-Tonnage Curves for All Indicated and Inferred Blocks in Model ........................................... 234
Figure 14.14.1: Model Changes from Maiden MRE to MRE#2 (Looking Northeast) .................................................. 235
Figure 14.14.2: Classification Wireframe Changes from Maiden MRE to MRE#2 (Looking South) ...................... 237
Figure 14.15.1: Extent of Current Drilling and Polygons Representing Targets for Further Drilling in 2019 .... 239
Figure 14.15.2: Long Section (Looking Northeast) Showing Block Model Coloured by Classification ............... 240
Figure 14.15.3: Exploration Potential Cross-section Location Map ................................................................................... 241
Figure 14.15.4: Cross-section A-A’ (Looking Northwest) Highlighting the Alpala Northwest Drilling Target.. 242
Figure 14.15.5: Cross-section A-A’ (Looking Northwest) Highlighting a Drilling Gap ............................................... 243
Figure 14.15.6: Cross-section B-B’ (Looking Northwest) Highlighting Western Limb Drilling Target ................. 244
Figure 14.15.7: Cross-section C-C’ (Looking Northwest) Highlighting Alpala Southeast Up-Plunge Target ... 245
Figure 14.15.8: Cascabel Distribution of Intrusions, Mineralised Corridors and Copper-Gold Targets .............. 246
Figure 14.15.9: Schematic Illustration of the Principal Areas of Sulphide Mineralisation in the Lowell-Gilbert
Model of Porphyry Deposits, Showing a Barren (Low-Grade) Core and Annular Ore Shells (after Lowell &
Gilbert, 1970) ........................................................................................................................................................................................... 247
Figure 16.2.1: Cumulative Distribution of Mean Rock Mass Ratings (Laubscher, 1990) Sorted by Lithology .. 251
Figure 16.4.1: Schematic of Groundwater Inflow Fluxes Associated with Block Cave Developments ................. 257
Figure 16.5.1: Plan View Showing Footprints and HR ............................................................................................................. 261
Figure 16.5.2: View of Production Areas and Access Development looking NW ........................................................ 262
Figure 16.5.3: Surface Subsidence Surface Projections .......................................................................................................... 263
Figure 16.5.4: Dilution and Recovery Model ............................................................................................................................... 264
Figure 16.5.5: Grade Sensitivity to Vertical Mixing ................................................................................................................... 265
Figure 16.5.6: Plan View of Typical Footprint Showing Zigzag Edge ................................................................................ 266
Figure 16.5.7: Position of Lifts Within a Column ....................................................................................................................... 269
Figure 16.6.1: Production Profile and Grades for 50 Mt per Annum Case ..................................................................... 272
Figure 16.6.2: Production Profile and Grades for 25 Mt then 50 Mt per Annum Staged Case .............................. 274
Figure 16.7.1: Plan View of Footprints and Access Infrastructure ...................................................................................... 281
Figure 16.7.2: Long Section Showing Access Infrastructure and First Phase Production Columns (Second Phase
Footprints Not Shown for Clarity) ................................................................................................................................................... 282
Figure 16.7.3: Schematic View Looking South-east Showing Access Infrastructure and First Phase Production
Columns (Second Phase Footprints Not Shown for Clarity) ................................................................................................. 282
Figure 16.7.4: Plan View Schematic of the “El Teniente Style” Extraction Level............................................................ 283
Figure 16.7.5: Cross-section Schematic of the Undercut, Extraction and Ventilation Level Under Development
...................................................................................................................................................................................................................... 284
Figure 17.1.1: Cascabel Simplified Flowsheet ............................................................................................................................. 293
Figure 17.1.2: Concentrator Plot Plan, 40 Mt/a.......................................................................................................................... 294
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Figure 17.13.1: Comminution Circuit Flowsheet and Mass Balance – 40 / 50 / 60 Mt/a .......................................... 319
Figure 17.13.2: Flotation Circuit Flowsheet and Mass Balance – 40 / 50 / 60 Mt/a .................................................... 321
Figure 17.13.3: Concentrate Dewatering Circuit Flowsheet and Mass Balance – 40 / 50 / 60 Mt/a..................... 323
Figure 17.14.1: Concentrator Plot Plan, 40 Mt/a ....................................................................................................................... 325
Figure 18.2.1: Transport Routes ....................................................................................................................................................... 341
Figure 18.4.1: Concentrate Pipeline Route and Profile ........................................................................................................... 343
Figure 18.6.1: Tailings Dam – Typical Section for Rockfill Dam........................................................................................... 346
Figure 18.9.1: Port Locations ............................................................................................................................................................. 350
Figure 18.9.2: Approach Channel for San Lorenzo Port ......................................................................................................... 351
Figure 18.9.3: Typical A-Frame Storage Building ...................................................................................................................... 356
Figure 18.9.4: Typical A-Frame Storage Building ...................................................................................................................... 356
Figure 18.9.5: Typical Stockpile Storage Building ..................................................................................................................... 357
Figure 18.9.6: Typical Ship Loading System ................................................................................................................................ 359
Figure 18.11.1: Proposed Water Delivery Route from the Mira River ............................................................................... 361
Figure 18.12.1: Northern Ecuadorian National Grid 2016-202. Source: Electricity Master Plan 2016-2025,
Ministry of Electricity and Renewable Power ............................................................................................................................. 366
Figure 18.12.2: Single Line Diagram 230 kV Power Supply to Cascabel .......................................................................... 368
Figure 18.12.3: Proposed Route of Overhead 230 kV Transmission Line and 23 kV to Pumping Stations ....... 369
Figure 18.12.4: Single Line Diagram 23 kV Power Supply to Pumping Stations .......................................................... 371
Figure 18.12.5: Single Line Diagram 23 kV Power Supply to Esmeraldas Facilities ..................................................... 372
Figure 19.4.1: Historical Copper Prices (US$/lb) (Macrotrends LLC, 2019) ..................................................................... 379
Figure 19.4.2: Indicative Forecast of Copper Prices to Year 2030. (World Bank Group, 2018, p. 43) ................... 379
Figure 20.3.1: Water Quality Sampling Locations ..................................................................................................................... 384
Figure 20.4.1: Cabuya Plantation ..................................................................................................................................................... 387
Figure 20.4.2: Local Community Meeting .................................................................................................................................... 388
Figure 20.4.3: Local Participation in Environmental Monitoring ......................................................................................... 388
Figure 20.4.4: SolGold Agro-Forestry Nursery ........................................................................................................................... 389
Figure 20.4.5: Bakery in Santa Cecelia ........................................................................................................................................... 390
Figure 20.5.1: Revegetated Drill Pad .............................................................................................................................................. 392
Figure 22.4.1: Cashflow for 50 Mt/a Fast Ramp-up ................................................................................................................. 409
Figure 22.5.1 - Spider graph illustrating sensitivity of metal price, OPEX and CAPEX, and Discount Rate. ...... 412
Figure 23.3.1: Map Showing the Adjacent Properties ............................................................................................................. 414
Figure 24.4.1: Construction Manning Requirements ............................................................................................................... 420
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Section 01 – Summary
1. Summary
1.1 Background
This Preliminary Economic Assessment (PEA) and Technical Report has been prepared and compiled by Wood
plc (Wood) for SolGold Plc (SolGold) and Cornerstone Capital Resources Inc (Cornerstone) for the Cascabel
Project, Alpala Copper-Gold-Silver Deposit in Northern Ecuador.
SolGold is a leading exploration company focused on the discovery and definition of world-class copper-gold
deposits. SolGold has a first mover advantage in Ecuador, a highly prospective yet under-explored section of
the Andean Copper belt, home of multiple Tier 1 copper and gold projects and half the world’s copper
resources. SolGold is listed on the Toronto Stock Exchange (TSX) and the London Stock Exchange (LSE).
1.2 Introduction and Terms of Reference

The contributors to this report include Wood plc as Lead Consultant, and with direct responsibility for the
processing, materials handling, and infrastructure components; SRK Exploration UK (SRK) with direct
responsibility for the geology resources estimation; Mining Plus (MP) with responsibility for the geotech,
hydrogeology and mine planning aspects of the study; Knight Piésold (KP) with responsibility for the
environmental and community aspects; and Ernst and Young (EY) with responsibility for the economic analysis
aspects of the study.
The effective date for this report is 25th March 2019. It relies on geological and Mineral Resource Estimate
published on the 4th January 2019 with an effective date of 7 November 2018, and on metallurgical Testwork
data received prior to 25th March 2019.
Readers are cautioned that the projected mining method, potential production profile and plan and mine plan
referred to in this PEA are conceptual in nature. There is no certainty that an economic outcome will be realised
or that a production decision will be made.
The preliminary economic assessment of the Cascabel Project (Alpala Deposit) includes Inferred Mineral
Resources that are considered too speculative geologically to have the economic considerations applied that
would enable them to be categorized as Mineral Reserves and there is no certainty that the preliminary
economic assessment will be realised.
Analyses of SolGold exploration samples have been performed by different laboratories over the life of the
project, including:
• ACME Vancouver
• Met-Solve Vancouver
• ALS Lima
• Inspectorate Lima.
ALS Kamloops Canada performed the metallurgical Testwork used by Wood to develop the recovery models
and the process plant flowsheets for this study.
All laboratories are independent of SolGold and Cornerstone and are accredited laboratories for the analysis
methods used.
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1.3 Reliance on Other Experts

SolGold Plc prepared the Market Studies in Section 19.
Ernst & Young (EY) carried out the economic analysis and prepared Section 22 of this PEA report. Information
including process plant recoveries, mill production schedules, and capital and operating cost estimates used
by EY as inputs to the economic analysis were provided by Wood and Mining Plus, who also verified that those
inputs were used by EY in the preparation of Section 22.
1.4 Property Description and Location

The Cascabel project is registered as an Advanced Exploration Licence for metallic minerals. The project is
located in northern Ecuador with the registered holder of the mineral tenure being Exploraciones Novomining
S.A. (ENSA) which was formerly called Santa Barbara Copper & Gold S.A. ENSA is currently jointly owned by
SolGold (85%) and Cornerstone Capital Resources (Cornerstone) (15%). The Cascabel mineral tenure was
granted on 12 January 2007 to ENSA. On the sale of ENSA by Santa Barbara Resources Ltd were granted a 2
percent net smelter return (NSR) as part of the terms of the sale of the property in 2012. This NSR may be
purchased as to one-half (1%) of the NSR for $1,000,000 within 3 months following completion of a feasibility
study, and the remaining one-half (1%) NSR for $3,000,000 within 3 months following a production decision.
In the event Cornerstone Capital Resources Inc.’s (Cornerstone) equity interest in ENSA is diluted below 10%,
Cornerstone’s equity interest will be converted to a half of one percent (0.5%) interest in a Net Smelter Return
and SolGold will have the right to purchase the Net Smelter Return for US$3.5 million at any time. As of the
25th March 2019, Cornerstone’s equity interest in ENSA had not diluted below 10%.
The project base is located at Rocafuerte within the Cascabel concession in northern Ecuador, an approximately
three hour drive on sealed highway north of Quito, close to water sources, power supply and in relative
proximity to port facilities in the Pacific Ocean.
Regulatory licenses and authorisations in place for the Cascabel Project include:
• Mining title for Advanced Exploration
• Environmental Licence
• Water License
• Fuel storage license
• Certificate of compliance with Employers Obligations.
1.5 Accessibility, Climate, Local Resources, Infrastructure and Physiography

Cascabel is located in northern Ecuador some 3 hours’ drive north of Quito, the capital city of Ecuador (Figure
1.5.1). Access is via a sealed highway that runs along the Rio Mira River. The closest major centre is Ibarra
located 90 km by road from the north of the concession. The property contains three small settlements: Santa
Cecilia Village, Rocafuerte Base Camp and Alpala Camp. Three further settlements lie proximal to the project
area at San Pedro, Urbina and Cachaco. Local labour is drawn from these settlements.
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Figure 1.5.1: Location Map
The topography of the project area is moderate to steep with elevations rising from 750 to 2,140 m above sea
level. The rugged terrain is incised by four large drainage complexes. Vegetation is tropical forest with a well-
developed soil horizon up to 10 m thick in parts.
The climate of the Project area is characterised by humid weather, with a bi-modal rainy season having peaks
in December and March, each with rainfall in excess of 200 mm on average. Total average rainfall for the region
is approximately 1,500 mm. Regionally, temperatures do not fluctuate greatly throughout the year. Average
annual temperature is approximately 17ºC, with maxima in excess of 30ºC and minima typically around 10ºC.
1.6 History
Historical exploration of the project area, undertaken from 1980 to 2011, highlighted widespread geochemical
anomalism in stream pan-concentrates, stream sediments and rock chips over a 9 km2 area in the northern half
of the license area. Previous explorers focused on the source of gold, copper, lead and zinc in stream sediments,
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Section 01 Page 32
which led to the location of gold-bearing, polymetallic epithermal quartz veins in streams that flank the
northern periphery of the Alpala deposit.
Cornerstone Capital Resources Inc (Cornerstone) signed a definitive agreement to acquire 100% of the shares
of Santa Barbara Copper and Gold S.A., a subsidiary of then Santa Barbara Resources Limited (TSXV-SBL), on
29 March 2011. Santa Barbara Copper and Gold S.A. was subsequently renamed Exploraciones Novomining
S.A. (ENSA). In April 2012 SolGold entered into a binding Letter of Intent with Cornerstone to earn an 85%
interest in ENSA. SolGold now holds an 85% registered and beneficial interest in ENSA. The Cascabel license is
100% owned by ENSA (see Section 4.3).
Upon signing of the agreement, SolGold assumed technical management and under Dr Bruce Rohrlach and
commenced the first systematic exploration program at Cascabel. The surface expression of the Alpala deposit
was discovered in May 2012 during reconnaissance mapping which located an 80 m-wide zone of copper and
gold bearing, dominantly sheeted and stockwork porphyry-style quartz veining in Alpala Creek. Follow-up
mapping, geochemical and geophysics programs were conducted and other porphyry related stockwork veins
were subsequently discovered in 2012 in the Moran, Tandayama and America Creeks.
In July 2012, SolGold Plc entered into an Earn-in Agreement with Cornerstone and Cornerstone Ecuador S.A.
(CESA) to explore the Cascabel licence. In February 2013 the Earn-in Agreement was supplemented by a
binding Term Sheet between SolGold Plc, Cornerstone, CESA and ENSA. The Term Sheet was revised in February
2014.
1.7 Geological Setting and Mineralisation

The Eocene Alpala porphyry deposit lies in a zone of overlap between the Eocene and Miocene Andean
porphyry belts. The Andean Porphyry belt is a well-documented linear belt that hosts many known copper
porphyry deposits as well as epithermal concentrations of gold, copper and silver. The belt extends from
southern Chile and Argentina in the south to Ecuador and Colombia in the north.
The Western Tectonic Realm (Cedial et al., 2003) of Ecuador and Colombia hosts multiple intrusion related
systems. This geological setting is associated with the porphyry copper, epithermal gold, and polymetallic skarn
mineral deposit types.
The accretionary terranes around the Cascabel licence are considered to hold significant potential for hosting
economic porphyry systems due to the combination of terrane accretion and compressional tectonics, shallow
subduction, crustal scale sutures and calc-alkaline magmatism.
1.8 Deposit Types

Porphyry deposits typically form from magmatic-hydrothermal fluids that have evolved from a voluminous
magma chamber several kilometres below the deposit itself. Predating or associated with those fluids are
vertical dikes and stocks of porphyritic intrusive rocks from which this deposit type derives its name.
As with many of the composite terrane across South America, the Western Tectonic Realm (Cedial et al., 2003)
of Ecuador and Colombia hosts multiple intrusion-related systems. These are hosted within a linear belt that
extends from southern Chile right through to Ecuador and Colombia to Panama. These mineralised systems
host the largest concentrations of copper in the world and numerous deposits are in active mining operations.
This geological setting is associated with the following mineral deposit types:
• Porphyry copper-(gold-silver-molybdenum) - related to the early stages of magmatism
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Section 01 Page 33
• Epithermal gold, low- and high-sulfidation - associated with volcanic regions above porphyry systems
• Polymetallic skarn - related to hydrothermal fluid flow from granite stocks through permeable and reactive
calcareous host-rocks (e.g., limestone and calcareous siltstone).
The mineralisation observed at surface and in the drill core along the trend of the Alpala Deposit is considered
as a classic porphyry copper-gold system and exploration has been designed with this in mind as a primary
target. The site team is continuously engaged in advancing the understanding of the porphyry systems at
Cascabel and exploration also keeps in mind the potential for surrounding economic porphyry deposits within
a 1-2 km radius of the Alpala Deposit, as well as the potential for discovery of epithermal and skarn deposits
peripheral to these porphyry systems throughout the Cascabel Project area.
1.9 Exploration
The major rock types of the Cascabel tenement consist of Cretaceous siltstones and minor sandstones that are
unconformably overlain by a Tertiary sequence of andesitic lavas and volcano-sedimentary rocks. A series of
Middle to Late-Eocene (Bartonian) hornblende-bearing diorites, quartz diorites and tonalities intrude the
volcano-sedimentary sequence and form plutons, stocks and dykes.
The geometry of the various lithologies and intrusive bodies at Alpala is now well understood and has been
modelled from the completed drilling demonstrating 3D continuity.
SolGold has completed geological mapping, soil sampling, rock saw channel sampling, geochemical and
spectral alteration mapping over 25 km2, along with an additional 9 km2 of Induced Polarisation and 14 km2
Magnetotelluric "Orion" surveys over the Alpala cluster and other targets at Aguinaga, Parambas, Tandayama-
America, Moran and Chinambicito.
This exploration activity has identified several corridors of Cu-Au mineralisation, as indicated by the distribution
of copper-bearing quartz veins, sulphide veinlets and fractures. Three major orientations exist, north-westerly,
northerly and north easterly, which are similar to the orientations expressed by the intrusions and faults.
Geological mapping, topographical and geophysical data suggest that the intrusive centres are localised by
the confluence between northwest trending deep seated structures and northeast and north-trending
structural corridors that cross the Cascabel Project.
Diamond drilling to date has defined a northwest-trending, steeply northeast-dipping dike-stock intrusive
complex that extends more than 2000 m northwest by 1000 m northeast and exceeds 2000 m in height.
A total of six major phases of intrusion have been defined by SolGold geologists on the basis of composition
and relative timing-relationships with porphyry-related vein-stages from observations at surface and within
the drill core. Each of these subsequent intrusions have either introduced mineralising fluids into the Alpala
system, remobilised existing mineralisation or contributed to localised overprinting and destruction of the pre-
existing mineralisation.
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1.10 Drilling
1.10.1 Introduction
SolGold commenced diamond drilling on 1 September 2013. A total of 133,576 m of drilling has been
completed at the time of the Effective Date of MRE#2. Three distinct phases of drilling have been completed
to date, with drilling on the Alpala deposit continuing in a fourth phase.
1.10.2 Phase 1 Drilling: Exploration and Reconnaissance Drilling
Phase 1 drilling focussed on extending the discovery outcrop of sheeted and stockwork “B” type quartz veins
in Alpala Creek, both at depth and along strike towards the northwest. Phase 1 drilling utilised 2 HP man-
portable machines to complete a total of 23,670.04 m diamond drilling. Drill holes were inclined at angles
between -60 to -87° towards the south west and provided relatively steep intersection angles into the
northwest trending Alpala body which dips approximately –78° towards northeast. Initial results indicated that
a mineralised copper-gold porphyry system exists at depth and that this mineralisation is intimately related to
the sheeted and stockwork veining seen at surface. The first phase of drilling concluded on 6 June 2016
following completion of a detailed review of geological interpretations at Alpala.
1.10.3 Phase 2 Drilling: Maiden Resource Drilling (MRE#1)
Phase 2 drilling focused on defining the extent of mineralisation at Alpala and the northwest and southeast
extensions to allow a maiden Mineral Resource estimate to be calculated. Phase 2 drilling utilised 7 HP man-
portable rigs, 2 Titeline track mounted rigs and 1 x Hytec track mounted rigs. The second phase of drilling
concluded on 18 December 2017 ahead of completion of the Maiden MRE (MRE#1). MRE#1 was completed
from an overall 62,525.6 m of drilling.
1.10.4 Phase 3 Drilling: Resource Update Drilling (MRE#2)
Phase 3 drilling focused on extending and upgrading the existing Alpala resource with drill targeting focussed
on infill drilling of the high-grade core of the deposit, as well as resource extension drilling both along and
across the main northwest trend of the deposit. Phase 3 drilling utilised 7 HP man-portable rigs, 3 Titeline track
mounted rigs and 2 x Hytec track mounted rigs to complete drilling. Phase 3 drilling was completed on the
7 November 2018 ahead of the updated MRE (MRE#2).
MRE#2 was estimated from a total of 133,576 m of drilling comprising 128 diamond drill holes, including 75
drill holes, 34 daughter holes, 8 re-drills, and 11 over-runs.
1.11 Sample Preparation, Analysis and Security

Sample preparation has been performed by two laboratories to date: Luis Aucay and Asociados, Cuenca, and
ALS Quito.
The assaying of drill core and channel samples collected during SolGold’s exploration programmes have been
performed by the laboratories: ACME, Vancouver, ALS Geochemistry, Lima and Met-Solve, British Columbia.
Sample preparation, chain of custody and data security procedures and assaying methods employed by
SolGold are consistent with industry best practices (Gilbertson & Pittuck, A technical report on an updated
mineral resource estimate for the Alpala deposit, Cascabel Project, Northern Ecuador, 2018).
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1.12 Data Verification

A routine quality assurance and quality control (“QAQC”) programme has been implemented by SolGold to
monitor the on-going quality of the analytical database. This programme involves Certified Blanks, Certified
Reference Material (“CRMs” or standards), Field Duplicates and Interlaboratory comparisons.
SRK’s review of the programme and the copper and gold results concluded:
• OREAS samples performed adequately, reporting values within three standard deviations.
• The two CDN CRMs used in the initial stage of drilling (up to hole CSD-15-011) show initially poor precision
in both copper and gold; however, this improved with time after changing laboratory.
• Good correlation between the parent and field duplicate assay results for copper and gold. The limited
outliers are considered to reflect small-scale geological variability, especially with respect to gold.
• Inter-laboratory comparisons of copper and gold test results shows a strong positive trend with certified
materials performing well.
Onsite verifications were conducted as part of this PEA study by Wood, Knight Piésold and SRK in August 2018.
This site visit included observations of personnel performing exploration activities, visits to communities and
potential sites to contain infrastructure and reviews of procedures and information collected in the areas of
environment, community, geotechnics, metallurgy and surface infrastructure.
Additional onsite verifications were conducted by SRK in October 2017 and January 2018 to review exploration
procedures, the geological database, geological modelling procedures, examine drill core, interview project
personnel and collect relevant information for the preparation of mineral resource models and compile
technical reports.
Onsite verifications found the procedures and information collected are of sufficient quality with no critical
gaps in the data that would pose significant risk to completing this PEA.
1.13 Mineral Processing and Metallurgical Testing

For the PEA, a metallurgical test program was conducted at ALS Metallurgical Laboratories, Kamloops, Canada.
The laboratory program consisted of sample preparation and composite formation, comminution tests
including SMC, Bond Ball Mill Work Index (BWI) and Bond Abrasion Index (Ai), flotation optimisation and locked
cycle tests on specified composites and rougher kinetic tests. Selected half HQ core was grouped into
comminution and flotation samples, with twenty sets of comminution tests and twenty rougher kinetic flotation
variability tests conducted. The sample was also used to form three master composites for process optimisation
and locked cycle tests. The composites were designated as:
1. Low Copper – Low Gold (LC-LG)
2. Intermediate Copper – High Gold (IC-HG)
3. High Copper – High Gold (HC-HG).
Assays for the three composites are presented in Table 1.13.1.
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Table 1.13.1: Head Assay Summary – Master Composites

Composite ASSAY – percent or g/tonne
Cu Fe S S(s) Ag Au TOC
Low Copper – Low Gold 0.77 6.7 3.34 2.26 2 0.76 0.03
(LC-LG)
Intermediate Copper – High Gold 1.19 8.8 5.38 4.74 3 2.39 0.05
(IC-HG)
High Copper – High Gold 1.93 8.9 4.64 3.51 5 2.61 0.02
(HC-HG)
Based on the samples tested, the Cascabel deposit is competent from a SAG mill perspective (average DWi -
7.06 kWh/m3 / average A*b - 42.7), moderately hard from a ball mill perspective (average BWI – 13.7 kWh/t)
and moderately abrasive (average Ai – 0.139). Based on average results the comminution circuit would consist
of SAG and ball mills. Elevated RQD values indicate that once the mine approached nameplate capacity pebble
crushing may be required. The initial comminution tests indicate significant variability and secondary crushing
may potentially need to be implemented in latter stages of operation.
Both the mineralogy and flotation results indicate the flotation performance aligns with similar chalcopyrite
dominant porphyry deposits. A flotation circuit would consist of roughing with a feed P80 of 150 µm, a
multistage cleaner circuit, incorporating a regrind section to reduce the cleaner feed P80 to 25 µm. Rejection of
pyrite in the cleaner circuit results in a 5% to 10% loss in gold and consideration should be given to retreatment
of the cleaner scavenger tailing. The Locked Cycle Flotation Circuit as tested is depicted in Figure 1.13.1.
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Section 01 Page 37
Figure 1.13.1: Locked Cycle Flotation Circuit
In the initial design, Cleaner Scavenger Concentrate was considered a Final Product and not circulated to the
First Cleaner Feed via the Regrind Mill as would normally be carried out to improve copper and gold recovery
to final concentrate.
The mass recoveries for each individual circuit have been applied to determine the flotation circuit
requirements for a typical three stage cleaning circuit with recycle of a cleaner scavenger concentrate and
second and third cleaner tailings.
Summaries of locked cycle conditions and results are given in Table 1.13.2 and Table 1.13.3, respectively.
Mineralogy and flotation results indicate the flotation performance aligns with similar chalcopyrite dominant
porphyry deposits. The following generic recovery functions for copper, gold and silver are considered a
reasonable approximation of copper concentrate performance and reflect the results obtained in the locked
cycle tests:
Copper Recovery to Copper Concentrate Equation:
90.0 × (1 + 33.5 × 𝐶𝑢𝑓 )

𝐶𝑢 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 =
(1 + 31.1 × 𝐶𝑢𝑓 ) + (1 − 𝑒 −33.6 × 𝐶𝑢𝑓 )
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Gold Recovery to Copper Concentrate Equation:
𝐴𝑢 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 = 85.5 × (1 − 𝑒 −5 × 𝐴𝑢𝑓 )
Silver Recovery to Copper Concentrate Equation:
𝐴𝑔 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 = 𝐴𝑢 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦
The concentrate grade and metal content will be impacted by the feed bornite to chalcopyrite ratio and the
feed pyrite content. At the current stage of evaluation there is insufficient information to incorporate these
factors. The concentrate grade equation has been developed to align with Testwork. It is recommended that a
geometallurgical approach to concentrate grade estimation be developed in subsequent phases of the project.
Copper Grade in Copper Concentrate Equation:
Concentrate Grade Copper = (1 – e-5.824 x Cuf) x 29.5
Table 1.13.2 Locked Cycle Test Conditions

Operation Conditioning pH Lime Collector PAX Frother Flotation
Time (kg/t) (Potassium MIBC Time
(min) Amyl Xanthate) (Methyl Isobutyl (min) Note 1
(g/t) Carbinol)
Mill – P80 155 µm 8.1
Rougher Con 1 1 8.0 5 As required 0.5
Rougher Con 2 1 8.0 1 1.0
Rougher Total 9 11.5
Regrind – P80 25 µm 0.30
Cleaner 1 1 11.0 8 4/5/6
Cleaner 2 1 11.0 4 3/4/5
Cleaner 3 1 11.0 2 2/ 3 / 4
Clnr Scavenger 1 10.6 10 3
Note 1: Lower Batch Flotation Times correspond to lower feed copper values
Table 1.13.3 Locked Cycle Results

Parameter Units LC-LG IC-HG HC-HG
Composite Composite Composite
Copper feed grade % Cu 0.79 1.17 2.03
Gold feed grade g/t Au 0.80 2.29 2.97
Copper recovery to copper concentrate % 86.0 93.2 93.0
Copper in copper concentrate % Cu 28.8 27.6 30.5
Gold recovery to copper concentrate % 79.4 79.3 85.2
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Gold in copper concentrate g/t Au 28.3 46.2 41.0

Mass yield to copper concentrate % 2.0 3.9 6.2
Copper recovery to pyrite concentrate % 5.8 2.2 1.9
Copper in pyrite concentrate % Cu 3.50 1.52 2.11
Gold recovery to pyrite concentrate % 4.9 5.6 5.5
Gold in pyrite concentrate g/t Au 3.04 7.8 8.85
Mass yield to pyrite concentrate % 1.3 1.6 1.8
No thickening or filtration tests have been conducted. Considering the expected size of final concentrate (P80
~25 µm) pressure filtration of concentrates will be required.
The following Testwork is recommended for future stages of the project:

• Ore sorting tests be conducted during the PFS
• Further SMC, BWI and Ai tests be conducted during the PFS and DFS
• Bond Rod Mill Work Index (RWI) tests, unconfined compressive strength (UCS) and Bond Crusher Work
Index tests be conducted
• Gravity gold recovery tests when more sample material and information is available
• A split flotation circuit should be tested to determine if enhanced recoveries and kinetics can be achieved
• Cleaner Testwork kinetic testing should be conducted to optimise flotation times
• Future flotation Testwork should be conducted in duplicate runs
• Future locked cycle Testwork should be as per Figure 1.13.2.
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Figure 1.13.2: Future Locked Cycle Test Circuit
1.14 Mineral Resource Estimates

MRE#2 resulted in a Mineral Resource Estimate of 2,050 Mt grading 0.60% copper equivalent (“CuEq”) of
Indicated Mineral Resources for a contained metal content of 8.4 Mt copper and 19.4 Moz gold, and an
additional 900 Mt grading 0.35% CuEq of Inferred Mineral Resources for 2.5 Mt Cu and 3.8 Moz Au, using a
0.2% CuEq cut-off grade (Table 1.14.1).
Mineral Reserves have not been declared at this time.
Table 1.14.1: Alpala Mineral Resource Statement Effective 07 November 2018*

Resource Tonnage Grade Contained Metal
Category (Mt) Cu (%) Au (g/t) CuEq (%) Cu (Mt) Au (Moz) CuEq (Mt)
Indicated 2,050 0.41 0.29 0.60 8.4 19.4 12.2
Inferred 900 0.27 0.13 0.35 2.5 3.8 3.2
*Notes:
1. Mr. Martin Pittuck, CEng, MIMMM, FGS, is responsible for this Mineral Resource statement and is an "independent
qualified person" as such term is defined in NI 43-101
2. Mineral Resource is reported using a cut-off grade of 0.2% copper equivalent calculated using [copper grade (%)] +
[gold grade (g/t) x 0.63]
3. Mineral Resource is considered to have reasonable prospects for eventual economic extraction by underground mass
mining such as block caving
4. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability
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5. The statement uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and
Mineral Reserves (May 2014) as required by NI 43-101.
6. The MRE is reported on 100 percent basis
Within the deposit and included in the above total MRE figures, a higher-grade core exists, totalling 400 Mt
grading 1.49% CuEq of Indicated Mineral Resources for a contained metal content of 3.6 Mt Cu and
11.9 Moz Au, and 20 Mt grading 1.05% CuEq of Inferred Mineral Resources for a contained metal content of
0.2 Mt Cu and 0.4 Moz Au, using a 0.9% CuEq cut-off (Table 1.14.2).
Table 1.14.2: Alpala Mineral Resource Statement Effective 07 November 2018, Expressed by a Range in Copper
Equivalent Cut-off Grades*
Classification CuEq Cut-off Tonnes (Mt) Grade Metal
Cu Au CuEq Cu Au CuEq
(%) (g/t) (%) (Mt) (Moz) (Mt)
Indicated 0.1 2,460 0.36 0.26 0.52 8.9 20.2 12.9
0.15 2,290 0.38 0.27 0.55 8.8 19.9 12.7
0.2 2,050 0.41 0.29 0.60 8.4 19.4 12.2
0.3 1,500 0.49 0.37 0.73 7.4 17.8 10.9
0.45 810 0.66 0.57 1.03 5.4 15.0 8.3
0.7 490 0.84 0.83 1.37 4.1 13.0 6.7
0.9 400 0.90 0.93 1.49 3.6 11.9 5.9
1.1 200 1.13 1.36 1.99 2.2 8.7 3.9
1.5 120 1.35 1.77 2.47 1.7 7.0 3.0
Inferred 0.1 1,380 0.22 0.11 0.28 3.0 4.7 3.9
0.15 1,140 0.24 0.12 0.32 2.8 4.3 3.6
0.2 900 0.27 0.13 0.35 2.5 3.8 3.2
0.3 490 0.34 0.16 0.45 1.7 2.5 2.2
0.45 150 0.49 0.26 0.65 0.7 1.2 1.0
0.7 50 0.67 0.41 0.93 0.4 0.7 0.5
0.9 20 0.72 0.52 1.05 0.2 0.4 0.2
1.1 10 0.76 0.70 1.20 0.1 0.1 0.1
1.5 - - - - - - -
*Note: refer to the Notes under Table 1.14.1 for description and qualifications that pertain to the resource statement.
The November 2018 MRE update (MRE#2) is reported using a cut-off grade of 0.2% copper-equivalent (CuEq)
which SolGold and SRK Consulting consider to be reasonable, reflecting the potential for economic extraction
by high production rate mass mining methods such as block caving. The central portions of the deposit present
an opportunity for early extraction of higher-grade material.
The updated resource estimate represents an increase in the overall reported resource of 108% (by metal
content) from 7.4 Mt CuEq in Dec 2017 Maiden MRE (MRE#1) using at 0.3% CuEq cut-off, to the current
15.4 Mt CuEq using a 0.2% CuEq cut-off.
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1.15 Mineral Reserve Estimates

No Mineral Reserve Estimate has been prepared for the Alpala deposit at this stage of the study.
1.16 Mining Methods

The mining assessment conducted for this PEA study indicates that the Alpala deposit lends itself to
underground mining using low cost mass mining methods such as block caving or panel caving. Other methods
reviewed as part of the study included sub-level caving and sub-level open stoping in isolated pockets of high
grade mineralisation. However, for the purpose of this study, these methods have not been considered.
The conceptual mine plan considered in this PEA consists of two phases. In the first phase, the highest value
material is targeted. Mining criteria are more conservative with column heights restricted to ~500 m and a
relatively even draw across each footprint to ensure even cave propagation. In the second phase, lower value,
but potentially economic material is mined, along with more aggressive mine planning assumptions, with taller
columns and a greater variation of draw heights within a column.
Based on the current mineral resource estimate (MRE #2) and the application of the parameters and design
process described above, approximately 2.4Bt of mill feed averaging 0.54% CuEq has been defined at this stage.
This includes a high-grade central core containing a mineral resource of some 420 Mt averaging 1.47% CuEq,
most of which (approx. 95%) is classified as Indicated with the remaining in the Inferred category.
The above mill feed tonnages include:
• Indicated Mineral Resources of 1.83Bt @ 0.61% CuEq ROM (0.41% Cu, 0.31g/t Au and 1.2 g/t Ag) which
constitutes approximately 89% of the MRE#2 Indicated Mineral Resource at a 0.2% CuEq cutoff grade
• Inferred Mineral Resources of 0.55Bt @ 0.36% CuEq (0.27%Cu, 0.13g/t Au and 0.8g/t Ag) which constitutes
approximately 61% of the MRE#2 Inferred Mineral Resource at a 0.2% CuEq cutoff grade
The mine plan objective is to provide environmentally sound project development options and optimise the
economics of the project whilst attempting to maximise recovery of the Alpala mineral resource. It targets the
high value material in the first phase to ensure optimisation of the project economics. Mining the lower value
second phase later maximises extraction without compromising the economics of the project.
Mine production scenarios preselected and assessed as part of the PEA include:
• Case 1 – 40 Mt/a, Life of Mine (LOM) 66 years.
• Case 2a – 50 Mt/a, Slow (Staged) Ramp-up, LOM 57 years.
• Case 2b – 50 Mt/a, Fast Ramp-up, LOM 55 years.
• Case 3 – 60 Mt/a, LOM 49 years.
For the purpose of this PEA, the production scenario assumed as the base case is Case 2b: 50 Mt/a Fast ramp-
up.
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1.17 Recovery Methods

The dominant copper mineral in the Alpala deposit is chalcopyrite with accessory amounts of bornite.
Chalcopyrite forms free grains from ~1 µm to 500 µm in altered host rock. Partial chalcopyrite rimming of
pyrite, as well as chalcopyrite and bornite inclusions in pyrite exist, from below 10 µm in size.
Grains of free gold exist, ranging in size from ~1 µm to 20 µm. In most cases the gold is included in chalcopyrite,
bornite or pyrite.
The copper concentrator and gold recovery circuit proposed for each mine production scenario is as follows :
• Case 1: 40 Mt/a – Two parallel lines with one line built for Phase 1 (ramp up to 50% nameplate capacity)
and two lines for 100% nameplate capacity.
• Case 2a: 50 Mt/a – (Slow Ramp-up) – Two parallel lines with one line built for Phase 1 (ramp up to 50%
nameplate capacity) and two lines for 100% nameplate capacity.
• Case 2b: 50 Mt/a – (Fast Ramp-up) – Two parallel lines with one line built for Phase 1 (ramp up to 50%
nameplate capacity) and two lines for 100% nameplate capacity. In this case, the second line will be
commissioned three years earlier than in Case 2a.
• Case 3: 60 Mt/a – Three parallel lines with one line built for Phase 1 (ramp up to 33% nameplate capacity)
and three lines for 100% nameplate capacity. (Modules identical to 40 Mt/a case.)
The concentrator is anticipated to utilise the following principal process areas for the recovery of copper and
gold into copper concentrates:
• Crushed ore stockpile and reclaim
• Secondary crushing (deferred)
• Open circuit SAG milling
• Pebbles return to pebble crushers (deferred)
• Closed circuit ball milling and classification
• Copper rougher flotation
• Rougher concentrate regrind
• Three stages of copper cleaners and cleaner scavenger flotation
• Copper concentrate thickening and storage
• Copper concentrate thickening, concentrate pipeline, filtration and storage
• Tailings thickening, disposal and decant water return
• Process water storage and distribution
• Raw water storage and distribution
• Reagent make-up and distribution
• High and low pressure air distribution.
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The Cascabel flow sheet is assembled from unit processes used commonly throughout the minerals processing
industry. The configuration of the unit processes have been optimised to provide the most energy efficient
flow sheet, with enhanced metallurgical performance.
Simplified versions of the Cascabel flowsheet are shown in Figure 1.17.1. The 40 Mt/a will utilise two modules
while the 60 Mt/a option will utilise the same configuration with three modules. The 50 Mt/a option will utilise
two modules (larger modules than the 40 Mt/a or 60 Mt/a cases).
Figure 1.17.1: Cascabel Simplified Flowsheet
A Site Plot Plan for the 50 Mt/a case is presented in Figure 1.17.2.
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Figure 1.17.2: Concentrator Plot Plan (GA), 50 Mt/a
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1.18 Project Infrastructure

It is envisaged that the Cascabel Project will consist of an underground block cave mining operation and a
surface processing plant, with associated materials handling and infrastructure facilities. The infrastructure (on-
site and off-site) considered in the PEA study, include the following:
• Roads and logistics
• Concentrate pipeline from the process plant to Esmeraldas port and water return pipeline
• Tailings storage facilities and associated infrastructure
• Surface facilities
• Underground mine infrastructure facilities
• Mine decline conveyor
• Mine services facilities including mine ventilation, mine dewatering, underground power supply and
distribution, compressed air supply and distribution, etc.
• Concentrate stockpiling and shipping facilities at the Esmeraldas port
• Water supply and distribution system
• Power supply and distribution system
• Communications, process control and instrumentation system
• Other Services.
Infrastructure facilities have been designed based on an ore production capacity of 40 Mt/a, with factoring
used to estimate the facilities required for the 50 Mt/a (both slow and fast ramp up) and 60 Mt/a cases.
1.19 Market Studies and Contracts

Metallurgical Testwork carried out to date indicates that the main product from the Cascabel project will be a
high-quality copper-gold-silver concentrate with no contaminants and medium to high copper and gold
grades plus additional silver credits, making it a desirable product for copper smelters worldwide.
No detailed Market Supply and Demand studies for copper concentrate have been conducted as part of the
PEA and at the time of writing this report the company has not entered into any formal off-take agreements
for the sale of concentrate products from the Alpala deposit.
1.20 Environmental Studies, Permitting and Social or Community Impact

SolGold has conducted environmental studies in the project area using qualified practitioners for a number of
years, which contributes to a defensible baseline. An experienced project team is leading meaningful social
engagement programs to support appropriate Corporate Social Responsibility.
Current exploration activity is fully permitted and in good standing. Mine development will require the
successful conclusion of an Environmental Impact Assessment and permitting from the Ministry of
Environment. This is a recognised process with successful precedent in Ecuador. There are no known
environmental issues that could materially impact the ability of SolGold to extract the mineral resources at the
Cascabel Project.
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1.21 Capital and Operating Costs

The estimate base date is 4th quarter 2018 and is expressed in US Dollars. Exchange rates used in the estimate
are shown in Table 1.21.1 and are based yearly average exchange rates in September 2018.
Table 1.21.1: Exchange Rates

Country Currency US$ per Unit
Australia AUD 0.73
China CNY 0.15
European Union EUR 1.16
Great Britain GBP 1.30
Thailand THB 0.03
USA US$ 1.00
Canada CAD 0.77
Table 1.21.2: Life of Mine Expenditure Estimate Summary (US$ Millions)

WBS Description 40 Mt/a 50 Mt/a 50 Mt/a 60 Mt/a
Fast Ramp Up Slow Ramp Up
Pre-Production Capital Cost 2,538.25 2,715.44 2,447.87 2,849.41
Post Establishment Capital Cost Note 1 7,525.40 7,572.01 7,798.07 7,661.68
Operating Cost 25,929.64 25,631.36 25,741.25 25,469.68
Total Capital and Operating Costs 35,993.29 35,918.81 35,987.20 35,980.77
Note 1: Includes Sustaining Capital Cost
A break down of the above Capital and Operating Costs is shown in Table 1.21.3 through Table 1.21.5 are
summarised in the following tables:
Table 1.21.3: Pre-Production Capital Cost Estimate Summary US$ Millions

WBS Description 40 Mt/a 50 Mt/a Fast 50 Mt/a Slow 60 Mt/a
(US$M) (US$M) (US$M)
Underground Mine 1,189.30 1,190.21 965.02 1,189.58
Process Plant Civil Platforms 28.34 32.39 32.39 36.14
Process Plant 316.68 362.05 357.75 399.10
Water Supply Infrastructure 7.03 8.04 8.04 8.90
Power Supply Infrastructure 44.57 50.65 50.65 56.50
Tailings Storage Facilities 65.00 80.00 80.00 80.00
Construction/Operations Camp 10.09 11.54 11.54 12.87
Concentrate Transportation 120.43 137.10 137.10 152.70
(Pipeline)
Water Return from Port 51.26 58.60 58.60 65.37
Underground Infrastructure 221.38 253.10 253.10 282.35
Port Facilities 26.00 29.72 29.72 33.16
Roads 3.34 3.34 3.34 3.34
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EPCM 107.29 123.18 122.67 135.65
Owners 104.17 110.84 99.36 116.00
Contingency 243.39 264.68 238.60 277.74
Total 2,538.25 2,715.44 2,447.87 2,849.41
Table 1.21.4: Post Establishment Capital Cost Estimate Summary US$ Millions
(US$M) (US$M)
Underground Mine 5,132.39 5,136.27 5,344.25 5,136.96
Process Plant 435.43 470.66 474.97 529.88
Infrastructure 1,845.41 1,835.81 1,848.30 1,849.20
Indirects 112.18 129.27 130.55 145.64
Total Post Establishment Capex 7,525.40 7,572.01 7,798.07 7,661.68
The estimate base date is 4th quarter 2018 and is expressed in US dollars. The capital cost estimates are
allocated to initial capital and sustaining capital.
The capital cost estimate has been developed in accordance with Wood’s capital cost estimating procedure
(PRJ-340-05) for a Conceptual study to meet the requirements of the National Instrument NI 43-101 for a
Preliminary Economic Assessment (PEA) study and is consistent with “AACE International” cost estimating
guidelines for a Class 5 estimate for the Process Industries.
The total LOM operating cost estimate is summarised in below in Table 1.21.5:
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Table 1.21.5 Unit Operating Cost Estimate Summary (US$/tonne milled)

WBS Description 40 mt/a 50 mt/a Fast 50 mt/a Slow 60 mt/a
Underground Mine Note 1 4.00 4.00 4.00 4.00
Process Plant 6.08 5.97 6.01 5.91
Surface Infrastructure 0.04 0.04 0.04 0.04
Concentrate Transportation (Pipeline) 0.07 0.07 0.07 0.07
Port Facilities 0.22 0.22 0.22 0.21
Roads 0.01 0.01 0.01 0.01
Closure 0.03 0.03 0.03 0.03

Total (US$/t) 10.80 10.68 10.73 10.61
Note 1: This figure does not include footprint development which is included in the post-establishment and sustaining
mining capex and the underground mine infrastructure which is included separately in the Underground Infrastructure
costs.
1.22 Economic Analysis

A discounted cash flow model was developed to evaluate the economics for the Project on a 100% Project
basis.
The economic modelling was done on a post-tax basis and the results are presented herein. The economic
results are summarised in Table 1.22.1 and indicate an after-tax NPV from US$4.1 B to US$4.5 B based on a
copper price of US$3.30 /lb and gold price of US$1300 /oz at an 8% discount rate for the four scheduled cases.
The projects’ Internal Rate of Return (IRR) is between 24.8% and 26.5%, with payback periods after production
commencement from 3.5 to 3.8 years. Sensitivity analysis was conducted on the copper and gold prices.
Table 1.22.1: Economic Results

40 Mt/a 50 Mt/a 50 Mt/a 60 Mt/a
Slow Fast
Post-tax cash flow (discounted) (8%) $M Real 4,195 4,094 4,349 4.548
Post-tax IRR % 26.5 24.8 25.9 25.7
Payback period (production commencement) Years 3.5 3.8 3.6 3.8
The financial evaluation presents the determination of the Net Present Value (NPV), payback period (time in
years to recapture the initial capital investment), and IRR for the project.
Annual cash flow projections were estimated over the life of the mine based on the estimates of capital
expenditures and production cost and sales revenue.
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The results of the analysis show the Cascabel Project to be potentially viable, warranting further study.
1.23 Adjacent Properties

No information from Adjacent properties has been relied on in this report.
1.24 Other Relevant Data and Information

1.24.1 Project Execution
Following completion of the PEA in 2019, it is expected that the project will progress to the Pre-Feasibility
Study (PFS) stage to further define and assess various mining, processing, materials handling and infrastructure
options, and ultimately select a preferred option for further evaluation at the Definitive Feasibility Study (DFS)
level with capital and operating cost estimates at an accuracy of +/- 10 to 15%. The Pre-Feasibility Study is
expected to be completed in December 2019 with a DFS scheduled for completion at the end of 2020.
Following DFS and upon project approval, project execution will follow consisting of Detail Engineering,
Procurement and Construction (EPCM / EPC).
SolGold will appoint EPCM / EPC consultants to engineer and design the new mine facility, to manage the
process of procuring (or procuring on behalf of SolGold) all tagged equipment and bulk materials, to manage
the logistics relating to equipment and materials, to enter construction contracts on behalf of SolGold and to
manage the construction and commissioning of the facilities required for the project. The strategy adopted for
project execution is based on an EPCM or EPC model.
During the execution, SolGold will self-perform certain activities which are best done by the owner and where
extensive local knowledge is essential. SolGold may manage aspects of the preparation for the new plant start
up and operation phase.
The objectives for the Cascabel Project are:

• To meet and exceed the safety targets for SolGold and the projects
• Develop and maintain good relationships with the local community and all stakeholders, making decisions
that are both socially and environmentally responsible throughout all stages of the project
• To maximise overall project NPV while maximising recovery of the Alpala Mineral Resource
• Design and construct the facilities using known and proven technology while taking advantage of new
technological developments in areas such as continuous mining, ore sorting, recovery and production of
by-products
• Develop plant designs that are safe to operate, environmentally sound and capable of achieving lowest
“life cycle” cost
• Complete project development and construction phases in a safe and responsible manner as early as
possible
• Complete all stages of the project on schedule and within budget.
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The schedule developed for the PEA shows the development of the underground block cave mine and
associated infrastructure is the longest duration activity. The approval process and the start of mine production
will govern to a large extent the timeline for the construction of other project facilities.
The permitting and approvals process will commence as soon as possible and will continue through the PFS
and DFS stages to ensure the proposed schedule will be achieved.
The PEA envisages that the project will be built using a modular approach. It is likely that some parts of the
plant may be more suited to pre-assembly. This concept of pre-assembled modules will be considered in detail
during the PFS phase. An indicative timeline for project implementation is shown in Table 1.24.1 below.
Table 1.24.1: Preliminary Project Dates

Activity Nominal Date
Pre-Feasibility Study December 2019
Definitive Feasibility Study December 2020
Procurement Tunnel & Shaft Sinking Equipment January 2021
Environmental License August 2021
Project Approval & Financing April 2021
Construction Permit June 2021
Detail Engineering June 2022
Construction Completed March2025
Commissioning June 2025
Handover to Operations July 2025
1.25 Interpretation and Conclusions

Based on the current Mineral Resource base (MRE#2) and geological, mining, metallurgical, environmental,
logistical, and financial information available for the study, this Preliminary Economic Assessment (PEA)
suggests that the Cascabel Project (Alpala Coper-Gold-Silver deposit) has the potential to support a large scale,
low cost underground block cave mining operation and associated processing, materials handling, and project
infrastructure facilities, capable of sustaining commercial production over a mine life in excess of 54 years
depending on the production scenario finally adopted.
The Alpala deposit is located in a favourable geological setting at low altitude in the proximity of infrastructure
including access roads, power, water supply sources, close to a major centre (Ibarra) potentially offering source
of labour, supplies and accommodation and facilities.
1.25.1 Risk and Opportunity Management
1.25.1.1 Mineral Resource Estimate
SRK is not aware of any significant risks and uncertainties that could be expected to affect the reliability or
confidence in the exploration information and Mineral Resource discussed herein.
As with all mineral projects, there is an inherent risk associated with mineral exploration. As such, there is no
guarantee that additional drilling will grow the model or improve confidence in the model. SRK are confident
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the Mineral Resource can be further upgraded in confidence with more drilling and that there is some potential
to grow the deposit model further.
The potential for the existing Mineral Resource and any future extensions to be converted to a Mineral Reserve
however, will only become well demonstrated following completion of a Prefeasibility study.
1.25.1.2 Mine Planning
Mining Plus has identified several opportunities to improve the project that should be studied in more detail
in a pre-feasibility study. These include:
• Campaign mining and stockpiling to expedite further the processing of higher grade
• Mechanical ore sorting to remove uneconomic material from the mill feed
• Production design optimisation
• Footprint layout design optimisation
• Materials handling optimisation.
Mining Plus has identified that typical risks for a large block caving project, exist in this project, including
seismicity, mudrush and cave performance. However, based on the available data, it is expected that these can
be managed to acceptable levels through further study and operation strategies, which would be typical for a
large block caving project of this nature.
1.25.1.3 Infrastructure
From an infrastructure perspective, Wood anticipate no obstacles to hinder the progression of the project to
the next phase. The project is located at a relatively low elevation when compared to other copper operations
in the Andes, it is located close to a major city and established national road and power transmission
infrastructure. Further work is required to optimise the tailings storage facilities.
1.25.1.4 Mineral Recovery Methods
From a mineral processing perspective, Wood anticipate no obstacles to hinder the progression of the project
to the next phase. Recoveries and concentrate grades are representative of a copper-gold porphyry deposit of
this nature with no deleterious elements reporting to the copper-gold-silver concentrate. Wood see the
following mineral processing opportunities for the project:
1. Production of a gold rich pyrite concentrate that may be sold or processed on site to produce gold bullion,
enhancing gold recovery.
2. Implementation of ore sorting technology to upgrade the concentrator feed grade.
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Wood see potential for generation of additional revenue from the Cascabel Project. To determine what
additional revenue may be generated, it is recommended to investigate the following areas in the next phase
of the project:
1. Pyrite Concentrate: The cleaner scavenger tailings represent the single largest loss of gold (and to a lesser
extent copper loss) from the flotation process. Flotation Testwork carried out to date indicates it is possible
to produce a gold rich pyrite concentrate from the first cleaner scavenger tailings stream. It may be
possible to produce a pyrite concentrate from the cleaner scavenger tailings stream. It is postulated that
this concentrate may be amenable to the Albion process (fine grinding – atmospheric oxidative leach) or
alternative hydrometallurgical processes to produce gold in the form of dore and copper in the form of
cathode. A cleaner scavenger concentrate sample(a pyrite concentrate)is currently undergoing Albion
testing.
Further Testwork is required to determine the viability of this concept.
2. Molybdenum: Molybdenum (as molybdenite) forms a halo around the high grade core of the deposit with
Mo assays less than 10 ppm in the high-grade core and molybdenum ranging from 10 ppm Mo to greater
than 40 ppm Mo (0.004 wt/wt%) in the lower grade periphery. Molybdenum tends to report with the
chalcopyrite to the copper concentrate. It may be possible to install a molybdenum recovery circuit and
perform a reverse float to recovery a molybdenum concentrate.
3. Magnetite: Significant magnetite occurs as veins, veinlets and the replacement of hornblende in the high-
grade core of the deposit. It may be possible to install a magnetic recovery circuit to recovery magnetite.
4. Sulphur: Sulphur (as contained in chalcopyrite) in the copper concentrate may be a viable sulphuric acid
credit from the smelter.
The potential production of sulfuric acid as a by-product in the smelting process is seen as an opportunity
to generate additional revenue. This will be investigated further as metallurgical Testwork progresses and
the study enters the next phase. Discussions with selected smelters during future negotiations on off-take
agreements as part of the concentrate marketing process should provide further appreciation of the value
of the sulphur credits.
The Testwork required to confirm the metallurgical response with respect to pyrite concentrate production,
molybdenum concentrate production and magnetite production is currently at the planning stage. Ore samples
have been selected and are being dispatched to the testing laboratory. A detailed metallurgical Testwork
program (including bulk copper gold concentrate production) is being developed and should be implemented
in the near future.
1.25.1.5 Capital and Operating Cost Estimates
Wood see the Capital and Operating Costs for the Cascabel Project to be in the same range as similar copper
porphyry projects.
1.26 Recommendations
Based on the findings of this study, it is recommended that given the strong fundamentals, the Cascabel Project
should progress to the Pre-Feasibility Study stage.
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Section 02 – Introduction
2. Introduction
2.1 Terms of Reference
This Preliminary Economic Assessment (PEA) has been prepared for SolGold Plc (SolGold) and Cornerstone
Capital Resources Inc (Cornerstone) for the Cascabel Project, Alpala Copper-Gold-Silver Deposit in Northern
Ecuador. SolGold is a leading exploration company focused on the discovery and definition of world-class
copper-gold deposits. SolGold has a first mover advantage in Ecuador, a highly prospective yet under-explored
section of the Andean Copper belt, home of multiple Tier 1 copper and gold projects and half the world’s
copper resources. SolGold is listed on the Toronto Stock Exchange (TSX) and the London Stock Exchange (LSE).
Wood was retained by SolGold to prepare a Preliminary Economic Assessment and a subsequent Technical
Report as a further step in the development of the Alpala Copper-Gold-Silver Deposit of the Cascabel Project.
This Preliminary Economic Assessment has been prepared in line with this requirement in compliance with the
Canadian National Instrument 43-101 (NI 43-101) Standard for Disclosure for Mineral projects.
This report has been prepared by multiple authors detailed in Section 2.4 Contributors to this Report.
2.2 Qualified Persons

Qualified Person Certificates as defined by NI 43-101 are included after the Date and Signature page of this
report. The relevant qualifications and experience and the sections each Qualified Person is responsible for are
detailed in the relevant Certificates.
2.3 Contributors to this Report

The following table details the work split between the various contributors to the preparation of this report.
Wood does not accept responsibility for the accuracy of any input by others.
Table 2.3.1: Work Split between Contributors to this Report

Section and Title Author
1 – Summary As per Relevant Chapter Author
2 – Introduction Wood (Summarised from all other sections)
3 – Reliance on other Experts Wood/Mining Plus/Knight Piésold/SolGold
4 – Property Description and Location SRK
5 – Accessibility, Climate, Local Resources, Infrastructure & SRK
Physiography
6 – History SRK
7 – Geological Settings and Mineralisation SRK
8 – Deposit Types SRK
9 – Exploration SRK
10 – Drilling SRK
11 – Sample Preparation, Analysis and Security SRK
12 – Data Verification SRK/Wood/Mining Plus/Knight Piésold
13 – Mineral Processing and Metallurgical Testing Wood
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Table 2.3.1: Work Split between Contributors to this Report

14 – Mineral Resource Estimate SRK
15 – Mineral Reserve Estimate Mining Plus
16 – Mining Method Mining Plus
17 – Mineral Recovery Method Wood
18 – Project Infrastructure Wood
19 – Market Studies and Contracts SolGold
20 – Environmental Considerations Knight Piésold
21 – Capital and Operating Cost Estimates Wood/Mining Plus/Knight Piésold
22 – Economic Analysis Ernst & Young (EY)
23 – Adjacent Properties SRK
24 – Project Execution Wood/Mining Plus
25 – Interpretation and Conclusions As per Relevant Chapter Author
26 – Recommendations As per Relevant Chapter Author
27 – References As per Relevant Chapter Author
2.4 Site Visits and Scope of Personal Inspections

SRK Exploration Services (UK)
The following personnel visited the Alpala Project between 26 and 31 October 2017.
• Martin Pittuck – Corporate Consultant (Mining Geology)
• James Gilbertson – Managing Director and Principal Geologist MCSM, CGeol, FGS
Mr Pittuck also visited site between 27 and 29 January 2018.
The following personnel visited the project site on 14th to 16th August 2018 for the purpose of developing a
general understanding of the project and reviewing specific aspect associated with their areas of input into this
report:
Wood Plc
• Cameron King – Manager Mining & Minerals, Brisbane (BE Chem Eng, University of Queensland, Aust)
• Dr Greg Harbort – Technical Director, Process (Bachelor of Engineering Metallurgy, University of
Queensland & Doctor of Philosophy, University of Queensland)
• Alfonso Ovalle Walker – Principal Underground Mining Engineer (Mining Eng, University of Chile)
• Jose Ale – Geotechnical Department Manager and Senior Geotechnical Engineer (visited site on 20th
October 2018 to review tailings storage facility requirements)
Knight Piésold
• Chris Brodie – Manager of Environmental Services (R.P. Bio)
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The following person visited the project site on 3rd to 5th April 2019 for the purpose of developing an
understanding of the geotechnical aspects of the project site.
Mining Plus Pty Ltd

• David Seers – Senior Geologist
2.5 Effective Date

The Effective Date of this Preliminary Economic Assessment is 25th March 2019.
2.6 Information Sources and References

Information used in this report has been gathered from a variety of sources including:
• Metallurgical Testwork undertaken by recognised Testwork laboratories, specifically ALS, Kamloops,
Canada (ALS)
• Information provided by qualified geologists employed by SolGold regarding the geology, drilling,
sampling and other exploration procedures and processes adopted by SolGold
• Information provided by SolGold pertaining to the past history of the Cascabel Project
• Information provided by SolGold in relation to the property location, property title and ownership and
mineral tenure
Several experts, as employees of the various independent consulting companies preparing this report,
contributed to the development of this report. These contributors are detailed below.
The following representative of Knight Piésold visited the project site and contributed to the development of
the environmental considerations, permitting and closure plan sections of this report.
• Chris Brodie – Manager of Environmental Services
The following representatives of Mining Plus contributed to the development of the mining method and
associated capital and operating cost estimates and project execution sections of this report.
• David Seers - Senior Geologist MAusIMM CP (Geo)
• William Bennett - Principal Mining Consultant M.Eng
• Dr Paul Hughes Rock Mechanics Consultant P.Eng, Ph.D., M.A.Sc
• Paul Murphy - Manager South America.
A well-established, competent and well-recognised laboratory, ALS Metallurgy located in Kamloops, BC,
Canada was engaged to perform the Metallurgical Testwork Program. Wood has relied on the results from this
Testwork program as the basis of the metallurgical response with respect to the project process plant.
Representatives of Wood as listed below, visited the project site and contributed to the development of the
mineral recovery and materials handling design, infrastructure requirements and the capital and operating cost
estimates of this report. These personnel are competent within their respective areas of input.
• Cameron King – Manager Mining & Minerals, Brisbane (BE Chem Eng, University of Queensland, Aust)
• Dr Greg Harbort – Technical Director, Process (Bachelor of Engineering Metallurgy, University of
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Queensland & Doctor of Philosophy, University of Queensland)

• Alfonso Ovalle Walker – Principal Underground Mining Engineer (Civil Mining Engineer, University of Chile)
• Jose Ale – Geotechnical Department Manager and Senior Geotechnical Engineer
Relevant sources of information are listed in Section 27 of this report.
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Section 03 – Reliance on Other Experts
3. Reliance on Other Experts

3.1 Market Studies amd Eonomic Analysis
The Qualified Person, Stephen G Cowley, for Section 19 (Market Studies) and Section 22 (Economic Analysis)
has relied on other experts for these sections as follows:
Section 19 – Market Studies:
This section was prepared by Eduardo Valenzuela, BE, MBus, FAusIMM, an employee of SolGold Plc.
While the work has been wholly relied upon the inputs have been checked and confirmed for relevance
and accuracy.
Section 22 – Economic Analysis:
This section was prepared by Ernst & Young (EY) in compliance with NI 43-101 by qualified accountants
in Australia and Canada. While the work has been wholly relied upon the inputs and outputs have been
checked and confirmed for relevance and accuracy.
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Section 04 – Property Description and Location
4. Property Description and Location

4.1 Summary
Cascabel project is registered as an Advanced Exploration Licence for metallic minerals. The project located in
northern Ecuador with the registered holder of the mineral tenure being Exploraciones Novomining S.A. (ENSA)
which was formerly called Santa Barbara Copper & Gold S.A. ENSA is currently jointly owned by SolGold Plc
(SolGold) (85%) and Cornerstone Capital Resources (15%). The Cascabel mineral tenure was granted on 12
January 2007 to ENSA. On the sale of ENSA by Santa Barbara Resources Ltd, Santa Barbara Resources Ltd were
granted a 2 percent net smelter return (NSR) as part of the terms of the sale of the property in 2012. This NSR
may be purchased as to one-half (1%) of the NSR for $1,000,000 within 3 months following completion of a
feasibility study, and the remaining one-half (1%) NSR for $3,000,000 within 3 months following a production
decision.
Regulatory licenses and authorisations in place for the Cascabel Project include:
• Mining title for Advanced Exploration
• Environmental Licence
• Water License
• Fuel Storage License
• Certificate of compliance with Employers Obligations.
4.2 Location
The Cascabel Project is located within the Imbabura province of northern Ecuador, approximately 100 km north
of the capital Quito and 50 km north-northwest of the provincial capital, Ibarra (Figure 4.2.1). The northern
border of the project lies approximately 20 km south of the Colombia-Ecuador border, and 75 km southeast
of San Lorenzo, located on Ecuador’s pacific coast.
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Figure 4.2.1: Location Map (Source: SolGold, 2018)
4.3 Mineral Tenure

The current mining licence was granted in March 2011 to Santa Barbara Copper and Gold S.A. (Santa Barbara)
under the name Cascabel with cadastral code 402288. The licence is valid for 25 years and renewable for a
further 25 years.
The licence was initially issued to ENSA on 12 January 2007. ENSA was subsequently sold to Cornerstone
Ecuador S.A. (CESA), a subsidiary of Cornerstone Capital Resources Ltd in July 2011. In July 2012, SolGold Plc
entered into a Earn-in Agreement with Cornerstone, ENSA and Cornerstone Ecuador S.A (CESA) to explore the
Cascabel licence. ENSA is currently jointly owned by SolGold (85%) and Cornerstone Capital Resources (15%).
(Earn-in Agreement).
In February 2013 the Earn-in Agreement was supplemented by a binding Term Sheet between SolGold Plc,
Cornerstone, CESA and ENSA . (Term Sheet)
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The Ecuador Mining cadastre classifies the Cascabel licence area as a single area under cadastral code 402288.
The license area covers 4,979 hectares (4.5 km2) and is registered as an Advanced Exploration Licence for
metallic minerals.
The license area is recorded under both political and geographical datums, being PSAD57 and WGS84 UTM17N
respectively (Table 4.3.1 and Figure 4.3.1).
Table 4.3.1: Cascabel Licence Boundary Coordinates

Province Territory Parish Sector
Imbabura Ibarra Carolina/Lita Rocafuerte
Datum: PSAD57 Datum: WGS84 UTM 17N

Vertice ID X Y X Y
PP 796,000 10,090,000 795,741.8 89,623.3
PP01 798,700 10,090,000 798,441.8 89,623.3
PP02 798,700 10,089,700 798,441.8 89,323.3
PP03 799,000 10,089,700 798,741.8 89,323.3
PP04 799,000 10,089,000 798,741.8 88,623.3
PP05 799,700 10,089,000 799,441.8 88,623.3
PP06 799,700 10,088,600 799,441.8 88,223.3
PP07 800,000 10,088,600 799,741.8 88,223.3
PP08 800,000 10,087,000 799,741.8 86,623.3
PP09 801,000 10,087,000 800,741.8 86,623.3
PP10 801,000 10,082,000 800,741.8 81,623.3
PP11 794,000 10,082,000 793,741.8 81,623.3
PP12 794,000 10,088,500 793,741.8 88,123.3
PP13 795,000 10,088,500 794,741.8 88,123.3
PP14 795,000 10,089,500 794,741.8 89,123.3
PP15 796,000 10,089,500 795,741.8 89,123.3
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Figure 4.3.1: Location and Vertices of the Cascabel Tenement (ID 402288) (Source: SolGold, 2018)
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4.4 Underlying Agreements

As part of the terms of the sale of Exploraciones Novomining S.A. by Santa Barbara Resources, Santa Barbara
Resources Ltd were granted a 2 percent net smelter return (the “NSR”). The NSR is the gross amount received
from the sale of ores, concentrates or precipitates process for the mine less the fair market costs of smelting,
refining, sampling, charges and penalties for treatment and testing and less the fair market costs of handling,
transporting, securing and insuring that material. Pursuant to the Earn-in Agreement and the Term Sheet,
SolGold Plc is entitled to the purchase of 1% NSR for US$1 M within 3 months of the completion of a bankable
feasibility report, and a further 1% NSR for US$3 M within 3 months of a decision made by the owners to mine
the projects. Since the dissolution of Santa Barbara Resources Ltd in 2015, the benefit of the NSR has been
held by a third-party agent in trust for the benefit of the prior shareholders of Santa Barbara Resources Ltd.
In the event Cornerstone Capital Resources Inc.’s (Cornerstone) equity interest in ENSA is diluted below 10%,
Cornerstone’s equity interest will be converted to a half of one percent (0.5%) interest in a Net Smelter Return
and SolGold will have right to purchase the Net Smelter Return for US$3.5 million at any time. As of the 25th
March 2019, Cornerstone’s equity interest in ENSA had not diluted below 10%.
4.5 Licences and Authorisations

Regulatory licenses and authorisations currently related to the Cascabel Project include:
• Registration of the Cascabel Mining Title for Advanced Exploration under Code 402288. and approved by
the Ministry of Natural Resources, Mines North Sub-secretariat, Ecuador - MRNNR-SRM, and the Mining
Regulations and Control Agency of Ecuador - ARCOMM).
• Environmental License under Mining Title Code 402288. (Ministry of the Environment, Ecuador).
• Water Licensing approved by the National Secretariat of Water of the Republic of Ecuador (SENAGUA).
• Fuel Licensing approved by the Hydrocarbon Regulation and Control Agency (“ARCH”)
• ANEXO 2.5. Copia de la Declaración Juramentada [ANNEX 2.5. Copy of the Affidavit]
• Certificate of Compliance with Employers Obligations (Ecuadorian Social Security Institute).
All licenses listed above remain current and no additional licences beyond the granted licenses above are
required to undertake exploration within the Cascabel licence.
An extension to the current advanced exploration area was granted in 2016 to allow drilling of the Aguinaga
deposit.
SolGold have entered into Land Access Agreements to all areas of the Cascabel Project concession with
proprietors and maintains strong working relationships with all stakeholders.
4.6 Environmental Considerations

Exploration and mining activities in Ecuador are subject to provisions of the Mining Act, 2009 (Ley de Minería).
According to the Mining Act, the holders of mining licences must obtain and submit environmental studies to
prevent, mitigate, control and repair the environmental and social impact resulting from such activities.
The Environmental Department of the Ministry of Energy and Mines is responsible for the approval of the
environmental studies of the Project. According to the Environmental Regulation for Mining Activities
(Reglamento Ambiental para Actividades Mineras), the required environmental studies are:
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• Environmental Impact Preliminary Evaluation (“EIPA”). The EIPA is a general environmental study which
describes the environmental components, project activities, potential environmental effects, and planned
prevention, correction, and/or mitigation measures.
• Environmental Impact Assessment (“EIA”), The EIA is a detailed, multidisciplinary technical study which
identifies and evaluates the potential negative environmental effects and details specific preventative or
corrective measures for the effects.
• Environmental Audit (“EA”). The EA provides a means of assessing and controlling the measures proposed
in the EIA and legal framework.
In August 2013, an Environmental Licence for advanced exploration including drilling was issued by the
Ecuadorean Ministry of Environment. SolGold has commenced acquisition of landholdings in the Cascabel
project area in anticipation of infrastructure requirements for the project development. As of the 30th of
November 2018, SolGold has purchased 686 hectares with negotiations ongoing on other properties.
SRK has not carried out any legal due diligence relating to the Environmental Licence. There are no existing
environmental liabilities on the property.
4.7 Mineral Rights in Ecuador

Mining in Ecuador is mainly governed by the Mining Act (“MA”), issued on 29 January 2009 and the General
Regulation of the Mining Act (“GRMA”), issued on 16 November 2009, which regulates activity as a whole. The
MA and GRMA recognise, regulate, and classify mining activities depending on production levels, namely:
large-scale mining; medium-scale mining; small-scale mining; and artisanal mining.
To conduct exploration in Ecuador, a mining licence must be granted by the Ministry of Mining and registered
with the respective mining registry managed by the Agency for Regulation and Control of Mining (“ARCOM”
(Agencia de Regulacion y Control Minero)). The term of a mining licence is 25 years and is renewable for similar
periods upon request by the licence holder. Once the licence has been granted, exploration may be conducted
for a four-year term, which is identified as the initial exploration period and governed by Article 37.
The holder of the licence is entitled to request a further four-year period from the Ministry of Mines, under
Article 37, to proceed with advanced exploration. At this point, part of the exploration licence will be
relinquished, although there is no legislated minimum area to be dropped. The Ministry will process this
application provided the company has met the minimum investment commitment during the initial exploration
stage and submitted a plan of activities and minimum expenditures contemplated under the advanced
exploration stage.
Other aspects of the Mining Act that are considered to be pertinent are described as follows:
Regarding taxation and royalties - The holder of the licence is subject to other taxes, payments and
contributions such as:
• Income Tax – 25% of profits
• Labour Profit-Sharing Tax – 15% (12% to the State and 3% to employees in the case of large-scale mining,
and 10% to the State and 5% to employees in the case of medium- and small-scale mining)
• Value Added Tax – 12%
• Municipal taxes and contributions, social security contributions
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• Annual conservation fee that the holder of the licence shall pay for each mining hectare by March each
year – This equates to 2.5% of the government mandate “basic salary”, currently US$394, per hectare of
the mining licence for the initial exploration period for fiscal year 2019. This doubles to 5% of the basic
salary per hectare for the advanced exploration and economic evaluation periods, and doubles again to
10% during the operational phase of the mining licence.
In addition to the taxes outlined above, the holder of the licence must pay to the State a royalty of no less than
5% of the value of all sales and no more than 8% for the sale of gold, silver and copper (large-scale mining).
For medium and small-scale mining, the royalty is 4% and 3% respectively, while artisanal mining is not subject
to royalties.
The Ecuadorian government has various taxes, duties and levies that may or may not be applicable to future
mining operations depending on the mining exploitation contract established between SolGold and the
Ecuadorian government and the laws in force at that time.
Regarding surface rights – The holder of a mining licence has an easement over the surface land in order to
duly exercise its mining rights. The rights emanating from this easement include, among others, the right to
occupy certain areas for constructions required for mining activities, as well as rights related to waterways,
railways, landing strips, ramps, transport belts, and electrical installations. The easement must be registered in
the mining registry managed by the ARCOM.
The owner of the surface land is entitled to receive payment from the holder of the mining licence for the
easement granted. In certain cases, the easement rights, including terms and conditions, are expressly agreed
to in contracts executed between the holder of the licence and the owner of the surface land. If no agreement
is reached, ARCOM may order the creation of the easement and determine the mandatory payments due to
the owner of the land.
SRK understand that SolGold holds all required permits and easements to operate across the Alpala deposit.
In August 2013, an Environmental Licence for advanced exploration including drilling was issued by the
Ecuadorean Ministry of Environment.
On July 26, 2013, the National Water Secretariat for the Mira Hydrographic Demarcation resolved to grant
ENSA the right to exploit the waters of River Mira, to be used during the execution of the advanced mining
exploration period at the Cascabel Project. The water concession is valid for a renewable term of ten years. The
water intake shall be used in mining and industrial exploration activities within the area authorised by the
Ministry of Mines. ENSA shall pay US$0.0039 per cubic metre to the National Water Secretariat.
Two Concessions for the Use and Consumption of Industrial Water been granted for the Cascabel Project for
advanced exploration activities. These ten-year licenses were approved in July 2013 and August 2017. The
combined concessions allow extraction from a maximum of 14 points or water sources (water collection points
are included for use in advanced exploration activities and for use in camps); and an authorised flow rate of
1.5 l/s for each point.
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4.8 Comments on Section 4

Cascabel project have in place the necessary regulatory licenses and authorisations required for its current
status of Advanced Exploration. Further, with the support of the community and government organisations, it
is expected that future license and authorisation requirements to advance the project will successfully be
attained.
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Section 05 – Accessibility, Climate, Local Resources, Infrastructure and
Physiography
5. Accessibility, Climate, Local Resources, Infrastructure and

Physiography
5.1 Summary
Cascabel is in northern Ecuador and is located three hours north of Quito, the capital city of Ecuador. Access is
via a sealed highway that runs along the Rio Mira River. The closest major centre is Ibarra located 90 km by
road from the north of the concession. The property contains three small settlements: Santa Cecilia Village,
Rocafuerte Base Camp and Alpala Camp. Three further settlements lie proximal to the project area at San Pedro,
Urbina and Cachaco. Local labour is drawn from these settlements.
The topography of the project area is moderate to steep with elevations rising from 750 to 2,140 m above sea
level. The rugged terrain is incised by four large drainage complexes. Vegetation is tropical forest with a well-
developed soil horizon up to 10 m thick in parts.
The climate of the Project area is characterised by humid weather, with a bi-modal rainy season having peaks
in December and March, each with rainfall in excess of 200 mm on average. Total average rainfall for the region
is approximately 1,500 mm. Regionally, temperatures do not fluctuate greatly throughout the year. Average
annual temperature is approximately 17ºC, with maxima in excess of 30ºC and minima typically around 10ºC.
5.2 Accessibility
The Cascabel Project is easily accessible from Quito, the Capital city of Ecuador. International flights regularly
arrive and depart from Mariscal Sucre International airport, 18 km east of Quito, from major carriers including
KLM, Qantas, American Airlines and Lufthansa. (Air Canada has also announced direct flights from Toronto to
Quito commencing in December 2019.)
From Quito, the project is accessible via the multi-lane E35 Pan-American Highway to Ibarra (approximately
100 km) and connected to the northern margin of the licence (approximately 90 km) via the sealed two lane
E10 highway that runs along the Rio Mira River valley. Driving time to the project offices at Rocafuerte is
approximately three hours.
Access to Alpala Camp within the Cascabel licence is via Carmen Road, a maintained two-lane dirt road from
Rocafuerte Offices through Santa Cecilia village, to Carmen. The main exploration prospects within Cascabel
are accessible via a series of maintained single lane dirt roads, as well as single lane 4x4 tracks and hiking trails
off the Carmen road. Alpala Camp is approximately 12 km or 40 mins drive from the Rocafuerte offices.
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Physiography
Figure 5.2.1: Major Access Roads (black) and Tracks (grey) for the Cascabel Project (Source: SolGold, 2016)
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Physiography
5.3 Local Resources and Infrastructure

The property is largely undeveloped, containing only three small settlements, Santa Cecilia Village Rocafuerte
Base Camp and Alpala Camp. Three further settlements lie proximal to the project area at San Pedro, Urbina
and Cachaco.
Infrastructure in the region and throughout Ecuador is generally good, with road access, power, water, skilled
labour and unskilled labour all readily available in the local area. A two-lane sealed highway (E10) connecting
the cities of Ibarra and San Lorenzo runs along the northern margin of the property, and a further multi-lane
highway (E15) provides a link further south to the port city of Esmeraldas. A multi-lane highway (Pan-American
E35) links Ibarra and the capital Quito. (Figure 5.3.1).
Power generation in Ecuador is dominated by hydro-electric with 18 power plants across the state. Currently
eight new hydroelectric dams are under construction in Ecuador, with the first completed in April 2016. Once
fully operational, this power station is set to generate 1,500 MW with Ecuador aiming for 86% of electricity
needs to be met by hydropower in 2020.
A small hydro-electric site is located at Carolinas to the southeast of the licence (Figure 5.3.1). Its current design
capacity is unknown.
Over 450 Ecuadorians are employed by Exploraciones Novomining.S.A (ENSA), including over 40 geologists.
Local labour is often available from Rocafuerte and surrounding settlements. Other services and goods can
often be procured from the surrounding settlements, with further options available at Ibarra or Quito.
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Physiography
Figure 5.3.1: Local Infrastructure in the Vicinity of the Cascabel Project (Source: SolGold, 2016)
Ecuador is evolving rapidly in terms of infrastructure and development, with 10 renewed and 13 operating
nationwide airports, 4 of which are international. Ecuador has more than 966 km of state railways, linking
highlands and coastal regions and is mainly used for tourism purposes. The port system comprises seven state
ports and ten private docks, specialised in general cargo and oil. The three major ports include Guayaquil,
Manta, and Bolívar. The Ministry of Transport and Public Works contribute to national development through
the formulation of policies, regulations, plans, programs and projects to ensure a National Intermodal and
Multimodal Transport, based on an international quality transport network standards, aligned with economic,
social, environmental guidelines and the national development plan.
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Physiography
5.4 Climate
Based on long term data from regional stations operated by the National Weather and Hydrology Institute
(Insitituto Nacional de Meteorología e Hidrología, or INAMHI), the climate of the project area is characterised
by humid weather, with a bi-modal rainy season, having peaks in December and March, each with rainfall in
excess of 200 mm on average. Total average rainfall for the region is approximately 1,500 mm. The Alpala camp
receives substantially higher rainfall than Rocafuerte, due to the orographic effect of its mountainous location.
The driest month is July with less than 30 mm of rain on average.
The climate in the mountainous regions of Ecuador is typically cooler than coastal parts of the country due to
the altitude. The Alpala camp lies at approximately 1750 m RL and nightly temperatures can drop below 9°C.
Rocafuerte lies at approximately 800 m RL and is often significantly warmer than Alpala.
Regionally, temperatures do not fluctuate greatly throughout the year. Average annual temperature is
approximately 17ºC, with maxima in excess of 30ºC, and minima typically around 10ºC.
5.5 Physiography
Ecuador comprises three main physical regions: The Costa (coastal region), the Sierra (highland region) and
the Oriente (eastern region). A central graben called the inter-Andean graben effectively divides the Sierra
region into the Cordillera Real (Eastern Cordillera) and the Cordillera Occidental (Western Cordillera). The
Cascabel Project area is located on the lower western foothills of the Cordillera Occidental, within the tropical-
savannah climate zone of Ecuador.
The topography is moderate to steep, with elevations of 750 m in the valley bottom to 2,200 m in the higher
exploration zones, incised by dendritic drainage complexes within the tributary watersheds of the Mira River
basin.
The Project area is characterised as having a patchwork of remnant mature tropical forest interspersed with
disturbed forest and cleared/agricultural land. The nearest protected area is the Cotacachi Cayapas Ecological
Reserve, which lies approximately 20 km to the southwest and is well outside of the Mira River catchment and
watershed.
The topography of the project area is moderate to steep (Figure 5.5.1) with elevations rising from 750 to
2,140 m above sea level. The rugged terrain is incised by four large drainage complexes. Vegetation is tropical
forest with a well-developed soil horizon up to 10 m thick in parts.
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Physiography
Figure 5.5.1: Typical Landscape in the Cascabel Project Area (Source: SRK, 2017)
5.6 Location of Mine Facilities

Areas suitable for the location of mine facilities including tailings storage areas, waste rock disposal and
processing plant are currently under consideration by SolGold. However, no details have been provided at this
time.

The availability of power, water, mining personnel are sufficiently available or are understood as part of the
Project development by SolGold and will not inhibit development. The concession area is sufficiently large to
host required infrastructure, including underground operations, processing plant, tailings facility, and any
waste rock storage. It is reasonable to expect that, should additional surface rights be required to
accommodate infrastructure, they could be obtained through existing and known processes.
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Section 06 – History
6. History
6.1 Summary
From 1980 to present day 10 different entities have conducted field activities over the Cascabel area.
Historical exploration of the project area, undertaken from 1980 to 2011, highlighted widespread geochemical
anomalism in stream pan-concentrates, stream sediments and rock chips over a 9 km2 area in the northern half
of the license area. Previous explorers focused on the source of gold, copper, lead and zinc in stream sediments,
which led to the location of gold-bearing, polymetallic epithermal quartz veins in streams that flank the
northern periphery of the Alpala deposit.
Upon signing of the agreement, SolGold assumed technical management and under Dr Bruce Rohrlach and
2014.
Rock channel-sampling and structural measurements of quartz veins over a 430 m by 200 m area at Alpala
provided the geological context for a diamond drilling program using a man-portable drill rig that commenced
in September 2013.
The first four holes of the drill program confirmed the surface mineralisation to depths of about 200 m.
However, the course of the program was changed by the length and high-grades of chalcopyrite-bearing
quartz vein stockworks encountered in Hole 5, which was started less than 18 months after the location of
surface mineralisation. This fifth drill-hole marks the discovery of the high-grade world-class Alpala porphyry
copper-gold deposit, with an overall interval of 1306 m at 0.62 % Cu and 0.54 g/t Au, including 552 m at 1.03
% Cu and 1.05 g/t Au from a 778 m down-hole depth.
6.2 Introduction
The earliest documented exploration in the Cascabel project area includes work conducted by the Directorate
General of Geology and Mines (DGGM) in 1980 to 1984 and a cooperative agreement with the Belgium Mission
from 1984 to 1985 (Gilbertson, 2017). This work identified quartz veins, stockworks and disseminated sulphides
at Parambas Creek in the southern part of the current tenement. An agreement between Rio Tinto Zinc (RTZ)
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and the Ecuadorian Government in 1986 facilitated the ICP analysis of rock samples from outcrops within the
area but the focus of this work was west of Junin, southwest of Cascabel. Lumina Gold Corp, formerly Odin
Mining and Exploration Ltd, undertook limited stream sediment sampling in the license area during 1988 to
1991, which generated Ag, Cu, Pb and Zn anomalies. However, Odin relinquished the Cascabel tenement back
to the Ecuadorian Government. The Ecuadorian Mining Development and Environmental Control Project (1998
to 2000), with the assistance of the British Geological Survey, completed 1:50,000-scale geological mapping
and stream-sediment sampling over much of the Western Cordillera. This work identified Au-Ag-Cu-Pb-Zn-
bearing, epithermal-type quartz veins hosted by propylitic- and clay-silica-altered volcanic rocks in the vicinity
of Cascabel, including outcrops in the Parambas Creek.
ENSA (which was formerly called Santa Barbara Copper & Gold S.A.) were granted the current Cascabel license
area along with other concessions in 2008. Subsequent prospecting, stream sediment- and rock-sampling
generated results anomalous in Au, Ag, Cu, Pb and Zn. Cornerstone Capital Resources Inc. acquired the project
from Santa Barbara Resources Limited, through the purchase of ENSA in February 2011. Prospecting,
reconnaissance mapping and a stream sediment survey in June - July 2011 delineated Cu-Au-Mo and Pb-Zn-
As rock chip anomalies, as well as Cu-Mo-Au stream sediment anomalies. A central 4 km by 5 km area of
interest was identified around porphyry-style outcrops in Moran Creek (Rohrlach et al., 2015). Gold-anomalous
rock samples, containing > 0.1 to > 1 g/t Au, were collected in Cachaco Creek and Parambas Creek from
outcrops that are located < 1 to 3 km from what became the discovery outcrop in Alpala Creek.
Table 6.2.1: Summary of Ownership History and Key Activities

Period Company Major Activities Advancing Cascabel Project
1980-1984 Ecuadorian Institute of Mining (INEMIN) in Noroccidente Project
JV with Codelco (Chile) through
the Llurimagua JV.
1984-1985 INEMIN & Belgium- Preliminary inspections
Ecuadorian Mission (BEM)
1986 INEMIN (ex-DGGM) & Rio Tinto Western Cordillera I: analyses of samples
Zinc Corporation from anomalies Parambas and Morán Rivers and
extensions identified in previous INMEM/BEM study
1988-1991 Lumina Gold (ODIN Mining & Exploration) Preliminary stream sediment sampling
1991-1997 Japan International Cooperation Agency Discovered porphyries that intrude
the Apuela batholith at Junin - in the same belt of
mineralisation as the Cascabel licence (proximal to but
not including Cascabel)
1998 - 2000 Government of Ecuador Western Cordillera II: Definition of geochemical provinces
within the Western Cordillera including Cascabel as part
of a Cu-Pb-Zn-Ag-Au epithermal deposit.
1998-2000 INEMIN EMDEC Project (Ecuadorian Mining Development &
Environmental Control Project)- 1
2008-2011 Santa Barbara Copper and Gold (SBCG) Stream Sediment & Rock Sampling (Indicated presence of
nearby porphyry system)
2011-2012 Cornerstone Capital Resources (CCR) Stream sediment, pan-con, rock chip sampling (93
samples)
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Table 6.2.1: Summary of Ownership History and Key Activities

Period Company Major Activities Advancing Cascabel Project
2012- Exploraciones Novomining SA May 2012: Alpala discovery outcrop found. Immediate
Present (ENSA) (SolGold 85% & CCR 15%) follow-up field programs
soil/rock chip/rock-saw channel sampling
Anaconda mapping
Soil spectral mapping – coarse fragments in soils
Nov 2012: Geophysics (ongoing)
Aug 2013: Environmental licence received from MAE
Sep 2013: Drilling commences at Alpala (ongoing)
Hole 5 marks the discovery of the high-grade world-
class Alpala porphyry copper-gold deposit
Dec 2017: Mineral Resource Estimate #1 announced
Nov 2018: Mineral Resource Estimate #2 announced
6.3 Noroccidente Project (1980-1984)

The first exploration undertaken over the Cascabel Project and surrounding areas was through an initiative of
the General Director of Geology and Mines (“DGGM”) called the Noroccidente Project. The project targeted
the mineral resources in the northern provinces of Carchi, part of Esmeraldas and Imbabura. Work involved
1:500,000 scale regional geology mapping and the collection of 822 stream sediment samples which were
analysed by atomic absorption spectroscopy (“AAS”) for gold, silver, copper, zinc and lead. This work identified
10 anomalies, including the Junín copper-molybdenum porphyry mineral property currently owned by Empresa
Nacional Minera del Ecuador (“Enami”) in JV with Codelco (Chile) through the Llurimagua Joint Venture.
The National Government of Ecuador signed a technical assistance agreement with the Government of Belgium
to undertake exploration work over each of the anomalies detected, including the Parambas River (partly within
the Cascabel Licence) and to expand regional exploration (DGGM, 1980). The Cascabel project was originally
named the Parambas Project.
6.4 Belgian Cooperation Project (1984-1985)

A cooperative agreement between the Belgian Mission and the Ecuadorian Institute of Mining (“INEMIN”, ex-
DGGM) resulted in geological, geochemical and geophysical investigations being carried out for VMS
(Volcanogenic-massive sulphide) and porphyry Cu mineralisation. This exploration covered the Cascabel
licence and surrounding areas.
Stockworks, veins and disseminated sulphides and sulphosalts were discovered over a number of sites. Only
the Junín, Parambas (Cascabel) and Zarapullo occurrences were deemed to have economic potential.
6.5 Western Cordillera I (1986)

Through an agreement between INEMIN (ex-DGGM) and the Rio Tinto Zinc Corporation (RTZ), selected
samples collected from previously determined anomalies (Parambas and Morán Rivers) and their extensions
were reanalysed using Inductively Coupled Plasma (“ICP”) for 29 elements.
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The samples had been historically collected during exploration projects sponsored by the United Nations and
with technical assistance from the United Kingdom and cooperation with Belgium.
Some exploration and sampling to the west of Junín (outside the current Cascabel licence area) was undertaken
where additional samples were collected for analysis by RTZ. A database was compiled containing 9,120
samples (INEMIN, 1990).
6.6 Lumina Gold Corp (Formally Odin Mining and Exploration Ltd). (1988-1991)
Lumina Gold Corp conducted limited stream sediment sampling in the Cascabel licence area and surrounding
areas. Anomalous Cu, Pb, Zn, and Ag results were obtained in an area controlled by mainly propylitic alteration.
Despite this, Odin did not continue its work and the licence was returned to the Ecuadorian State (Silva and
Rosero, 2011).
6.7 Japan International Cooperation Agency (1991-1997)

Detailed exploration studies were conducted by the Japan International Cooperation Agency - Metal Mining
Agency of Japan (“JICA-MMAJ”) in Junín area proximal but, not including, the Cascabel licence and discovered
porphyries that intrude the Apuela batholith.
They concluded that the mineralisation is associated with zones of sericitic alteration and facies of granodioritic
porphyries. Using the available geological data, preliminary mineral resource estimates were made for Junín
which indicated 982 Mt at 0.89% Cu, 0.04% Mo and 0.01 g/t Au with a 0.4% Cu cut-off grade (Gribble, 2004).
Whilst not adjacent, the Junín deposit is regionally in the same belt of mineralisation as the Cascabel licence
(JICA, 1998). SRK cautions that Mineral Resources are not Mineral Reserves and do not have demonstrated
economic viability.
6.8 Western Cordillera II (1998-2000)

Under the Mining Development and Environmental Control Project (“PRODEMINCA”) along the Western
Cordillera, the Government of Ecuador collected 15,175 stream sediment samples. Samples were analysed by
ICP for 38 elements. Spatial and geochemical analysis of this data led to the definition of geochemical provinces
within the Western Cordillera.
The Parambas sector, which contains the Cascabel licence, within the framework of this project was considered
as a Cu-Pb-Zn-Ag-Au epithermal deposit, consisting of irregular veins in an area of propylitic alteration and
locally siliceous. The mineralisation may be related to the volcanic activity of the San Juan de Lachas Unit
(Boland et al., 2000).
6.9 Santa Barbara Copper and Gold SA (2008-2011)

The private company Santa Bárbara Copper and Gold S.A. (SBCG) applied for the Cascabel licence from the
Ecuadorian State, along with other licences and in 2008, submitted an environmental impact study to the
Ministry of the Environment. Stream silt surveys and other prospecting identified widespread geochemical
anomalism.
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6.10 Cornerstone Capital Resource (2011-2012)

Upon signing of the agreement, SolGold assumed technical management and under Dr Bruce Rohrlach ,
2014.
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Section 07 – Geological Setting and Mineralisation
7. Geological Setting and Mineralisation

7.1 Summary
The Eocene Alpala porphyry deposit lies in a zone of overlap between the Eocene and Miocene Andean
porphyry belts that extend from Colombia through Ecuador and Peru into Chile and Argentina. The basement
rocks consist of tholeiitic basalts of the Dagua-Piñon Terrane, an oceanic plateau that is believed to have
accreted to South America in the Late Cretaceous. The magmatism in northern Ecuador and southern Colombia
is characterised by the lack of a well-developed arc and erratic pluton distribution. This suggests a low-angle
subduction environment, conducive to compression and porphyry mineralisation.
Submarine arc volcanism deposited the volcano-sedimentary rock sequence of the Macuchi Formation during
the Palaeocene through the Eocene, followed by the sub-aerial deposition of volcanic and volcaniclastic rocks
of the San Juan de Lachas Formation during the Oligocene to mid-Miocene. Late Eocene to Miocene age
plutons and stocks of hornblende-bearing diorite, quartz diorite and tonalite form major intrusive complexes,
known as the Santiago batholith (Eocene) and Apuela batholith (Miocene). The Apuela batholith hosts the Late
Miocene Junin (Llurimagua) copper-molybdenum porphyry deposit.
The Toachi Fault Zone is a major north-northeast trending structure that separates Eocene magmatism to the
west from Miocene magmatism to the east. The TFZ cuts though both the Macuchi and San Juan de Lachas
Formations and juxtaposes these sequences against Cretaceous sedimentary rock units.
The major rock types of the Cascabel tenement consist of Cretaceous siltstones and minor sandstones that are
unconformably overlain by a Tertiary sequence of andesitic lavas and volcano-sedimentary rocks. A series of
Middle to Late-Eocene (Bartonian) hornblende-bearing diorites, quartz diorites and tonalities intrude the
volcano-sedimentary sequence and form plutons, stocks and dykes. At least six major phases of intrusion have
been delineated based on composition and relative timing-relationships with porphyry-related vein-stages.
Diamond drilling to date has defined a northwest-trending, steeply northeast-dipping dike-stock intrusive
complex that extends more than 2,000 m northwest by 1,000 m northeast and exceeds 2,000 m in height.
The porphyry-related vein types and paragenesis at Alpala indicate a systematic progression in time and have
been described by SolGold using the nomenclature originated by Gustafson and Hunt (1975). Early-stage veins
contain quartz and/or magnetite. Planar and through-going, B-type quartz veins cross-cut the early vein types
and consist of quartz-magnetite-chalcopyrite. At least two stages of B-type veins are recognised, with
magnetite more abundant in early B1 veins and chalcopyrite more common in the later B2 veins. The B-type
veins contain the majority of the copper and gold in the deposit. Chalcopyrite-rich, C-type veins contain rare
to minor bornite and cross-cut earlier vein types. The C-type veins contain significant amounts of metal but
constitute a small volume-portion of the drill-core. The B- and C-type veins are spatially associated with
intrusions that show variable feldspar-destructive, sericite-chlorite+clay overprinting of biotite-actinolite and
chlorite-epidote alteration mineral assemblages.
Late-stage, pyritic D-type veins with quartz-sericite-pyrite selvedges contain chalcopyrite, minor bornite and
locally, molybdenite. Many of the later vein types re-open earlier vein stages and contain anhydrite. Late-stage
hydrothermal-matrix breccia bodies cut the volcanic host-rocks and the intrusions, typically post-date sericite-
chlorite+clay alteration and are locally cut by pyritic D-type veins and anhydrite veins.
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The earliest formed copper sulphide minerals observed in drill-core consists of abundant chalcopyrite and rare
bornite in B-type veins. Chalcopyrite most commonly forms after, and surrounds, cubic and massive pyrite in
C- and D-type veins. It also occurs in anhydrite-rich veins and B-type veins that have been re-opened by later
vein types. Late-stage bornite is in textural equilibrium with pyrite and chalcopyrite in C- and D-type veins,
which suggest that these later-stage veins formed at a lower temperature and a higher sulfidation state than
chalcopyrite and rare bornite in early-stage B-type veins.
There is a very strong correlation between the abundance of B-type veins and copper-gold grades. which are
highest within the pre-mineral diorite (D10) and syn-mineral quartz diorite (QD10) bodies. Raw assay statistics
also highlight these two bodies as being the primary host rocks.
7.2 Regional Geology

The accretionary terranes around the Cascabel licence are considered to hold significant potential for hosting
economic porphyry systems due to the combination of terrane accretion and compressional tectonics, shallow
subduction, crustal scale sutures and calc-alkaline magmatism.
At the regional scale, the Cascabel Project lies within the Western Tectonic Realm (“WTR”) of Ecuador and
Colombia according to Cedial et al. (2003) and within the Cordillera Occidental of northern Ecuador. The
Western Tectonic Realm of Ecuador and Colombia comprises the three composite terrane assemblages: PAT
(Pacific assemblage), CHO (Choco arc) and CAT (Caribbean terranes) as shown in Figure 7.2.1. Within the Pacific
composite terrane assemblage (“PAT”) there are three terranes, from east to west: Romeral (“RO”), Dagua-
Pinon (“DAP”) and Gorgona (“GOR”) terranes. The Dagua-Pinon terrane (“DAP”) is correlated with the Pinon
and Macuchi terranes of western Ecuador.
Complete characterisation of the terranes of the WTR, including their exact boundaries and times of collision
with the continent, is not well known. However, all litho-tectonic terranes of the WTR contain fragments of
Pacific oceanic plateaus, aseismic ridges, intra-oceanic island arcs and/or ophiolites (i.e. obducted oceanic
crust). All terranes were developed in or on oceanic basement and all are allochthonous with respect to
continental South America.
In the PAT, the RO terrane contains ultramafic complexes, ophiolite sequences and oceanic sediments of
probable Jurassic to early Cretaceous age. The Romeral terrane is traced southward into Ecuador where it
underlies the western margin of the Cordillera Real and much of the Inter-Andean depression beneath
extensive Miocene, Pliocene and recent volcanic cover.
To the west of the Romeral terrane, the Dagua-Pinon terrane, hosting the Cascabel Project is dominated by
basaltic rocks of tholeiitic mid-oceanic ridge basalt (“MORB”) affinity, and sequences of flyschoid siliciclastic
sediments (including chert, siltstone and greywacke). These are thought to be accreted fragments of oceanic
crust, aseismic ridges and oceanic plateaus. Several I-type calc-alkaline batholiths and plutons ranging from
tonalitic to granodioritic composition and of Palaeocene to Miocene age intrude the DAP terrane along its
entire length (Cedial et al., 2003). These are the plutons that are responsible for porphyry mineralisation within
the Dagua-Pinon terrane and host the Junín and Cascabel porphyry deposits.
The GOR terrane (Figure 7.2.1) lies further west, mostly offshore. It comprises a more recently accreted oceanic
plateau.
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The tectonic building blocks that comprise this northwest margin of South America are bound by north-
northeast-trending crustal-scale faults or sutures. Strike-slip structures are the dominant structural pattern. In
the vicinity of the Cascabel Project, the principal terrane boundary is the Cauca-Pujili fault system which forms
the suture between the Romeral terrane and the Dagua-Pinon terrane. This is a major fault system which in
detail comprises several strands; several of which pass near or through the Cascabel Project (e.g. the Toachi
Fault). In Colombia, the Cauca fault system is well exposed for much of its length, and where its’ kinematics are
that of a dextral strike-slip fault. The fault is poorly exposed in northern Ecuador due to Pliocene and
Quaternary volcanic and sedimentary cover in the Inter-Andean depression, however, the presence of ophiolite
along the extension of this fault zone (i.e. the Pujili Fault) southwest of Quito attests to its role as a major
terrane suture. In northern Ecuador the Cauca Fault is referred to as the Pujili Fault.
Figure 7.2.1: Regional Tectonic Elements of Northern Ecuador and Colombia (Source: Cedial et al., 2003)
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Subduction-related calc-alkaline magmatism of tonalitic to quartz dioritic composition affected the Dagua-
Pinon terrane between 44 Ma and 13 Ma (Piedrancha, Rio Santiago, Apuela, Anchicaya Batholiths and the
Arboledus Stock), as well as the Romeral Terrane (Suarez, Piedrasentada and San Cristobal Plutons in southern
Colombia). This magmatism in northern Ecuador and southern Colombia is characterised by the lack of a well-
developed arc and with erratic pluton distribution. This suggests a low-angle subduction environment,
conducive to compression and porphyry mineralisation. There is a general eastward migration of magmatic
focus from the Dagua-Pinon terrane to the Romeral terrane, suggesting final approach of the Gorgona oceanic
plateau as subduction progressively shallowed due to the increasingly buoyant nature of crust entering the
subduction zone.
Figure 7.2.2: Regional Tectonic Elements of Colombia and Northern Ecuador Showing the Subducting Carnegie
Ridge (Source: SolGold 2017)
In addition to the long history of transpressive compression in the Cascabel region as recorded by the docking
of the RO, DAP and GOR terranes, more recent cause for ongoing tectonic compression (an important
requirement for forming porphyry systems) is the shallow buoyant subduction of the Carnegie Ridge (post
8 Ma), whose eastward subducted projection is interpreted by Gutscher et al. (2003) to extend beneath the
Ecuador-Colombia border and underlie the area of the Cascabel Project (Figure 7.2.2).
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7.3 Local Geology – Cascabel Licence

Figure 7.3.1 illustrates the geology of the region around and southwest of Cascabel. The Cascabel Project lies
along the western foothills of the Western Cordillera. The Caucha-Pujili Fault zone is defined by the series of
sub-parallel structures located midway between Otavalo and the Apuela Batholith. The Toachi Fault is a major
structure that is sub-parallel to the Cauca-Pujili Fault Zone and is mapped near the El Corazon deposit on the
southwest side of the Apuela Batholith. The mapped extension of the northeast-trending Toachi Fault, to the
northeast of the Apuela Batholith, runs through the Cascabel Project and several kilometres west of Chical
(Figure 7.3.1).
Magmatism in northern Ecuador is typified by the lack of a well-developed volcanic arc and with erratic pluton
distribution consistent with shallow subduction systems. There is a crude migration of the focus of magnetism
from west to east reflecting post Eocene shoaling of the subducting Farallon plate. The Santiago Batholith
shown in Figure 7.3.1 is Eocene in age. In contrast, the Apuela Batholith (which hosts the Junín porphyry
deposit) is of younger (Miocene) age, and the intrusive complexes south of Cascabel, and at Chical, are also
interpreted to be Miocene age (Figure 7.3.1), an important time for porphyry formation in Ecuador. This belt
of Miocene age intrusives extends into southern Colombia and hosts the porphyry deposits at Piedrasentada-
Dominical (Miocene), El Tambo (Miocene) and Piedrancha (Eocene) (Sillitoe, 1982).
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Figure 7.3.1: Regional Geology Around and Southwest of the Cascabel Licence (Source: Rohrlach 2012)*
*Note: The Cascabel license area is shown by the yellow polygon and the Junin (Llurimarga) Cu-Mo porphyry deposit is
indicated by the large yellow circle.
The Apuela Batholith sits astride the Toachi fault and likely intruded along the fault plane (Figure 7.3.1). This
structure is consequently inferred to penetrate to or near the base of the crust, facilitating mid-to-upper crustal
emplacement of batholiths, including the Apuela Batholith. The Apuela Batholith comprises a nested series of
intrusions that include quartz porphyry, granodioritic porphyries and diorite porphyry, all of which are different
intrusive facies of the larger composite batholith.
The principal deposits and prospects in the region are:

• Junín (Llurimarga) - Empresa Nacional Minera del Ecuador (Enami): Porphyry Cu-Mo (982 Mt @ 0.89% Cu,
0.04% Mo, 0.01 g/t Au – Inferred, 0.4% Cu cut-off grade) (Gribble, 2004)
• Cuellaje: Pb-Zn-Ag occurrence near the east border of the Apuela Batholith is related to a porphyry Cu
system (Graves, 2012)
• El Corazon – Skeena Resources (50%): Epithermal Au, Ag, Cu vein system and siliceous hydrothermal
breccias (Skeena Resources, 2006)
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• Rio Amarillo: Au, Ag, Cu occurrence related to epithermal veins and porphyritic intrusions. A Cu skarn is
reported at Rio Amarillo (Graves 2012).
SRK cautions that these prospects do not necessarily constitute the same deposit style or mineralisation
behaviour as seen at Alpala, but rather illustrate the overall mineralisation prospectivity of the region. Further,
SRK cautions that Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability.
The geology of the Cascabel Project on the northwest side of the Toachi Fault comprises a series of relatively
small to modest size stocks. These small stocks together with the abundance of Tertiary andesitic volcanic and
volcaniclastic rocks, suggest limited amounts of erosion since intrusion emplacement. In contrast, to the
southeast of the Toachi Fault, the distribution of the intrusions are more extensive and there is an abundance
of Cretaceous sedimentary rocks, which suggests a deeper level of erosion than to the northwest.
Structural mapping by Cornerstone at Cascabel as well as interpretation by Rohrlach of more regional Digital
Elevation Model (“DEM”) data within the 5 km Area of Interest (“AOI”), reveal a series of four major northwest-
trending faults.
These second-order northwest-trending structures are likely to exhibit important controls on mineralisation at
Cascabel, where they control the northwest-trending zone of clay-mica alteration and also further south where
regional stream sediment Au anomalism appears to be crudely controlled by northwest-trending structures.
Third-order NNW-trending structures may also play an important role in localising mineralisation.
7.4 Alpala Deposit Geology

7.4.1 Introduction
The Alpala group is a roughly northwest trending porphyry cluster located in the south of the Cascabel licence
and has been the primary focus for exploration under SolGold, hosting all the drilling to date. The diamond
drilling has defined a north-westerly-trending, steeply northeast-dipping, dyke-stock complex of diorite to
quartz diorite intrusions that extends more than 2,000 m northwest by 1,000 m northeast and exceeds 2,000
m in height.
7.4.2 Lithologies and Faults
The intrusions are typically equigranular to sub-porphyritic, hornblende-bearing intrusions of Eocene

(Bartonian) age and are hosted by a sequence of andesitic volcaniclastic rocks, lavas and volcano-sedimentary
rocks. A total of six major phases of intrusion (summarised in Table 7.4.1) have been defined by SolGold
geologists on the basis of composition and relative timing-relationships with porphyry-related vein-stages
from observations at surface and within the drill core. Each of these subsequent intrusions have either
introduced mineralising fluids into the Alpala system, remobilised existing mineralisation or contributed to
localised overprinting and destruction of the pre-existing mineralisation. Thin-section petrography reveals the
presence of very fine-grained quartz in the groundmass of the intrusions, which suggests compositions that
range from quartz diorite to tonalite. However, the intrusive rock types are classified on the basis of
observations made by the field geologist with a 20x hand-lens (Garwin et al., 2017).
The D10 diorite to microdiorite forms the first phase of intrusive activity introduced into the volcanic- and
volcaniclastic-host rocks, guided along steeply dipping fault networks orientated northwest, north-northwest,
north and less commonly, northeast. The D10 intrusions are interpreted to have been emplaced pre-
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mineralisation but nevertheless contain significant intersections of mineralisation particularly close to later
QD10 dykes.
The QD10 quartz diorite consists of at least five tabular, north-westerly-striking, dyke-like bodies that coalesce
at depth, which are characterised by unidirectional solidification textures (UST) along their apical margins. The
UST zones discovered to date extend up to 50 vertical meters and consist of coarse-grained, prismatic quartz
and magnetite. The QD10 dykes have intruded along the same structure network as the D10, cross cutting or
re-opening the D10 intrusive contacts. The QD10 is thickest in the core of the deposit, at depths of around
1,400 m below the surface from where it forms dykes extending upwards. The QD10 has been identified as an
early stage main mineralising phase of intrusion and is the main copper and gold bearing lithology. The
highest-grade drill intersections are found in the QD10. Radiometric U-Pb SHRIMP dates on zircons return 39.4
+ 0.6 Ma (2 σ) for the early mineralisation QD10 quartz diorite intrusion (Armstrong, 2016).
The D15/IM diorite stock and QD15 quartz diorite dykes are intra-mineralisation intrusive phases. Although
these intrusions have been interpreted to play a minor role in introducing mineralising fluids into the system,
both the D15/IM and the QD15 may have contributed to significant remobilisation of mineralisation. The
ID15/M in particular, is the most extensive intrusive lithology in the Alpala deposit and forms a large plutonic
stock at the base of the system with multiple finger-like structures persisting into the shallower parts of the
deposit, significantly disrupting the continuity of the mineralised D10 and QD10. Intra-mineralisation tonalite
dykes (T15) have also been observed in drill-core.
D20/LM and QD20/LM QD are late-mineralisation diorite stock and quartz diorite dyke intrusions which have
not been found to carry any significant grade; these postdate and cross cut earlier mineralisation. Radiometric
U-Pb SHRIMP dates on zircons return 38.7 + 0.6 Ma (2 σ) for a late-mineralisation QD20 dike (Armstrong,
2015).
The geometry of the various lithologies and intrusive bodies at Alpala is now well understood and has been
modelled from the completed drilling demonstrating 3D continuity. Table 7.4.1 provides a summary of the
main intrusions in chronological order. A series of later stage post mineralisation (“PM”) barren intrusions have
also been identified as well as an extensive zone of hydrothermal brecciation along the north-eastern flank of
the deposit. Minor intersections of mineralisation have been identified within the breccia, attributed to quartz
vein-bearing clasts of mineralised diorite.
Table 7.4.1: Relative Timing of the Volcanic Rocks and Six Main Intrusive Phases Identified at Alpala
Lithology V D10 QD10 QD15 D15/IM D20/LM QD20/
LM QD
Relative 0 1 2 3 4 5 6
Timing
Lithology Macuchi Sub- Porphyritic Porphyritic Fine Porphyritic Porphyritic
volcanics & porphyritic Qtz-Diorite Qtz-Diorite grained Diorite Qtz-Diorite
volcaniclast fine-med Diorite
ics Diorite
Veining All vein All vein All vein Minor B1, Common Rare B, No B or C,
types types types, Common D, Abundant Abundant
Abundant B2 & later Occasional D D
B1, B2 and veins B1 and B2
C
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Table 7.4.1: Relative Timing of the Volcanic Rocks and Six Main Intrusive Phases Identified at Alpala
Lithology V D10 QD10 QD15 D15/IM D20/LM QD20/
LM QD
Distinguishing - - Unidirectio - - - -
Features nal
solidificatio
n textures
(UST)
Three major steeply-dipping to sub-vertical sets of faults are recognised in the Alpala system, showing strike-
directions of northwest, north-northwest and less commonly, northeast. The amounts of post-mineralisation
offset along these faults are believed to be small.
SolGold has undertaken the 3D geological modelling of the Alpala lithologies based on the lithological logging,
cross sectional and bench plan diagrams developed on site, SRK provided initial guidance and recently
conducted a detailed review of the geological and grade models. A 3D fault model has also been created by
SolGold.
7.4.3 Porphyry-Related Vein Stages
The porphyry-related vein types and paragenesis at Alpala indicate a systematic progression in time (Garwin
et al., 2017) and have been described by SolGold using the nomenclature originated by Gustafson and Hunt
(1975) as follows and illustrated in Figure 7.4.1 and Figure 7.4.2:
• Following the formation of UST textures within the apical margins, early-stage, minor and wavy AB-type
quartz veins deficient in sulphide minerals are followed by magnetite (M) veinlets.
• Planar and through-going, B-type quartz veins cross-cut the early vein types and consist of quartz-
magnetite-chalcopyrite. At least two stages of B-type veins are recognised at Alpala, with magnetite more
abundant in early B1 veins and chalcopyrite more common in the later B2 veins. The B-type veins contain
the majority of the copper and gold in the deposit.
• Chalcopyrite-rich, C-type veins contain rare to minor bornite and cross-cut earlier vein types. The C-type
veins contain significant amounts of metal but constitute a small volume-portion of the drill-core. The B-
and C-type veins are spatially associated with intrusions that show variable feldspar-destructive, sericite-
chlorite+clay overprinting of biotite, actinolite and chlorite-epidote alteration mineral assemblages.
• D-type veins with quartz-sericite-pyrite selvages contain chalcopyrite, minor bornite and locally,
molybdenite. Many of the later vein stages exploit and re-open earlier vein stages. A Re-Os date on
molybdenite in a D-type vein that cuts a late-mineralisation diorite dike indicates 38.6 + 0.2 Ma (2 σ).
Anhydrite is a common constituent of late-stage veins.
• Late-stage hydrothermal-matrix breccia bodies and volumetrically small igneous-matrix breccias, including
pebble dykes, typically post-date sericite-chlorite+clay alteration and are locally cut by pyritic D-type veins
and anhydrite veins. The breccias post-date the volcanic host rocks and intrusions.
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Figure 7.4.1: Paragenesis of the Porphyry-Related Vein Types at Alpala (Source: SolGold, 2017)*
*Notes: Later vein-stages can re-open earlier vein stages / Anhydrite occurs over wide temperature range / A, AB veins and
EDM veins are uncommon / EDM veins preferentially mineralised by later Cpy.
Figure 7.4.2: Example Cross Cutting Relationships Observed in Alpala Core (Source: SolGold, 2014)*
*Note: B1 cut by B2, cut by C cut by CD cut by D vein
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7.4.4 Mineralisation
Mineralisation is seen across the six main intrusive bodies and the porphyry-related vein types to a varying
degree. Early-formed hydrothermal magnetite occurs within early AB- and B1-type veins, and as monomineralic
veinlets, disseminated grains and replacements of hornblende. Magnetite is variably converted to metallic
haematite and pyrite in the upper part of the deposit where chlorite-epidote altered intrusions and
volcaniclastic rocks are moderately to strongly affected by feldspar-destructive alteration, (Garwin et al., 2017).
The earliest formed sulphide mineral observed in drill-core consists of abundant chalcopyrite and rare bornite
in B-type veins. Chalcopyrite most commonly forms after, and surrounds, cubic and massive pyrite in C- and
D-type veins. It also occurs in anhydrite-rich veins and B-type veins that have been re-opened by later vein
types. Late-stage bornite is in textural equilibrium with pyrite and chalcopyrite in C- and D-type veins, which
suggests that these later-stage veins formed at a lower temperature and a higher sulfidation state than
chalcopyrite in early-stage B-type veins (Einaudi et al., 2003).
Scanning Electron Microscopy (SEM) techniques including Backscattered Electron (BSE) imaging and Energy
Dispersive X-ray Spectroscopy (EDS) indicate that gold occurs as discrete grains of electrum (typically 65% to
85% Au) that range from 1 to 50 microns in diameter (Muhling, 2014, 2015 and 2018). The electrum grains
occur within chalcopyrite, bornite, pyrite and rarely quartz and anhydrite. Grains of low-Ag gold (>90% Au)
that are 1 to 3 microns in diameter are associated with sulphide grains and occur locally within silicate minerals
(Muhling, 2017).
The bulk of the copper mineralisation is hosted within the B-veins (Figure 7.4.3). Chalcopyrite-rich, C-type
sulphide veins also contain significant amounts of metal and may be associated with elevated gold grades.
Mineralising fluids are believed to have been introduced during the emplacement of the QD10 and to a less
extent the QD15 intrusive. These defined two broad mineralising events at Alpala.
Quartz- and sulphide-vein abundances are recorded by SolGold during core logging and allow for the
correlation with the final assay grades (Figure 7.4.4). This correlation illustrates a strong important to B-type
veining to the mineralising system, particularly below 2% Cu. Therefore B-type vein abundance can be used as
an analogy for the mineralisation boundaries during modelling.
Figure 7.4.3: Magnetite-Bearing B1 Quartz Vein Stockwork with Clots of Chalcopyrite (cp)
(Source: Garwin et al., 2017)
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Figure 7.4.4: Correlation Statistics between B-Vein Abundance and Final Cu Assay
Grade (Gilbertson & Pittuck, A technical report on an updated mineral resource
estimate for the Alpala deposit, Cascabel Project, Northern Ecuador, 2018)
SolGold has undertaken 3D geological modelling of the Alpala mineralisation based on the sample assay
information and B- and C-vein abundance logging as described further in Section 14.5.
7.4.5 Petrographic Studies
Petrographic studies have been conducted by Applied Petrologic Services and Research during 2013-2015 and
Dr. Roger Taylor from 2015 through 2018. The main conclusions from the integration of this work with the
detailed logging of diamond drill-core by ENSA geologists work are summarised in Sections 7.4.2 - 7.4.4.
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7.4.6 Hydrothermal Alteration
The varying styles of hydrothermal alteration in the tenement area are illustrated in Figure 7.4.5, which
represents the integration of Anaconda mapping with TerraSpecTM results from soil and deep-auger samples.
Chlorite- and epidote-bearing propylitic assemblages occur proximal to distal to the major porphyry centres
of the Alpala cluster, Aguinaga and Tandayama-America. The Alpala porphyry cluster targets, Trivinio and
Carmen are associated with quartz-sericite/paragonite+illite (phyllic) zones. Dickite- and pyrophyllite-bearing
clay (advanced argillic) alteration occurs over the southernmost part of Alpala Central, Hematite Hill and Alpala
East, South and SE. Aguinaga and Tandayama are characterised mostly by kaolinite-illite-smectite (argillic)
alteration that overprints small zones of biotite (potassic-) alteration that are surrounded by epidote-propylitic
alteration. The sphalerite- and chalcopyrite-bearing epithermal quartz veins hosted by phyllic and propylitic
altered volcanic rocks in the Parambas, Carmen and Cachaco areas are inferred to be the distal expression of
a porphyry centre(s).
The relationships of hydrothermal alteration to intrusion stages and vein types in the Alpala deposit are
described in Section 7.4.3.
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Figure 7.4.5: Surface Expression of Hydrothermal Alteration Across the Cascabel

Licence (Source: Garwin et al., 2017)
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7.4.7 Intrusive Genetic Model
A simplified schematic intrusive and vein paragenesis model for the formation of the Alpala deposit has been
developed with SolGold and is given in Figure 7.4.6 in which the top half shows the deposit in plan-view and
the lower half shows the deposit in section, looking northwest.
The earliest intrusion, the D10, was intruded, probably along a north-westerly structure accounting for the
elongated shape, into the host andesite volcanics, to form the host rock sequence for the deposit (Figure 7.4.6).
The main phase of mineralisation was subsequently emplaced through the intrusion of dyke-like syn-mineral
QD10 intrusions, resulting in AB, B1 and B2 and C veining, (B). Mineralising fluids sourced from the high-grade
apophyses of these intrusions, displaying Unidirectional Solidification Textures (UST), would further intrude
upwards into the D10. Due to the high density of these saline fluids, the mineralisation would also intrude
downwards along the apical margins.
A second weaker stage of mineralisation was introduced through the later intrusion of intra-mineral QD15,
D15 and minor T15 bodies, which locally exploited the intrusive contacts of earlier intrusions (C). This now
composite intrusive body was again intruded on the north-eastern side by a late stage hydrothermal breccia
which continued through to the current topographical surface (D).
Figure 7.4.6: Schematic Evolution of Alpala Intrusive Stages and Relative Vein Paragenesis (Source: SRK, 2017)
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7.4.8 Structural Geology
The structural model for the Alpala deposit is in its early stages. Geological mapping, topographical and
geophysical data suggest that the intrusive centres are localised by the confluence between northwest trending
deep seated structures and northeast and north-trending structural corridors that cross the Cascabel Project
(Figure 7.4.7).
Figure 7.4.7: Cascabel Tenement Distribution of Intrusions, Mineralised Corridors and

Copper-Gold Target Areas (Source: Garwin et al., 2017)
Surface mapping, drill core orientation and subsequent structural measurements further indicate that veining
is also aligned to these trends (Figure 7.4.8), which has also influenced the distribution of the Alpala intrusions.
The late-stage post-mineralisation QD20 quartz diorite dykes preferentially intrudes along northeast-trending
structures.
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Figure 7.4.8: Surface B-Vein Intensities across Alpala Central Illustrating the Intersection between the NW and NE
Trending Structures (Source: SolGold, 2017)*
*Note: B-Vein intensities = light blue = 0.5 to 2%; purple = 2 to 5%; red = 5 to 20%; green > 20% B-veins
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Section 08 – Deposit Types
8. Deposit Types
8.1 Summary
Porphyry deposits typically form from magmatic-hydrothermal fluids that have evolved from a voluminous
magma chamber several kilometres below the deposit itself. Predating or associated with those fluids are
vertical dikes and stocks of porphyritic intrusive rocks from which this deposit type derives its name.
As with many of the composite terrane across South America, the Western Tectonic Realm (Cedial et al., 2003)
of Ecuador and Colombia hosts multiple intrusion-related systems. These are hosted within a linear belt that
extends from southern Chile right through to Ecuador and Colombia to Panama. These mineralised systems
host the largest concentrations of copper in the world and numerous deposits are in active mining operations.
This geological setting is associated with the following mineral deposit types:
• Porphyry copper-(gold-silver-molybdenum) - related to the early stages of magmatism;
• Epithermal gold, low- and high-sulfidation - associated with volcanic regions above porphyry systems; and
• Polymetallic skarn - related to hydrothermal fluid flow from granite stocks through permeable and reactive
calcareous host-rocks (e.g., limestone and calcareous siltstone).
The mineralisation observed at surface and in the drill core along the trend of the Alpala Deposit is considered
as a classic porphyry copper-gold system and exploration has been designed with this in mind as a primary
target. The site team is continuously engaged in advancing the understanding of the porphyry systems at
Cascabel and exploration also keeps in mind the potential for surrounding economic porphyry deposits within
a 1-2 km radius of the Alpala Deposit, as well as the potential for discovery of epithermal and skarn deposits
peripheral to these porphyry systems throughout the Cascabel Project area.
8.2 Porphyry Copper Systems

Porphyry deposits are characterised by disseminated, veinlet- and fracture-controlled copper-iron sulphide
minerals distributed throughout a large volume of rock in association with potassium silicate, sericitic, propylitic
and, less commonly, advanced argillic alteration in porphyritic plutons and in the immediate wall rocks (Myer
and Hemley, 1967; Lowell and Guilbert, 1970; Gustafson and Hunt, 1975; Titley and Beane, 1981; Einaudi, 1982).
In porphyry systems, there exists a close spatial and temporal link between volumetrically-small causative
intrusions and broadly dispersed magmatic-hydrothermal alteration and mineralisation. Porphyry copper
deposits are large (commonly hundreds to thousands of million tonnes) and low to medium in grade (0.3 to
1.5% copper). The majority of gold-rich porphyry deposits occur in the circum-Pacific and commonly contain
0.3 to 1.6 g/t gold (Sillitoe, 1990 and 1993).
Porphyry systems are causal to different deposits including:

• Porphyry deposits centred on the parent intrusion and its surrounding host rocks
• Epithermal and skarn deposits peripheral to porphyry deposits
• Carbonate replacement and sediment hosted deposits with increasing distance from the parent intrusion.
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Globally the most significant systems tend to be Mesozoic or Cenozoic in age. In South America, the most
important metallogenic epochs are Eocene to Miocene. Porphyry deposits occur in linear belts related to
composite plutons and convergent plate boundaries either within continental magmatic arcs or island arcs in
association with subduction zones or post-collision volcanism. Porphyry deposits are often located at the
intersection of the porphyry belt and intra-arc fault zones, forming at relatively shallow depths of 1 to 4 km
and related to magma chambers forming vertical elongate stocks or dyke swarms (Sillitoe, 2010). Several
discrete stocks are often emplaced in one area, resulting in spatially and temporally clustered deposits or
structurally controlled alignments, which consist of several generations of intermediate to felsic porphyritic
intrusions.
In porphyry systems, there is a common upward- and outward-zoning in hydrothermal alteration, characterised
by a core of biotite + K-feldspar (potassic, > 300oC), proximal actinolite- through epidote-propylitic (300 to
230oC) to distal chlorite-calcite-propylitic (< 230oC) alteration. In many systems, these early-stage alteration
zones are overprinted by transitional-stage chlorite-sericite-clay (intermediate argillic); and late-stage quartz-
sericite (sericitic-phyllic) and quartz-alunite-pyrophyllite-dickite (advanced argillic) alteration. A similar zoning
in sulphide minerals occurs, characterised by central, higher-temperature bornite-chalcopyrite, proximal
chalcopyrite-pyrite and distal, lower-temperature pyrite-chalcopyrite-sphalerite-galena. This last assemblage
is common in the late-stage, epithermal veins that locally flank porphyry centres.
The general characteristics of porphyry systems are described in Table 8.2.1. The most important of these
characteristics are:
1. Small diameter (<2 km) causative intrusions of intermediate to felsic composition
2. Shallow levels of emplacement (typically 1-4 km)
3. Porphyritic texture of causative intrusions, where feldspar, quartz and mafic phenocrysts are contained in
a fine-grained to aplitic groundmass
4. Multiple phases of intrusion, pre-, syn- and post-ore; late-stage diatremes are common in western Pacific
volcanic-arc settings
5. Several stages of hydrothermal alteration associated with each mineralizing intrusion
6. Extensive development of fracture-controlled alteration and mineralisation in both porphyritic intrusions
and adjacent wall-rock
7. A progression from early, discontinuous and irregular veins and veinlets (“A veinlets”) through transitional,
planar veins (“B veins”) to late, through-going veins (“D veins”) and breccia bodies (vein terminology
follows that of Gustafson and Hunt, 1975)
8. A progression in hydrothermal alteration from early, central potassium silicate and distal propylitic styles
to late sericitic / phyllic, advanced and intermediate argillic alteration types
9. Sulphide and oxide minerals which vary from early (bornite)-magnetite through transitional chalcopyrite-
pyrite to late pyrite-(hematite), pyrite-enargite or pyrite-bornite
10. Fluid inclusion studies which indicate that early alteration and copper mineralisation are generated by
magmatic fluids with 30 to >60 wt. % NaCl equivalent over a temperature range of 400o to >700oC,
whereas the fluids related to late alteration and mineralisation commonly include a meteoric component
and are more dilute (<15 wt. % NaCl equivalent) and lower in temperature (200oto 400oC).
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The Andean Porphyry belt is a well-documented linear belt that hosts many known copper porphyry deposits
as well as epithermal concentrations of gold, copper and silver. The belt extends from southern Chile and
Argentina in the south to Ecuador, Colombia and Panama in the north.
The Alpala Porphyry Copper-Gold-Silver deposit, at the Cascabel Project in Northern Ecuador, occurs near the
overlap of Eocene and Miocene Andean porphyry belts that extend from Colombia through Ecuador and Peru
into Chile and Argentina (Figure 8.2.1). The deposit formed in the Eocene (~39 Ma; Garwin et al., 2017), which
is similar in age to the giant La Escondida and El Abra deposits in Chile (Cunningham et al., 2008).
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Table 8.2.1: Descriptive Summary of the Characteristics of Copper-(Gold) Porphyry Deposits
Age Range Mainly Cenozoic and Mesozoic, but can be any age; Tertiary most common
Classic Provinces Continental margin:

(Classic Deposits) Western USA (Bingham and Dos Pobres)
Central Andes
(Bajo de la Alumbrera and Marte)
Papua New Guinea-Irian Jaya
(Grasberg, Ok Tedi, Freida River)
Island arc:
Western Pacific (Panguna, Batu Hijau, Lepanto- Far South East)
Structural Style Mainly brittle, with early semi-ductile “A veinlets” related to magmatic intrusion; fracture
patterns indicate regional and local stress fields
Mineralisation Style Steeply-dipping stockwork veins and fractures localised about causative intrusion(s);
progression of “A”, “B” and “D” veins through space and time
Host Rocks Intermediate to felsic calc-alkaline and K-alkaline porphyritic intrusions and adjacent
volcanic, sedimentary and other rock types; coeval andesitic to dacitic volcanic rocks are
common in island arc settings; K-alkaline rocks more common in continental settings
Metal Associations and Central Cu-Au (Mo, Ag); outer Pb-Zn (Ba, Mn); Mo common in core of continental deposits
Ratios and in periphery of island arc deposits. Common Au (ppm): Cu (%) of 1:3 to 1:1 with > 1:1
for deposits with Au > 0.6 ppm
Gold Fineness Native gold and electrum
Proximal Alteration Variation in space and time with respect to causative intrusion(s) emplacement: central and
early K-silicate alteration; peripheral and late intermediate argillic, sericitic-phyllic and
advanced argillic alteration associated with structures and lithocaps (advanced argillic)
P-T Conditions Shallow depth of emplacement (typically 1-4 km); early-stage fluids ~400->700oC; late-
stage fluids ~200-400 oC
Ore Fluids Early-stage, near-neutral, oxidised, high salinity (>30 wt.% NaCl) fluids;
Late-stage, near-neutral to acid, more reduced, lower salinity (<15 wt.% NaCl) fluids
Other Features Topology of subducting slab exerts a control on porphyry mineralisation in the overlying
arc; as do deformational settings that lead to crustal thickening, block uplift and arc-
transverse fault / fracture zones
References: Titley and Beane (1981), Beane and Titley (1981), Cox (1986), Dilles et al. (1992), Sillitoe (1993) and Einaudi
(1995).
An idealised schematic of Porphyry Deposits Illustrating the classic generic model and possible related deposit
types are shown in Figure 8.2.2. Global distribution of Porphyry deposits and their documented ages and size
are shown below in Figure 8.2.3 and Figure 8.2.4, respectively.
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Figure 8.2.1: Location of the Alpala Porphyry Copper-Gold Deposit, Cascabel Project in the Eocene Porphyry Belt
of Northern Ecuador
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Figure 8.2.2: Schematic of an Idealised Copper Porphyry Deposit Illustrating the Classic Generic Model and
Possible Related Deposit Types (Source: Sillitoe, 2010)
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Cascabel Project, Northern Ecuador, Alpala Copper-Gold-Silver Project
Figure 8.2.3: Distribution of Copper Porphyry Deposits and their Documented Ages (Source: Sillitoe, 2010)
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Cascabel Project, Northern Ecuador, Alpala Copper-Gold-Silver Project
Figure 8.2.4: Distribution of World Porphyry Deposits and their Documented Size by Tonnage (Mt) (Source: USGS, 2008, after Singer, Berger & Moring, 2008)
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Section 09 – Exploration
9. Exploration
9.1 Summary
Amongst the first exploration techniques employed on the Cascabel Project was geochemical sampling of
stream sediment, soil and rock which built on historical programmes.
Soils samples collected over the Cascabel Project area produced coincident molybdenum, gold and
copper/zinc ratio in soil anomalies across a number of inferred porphyry centres. TerraSpec™ analysis of the
coarse residues from 3,300 soil samples was used to identify zones of variable clay-mica alteration.
Hydrothermal alteration deduced from these results was inferred to represent the structurally controlled roots
of a lithocap above the Alpala porphyry system.
Building on past 1:10,000 scale mapping of the project area, the SolGold field teams continue to perform 1:500
scale, “Anaconda” style geological mapping over the tenement area and updates to the local geology map
remain on-going.
A total of 423 rock chip and grab samples have been taken across the Alpala prospect to identify and define
the surface mineralisation and geology and form the basis of more detailed channel sampling. The channel
sampling program resulted in 702 samples from 84 channels. The results provided an inferred margin of a
mineralised porphyry system and allowed SolGold to plan the first targeted core drill holes into the Alpala
system.
A helicopter-borne magnetics and radiometric survey was flown over the entire Cascabel tenement. The
reduced to the pole images from this data identified a magnetic high/low complex that is broadly coincident
with the >1.4 ppm Mo soil anomaly that is centred on the Alpala cluster.
A ground magnetic survey was completed over about 30 km2 of the Cascabel tenement. This represented
650 km of total-field magnetic data that was acquired from east-west oriented lines spaced every 50 m. The
reduced to the pole image for the ground magnetics data identified a major zone of magnetite-destruction to
occur over much of the Alpala porphyry cluster.
The 3D magnetic inversion (MVI) models based on the ground magnetic data in the Alpala region mostly
coincide with subsurface mineralised envelopes and reveal a northwest trending line of significant magnetic
bodies at Moran, Trivinio, Alpala Northwest, and Alpala Central.
Petrographic studies have identified more than six major phases of intrusion that are delineated on the basis
of composition and relative timing-relationships with porphyry-related vein-stages.
Scanning Electron Microscopy (SEM) techniques indicate that the primary copper minerals are chalcopyrite and
bornite. Also, gold occurs as discrete grains of electrum (typically 65% to 85% Au) that range from 1 to 50
microns in diameter. The electrum grains occur within chalcopyrite, bornite, pyrite and rarely quartz and
anhydrite. Grains of low-Ag gold (>90% Au) that are 1 to 3 microns in diameter are associated with sulphide
grains and occur locally within silicate minerals.
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9.2 Introduction
SolGold’s exploration has initially targeted the licence as a whole as well as specifically targeting a number of
the priority prospects within the licence.
Recent exploration at the Cascabel Project began with the acquisition of the project by Cornerstone Capital
Resources from Santa Barbara Copper and Gold S.A. in 2011.
Cornerstone expanded on preliminary exploration carried out in the 1980s by completing reconnaissance
mapping alongside stream-sediment, panned concentrate and rock chip sampling campaigns in June to July
2011. The early Cornerstone exploration identified Cu-Au-Mo and Pb-Zn-As rock chip anomalies, as well as
Cu-Mo-Au stream sediment anomalies, while concluding that copper was consistently anomalous and that a
high-proportion of rock chip samples contain >1 g/t Au.
SolGold assumed technical management of the project following the signing of an Earn-in Agreement with
Cornerstone in April 2012 and the first systematic exploration commenced at Cascabel in May 2012.
SolGold’s exploration began with reconnaissance rock chip and channel sampling in conjunction with multi
element soil geochemistry studies taking in approximately 3,000 samples across 30 km2. A heli-borne magnetic
survey was conducted in November 2012 across the 50 km2 licence.
Following the receipt of an Environmental Licence in August 2013, drilling commenced at Alpala in September
2013. to date (7 November 2018) 133,576 m of drilling across 128 drill holes (including 75 primary holes, 34
daughter holes, 8 re-drills and 11 over-runs) has been completed at Alpala. In August 2014 a deep penetration
3D IP Orion survey was conducted over a 15 km2 area of the Cascabel Project.
SolGold has completed geological mapping, soil sampling, rock saw channel sampling, geochemical and
spectral alteration mapping over 25 km2, along with an additional 9 km2 of Induced Polarisation and 14 km2
Magnetotelluric "Orion" surveys over the Alpala cluster and other targets at Aguinaga, Parambas, Tandayama-
America, Moran and Chinambicito.
This exploration activity has identified several corridors of Cu-Au mineralisation, as indicated by the distribution
of copper-bearing quartz veins, sulphide veinlets and fractures. Three major orientations exist, north-westerly,
northerly and north easterly, which are similar to the orientations expressed by the intrusions and faults.
Alpala is the most advanced of the Cascabel prospects and has been the subject of geological mapping, soil
and rock geochemical sampling and heli-borne geophysical surveys. This exploration work quickly moved
towards detailed trenching/channel sampling of the exposed mineralisation within the Alpala creek system and
then ultimately to the current core drilling programme as discussed in Section 10. Exploration has extended
out along strike to incorporate areas of Alpala Northwest and Southeast.
9.3 Grids and Surveys

The grid that is used for all coordinates is WGS 84 / UTM zone 17N (EPSG:32617). No local grids have been
used for the project.
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9.3.1 Ground Control Points
Three permanent first order ground control points (JW001, JW002, JW003), have been used on the Cascabel
Project since early 2014. The three ground control points were installed using a differential DGPS and are
marked by solid concrete plinths (Table 9.3.1). The control points were taken installed and calibrated following
the procedure of the "Manual of Technical Specifications - Geodetic Surveys - Horizontal Control" of the
Geographic Military Institute of Ecuador.
Table 9.3.1: Ground Control Points – First Order Stations

Name Code Northing* Easting* Elevation* Type Observations
JW001 GPS 83083.479 796513.326 1618.787 Cement Alpala Base Camp
Plinth
JW002 GPS 86101.640 797442.985 1177.234 Cement Santa Cecilia Village
Plinth
JW003 GPS 88636.474 798297.722 887.243 Cement Rocafuerte Base Camp
Plinth
*Reference System WGS84 UTM17N
Figure 9.3.1: Example of Ground Control Point JW001 Installed at Rocafuerte
9.3.2 LiDAR Surveys
A 3D airborne laser scanning, light detection and ranging LIDAR topographic survey was completed in
November 2018 by SAI - Serviços Aéreos Industrias. Processing and approval of final data is underway and
final data will be available for use in future studies from 2019.
Six ground control points (SAI01-06) were installed using a differential DGPS (Table 9.3.2) and marked by solid
concrete plinths. The control points were taken installed and calibrated following the procedure of the "Manual
of Technical Specifications - Geodetic Surveys - Horizontal Control" of the Geographic Military Institute of
Ecuador.
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Table 9.3.2: Ground Control Points – Lidar Survey, First Order Stations
Control Easting Northing Elevation Lidar Elevation Laser Location
Point Accuracy
SAI01 798,238.854 88,690.707 876.8019 876.83 -0,0281 Rocafuerte
SAI02 799,599.791 87,950.746 847.6342 847.68 -0,0458 San Pedro
SAI03 801,160.14 83,199.218 1,636.9805 1,636.99 -0,0095 Urbina
SAI04 797,657.063 85,628.262 1,235.6697 1,235.69 -0,0203 Santa Cecilia
SAI05 797,657.063 86,742.07 1,164.1025 1,164.12 -0,0175 Aguinaga
SAI06 794,156.312 82,299.485 1,324.8054 1,324.84 -0,0346 Rio Cristal
SAI01 798,238.854 88,690.707 876.8019 876.83 -0,0281 Rocafuerte
9.3.3 Database Re-projection
9.3.3.1 PSAD 56 Re-projection to WGS84 UTM17N
Topographic information (topographic contours, streams, roads towns) the initial magnetics survey and a
number of historical datasets originally obtained in PSAD56 UTM Zone 17N coordinate system were re-
projected to WGS84 UTM Zone 17N early in the project. All data and databases used on the project uses
WGS84 UTM17N coordinate system.
9.3.3.2 DTM RL Re-projection
Drill hole locations are initially positioned by handhold GPS before Health Safety and Environment (HSE)
clearance and site preparation. Once a drill hole collar has commenced, qualified surveyors from SolGold
Topographic team pick up using differential GPS equipment tied into ground control points.
Surveyed coordinates provided by licensed surveyors using differential GPS have been used for all drill hole
collars. Positioning is provided in WGS 84/UTM zone 17N coordinates and loaded into the geological database.
There are no database re-projections.
The SIGTIERRAS data has been used for planning of infrastructure for this study and for illustrative purposes
to show the topography in relation to drilling. This data is provided by the Ministerio De Agricultura y
Ganadieria (National Information System Rural Lands and Technological Infrastructure), the digital elevation
model has been derived from aerial photographs and has a spatial resolution of 10 m. The Ministerio De
Agricultura y Ganadieria website describes this information as:
The digital terrain model (DTM) is a continuous surface that represents the heights of the earth's surface and
is obtained from aerial photographs taken by SIGTIERRAS. It has a spatial resolution of 3 m for the Sierra
region, 4 m for the Costa region and 5 m for the Amazon region and an altimetric precision of 1.5 m in the
Coast and Sierra, and 3 m in the Amazon. It is presented as TIFF files with dimensions equivalent to the 1: 5K
sheets generated by the Military Geographical Institute (IGM), of approximately 5.3 km2. About 43,800 TIFF
files cover approximately 88% of the surface of Ecuador. It is available for download through the web
application in the version of 10 m of spatial resolution -resample-. The MDT generated in the project has
been completed with MDT from other sources to obtain a better coverage. A 50 m version is also available
that was used to calculate accessibility models at the national continental level. The full resolution MDT can
be requested in offices. (www.metadatos.sigtierras.gob.ec. (2018)).
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The version cited above with the 10 m spatial resolution was the basis of the DTM. A surface was generated
from the published contours in PSAD56 UTM Zone 17 N. This surface was then re-projected to WGS84 UTM
Zone 17N. Discrepancies were identified between this surface and the differential GPS coordinates of drill hole
collars, trenches and other surveyed points.
A correction factor was determined by fitting the surface to the survey points. The best fit of the data showed
the more accurate survey pickups plotted on average of 60 m below the published survey data. This correction
was then applied to the surface as a constant shift of –60 m from the published value. With the correction
applied, differences in accuracy between the two datasets are still seen in the data. The maximum difference
between the surveyed collars and the new corrected surface is 18 m. These differences between will be rectified
with the LiDAR survey due by the end of the year.
Figure 9.3.2: Example Section Showing Corrected DTM Following Re-Projection of -60 m RL, Resulting in Close Fit
to Drill Hole Collars and Rock-Saw Channel Collars Obtained Using DGPS
9.3.3.3 Rock-saw Channel Sample RL Re-projection
The rock saw channel (trench) sampling data has been re-projected to the corrected topographic surface
discussed above. All trench collars have been surveyed by DGPS and trench traces have been pressed to the
corrected topographic surface. As these are near surface samples, slight variations in elevation between the
surveyed locations and the surface meant that the channel samples were in some cases entirely above the
corrected topographic surface. The geological modelling package excluded the samples on this basis. To
ensure rock saw channel sampling was considered in the model, the collars (starting point) captured by
differential GPS was pressed to the topographic surface. The process of this shift is to plot the collar using the
surveyed easting and northing and project the RL onto the survey surface. The other sample intervals along
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the channel used the azimuth, bearing and distance recorded with the sample information. These samples will
be corrected to the LiDAR surface when this is available for future estimates.
9.4 Geological Mapping

Building on past 1:10,000 scale mapping of the project area, the SolGold field teams continue to perform 1:500,
1:1,000 and 1:2,000-scale, “Anaconda” style geological mapping over the tenement area and updates to the
local geology map remain on-going. This mapping targets the identification of alteration styles as well as
porphyry vein style mineralisation in outcrops. The process is limited by the degree of cover and the deep
tropical weathering experienced across the region.
9.5 Geochemical Sampling

Amongst the first exploration techniques employed on the Cascabel Project was geochemical sampling of
stream sediment, soil and rock which built on historical programmes discussed in Section 6.
Table 9.5.1: Geochemical Samples Taken from the Cascabel Project by Type
Sample Type Samples
Pan Concentrate 223
Stream Sediment 94
Rock (rock chips and grabs) 423
Soil (hand dug and shallow auger) 3,287
Soil (Deep Auger) 545
Rock-saw Channel Samples (Trench) 1,434
9.5.1 Soil Orientation Survey
In order to support the soil geochemical sampling programmes, an orientation survey was carried out from
August 2012 to January 2013. This survey involved the collection of six samples per sample site, with two
samples from each of the A, B and C soil horizons, for a total of 1,420 soil samples. The two samples collected
from each horizon enabled sieving to two size fractions for analysis: -80 mesh and -230 mesh. Each sieved
fraction was dissolved in the laboratory using the same four-acid digestion prior to analysis.
Based on the orientation soil results, the conclusion reached was that the C-horizon yielded the greatest
contrast between anomaly and background, and that the C-horizon should be targeted in future soil sampling
campaigns at Cascabel.
9.5.2 Soil Geochemical Sampling
Following the results of this orientation survey, C-horizon samples were taken on a 200 x 100 m grid from
August 2014 and sieved to -80 mesh in the laboratory. The grid was later in-filled to a density of 100 x 100 m
over priority areas until February 2016. The samples were collected on a grid trending 045°, principally
orthogonal to the strike of the dominant structures in the licence area. Soil samples were principally collected
by hand auger from a depth of 1 to 2 m.
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Between 2012 and 2016 almost 3,300 soils samples were collected over the Cascabel Project area, producing
coincident molybdenum, gold and copper/zinc ratio in soil anomalies across a number of inferred porphyry
centres (TerraSpec™ analysis of the coarse residues from soil samples was undertaken to assist in mapping
hydrothermal alteration mineral in zones of variable clay-mica alteration. This technique worked especially well
at the Alpala cluster, where it identified zoned neutral- to acid-alteration assemblages over an area of 2.5 x
1 km (Rohrlach et al. 2015). This zoning, with respect to the discovery outcrop, was interpreted to indicate
proximal illite (phengite), passing upwards and outwards through kaolinite into dickite and pyrophyllite. This
distribution of hydrothermal alteration deduced from the soils was inferred to represent the structurally
controlled roots of a lithocap above the Alpala porphyry system(s) (Garwin et al., 2017).
Figure 9.5.1: Summary of Soil Geochemical Results for the Cascabel Tenement, Showing Molybdenum,
Manganese and Cu/Zn (Source: SolGold, 2017)
9.5.3 Rock Chip Sampling
A total of 423 rock chip and grab samples have been taken across the Alpala prospect to identify and define
the surface mineralisation and geology ahead of further, more detailed channel sampling.
9.6 Geophysics
9.6.1 Licence-wide Magnetics
A helicopter-borne magnetics and radiometric survey was flown over the entire Cascabel tenement in
November 2012, using a line spacing of 100 m. The flight lines were oriented north-south. The reduced to the
pole images from this data identified a magnetic high / low complex that is broadly coincident with the
>1.4 ppm molybdenum soil anomaly that is centred on the Alpala cluster.
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Three-dimensional inversion modelling of the interpreted intrusives at Alpala and the surrounding prospects,
based on the helicopter flown magnetic data was conducted by SolGold in 2014 at which time the drill
programme was at an early stage. Images of the 3D model in the Alpala area are shown in Figure 9.6.1. This
data was correlated with the TerraSpec surface alteration data in an attempt to understand the characteristics
of the host intrusives and the potential location for economic mineralisation.
Figure 9.6.1: Magnetic (MVI) Model for the Alpala Area (Source: Rohrlach et al., 2015)
9.6.2 Orion – IP / 3DMT Survey (2014)
A deep penetration Orion – IP/3DMT survey was completed over approximately 15 km2 in the tenement area
during August 2014. The 2D and 3D modelling of this electrical data show large volumes of high chargeability
(>60 milliseconds), inferred to be related to pyrite, to lie above and adjacent to the Alpala drill area and to the
southeast, beneath the neutral- to acid-alteration lithocap inferred from the TerraSpec soil analyses. A deep
magneto-telluric (“MT”) conductor (<120 ohm-meters to depths >2,000 m), ~750 m in diameter, is centred
west of the Alpala drill area and encompasses the majority of the drill holes completed to date.
9.6.3 Ground Magnetics Survey and Spartan – IP / 3DMT survey (2017)
A ground magnetic survey was completed over about 30 km2 of the Cascabel tenement in April 2017. In total,
650 km of total-field magnetic data was acquired from east-west oriented lines spaced every 50 m. The reduced
to the pole image for the ground magnetics data shows a major zone of magnetite-destruction to occur over
much of the Alpala porphyry cluster. This zone of magnetite-destruction is related to intense hydrothermal
(phyllic and advanced argillic) alteration that has converted magnetite to pyrite (+hematite) and chalcopyrite
from surface to depths of more than 750 m, as determined from drilling. Below this depth, high-grade copper
and gold mineralisation occurs with magnetite-rich, hydrothermally altered intrusions. The surface projection
of the copper equivalent models for 0.7 % and 1.0 % coincide with the zone of magnetite-destruction, which
suggests that similar high-grade mineralisation may exist along strike in areas where magnetite-destructive
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alteration occurs. The significant amounts of copper and gold in Hole 24 at Alpala Southeast indicates that
copper mineralisation is related to the eastern margin of the zone of magnetite-destruction.
The 3D magnetic inversion (“MVI”) models based on the ground magnetic data in the Alpala region mostly
coincide with subsurface mineralised envelopes and reveal a northwest trending line of significant magnetic
bodies at Moran, Trivinio, Alpala Northwest and Alpala Central. The central body defined by the 3D MVI models
coincides with the 1.0% copper equivalent model at Alpala Central and defines the current growing exploration
target confirmed by drilling.
9.6.4 Rock Saw Channel Sampling
A programme of channel sampling has been conducted across Alpala in 2012 and 2013, resulting in 702
samples from 84 channels. These have focussed on the surface expression of the intense B-veining and
alteration observed within the Alpala creek system. After marking out a roughly 5 cm wide channel along the
base of these outcrops in such a way to ensure continual sampling, a 5 cm deep channel is cut with the use of
a rock saw to ensure that consistent samples are taken. Examples of this channel sampling are shown in Figure
9.6.2. The total number of these rock saw channels at the time of writing is 1,434 samples from 263 channels
taken from across the project area.
Samples were taken on average every two metres although final sample lengths varied from 0.35 to 2.7 m.
At Alpala, most of the sample channels have been along drainages over an area of approximately 250 m x
200 m of erosional exposures of quartz stockwork veins. Zones of moderate-to-high density sheeted and
stockwork quartz veining are associated with the highest grades. The highlights of these trenches are:
• TH46 45.64 m @ 0.81 g/t Au, 0.59% Cu.
• TH56A 56.93 m @ 1.16 g/t Au, 0.34% Cu.
• TH57 45.50 m @ 0.46 g/t Au, 0.25% Cu.
• TH64A 54.73 m @ 0.21 g/t Au, 0.17% Cu.
These channel results provided an inferred margin of a mineralised porphyry system and allowed SolGold to
plan the first targeted core drill holes into the Alpala system. These are discussed in Section 10.
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Figure 9.6.2: Alpala Creek Discovery Outcrop of Porphyry-Style Quartz Veins Showing Copper-Gold Rock-Channel
Sample Results (Source: Garwin et al., 2017)
9.7 Petrology, Mineralogy, and Research Studies

9.7.1 Petrographic Studies
Petrographic studies have been conducted by Applied Petrologic Services and Research during 2013-2015 and
Dr. Roger Taylor from 2015 through 2018. The main conclusions from the integration of this work with the
detailed logging of diamond drill-core by ENSA geologists work can be summarised as follows.
• More than six major phases of intrusion are delineated on the basis of composition and relative timing-
relationships with porphyry-related vein-stages. Thin-section petrography reveals the presence of very
fine-grained quartz in the groundmass of the intrusions, which suggests compositions that range from
quartz diorite to tonalite. However, the intrusive rock types are classified on the basis of observations made
by the field geologist with a 20x hand-lens.
• The porphyry-related vein types and paragenesis indicate a systematic progression in time and are
described using the nomenclature established by Gustafson and Hunt (1975). Early-stage, minor and wavy
AB-type quartz veins deficient in sulphide minerals are followed by magnetite (M) veinlets. These vein types
post-date the formation of the USTs. Planar and through-going, B-type quartz veins cross-cut the early
vein types and consist of quartz-magnetite-chalcopyrite. At least two stages of B-type veins are recognised,
with magnetite more abundant in early B1 veins and chalcopyrite more common in the later B2 veins. The
B-type veins contain the majority of the copper and gold in the deposit. Chalcopyrite-rich, C-type veins
contain rare to minor bornite and cross-cut earlier vein types. The C-type veins contain significant amounts
of metal but constitute a small volume-portion of the drill-core. The B- and C-type veins are spatially
associated with intrusions that show variable feldspar-destructive, sericite-chlorite+clay overprinting of
biotite-actinolite and chlorite-epidote alteration mineral assemblages.
• Late-stage, pyritic D-type veins with quartz-sericite-pyrite selvedges contain chalcopyrite, minor bornite
and locally, molybdenite. Many of the later vein stages exploit and re-open earlier vein stages. Anhydrite
is a common vein constituent as it is deposited over a wide range of temperatures and re-opens earlier
vein stages. Late-stage hydrothermal-matrix breccia bodies and volumetrically small igneous-matrix
breccias, including pebble-dikes, typically post-date sericite-chlorite+clay alteration and are locally cut by
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pyritic D-type veins and anhydrite veins. The breccia bodies cut the volcanic host-rocks and the pre, early-
and intra-mineralisation intrusions.
9.7.2 Mineralogy
Mineralogy studies have been undertaken by Dr. Janet Muhling from 2014 through 2018. Scanning Electron
Microscopy (“SEM”) techniques including Backscattered Electron (“BSE”) imaging and Energy Dispersive X-ray
Spectroscopy (“EDS”) indicate that the primary copper minerals are chalcopyrite and bornite.
Early-formed, hydrothermal magnetite occurs within early AB- and B1-type veins, and as monomineralic
veinlets, disseminated grains and replacements of hornblende. Magnetite is variably converted to metallic
hematite and pyrite in the upper part of the deposit where chlorite-epidote altered intrusions and volcaniclastic
rocks are moderately to strongly affected by feldspar-destructive alteration. The earliest formed copper
sulphide minerals observed in drill-core consists of abundant chalcopyrite and rare bornite in B-type veins.
Chalcopyrite most commonly forms after, and surrounds, cubic and massive pyrite in C- and D-type veins. It
also occurs in anhydrite-rich veins and B-type veins that have been re-opened by later vein types. Late-stage
bornite is in textural equilibrium with pyrite and chalcopyrite in C- and D-type veins, which suggest that these
later-stage veins formed at a lower temperature and a higher sulfidation state than chalcopyrite in early-stage
B-type veins (Einaudi et al., 2003).
Gold occurs as discrete grains of electrum (typically 65% to 85% Au) that range from 1 to 50 microns in diameter
(Muhling, 2014, 2015 and 2018). The electrum grains occur within chalcopyrite, bornite, pyrite and rarely quartz
and anhydrite. Grains of low-Ag gold (>90% Au) that are 1 to 3 microns in diameter are associated with sulphide
grains and occur locally within silicate minerals (Muhling, 2017).
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Figure 9.7.1: Scanning electron microscope - back scattered electron images showing the distribution of electrum
contained within sulphide- and gangue-minerals. A) Electrum in chalcopyrite adjacent to pyrite, contained in
quartz; B) Electrum along a fracture in pyrite and as discrete grains within and adjacent to pyrite in the presence
of chalcopyrite, anhydrite and quartz; C) Electrum in anhydrite adjacent to chalcopyrite, magnetite and quartz;
and D) Electrum along a grain boundary between chalcopyrite and bornite. *
B
*All images show a scale-bar in microns (1000 microns = 1 mm). Common mineral abbreviations: Anhy - anhydrite (CaSO4);
Au - electrum (65% to 85% gold); bn - bornite (Cu5FES4); cpy - chalcopyrite (CuFeS2); mgn - magnetite (Fe3O4); py - pyrite
(FeS2); qz - quartz (SiO2) and rtl - rutile (TiO2).
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Section 10 – Drilling
10. Drilling
10.1 Summary
Drilling is undertaken in a professional manner in line with industry practices including:
• Accurate locating of Drill Holes by differential GPS
• Recording downhole surveys taken at 30 m intervals, or 1 m in the case of daughter holes
• Drilling is undertaken by reputable drilling contractors with fit for purpose equipment
• Achieving core recoveries of 97.5%
• Securing core in an undercover facility.
10.2 Introduction
SolGold commenced diamond drilling on 1 September 2013. A total of 133,576 m of drilling has been
completed at the project and 3 distinct phases of drilling have been completed thus far.
Table 10.2.1: Total Drilling Completed at Alpala as of 30 October 2018*

Phase Period Drill Drill Phase Cumulative Description
Fleet Holes Meterage Meterage
1 01-Sep-13 to 2 1-17 23,670.04 23,670.04 Exploration and Reconnaissance
06-Jun-16 drilling
2 07-Jun-16 to 10 18-38 38,855.56 62,525.60 Maiden Resource Drilling (MRE#1)
18-Dec-17
3 19-Dec-17 to 12 39-75 71,050.40 133,576.00 Resource Update Drilling (MRE#2)
07-Nov-18
4 In progress 12 In In progress In progress Resource growth and Pre-
progress Feasibility Requirements
*Note: the total amount of meters quoted in MRE#1 was 53,616 m which relates to the meterage that had been assayed
at the effective date for MRE#1.
10.2.1 Phase 1 Drilling: Exploration and Reconnaissance Drilling
Phase 1 drilling focussed on extending the discovery outcrop of sheeted and stockwork “B” type quartz veins
in Alpala Creek, both at depth and along strike towards the northwest. Phase 1 drilling utilised 2 HP man-
portable machines to complete 17 drill holes and 2 re-drills (CSD-13-001 to CSD-16-017) for a total 23,670.04 m
of drilling. Drill holes were inclined at angles between -60 to -87° towards the southwest and provided relatively
steep intersection angles into the northwest trending Alpala body which dips approximately –78° towards
northeast. Initial results indicated that a mineralised copper-gold porphyry system exists at depth and that this
mineralisation is intimately related to the sheeted and stockwork veining seen at surface. The first phase of
drilling concluded on 6 June 2016 following completion of a detailed review of geological interpretations at
Alpala.
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10.2.2 Phase 2 Drilling: Maiden Resource Drilling (MRE#1)
Phase 2 drilling focused on defining the extent of mineralisation at Alpala and the northwest and southeast
extensions to allow a maiden Mineral Resource estimate to be calculated. Phase 2 drilling utilised 7 HP man-
portable rigs, 2 Titeline track mounted rigs and 1 x Hytec track mounted rigs to complete holes 18-38 and
partially completed holes 29, 32-D2, 33-D1, 34-D1 and holes 35-38. The second phase of drilling concluded on
18 December 2017 ahead of completion of the Maiden MRE (MRE#1). MRE#1 was completed from an overall
62,525.6 m of drilling.
10.2.3 Phase 3 Drilling: Resource Update Drilling (MRE#2)
Phase 3 drilling focused on extending and upgrading the existing Alpala resource with drill targeting focussed
on infill drilling of the high-grade core of the deposit, as well as resource extension drilling both along and
across the main northwest trend of the deposit. Phase 3 drilling utilised 7 HP man-portable rigs, 3 Titeline track
mounted rigs and 2 x Hytec track mounted rigs to complete drilling of Hole 74 and partially complete hole 75.
Phase 3 drilling was completed on the 7 November 2018 ahead of the updated MRE (MRE#2).
MRE#2 was estimated from a total of 133,576 m of drilling comprising 128 diamond drill holes, including 75
drill holes (Holes 1-75), 34 daughter holes, 8 re-drills, and 11 over-runs.
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Figure 10.2.1: Plan of all Drill Holes and Rock-Saw Channels Showing Copper Equivalent Assay Results, Intervals
Awaiting Assay Results are Coloured Blue (SolGold, 2018)
.5
10.3 Collar Surveys

Azimuth and dip of the drill rig setup are measured and checked by SolGold ahead of the start of all drill holes.
Collar locations are initially positioned using hand-held GPS units and then picked up by professional surveyors
after drilling has been completed (Figure 10.3.1).
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Figure 10.3.1: Example Final Collar Position – CSD-13-001
10.4 Downhole Surveys

A Single Shot Reflex Ezi-Gyro system is used to provide a down hole survey upon completion of each drill hole.
Readings are taken by the drilling contractors at 30 m intervals and provided to the SolGold geology team.
Any deflection of more than 10 degrees in dip or azimuth within a 30 m interval is resurveyed.
Where daughter holes are drilled, a magnetic survey tool integrated into the steerable Devico tool is used at 1
m intervals to steer the hole onto the new azimuth/dip.
10.5 Diamond Drilling Procedures

During SRK’s site visit in October 2017 and January 2018, the drilling being performed by contractors and
managed by SolGold’s geological team, was observed. Three drilling contractors are undertaking the drilling:
HP, Titeline and Hy-tech.
HP drill rigs are custom made Hydracore man-portable rigs with a maximum capacity drilling at PQ diameter
(85.0 mm core) to 300 m depth, HQ (63.5 mm core) to 1,000 m, NQ (47.6 mm core) to 1,900 m, or BQ (36.4 mm
core) to 2,400 m.
Titeline use ‘880 UDR’ drill rigs capable of drilling NQ to 3,000 m.
Hy-tech employ Tech 5000 drill rigs capable of drilling NQ to 3,400 m.
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A Devico DeviDrill steerable wireline core barrel is used to drill daughter holes from a parent. The DeviDrill tool
has an NQ (47.6 mm core) size and is capable of drilling up to 3000 m depth. The tool has a maximum deviation
of 20° per 30 m, however a maximum deviation of 9° per 30 m is recommended.
Drill pads, water sumps and rain shelters are constructed by SolGold field teams at each site under the
supervision of the contractors (Figure 10.5.1).
All drilling is undertaken using Diamond Core (“DC”) triple tube at either PQ3 (83.0 mm core), HQ3 (61.1 mm
core) or NQ3 (45.0 mm core) core size.
Core is produced in 3 m core runs and placed into wooden core boxes. Core recoveries are recorded at the
drill site. Core boxes are then transported to the main project office for logging and sampling. Cut wooden
blocks are placed at the end of each run to record drill depths.
Core orientation is performed at 30 m intervals using a Reflex ACT III Ezi-Ori system.
Figure 10.5.1: Diamond Drill Hole Location CSD-17-031
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10.6 Core Recovery

SRK has reviewed the drill core recovery results and found that recovery is good with average recoveries of
97.5% being achieved. Areas of low recovery are noted to be restricted to single sample intervals with no
discernible spatial relationship or within the upper 10 m of each drill hole.
10.7 Core Storage

Core is labelled and photographed ahead of being transported from the drill sites by 4x4 vehicles to the project
office site at Rocafuerte where it is logged and sampled. All core from the Alpala project is stored at the camp
under cover, alongside the logging area.
Figure 10.7.1: Core Storage at the Rocafuerte Facility
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10.8 SRK Comments

From SRK’s review during their technical site visits, the drilling at Alpala has been conducted in a professional
manner using industry best practices and has produced core of sufficient quality and recovery to be used in a
future Mineral Resource estimation. SRK is unaware of any material factors that would impact the accuracy and
reliability of the sample results.
The initial spread and design of the drill holes was limited by access and topography hence the use of man-
portable rigs. This has resulted in some low intersection angles of the mineralised body which is not uncommon
when drilling a steeply dipping porphyry deposit. With the introduction of the further rigs and the use of the
Devico device, SolGold have been able to better target the mineralisation at Alpala. SolGold also achieve a high
degree of control over this complex multi-contractor drilling programme through the use of their own
independent foreman.
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Section 11 – Sample Preparation, Analyses and Security
11. Sample Preparation, Analyses and Security

11.1 Summary
The assaying of drill core and channel samples collected during SolGold’s exploration programmes have been
performed by three laboratories; ACME, Vancouver, ALS Geochemistry, Lima and Met-Solve, British Columbia.
Following a review of the sample preparation, chain of custody and data security procedures and assaying
methods employed by SolGold, SRK is of the opinion that they are consistent with industry best practices and
suitable for use in an MRE.
11.2 Introduction
The following section outlines the sample preparation and assay procedures and protocols employed by
SolGold.
11.3 Sampling Methods

11.3.1 Core Sample Selection and Mark-up
Prior to cutting and collection of samples, all core is marked up for sampling. A standard sampling interval of
2 m has been selected by SolGold although smaller samples may be taken in significant zones (≥25 cm) of
massive sulphide. In these situations, the massive sulphide zone is sampled to its margins and the sampling
interval returned to even number depth intervals (e.g. 2 m, 4 m, 6 m) as soon as possible after the interval. All
core is submitted for assay.
11.3.2 Core Sawing
Before cutting, all core is marked up by a geologist or competent core technician, ensuring that representative
half core is created.
Four electrical core saws are operated at the Rocafuerte exploration camp Figure 11.3.1), alongside the logging
facility; all core is split longitudinally. Following splitting, all core is returned to the core trays prior to being
selected for sampling. Intervals of highly broken core that may be washed away by the water supply are
wrapped in plastic and/or masking tape to increase the retention of fines. Intervals of extremely broken or
fragmented core or clay rich core are left in the core tray without sawing and split during sampling by cleaver
and spatula.
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Figure 11.3.1: Core Cutting Facilities at Rocafuerte (SolGold, 2018)
11.3.3 Sample Collection
Half core is sampled including coarse and fine rock fragments. Where there is significant fine material, a trowel
is used to ensure that no less than 50% of the fines are included in the sample. All material is placed into high
strength plastic sample bags, which in turn are placed into calico sample bags. Sample numbers are written on
the exterior of the plastic bags with a waterproof marker and a corresponding barcoded plastic sample ticket
placed into each plastic bag.
11.3.4 Magnetic Susceptibility Analysis
Following sampling of the core, magnetic susceptibility measurements are taken of the half core samples over
the length of each hole at two metre intervals. All measurements are taken using a KT-10 Magnetic
Susceptibility Meter, manufactured by Terraplus (Figure 11.3.2).
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Figure 11.3.2: Magnetic Susceptibility Analysis (SolGold, 2018)
11.3.5 Channel Sampling
Channel samples taken with the use of a rock saw are collected at either 1 or 2 m intervals, bagged and labelled
using the same procedures as detailed for drill core.
11.4 Metallurgical Sampling

Selected half NQ core samples were composited into approximately 24 m metallurgical samples. Individual half
core samples were individually vacuum sealed in a plastic sleeve. These samples are then placed in bubble
wrap to prevent splitting samples during transport. Composite samples were placed in plastic drums (1 sample
/drum) for shipping (Figure 11.4.1).
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Figure 11.4.1: Metallurgical Sampling (SolGold, 2018)
11.5 Density Determinations

Specific gravity analysis was historically conducted on approximately 10 cm pieces of whole core taken every
core box; however, this was subsequently changed to one piece of half core taken every 25 m. The density has
been measured using a wax sealed method immersed in water. Core is sawed orthogonally to provide smooth
ended core-cylinders, before being placed into a small drying oven for 1 hour at 225°C. Core is then weighed
to provide mass of dried, unwaxed core in air (Measurement A). Dried core is then coated in wax, before a
second measurement of the mass of waxed core in air (Measurement B). Waxed core is then submerged in
water and again weighed to provide mass of submerged, waxed core (Measurement C). Specific gravity is then
calculated using the expression below, assuming that the density of paraffin wax is 0.914 g/cm3.
𝐴
𝑆𝐺 =
[𝐵 − 𝐶] − [𝐵 − 𝐴]/0.914
The current project database contains 9,150 specific gravity measurements.
11.6 Analytical and Test Laboratories

Analyses of SolGold exploration samples have been performed by different laboratories over the life of the
project (Table 11.6.1). All laboratories are independent of SolGold and Cornerstone and are accredited
laboratories for the analysis methods used.
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Table 11.6.1: Historic Lab Usage

LABCODE Sample Type Start End Preparation Analyses
ACME Core Jul 2012 Aug 2016 Luis Aucay and ACME Vancouver
Rock Chip Asociados,
Sediment Cuenca
Soil
Trench
METSOLVE Core Apr 2016 Aug 2016 Luis Aucay and Met-Solve
Rock Chip Asociados, Vancouver
Trench Cuenca
ALS Core Oct 2014 Present ALS Quito ALS Lima
Rock Chip ALS Vancouver
Trench (for Metallurgical
Metallurgical sampling)
Inspectorate Cross-check Jul 2017 Present N/A Inspectorate
Duplicates Lima
(Pulps/Crush)
11.7 Sample Preparation and Analysis

11.7.1 ACME Laboratory
At the ACME Laboratory in Cuenca, all rock, channel and drill core samples are prepared using standard rock
preparation procedures (ACME Code: R200-250/ PRP70-250) including crushing (1 kg to ≥70% passing
10 mesh (2 mm)), splitting (split to 250g) and pulverising (≥85% passing 200 mesh (75 µm)).
Prepared samples are then assayed by ALS Laboratories in Lima, Peru using three methods.
• Au by lead collection fire assay with AAS (atomic adsorption spectrometry) on a 30 g sample (FA430/G601)
• Multi-acid digest ICP with ES (emission spectrometry) finish for 35 elements on a 0.25 g aliquot (MA300/1E)
• Multi-acid digest ICP with ES finish for 23 elements on a 0.25 g aliquot (MA370/7TD) (for over limits Ag,
Cu, Pb, Zn samples).
Method MA300 is only partial for some S-, Cr- and Ba- bearing minerals and some oxides of Al, Hf, Mn, Sn, Ta
and Zr. Volatilisation during fuming may result in some loss of As, Sb and Au.
In summary
• Ag, As, Au, Cu, Sb were analysed by MA300, 4AD and 1E methods
• Cu were also analysed by 7TD and MA370 methods
• Au was analysed by FA, FA430, G6 methods.
Soil samples submitted to ACME undergo SS80 preparation (Dry at 60˚C; sieve 100 g to -80 mesh), followed
by AQ201 Aqua Regia 1:1:1 digestion ICP-MS analysis for 36 elements.
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11.7.2 ALS Laboratories
Samples sent to ALS Laboratories in Quito are prepared by crushing (CRU-31), logging (LOG-22), weighing
(LOG-24), pulverisation of 1 kg to 85% passing 75 µm (PUL-32) and splitting (SPL-21), before being transferred
to a new sample bag (TRA-21) and re-weighed.
Prepared samples are then dispatched to ALS Lima, Peru for assaying.
A variety of methods have been used for analysis of rock, channel and drillcore samples by ALS:
• 4 acid digest ICP with MS finish for 48 elements on a 0.25g aliquot (ME-MS61)
• 4 acid digest ICP with AES finish for 33 elements on a 0.25g aliquot (ME-ICP61)
• Aqua-regia digest ICP with MS finish for 51 elements on a 0.5g aliquot (ME-MS41)
• Au by lead collection fire assay with AAS finish on a 30g sample (Au-AA23)
• Au by lead collection fire assay with gravimetric finish on a 30 g sample (GRA-21
• Ag by aqua-regia digestion and AAS finish on a 0.5g sample (Ag-AA46)
• Cu by aqua-regia digestion with AAS finish on a 0.5g sample (Cu-AA46) (Over limits Cu)
• Cu by four acid digestion and AAS finish on a 0.4 g sample (Cu-AA62) (Over limits Cu).
In summary:
• Ag, As, Cu, Sb were analysed by MEICP61, MEMS41, MEMS61, 4AD
• Cu over-grade was analysed by AA46, AA62
• Au was analysed by AA23, FA, MEICP61, MEMS41.
Data reported from an aqua-regia digestion should be considered as representing only the leachable portion
of the particular analyte.
Additionally, all samples submitted to ALS Laboratories have been scanned for hyper-spectral mineralogy,
combining TerraSpec ©, 4HR scanning and aiSIRISTM interpretation (HYP-PKG).
11.7.3 Met-Solve Laboratories
Samples submitted to Met-Solve laboratories first undergo sample preparation at ACME’s laboratory in Cuenca
as detailed above.
Samples are the dispatched to Met-Solve laboratories in Langley, British Columbia for assay by two methods:
• Au by lead collection fire assay with AAS finish on a 30g sample (FAS-111)
• 4 acid digest ICP with AES (Atomic Emission Spectrometry) or MS finish on a 0.2 g aliquot with a 0.2 g
aliquot (IMS-230/ICF-6Cu – Ore grade).
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In summary:
• Ag, As, Cu, Sb were analysed by IMS230 and 4AD methods
• Cu was also analysed by FAS111
• Au was analysed by FAS415, FAS111, FA methods.
11.7.4 Bureau Veritas (Peru)
External umpire check assays were undertaken by Bureau Veritas (Peru) via their Quito office. The analyses of
pulps used the following methods:
• 50g Lead Collection Fire Assay Fusion - AAS Finish 50 (FA450)
• 4 Acid digestion ICP-MS analysis 0.25 (4A200)
• 4 Acid Digest AAS Finish (MA402).
In summary:
• Ag, As, Cu, Sb were analysed by 4A200
• Cu was also analysed by MA402
• Au was analysed by FA450.
11.8 Databases
All geological and sample analysis data is managed in the AcQuire geological database. AcQuire uses SQL
Server as its database allowing security to be applied at both the database and application levels. Restricted
access to the database.
• Three dedicated database geologists manage the database including QAQC of data and imports
• Two additional geologists are responsible for managing the Terraspec™ information
• Direct entry of Geotech and SG information is undertaken by technicians in the core shed
• Read only access through a web application to the database through preconfigured views.
The data integrity is also enforced through the database structure. There are numerous rules that enforce
data integrity such as primary keys, parent child relationships and field validations that combine with
business rules set up in import procedures to ensure that only valid data is stored correctly.
Examples include:
• Sample Id uniqueness
• Prevention of overlapping intervals
• Prevention of information extending beyond depth of hole
• Separation of samples from QAQC analysis and descriptions.
Data collection has been configured to ensure minimum manual entry of information thus reducing the
potential to introduce errors. Invalid data is flagged and must be corrected before it can be stored.
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Data is provided from geologists or laboratories in predefined templates. Data is loaded using import
procedures designed specifically for those templates. This ensures that the data is loaded correctly and
consistently independent of the operator performing the data load.
The main steps in the dataflow relating to sample and lab analyses are:
• Sample intervals and the Sample ID (unique identifier) is imported from sample cut sheets created with the
geological log. Duplicates, standards and blanks are also recorded at this time
• After loading of interval and sample information, despatch information is then created in acQuire and
provided as a hard copy to accompany the samples to the lab. A despatch report is also generated from
acQuire and emailed to the lab using a lab specific template
• Lab emails the results to the recipients: Project Manager, Database team (3 personnel)
• Database manager places in a directory for loading
• Returned data is compared with the original despatch, ensuring data has been received for the samples
that were despatched. This also acts as a check to ensure that Sample Ids are consistent with those that
were sent
• Analysis data is loaded to the database via lab job number with a pending status. This status ensures that
data is not available for export or to users generally, but data is stored in the database
• QAQC assessment of the lab job is performed. This includes an assessment of performance of the lab in
analysis of duplicates, standards and blanks using scatter plots and line plots;
• On acceptance of the lab job, the assays are accepted in the database, and data is available to users.
11.9 Sample Security

Samples are packaged on site by SolGold and have been dispatched periodically to one of the three assaying
laboratories via two sample preparation laboratories in either Cuenca or Quito though the history of the drilling
programme. Sample security and dispatch forms are completed for each shipment documenting the number
and type of samples to be received by the laboratory. A SolGold driver transports the samples to either the
ACME preparation laboratory in Cuenca (ACME or Met-Solve assaying), or the ALS preparation laboratory in
Quito (ALS assaying).
11.10 Sample Storage

The Rocafuerte core facility is located in a secured compound with dedicated undercover processing and
storage areas (Figure 11.10.1). After logging and cutting, samples are bagged and magnetic susceptibility
readings taken in the sample area (Figure 11.10.2). Samples remain here until they are despatched.
Core is stored in stacked core boxes available for review and future sample requirements. Pulps are held at the
laboratory for 90 days, then transported to the SolGold facility in Quito (Figure 11.10.3).
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Figure 11.10.1: Core Storage (SolGold, 2018)
Figure 11.10.2: Geotech and Sampling Area (SolGold, 2018)
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Figure 11.10.3: Pulp Storage (SolGold, 2018)
11.11 SRK Comments

Following a review of the sample preparation, sample and data security procedures and assaying employed by
SolGold, SRK is of the opinion that they are consistent with industry best practices and suitable for a project at
this level of exploration.
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Section 12 – Data Verification
12. Data Verification

12.1 Summary
monitor the on-going quality of the analytical database. This programme involves Certified Blanks, Certified
Reference Material (“CRMs” or standards), Field Duplicates and Interlaboratory comparisons.
SRK’s review of the programme and the copper and gold results concluded:
• OREAS samples performed adequately, reporting values within three standard deviations
• The two CDN CRMs used in the initial stage of drilling (up to hole CSD-15-011) show initially poor precision
in both copper and gold; however, this improved with time after changing laboratory
• Good correlation between the parent and field duplicate assay results for copper and gold. The limited
outliers are considered to reflect small-scale geological variability, especially with respect to gold
• Inter-laboratory comparisons of copper and gold test results shows a strong positive trend with certified
materials performing well.
Onsite verifications were conducted as part of this PEA study by Wood, Knight Piésold and SRK in August 2018.
This site visit included observations of personnel performing exploration activities, visits to communities and
potential sites to contain infrastructure and reviews of procedures and information collected in the areas of
environment, community, geotechnics, metallurgy and surface infrastructure.
Additional onsite verifications where conducted by SRK in October 2017 and January 2018 to review
exploration procedures, the geological database, geological modelling procedures, examine drill core,
interview project personnel and collect relevant information for the preparation of mineral resource models
and compile technical reports.
Onsite verifications found the procedures and information collected are of sufficient quality with no critical
gaps in the data that would pose significant risk to completing this Preliminary Economic Assessment study.
12.1.1 Certified Reference Materials
Since the start of the drilling at Alpala, SolGold has introduced seven different CRMs into the analysis sample
stream, sourced from CDN Resource Laboratories Ltd., Canada (“CDN”), between October 2013 and July 2016
and Ore Research and Exploration, Australia (“OREAS”) between March 2015 and the present. A total of 1,616
CRMs have been inserted into the sample stream to date.
12.2 Verifications by SolGold

SolGold routinely undertakes data verification as part of the on-going exploration programme. Checks
completed include validation for all tabulated data, including collar and down-hole survey, sampling
information, assay and lithology interval data. Validation of sample results from the latest phase of drilling uses
standards, blanks and duplicate samples inserted routinely into each batch submitted to the laboratory to a
percentage of 8.7%, Table 12.2.1.
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Table 12.2.1: Summary of QAQC Samples

Sampling Programme Total (%) Comment
Normal Samples 66,739 90.5
Pulverised Certified Blanks 1821 2.5
OREAS 22d 305 0.4 Gold Blank from Ore Research and Exploration
OREAS 22e 873 1.2 Gold blank from Ore Research and Exploration
CDN-BL-10 114 0.2 Blank from CDN Resource Laboratories
Coarse Certified Blanks 529 0.7
OREAS C27c 529 0.7 Gold blank from Ore Research and Exploration
Certified Reference Material 1616 2.2
CDN-CM-17 51 0.1 CM-17 from CDN Resource Laboratories
CDN-ME-19 61 0.1 CM-19 from CDN Resource Laboratories
OREAS 501b 394 0.5 CRM-501b from Ore Research and Exploration
OREAS 501c 345 0.5 CRM-501c from Ore Research and Exploration
OREAS 502c 221 0.3 CRM-502c from Ore Research and Exploration
Field Duplicates 2432 3.3
Coarse Duplicates 0 0.0
Pulp Duplicates 0 0.0
Lab Duplicates 1644 2.2
Total QC Samples 6984 9.5
Total Samples 73,723 100
Figure 12.2.1 and Figure 12.2.2 show the performance and usage of the most commonly used CRMs by date
and by laboratory.
The charts below demonstrate that the CRMs typically perform well however it also highlights several examples
of possible sample switches or miss labelled CRMs. Examples of the mislabelled CRMs are two points of OREAS
504b (red) plotting in OREAS 502b (orange) in Figure 12.2.1 and one point of OREAS 501b (green) plotting in
OREAS 504b (red) in Figure 12.2.2.
There are further examples within each of the CRMs data populations which have been discussed in detail
below, overall however SRK does not consider these CRM swaps to be a material concern.
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Figure 12.2.1: Summary of CRM Copper Results by Lab and Date
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Figure 12.2.2: Summary of Au CRM Results by Laboratory and Date
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12.2.1 Sample Quality Assurance and Quality Control Programmes
monitor the on-going quality of the analytical database. This programme is set out for all geologists in a
standard sampling protocols document and involves the insertion of:
• Certified Blanks – every 50th sample and at the start of every drillhole;
• Certified Reference Material (“CRMs” or standards) – from Ore Research and Exploration, Australia
(“OREAS”), - inserted every 50th sample; and
• Field Duplicates – two sets of ¼ core are sampled and inserted as every 30th sample.
12.2.2 Certified Reference Materials
Since the start of the drilling at Alpala, SolGold has introduced seven different CRMs into the analysis sample
stream, sourced from CDN Resource Laboratories Ltd., Canada (“CDN”), between October 2013 and July 2016
and Ore Research and Exploration, Australia (“OREAS”) between March 2015 and the present. A total of 1,616
CRMs have been inserted into the sample stream to date.
The certified limits for the respective CRMs are provided in Table 12.2.2 below.
Table 12.2.2: Certified Reference Material Summary Details

QAQC_ID Au g/t Cu ppm Mo ppm Ag g/t Pb ppm Zn ppm
CDN-CM-17 1.37 7,910 750 14.4 - -
CDN-ME-19 0.62 4,740 - 103 9,800 7,500
OREAS 501b 0.248 2,600 99 0.778 23.0 89.0
OREAS 501c 0.221 2,760 97 0.461 21.5 81.0
OREAS 502b 0.495 7,730 238 2.09 31.5 134
OREAS 502c 0.488 7,830 226 0.779 23.5 109
OREAS 504b 1.61 11,100 499 3.07 26.2 108
SRK has reviewed the results for each of the seven CRMs in relation to copper and gold as well as molybdenum
values when possible. The OREAS samples performed adequately, reporting values within three standard
deviations. The subsections below discuss each of the OREAS CRMs and highlight SRK’s observations on their
performance.
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12.2.2.1 OREAS 501b
OREAS 501b has been used between May 2015 and September 2018. Broadly, the dataset has performed well,
with only three samples of the 394 plotting outside of three standard deviations. Two of these are represented
on both the gold and the copper plots and are likely to be sample switches. Sample D119070 appears to be
CRM OREAS 504b and sample D236050 could be a blank or normal sample.
For a small proportion of the dataset, a clear and consistent under-reporting of gold and over-reporting of
copper can be observed in OREAS 501b from February 2018 onwards as shown in Figure 12.2.3 to Figure 12.2.5.
The step in these results post-February 2018 suggests an error in the sample labelling on-site. The combined
results in Figure 12.2.1 and Figure 12.2.2 clearly illustrate SRK’s opinion that the samples submitted as OREAS
501b from February onwards are likely to have actually been OREAS 501c.
Figure 12.2.3: OREAS 501b Plot for Au (ppm) by Sample Number*
*Note: under-reporting of gold clear at far right of the plot
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Figure 12.2.4: OREAS 501b Plot for Au (ppm) by Date Sampled
Figure 12.2.5: OREAS 501b Plot for Cu (ppm) by Sample Number
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12.2.2.2 OREAS 501c
OREAS 501c demonstrated several assayed gold and copper grades falling outside of three standard
deviations. Batches since July 2018 have all reported values within 3 standard deviations of the mean as shown
in Figure 12.2.6.
Figure 12.2.6: OREAS 501c Plot for Au (ppm) by Date and Cu (ppm) by Sample Batch
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12.2.2.3 OREAS 502b
OREAS 502b has performed well with all but two samples plotting within three standard deviations. D106770
appears to be a CRM switch with OREAS 504b as shown in Figure 12.2.7.
Figure 12.2.7: OREAS 502b Plot for Au (ppm) and Cu (ppm) by Sample Batch
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12.2.2.4 OREAS 502c
OREAS 502c has performed well with all but one copper result plotting within three standard deviations.
D247470 appears to be a blank or normal sample switch. A slight under-reporting bias has been observed in
gold as demonstrated in Figure 12.2.8.
Figure 12.2.8: OREAS 502c Plot of Au (ppm) by Sample Batch*
*Note: showing a slight under-reporting of the mean gold value (purple dashed line) and OREAS 502c plot for copper
showing possible sample switch.
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12.2.2.5 OREAS 504b
OREAS 504b plots well but with a slight under-reporting of gold and four samples plotting outside of three
standard deviations which appear to be CRM switches with OREAS 502b as illustrated in Figure 12.2.9.
Figure 12.2.9: OREAS 504b Plot of Au (ppm) and Cu (ppm) by Sample Batch*
*Note: showing a slight under-reporting of the mean value (purple dashed line) and possible CRM switches for Cu.
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12.2.2.6 CDN CRMs
The two CDN CRMs used from the start of the drilling through to completion of hole CSD-15-011 show initially
poor precision in both copper and gold; however, this has improved with time after changing laboratory as
shown in Figure 12.2.10 and Figure 12.2.11.
Figure 12.2.10: Above – Copper Results from CRM CDN-ME-19. Below – Copper Results from CDN-CM-17
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Figure 12.2.11: Above – Gold Results from CRM CDN-ME-19. Below – Gold Results from CDN-CM-17
Whilst there is an improvement in CRM performance coincident with the change in labs, further investigation
of these early results suggests that the variation in assay value was caused by problems with the CRM material
because re-assays of samples from the early affected batches shows a strong correlation between ACME and
umpire laboratory which suggests laboratory precision was not an issue.
SRK is therefore satisfied that in general, the standards demonstrate an acceptable degree of accuracy at the
assaying laboratories and the poorer performance from the ACME laboratory, which has now been addressed
with the change in laboratory and CRMs, has not introduced a bias into the results.
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12.2.3 Blanks
Certified blank material sourced from CDN and OREAS has been inserted into the sample stream at a frequency
of 2.5%. The majority of blanks used are pulped, but more recently coarse blanks have been introduced (OREAS
C27c). The certified limits for the blank material are presented in Table 12.2.3. A total of 1,821 blanks have been
inserted into the sample stream at Alpala.
SRK has reviewed the blank material for gold and copper results only.
Table 12.2.3: Certified Blank Summary Details

QAQC ID Au g/t Cu ppm Mo ppm Ag g/t Pb ppm Zn ppm
CDN-BL-10 0.01 - - - - -
OREAS 22d 0.001 9.23 2.36 - 0.72 6.70
OREAS 22e 0.001 7.97 1.05 - <1 4.33
OREAS C27c 0.002 7.49 3.64 0.235 27.9 118
The OREAS 22d and 22e are certified quartz sand pulps to which 0.5% iron oxide has been added and are
specifically sold as ‘low background gold blank material’ (<0.001 ppm Au). OREAS C27c is a rhyodacite blank
chip certified reference material with gold reported as <2 ppb Au (0.002 ppm Au).
SRK considers coarse blank material such as OREAS C27c preferable to pulp blank material because coarse
blank samples undergo sample preparation at the laboratory the in the same manner as the regular samples,
thus highlighting potential contamination resulting from the crushing and pulverising process.
CDN-BL-10 is a blank granitic material with low gold values (<0.01 ppm Au). It also contains low-level copper
values, but which have not been certified.
The OREAS blanks have typically performed well with 96.4% of 22d, 93.8% of 22e and 92.4% of C27c samples
reporting values at or lower than the detection limit of 0.005 ppm Au. The range of values over detection within
the 22d data set has a maximum of 0.009 ppm Au, which is considered non-material.
Blank material 22e and C27c however, have seven sample results over 0.1 ppm Au and up to a maximum of
0.494 ppm Au which are very high and warranted investigation. SRK has identified that the samples in question
reside in batches from between 07 September to 17 October 2018, as shown in Figure 12.2.13. In most cases,
the samples in question are isolated incidents within the batches but SRK notes that two of these samples
reside in batch LI18266835 in which 0.223 ppm Au is reported for blank 22e and 0.217 ppm Au is reported for
blank C27c.
SolGold recognised and addressed the issues with the laboratory and consequently the laboratory has changed
their control procedures to improve or solve this issue. SRK notes that the issue is evident in results from both
pulp blanks and coarse blanks. Since pulp blanks do not undergo sample preparation they are unlikely to
become contaminated and so these high grade blank results may be due to swapping of blanks with CRMs
during sample dispatch at site and recommends this should also be investigated.
CDN-BL-10 did not perform well with 70.8% of the samples above 0.005 ppm Au with only one sample above
0.1 ppm Au. SRK notes that these blanks have not been used since 2016.
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Figure 12.2.12: Gold Blank Results (ppm) by Batch Number (capped at 0.1 ppm Au)
Figure 12.2.13: Gold Blank Results (ppm) by Batch Date
The OREAS 22d and 22e blanks have performed moderately well for copper with 93.4% of 22d and 88.2% of
22e samples reporting values within the mean plus three standard deviations. OREAS C27c performed poorly
for copper with only 48.8% of the samples reporting within the mean plus three standard deviations (Figure
12.2.14). The copper results from CDN-BL-10 show a consistent low value however due to the copper value not
being certified for the material and its inerrant value being clearly above detection limit for the analytical
method, the interpretation of these results is limited.
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Figure 12.2.14: Copper Blank Results (ppm) by Sample Number
Several high copper results have been identified within the data set up to a maximum value of 7,910 ppm Cu.
The high copper grades belong to the same samples that have high gold grades mentioned above which
supports the conclusion that these are sample switches (Figure 12.2.15).
As mentioned with the CRM review, while all due care should be taken to ensure sample switches do not occur,
SRK does not consider these inconsistencies to materially influence the results of the regular samples. Attention
should be paid to ensure that sample switches are not repeated in future work.
Figure 12.2.15: Copper Blank Results (ppm) by Batch Date
It is SRK’s opinion that the blanks have typically performed well despite a small number of possible sample
switches. A total of 93.1% of the samples plot at or below the detection limit for gold and within reasonable
limits for copper. OREAS’ blank material is considered more appropriate than CDN for this style of deposit.
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OREAS 22d and 22e clearly perform well, specifically in relation to gold however the inclusion of coarse blank
material is also advantageous when testing the sample preparation facilities. Despite the range in copper and
to some extent gold results, it is SRK’s opinion that these are of a low level and do not suggest significant levels
of contamination if any.
SRK recommends further round robin tested coarse blank material such as a limestone, granite or pure silica
sand product be included to complement the OREAS blank materials.
12.2.4 Field Duplicates
For intervals of core that are assigned as a field duplicate sample, two ¼ core samples are submitted
concurrently to serve as a field duplicate pair.
To date, 2,432 field duplicates have been collected at an average of around 20 per hole, resulting in a frequency
of 3.4% of the sample stream.
There is a good correlation between the parent and field duplicate assay results for copper and gold. The
limited outliers for copper do not correlate with outliers for gold. The limited outliers within duplicates are
considered to be a reflect small-scale geological variability, especially with respect to gold. Plots for parent and
field duplicate comparisons for copper and gold are presented in Figure 12.2.16 and Figure 12.2.17.
Figure 12.2.16: Comparison of Field Duplicate Results for Copper (ppm)
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Figure 12.2.17: Comparison of Field Duplicate Results for Gold (ppm)
12.2.5 Pulp Duplicates
SolGold has not submitted any pulp return samples as pulp duplicate samples for re-assayed by the same
laboratory. This is typically conducted to analysis the repeatability of the results based on the laboratories
calibration. It is recommended that sample suites of around 5% of the total population, selected to spanning
the full distribution of grade ranges, be re-submitted. SRK recommend that a periodic pulp duplicate analysis
programme is undertaken as part of the on-going QAQC review process.
12.2.6 Inter-Laboratory Comparisons
12.2.6.1 ACME vs. Met-Solve (May 2016)
A comparison of drillhole sample analysis between ACME and Met-Solve laboratories was conducted by
SolGold in May 2016, using samples from drillhole CSD-16-016. The results of the comparison on copper and
gold are presented in Figure 12.2.18 to Figure 12.2.21, below.
The outcome of the laboratory comparison illustrates that there is a strong positive correlation between results
from ACME and Met-Solve.
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Figure 12.2.18: Copper (ppm) Assay Comparison between Met-Solve and ACME Laboratories through Drillhole
CSD-16-016
Figure 12.2.19: Plot of Copper (ppm) Assay Results; ACME vs. Met-Solve Laboratories
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Figure 12.2.20: Gold (ppm) Assay Comparison between Met-Solve and ACME Laboratories through Drillhole
CSD 16-016
Figure 12.2.21: Plot of Gold (ppm) Assay Results; ACME vs. Met-Solve Laboratories
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12.2.6.2 ACME vs. Met-Solve (April 2016)
A comparative assay of 64 samples from three holes (CSD-14-008, CSD-15-010, CSD-13-005) between ACME
and Met-Solve was completed in April 2016. The results of the analysis show generally well-correlated results;
however, results are generally slightly higher in copper and gold for Met-Solve samples. No CRMs or blanks
were included in the comparison.
12.2.6.3 ACME vs. ALS (December 2014)
A comparison of drillhole sample assays from ACME and ALS was completed in December 2014. Check analysis
included samples from CSD-14-006, CSD-13-003 and CSD-13-005 where some certified reference samples and
blanks have recorded anomalous results. The results of the comparison show a strong correlation between the
two analyses with the CRM and blank samples performing well within two standard deviations of certified
values.
12.2.6.4 ALS vs. Inspectorate (Bureau Veritas) (December 2017)
Seventy-nine samples have been re-assayed by Inspectorate in December 2017. These samples came from
between 968 and 1050 m in drillhole CSD-17-028 and included three certified reference material samples.
Comparison of results shows a strong positive trend, with all certified materials performing well.
12.3 Verifications by SRK

12.3.1 Site Visit – Resource Estimate Studies
In accordance with international best practices, Mr James Gilbertson of SRK Exploration and Mr Martin Pittuck
of SRK (UK) visited the Alpala Project between 26 and 31 October 2017. Mr Pittuck also visited site between 27
and 29 January 2018.
The purpose of the site visits was to review the digitisation of the exploration database and validation
procedures, review exploration procedures, define geological modelling procedures, examine drill core,
interview project personnel and collect all relevant information for the preparation of a revised mineral resource
model and the compilation of a technical report. During the visit, particular attention was given to the treatment
and validation of historical drilling data.
The site visits were also aimed at investigating the geological and structural controls on the distribution of the
gold mineralisation in order to aid the construction of three-dimensional gold mineralisation domains.
SRK was given full access to relevant data and conducted interviews with SolGold personnel to obtain
information on the past exploration work, to understand procedures used to collect, record, store and analyse
historical and current exploration data.
12.3.1.1 Verification of Sample Database
SRK completed a phase of data validation on the digital sample database supplied by SolGold which included
a search for sample overlaps, duplicate or absent samples, anomalous assay and survey results; no material
issues were identified in the final sample database.
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12.4 Verifications by Wood

12.4.1 Site Visit - PEA
Greg Harbort and Cameron King (Wood Australia) and Alfonso Ovalle Walker (Wood Chile) attended Cascabel
site during the period 14 to 16 August 2018 and José Ale also (Wood Peru) attended site on 21 October 2018.
Expertise are:
• Greg Harbort – Director Metallurgy
• Cameron King – Mining and Minerals Brisbane
• Alfonso Ovalle Walker – Lead Surface Infrastructure
• José Ale – Civil and Geotechnical Engineering.
Wood participated in a number of workshops with site personnel and PEA consultants over the three days at
Cascabel. As part of the site visit, consultants reviewed core, inspected sites that may potentially be used for
infrastructure and inspected existing road access and drilling platforms actively drilling, specifically:
• Project area to understand constraints in locating surface infrastructure
• Inspect road access to and with the project area
• Inspect areas suitable for:
Raw water source
Tailings storage
Waste rock storage
Process plant location.
• Participate in discussions and workshops on other options including:
Port options
Electrical infrastructure
Surface run-off.
• Inspect and approve core proposed for metallurgical sampling
• Observe metallurgical sampling and despatching procedures
• Determine analysis procedures required
• Identified laboratories capable of undertaking required metallurgical tests.
An initial review of the Cascabel drilling database and selected core trays indicated chalcopyrite dominant
copper mineralogy with minor bornite and pyrite, with moderate competence. Samples for the metallurgical
test program were continuous core runs within the drill holes that met the sample selection criteria, identified
by physical inspection by Wood and SolGold staff, copper-gold assays and/or core logs, verified by core
photographs. From the available suitable core, a sample set that provided broad spatial representation and
was relevant to the likely mine plan and potential viability for the resource was selected. Core selected was half
core, remaining after exploration assays were conducted. A skeleton 10 cm sample every 2 m interval was
retained in the core trays. In addition, core used for prior specific gravity testing was retained in the core trays.
Any extraneous matter such as solid or core cutting clay was removed from the samples to prevent
contamination.
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Wood was given full access to relevant data and conducted interviews with SolGold personnel to obtain
information on the past exploration work, to understand procedures used to collect, record, store and analyse
historical and current geological, geochemical and metallurgical data.
12.5 Verifications by Knight Piésold

12.5.1 Site Visit
Chris Brodie (of Knight Piésold Canada, “KP”) attended Cascabel site during the period 14 to 16 August 2018.
Expertise are:
• Chris Brodie: Environmental and Social Impact Assessments (Representative for Qualified Person for
Environment)
While on site KP attended potential sites for infrastructure and tailings, observed local communities and
infrastructure within the project area and met with SolGold officials to understand, access and assess existing
and planned Geological, Environment and Social programs currently in place and information derived from
them such as:
• environmental awareness
• relevant sampling and monitoring plans
• baseline environmental studies
• environmental management plans
• community engagement activity
• community contingency plans
• baseline geological information that may be used for overall project design and the Project’s potential
impacts on the environment, including groundwater movement.
• other relevant material provided by SolGold
KP was given full access to relevant data and conducted interviews with SolGold personnel to obtain
information on the past work, to understand procedures used to collect, record, store and analyse historical
and current environment, social and geological data.
12.6 Verifications by Mining Plus

12.6.1 Site Visit
Mining Plus representative David Seers visited the Alpala property between April 3rd and 5th, 2019. The
purpose of his visit was to review:
• Assess the extent of development and composition of soil profiles
• Review and geotechnically log select intervals of drill core selected by SolGold
• Discuss and understand geotechnical logging practices employed by the site and the impact on the
logging practices on the rock mass assessment performed by Mining Plus.
SolGold provided Mining Plus with information and resources related to these activities during the site visit.
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12.7 Comments
12.7.1 SRK
SRK has reviewed the data collection methodologies during the technical site visits and has undertaken a review
of the assay and geology database provided by SolGold.
Assessment of the current QAQC data indicates the assay data for the drilling and sampling to date has
appropriate accuracy and precision.
SRK recommends that future sample QAQC programmes are extended to increase insertion frequency to 15%
and that the following are employed:
• Coarse blanks continued to be inserted;
• Pulp duplicates are inserted as well as field duplicates;
• Additional round robin tested coarse material (such as limestone, granite or pure silica sand) is sourced
and tested for use as blanks;
• Batch LI18266835 should be reviewed further following two failed blanks showing significantly high gold
grades (0.223 ppm Au & 0.217 ppm Au);
• Additional periodic check assay programmes are employed where stored pulps are selected in a way that
honours the original statistical spread of assays and are re-assayed at a separated umpire laboratory.
• QAQC is assessed on a batch-by-batch basis when results are received and problems flagged and
addressed with the assay lab immediately.
SRK’s database validation suggests that SolGold’s approach is reasonable and appropriate. Notwithstanding
this, SRK recommends that batches affected by the early poor performance of the CDN CRMs are re-assayed
to confirm the original assay values. These samples should be dispatched with new OREAS CRM, as these have
been shown to perform well.
SRK is of the opinion that all data is of sufficient quality for inclusion in a Mineral Resource estimate and
Preliminary Economic Assessment.
In considering geological, mining geotechnics, hydrogeological requirements, there is sufficient amount of

data to proceed with the PEA and there are no critical gaps in the data sets that would pose significant risk to
completing the Geology and Mining component of the PEA.
12.7.2 Wood
Wood is of the opinion that metallurgical samples and procedures selected for the analytical testing carried
out as part of this study are of sufficient quality for inclusion in a PEA.
12.7.3 Knight Piésold
Knight Piésold is of the opinion that the environmental and social databases are sufficient to support this
PEA.
12.7.4 Mining Plus
Mining Plus is of the opinion that the data pertaining to the mine design is sufficient to support this PEA.
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Section 13 – Mineral Processing and Metallurgical Testing
13. Mineral Processing and Metallurgical Testing

13.1 Summary
Metallurgical Testwork was based on 20 samples, averaging 53 kg per sample, obtained from 480 m of NQ
sized half core from five drill holes representing the major domain groups from preliminary geometallurgical
models.
Testwork was conducted at ALS Metallurgical Laboratories, Kamloops, Canada. The laboratory program
consisted of:
• Sample preparation and composite formation
• Comminution tests including SMC, Bond Ball Mill Work Index (BWI) and Bond Abrasion Index (Ai)
• Flotation optimisation and locked cycle tests on specified composites
• Rougher kinetic tests.
Selected samples were grouped into comminution and flotation samples, with twenty sets of comminution
tests and twenty rougher kinetic flotation variability tests conducted. The sample was also used to form three
master composites for process optimisation and locked cycle tests. The composites were designated as:
3. High Copper – High Gold (HC-HG)
Assays for the three composites are presented in Table 13.1.1
Table 13.1.1: Assays for Three Composites

Composite Assay – percent or g/tonne
Cu Fe S S(s) Ag Au TOC
Low Copper – Low Gold 0.77 6.7 3.34 2.26 2 0.76 0.03
(LC-LG)
Intermediate Copper – High Gold 1.19 8.8 5.38 4.74 3 2.39 0.05
(IC-HG)
High Copper – High Gold 1.93 8.9 4.64 3.51 5 2.61 0.02
(HC-HG)
Based on the samples tested, the Alpala Deposit appears to be competent from a SAG mill perspective (average
DWi - 7.06 kWh/m3 / average A*b - 42.7), moderately hard from a ball mill perspective (average BWI – 13.7
kWh/t) and moderately abrasive (average Ai – 0.139).
Based on average results the comminution circuit would consist of SAG and ball mills. Elevated RQD values
indicate that once the mine approached nameplate capacity pebble crushing may be required. The
comminution tests indicate significant variability and secondary crushing may potentially need to be
implemented in latter stages of operation.
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of the cleaner scavenger tailing. The Locked Cycle Flotation Circuit as tested is depicted in Figure 13.1.1:
Figure 13.1.1: Locked Cycle Floatation Circuit
In the initial design, Cleaner Scavenger Concentrate was considered a Final Product and not circulated to the
First Cleaner Feed via the Regrind Mill as would normally be carried out to improve copper and gold recovery
to final concentrate.
The mass recoveries for each individual circuit have been applied to determine the flotation circuit
requirements for a typical three stage cleaning circuit with recycle of a cleaner scavenger concentrate and
second and third cleaner tailings.
Summaries of locked cycle conditions and results are given in Table 13.1.2 and Table 13.1.3 respectively.
Mineralogy and flotation results indicate the flotation performance aligns with similar chalcopyrite dominant
porphyry deposits. The following generic recovery functions for copper, gold and silver are considered a
reasonable approximation of copper concentrate performance and reflect the results obtained in the locked
cycle tests:
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90.0 × (1 + 33.5 × 𝐶𝑢𝑓 )

(1 + 31.1 × 𝐶𝑢𝑓 ) + (1 − 𝑒 −33.6 × 𝐶𝑢𝑓 )
𝐴𝑢 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 = 85.5 × (1 − 𝑒 −5 × 𝐴𝑢𝑓 )
The concentrate grade and metal content will be impacted by the feed bornite to chalcopyrite ratio and the
feed pyrite content. At the current stage of evaluation there is insufficient information to incorporate these
factors. The concentrate grade equation has been developed to align with Testwork. It is recommended that a
Table 13.1.2: Locked Cycle Test Conditions

Operation Conditioning pH Lime Collector PAX Frother MIBC Flotation Time
Time (kg/t) (Potassium (Methyl (min) Note 1
(min) Amyl Xanthate) Isobutyl
(g/t) Carbinol)
Mill – P80 155 µm 8.1
Cleaner 1 1 11.0 8 4/5/6
Cleaner 2 1 11.0 4 3/4/5
Cleaner 3 1 11.0 2 2/ 3 / 4
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Table 13.1.3: Locked Cycle Results

Parameter Units LC-LG IC-HG HC-HG
Composite Composite Composite
Copper feed grade % Cu 0.79 1.17 2.03
Gold feed grade g/t Au 0.80 2.29 2.97
Copper recovery to copper concentrate % 86.0 93.2 93.0
Copper in copper concentrate % Cu 28.8 27.6 30.5
Gold recovery to copper concentrate % 79.4 79.3 85.2
Gold in copper concentrate g/t Au 28.3 46.2 41.0
Mass yield to copper concentrate % 2.0 3.9 6.2
Copper recovery to pyrite concentrate % 5.8 2.2 1.9
Copper in pyrite concentrate % Cu 3.50 1.52 2.11
Gold recovery to pyrite concentrate % 4.9 5.6 5.5
Gold in pyrite concentrate g/t Au 3.04 7.8 8.85
Mass yield to pyrite concentrate % 1.3 1.6 1.8
Testwork results are included in Appendix 1 - M5754 Report - Phase I Met Testing Report.

• A split flotation circuit should be tested to determine if enhanced recoveries and kinetics can be achieved
• Cleaner Testwork kinetic testing should be conducted to optimise flotation times
• Future flotation Testwork should be conducted in duplicate runs to ensure that results are significant.
Future locked cycle Testwork should be as per Figure 13.1.2.
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Figure 13.1.2: Future Locked Cycle Test Circuit
• Cleaner scavenger concentrate will be reground before feeding the First Cleaner. Sighter tests regrinding
Second and Third Cleaner Tails should be conducted to see if improved grade / recovery can be
accomplished.
• Additional Testwork should be conducted with lower grade material. With low copper heads the
concentrate grade equation indicates that concentrate copper grades of less than 24% copper may occur.
An additional cleaner stage may be required to improve concentrate grade. For very low copper head
grade material evaluate addition of lime to the primary grinding circuit to determine if increased copper
concentrate grade can be achieved.
• Additional pyrite concentrates will be produced in the current and future test programs to allow gold
cyanidation and thio-sulphate recovery tests to be conducted.
• Undertake limited vendor concentrate regrind tests in the PFS. In the DFS sufficient sample should be
generated to allow larger scale vendor tests.
• Undertake limited vendor concentrate thickening tests in the PFS. In the DFS sufficient sample should be
generated to allow larger scale vendor tests. Representative tests should be repeated with site sourced
water.
• Undertake limited vendor concentrate filtration in the PFS. In the DFS sufficient sample should be
generated to allow larger scale vendor tests. Transportable Moisture Levels (TML) should be evaluated.
• Further variability and locked cycle flotation tests should be conducted to allow evaluation of variability
from both spatial and geometallurgical aspects. Tests should be aligned to the proposed mine schedule,
including lower grade samples. Representative tests should be repeated with site sourced water.
• Thickened, paste and filtered tailing options should be more fully evaluated at the PFS stage, including
laboratory tests to characterise tailing.
• Material handling tests should be undertaken during the PFS when sufficient material is available.
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• Representative concentrate samples should be despatched to selected smelters.

• Considering the material required for DFS testing a pilot plant campaign should be considered.
13.2 Historical Metallurgical Testwork

An initial Testwork program was conducted in 2014 by the Inspectorate Metallurgical Division, Bureau Veritas
Commodities Canada Ltd, under the supervision of SolGold (Bureau Veritas Commodities Canada Ltd. 2014).
The Testwork is not considered representative as it was limited to flotation roughing and open cleaning
flotation tests on three composites. Table 13.2.1 provides a summary of the composites tested.
Table 13.2.1: Samples Tested in Bureau Veritas, 2014 Test Program

Composite Hole ID From Depth To Depth Assay
(m) (m) g/t Au % Cu %S
1 CSD-13-005 802 850 1.08 1.05 2.43
2 CSD-13-005 934 982 0.54 0.67 5.95
3 CSD-13-005 1098 1146 2.21 1.80 7.57
Conditions for composite 1 were a 129 µm flotation feed P80, 80 g/t potassium amyl xanthate and 40 g/t A3418,
natural pH, no concentrate regrind and a two stage cleaner circuit. These conditions achieved a copper recovery
of 79.5%, a gold recovery of 81.0%, with a concentrate grade of 21.1% Cu.
Tests on composite 2 based on a 128 µm flotation feed P80, 80 g/t potassium amyl xanthate and 40 g/t A3418,
natural pH, with a concentrate regrind to 33 µm and a two stage cleaner circuit produced a final concentrate
grade of 10.5% Cu. This was achieved at a copper recovery of 84.3% and a gold recovery of 84.1%.
Tests on composite 3 were based on a 130 µm flotation feed P80, 80 g/t potassium amyl xanthate and 40 g/t
A3418, natural pH, a concentrate regrind to 43 µm and a two stage cleaner circuit. This achieved a copper
recovery of 81.1%, a gold recovery of 81.1%, with a concentrate grade of 20.3% Cu.
The above test results are not considered representative as they were based on incomplete Testwork from
samples obtained from a single drill hole.
13.3 Historical Mineralogy

Between 2014 and 2018, 36 polished sections were submitted for examination by Scanning Electron
Microscopy (SEM) techniques including Backscattered Electron (BSE) imaging and Energy Dispersive X-ray
Spectroscopy (EDS). The aim of the investigation was to determine the sites of copper, gold (and silver) in the
samples, with emphasis on the grain sizes, textures, compositions and characteristics of all the major metallic
minerals. Of particular importance was the location of gold, either within the lattice of sulphide minerals or as
free grains.
Findings from the mineralogical assessment are as follows:

• Chalcopyrite was the predominant host of copper in the majority of samples, with bornite dominant in
CSD-25 866.9 m and significant in CSD12-166.1 m and CSD13-005 965.0 m.
• Chalcopyrite forms free grains from ~1 µm to 0.5 mm in altered host rock and grains up to 2 mm in veins.
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• Chalcopyrite rimming of magnetite was observed in CSD13-005 818.4, CSD13-005 823.3 m and CSD13-
005 951.0 m, while chalcopyrite rimming of pyrite was noted in CSD13-005 951.0 m, CSD13-005 965.0 m,
CSD13-005 1126.4 m and CSD13-005 1133.0 m
• Minor amounts of both chalcopyrite and bornite were inclusions in pyrite, from 10 µm to <1 µm in size.
Bornite grains in CSD-28 1124.15 m were intergrown with phyllosilicates
• In samples CSD-23R 1153.15 m and CSD-25 821.5 m some pyrite was enclosed by digenite, chalcocite and
rare covellite
• In CSD-25 866.9 m fractured pyrite crystals have fractures filled by chalcopyrite and tennantite, with
chalcopyrite and tennantite also filling interstices between pyrite crystals and enveloping or partly
enclosing them. There were also fine veinlets of pyrite with interstitial chalcopyrite and tennantite
• Bornite also forms free grains in altered rock from ~1 µm to 0.5 mm in size but is mostly intergrown with
chalcopyrite and forms irregular or symplectic inclusions in chalcopyrite. Inclusions of bornite in magnetite
and pyrite are commonly associated with chalcopyrite and are several µm down to <1 µm in size
• Grains of free gold were observed in the majority of samples, ranging in size from ~1 µm to 20 µm. In most
cases the gold was included in chalcopyrite, bornite or pyrite.
13.4 Testwork
13.4.1 Introduction
A metallurgical test program was conducted at ALS Metallurgical Laboratories, Kamloops, Canada. The
program was conducted to evaluate metallurgical performance, with the following objectives:
• To generate comminution data to allow for comminution circuit sizing and evaluation
• To quantify the extent of recovery variability
• To generate a better understanding on the impact of mineralogy, lithology and alteration on recovery and
grade
• To provide limited reagent regime screening
• To gain a better understanding of flotation conditions (pulp density, primary grind size, collector dosage,
pH) on recovery
• To provide sufficient information to evaluate process operating costs
• To investigate the concentrate regrind requirements
• To empirically evaluate if gravity gold recovery tests are warranted at a later project phase
• To determine potential opportunities and risks that can be further evaluated in later stages of the project.
13.4.2 Metallurgical Testwork Program
Metallurgical Testwork was based on 20 samples, averaging 53 kg per sample, obtained from 480 m of NQ
sized half core from five drill holes representing the major domain groups from preliminary geometallurgical
models.
Testwork was conducted at ALS Metallurgical Laboratories, Kamloops, Canada. The laboratory program
consisted of:
• Sample preparation and composite formation
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• Comminution tests including SMC, Bond Ball Mill Work Index (BWI) and Bond Abrasion Index (Ai)
• Flotation optimisation and locked cycle tests on specified composites
• Rougher kinetic tests.
Selected samples were grouped into comminution and flotation samples, with twenty sets of comminution
tests and twenty rougher kinetic flotation variability tests conducted. The sample was also used to form three
master composites for process optimisation and locked cycle tests. The composites were designated as:
3. High Copper – High Gold (HC-HG)
13.4.3 Sample Selection
The core selection was governed by a geometallurgical matrix that incorporated high, medium and low grade
samples defined by the following criteria:
• Metal, veining, sulphur, mineral content and abundance
• Alteration styles and intensity
• Geological lithotypes
• Magnetic susceptibility
• RQD.
Sampling provided a broad spatial representation relevant to the likely mine plan. A skeleton 10 cm sample
every 2 m interval was retained in the core trays. In addition, core used for prior specific gravity testing was
retained in the core trays. Details on the samples tested are given in Table 13.4.1.
Table 13.4.1: Sample Selection for 2018 Test Program

Met Sample Hole_ID Ore Ore Ore Cu Au Master Composite
Numbers Interval Interval Interval (%) (g/t)
(From) (To) (m)
MET001 CSD-18-041-D1- 1168 1192 24 0.78 0.60 Low copper -
D2 Intermediate gold
MET004 CSD-18-043 1200 1224 24 1.20 1.50 Intermediate copper -
High gold
MET005 CSD-18-043 1224 1248 24 1.60 1.67 High copper - High gold
MET006 CSD-18-055R 1320 1344 24 2.37 3.34 High copper - High gold
MET009 CSD-18-057 960 984 24 0.64 0.90 Low copper -
Intermediate gold
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Table 13.4.1: Sample Selection for 2018 Test Program

Met Sample Hole_ID Ore Ore Ore Cu Au Master Composite
Numbers Interval Interval Interval (%) (g/t)
(From) (To) (m)
Intermediate gold
High gold
High gold
High gold
High gold
High gold
Intermediate gold
Intermediate gold
Intermediate gold
13.4.4 Head Characterisation
Variability samples were assayed for copper by ICP, gold by fire assay, sulphur by Leco or equivalent and iron
by AAS.
Each master composite was assayed for Ag, Al, As, Au, B, Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Hg, K, Li, Mg, Mn, Mo,
Na, Ni, P, Pb, Sb, Se, Sn, Sr, Ti, Tl, U, V, W, Zn, total sulphur, sulphur as sulphides, carbonates, organic carbon,
fluorides, chlorides and Re.
13.4.5 Mineralogy
No mineralogy has been conducted on Testwork samples. Subsamples have been retained as a reserve for
future mineralogical analysis.
13.4.6 Grinding
Twenty comminution tests including SMC, Bond Ball Mill Work Index (BWI) and Bond Abrasion Index (Ai) were
conducted. A summary of the results is shown in Table 13.4.2.
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Table 13.4.2: Comminution Results

Test SMC BWI Ai
Sample ID DWi Axb P80 μm BWI Abrasion Index
kWh/m3 kWh/t
Met 001 10.98 26.2 107 16.1 0.093

Met 002 7.63 37.7 115 13.5 0.132
Met 003 8.06 35.7 114 14.1 0.174
Met 004 9.72 29.7 109 15.2 0.161
Met 005 7.13 40.7 114 13.4 0.132
Met 006 6.14 46.5 114 13.6 0.159
Met 007 6.33 45.6 120 13.5 0.222
Met 008 6.46 43.8 117 13.3 0.222
Met 009 10.22 27.1 104 15.3 0.096
Met 010 7.70 36.8 114 14.3 0.121
Met 011 4.41 64.3 115 12.6 0.088
Met 012 6.35 45.5 119 12.8 0.121
Met 013 4.59 60.8 114 13.2 0.104
Met 014 6.56 43.6 116 13.6 0.167
Met 015 4.85 58.6 120 13.2 0.184
Met 016 6.51 43.4 115 12.7 0.175
Met 017 5.43 54.2 118 12.3 0.187
Met 018 6.86 40.9 119 13.2 0.175
Met 019 8.96 30.2 106 14.7 0.029
Met 020 6.38 42.9 108 13.3 0.033
Average 7.06 42.7 114 13.7 0.139
StDev 1.80 10.7 4.63 0.98 0.054
80th Percentile 8.06 46.5 118 14.3 0.175
COMMENT - Medium - Medium Slightly
Hardness Hardness Abrasive
13.4.7 Gravity Recoverable Gold
No gravity recoverable gold tests were conducted.
Considering the fine gold size, a gold gravity circuit is at this stage of the project considered to have limited
potential. Evaluation of the potential for gravity gold recovery is however recommended for the future when
more sample material and information is available.
13.4.8 Flotation
Rougher grind size optimisation tests were conducted at target P80 values of 105 µm, 150 µm, 212 µm and 250
µm. The test conditions were ~10 g/t PAX, frother as required, natural pH and ~12 minutes batch flotation
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time. A flotation feed grind size P80 of 150 µm was considered the optimum for each composite. A summary
of results is given in Table 13.4.3.
Table 13.4.3: Rougher Grind Size Optimisation Results

Low Copper - Intermediate Gold Composite
Test P80 Concentrate Grade Rougher Recovery
µm % Cu g/t Au Cu (%) Au (%) Mass (%)
KM5754-01 158 5.69 5.95 94.0 87.7 12.6
KM5754-04 222 5.27 5.40 92.6 87.8 13.8
KM5754-05 107 6.12 6.55 94.8 90.5 12.7
KM5754-13 320 5.13 5.63 88.9 85.2 13.3
Intermediate Copper - High Gold Composite
KM5754-02 155 7.86 15.85 96.5 93.9 14.8
KM5754-06 195 7.40 14.97 96.2 93.8 15.4
KM5754-07 112 8.42 17.4 96.1 94.6 13.9
KM5754-14 330 9.60 22.9 93.0 92.5 16.9
High Copper - High Gold Composite
KM5754-03 157 12.3 17.9 96.8 92.7 15.6
KM5754-08 197 11.0 15.44 96.5 90.8 17.4
KM5754-09 114 13.7 18.6 96.6 92.4 14.5
KM5754-15 317 10.9 16.6 22.1 93.3 90.6
Rougher Kinetics at a grind of 150 micron are presented in the Figure 13.4.1.
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Figure 13.4.1: Rougher Kinetic Curves
Rougher Floation - Cu Kinetic Curve Rougher Floation - Au Kinetic Curve

Low Copper Master Composite Low Copper Master Composite
100 100
90 90
80 80
70 70
Au Recovery - %
Cu Recovery - %
60 60
50 50
40 40
30 30
20 20
10 10
0 0
0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14
Rougher Flotation Time - minutes Rougher Flotation Time - minutes
Rougher Flotation - Cu Kinetic Curve Rougher Flotation - Au Kinetic Curve

Intermediate Copper Master Composite Intermediate Copper Master Composite
100 100
90 90
80 80
70 70
Cu Recovery - %
Au Recovery - %
60 60
50 50
40 40
30 30
20 20
10 10
0 0
0 2 4 6 8 10 12 0 2 4 6 8 10 12 14
Rougher Flotation - Cu Kinetic Curve Rougher Flotation - Au Kinetic Curve

High Copper Master Composite High Copper Master Composite
100 100
90 90
80 80
70 70
Cu Recovery - %
Au Recovery - %
60 60
50 50
40 40
30 30
20 20
10 10
0 0
0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14
There is a very fast floating component in the feed as indicated by the steep kinetic curve at the start of the
float. The curve then flattens, requiring substantial additional flotation time to recover the slow floating fines.
A split coarse / fines float may enhance recovery and reduce the size of the flotation circuit. Based on the curves
above the scaleup factor to convert batch flotation time to continuous residence time should be 2.5.
Cleaner feed grind size optimisation tests were conducted at target P80 values of 15 µm, 25 µm, 38 µm and
53 µm. Some variability in the actual P80 achieved was noted but is not expected to affect conclusions. Following
regrind the rougher concentrate was treated through a three stage open cleaner circuit. A cleaner flotation
feed grind size P80 of 25 µm was considered the optimum. A summary of results is given in Table 13.4.4.
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Table 13.4.4: Cleaner Feed Grind Size Optimisation Results

Low Copper-Low Gold Master Composite
Test Feed P80 Final Concentrate Rougher Recovery Overall Recovery
Grade
Rougher Cleaner % Cu g/t Au Cu (%) Au (%) Cu (%) Au (%)
KM5754-10 158 50 18.2 19.3 94.4 90.3 85.0 77.5
KM5754-19 158 32 27.9 23.7 93.0 86.7 85.6 72.2
KM5754-22 158 34 25.3 26.1 94.3 91.1 86.7 78.7
KM5754-25 158 13 33.5 33.8 92.6 90.6 79.9 74.2
KM5754-28 158 22 29.5 23.8 94.2 88.5 84.7 70.6
Intermediate Copper-High Gold Master Composite
Grade
KM5754-11 155 71 15.9 29.6 96.6 94.2 89.8 85
KM5754-20 155 46 25.4 47.7 95.2 93.2 89.7 81.8
KM5754-23 155 41 26.3 49.2 96.7 96.5 90.5 85.3
KM5754-26 155 14 32.5 58.1 96.2 95.4 89.3 80.6
KM5754-29 158 27 27.8 44.2 96.2 93.7 89.2 75.0
High Copper-High Gold Master Composite
Grade
KM5754-12 157 72 22.7 32.3 96.9 93.3 90.1 85.4
KM5754-21 157 36 31.1 40.2 95.6 88.4 90.1 79.2
KM5754-24 157 33 30.7 40.3 96.7 92.5 90.2 82.0
KM5754-27 157 17 33.3 41.6 96.7 92.3 92.9 80.0
KM5754-29 158 25 29.8 37.6 96.7 93.1 91.8 81.7
The locked cycle conditions used are detailed in Table 13.4.5 according to the Flow Sheet shown below.

Operation Conditioning pH Lime PAX MIBC Flotation
Time (kg/t) (g/t) Time
(min) (min) Note 1
Mill – P80 155 µm 8.1
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Operation Conditioning pH Lime PAX MIBC Flotation
Time (kg/t) (g/t) Time
(min) (min) Note 1
Cleaner 1 1 11.0 8 4/5/6
Cleaner 2 1 11.0 4 3/4/5
Cleaner 3 1 11.0 2 2/3/4
The Locked Cycle Flotation Circuit as tested is depicted below:
Figure 13.4.2: Locked Cycle Flotation Circuit
It must be noted that the Cleaner Scavenger Concentrate was considered a Final Product and not circulated to
the First Cleaner Feed via the Regrind Mill as would normally be carried out to improve copper and gold
recovery to final concentrate.
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The locked cycle results based on the last two cycles are summarised in Table 13.4.6.
Table 13.4.6: Locked Cycle Results
LOCKED CYCLE TEST RESULTS - KM5754-31 Low Copper Master Composite
ASSAY DISTRIBUTION
STREAM Weight % Weight %

Cu Fe S Au Based on Based on Cu Fe S Au
Rgh Feed Unit Feed
Copper Ro Feed 0.79% 6.63% 3.51% 0.80 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Copper Ro Con 5.15% 16.86% 17.58% 5.05 14.49% 14.49% 94.69% 36.84% 72.60% 91.95%
Copper Ro Tail 0.05% 4.90% 1.12% 0.07 85.51% 85.51% 5.31% 63.16% 27.40% 8.05%
Copper 1st Clnr Feed 5.31% 16.91% 17.78% 5.21 15.85% 100.00% 106.80% 40.41% 80.29% 103.64%
Copper 1st Clnr Con 21.55% 24.51% 30.39% 20.21 3.59% 22.66% 98.14% 13.27% 31.09% 91.13%
Copper 1st Clnr Tail 0.56% 14.68% 14.09% 0.81 12.26% 77.34% 8.65% 27.14% 49.20% 12.51%
Copper 2nd Clnr Feed 21.55% 24.51% 30.39% 20.21 3.59% 100.00% 98.14% 13.27% 31.09% 91.13%
Copper 2nd Clnr Con 29.03% 28.51% 36.20% 26.90 2.50% 69.72% 92.17% 10.76% 25.83% 84.56%
Copper 2nd Clnr Tail 4.33% 15.30% 17.00% 4.81 1.09% 30.28% 5.97% 2.51% 5.27% 6.57%
Copper 3rd Clnr Feed 29.03% 28.51% 36.20% 26.90 2.50% 100.00% 92.17% 10.76% 25.83% 84.56%
Copper 3rd Clnr Con 30.40% 28.85% 36.80% 28.35 2.23% 89.14% 86.04% 9.71% 23.40% 79.44%
Copper 3rd Clnr Tail 17.80% 25.70% 31.30% 15.00 0.27% 10.86% 6.14% 1.05% 2.42% 5.12%
Copper Clnr Scav Feed 0.56% 14.68% 14.09% 0.81 12.26% 100.00% 8.65% 27.14% 49.20% 12.51%
Copper Clnr Scav Con 3.59% 28.31% 32.07% 3.04 1.27% 10.39% 5.80% 5.44% 11.63% 4.85%
Copper Clnr Scav Tail 0.21% 13.10% 12.00% 0.56 10.99% 89.61% 2.86% 21.70% 37.56% 7.66%
LOCKED CYCLE TEST RESULTS - KM5754-32 Intermediate Copper Master Composite
ASSAY DISTRIBUTION

Rgh Feed Unit Feed
Copper Ro Feed 1.17% 8.61% 5.35% 2.29 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Copper Ro Con 7.50% 25.26% 27.94% 14.40 15.09% 15.09% 96.91% 44.27% 78.75% 94.81%
Copper Ro Tail 0.04% 5.65% 1.34% 0.14 84.91% 84.91% 3.09% 55.73% 21.25% 5.19%
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LOCKED CYCLE TEST RESULTS - KM5754-33 High Copper Master Composite
ASSAY DISTRIBUTION

Rgh Feed Unit Feed
Copper Ro Feed 2.03% 8.94% 4.85% 2.97 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Copper Ro Con 11.96% 22.21% 23.57% 17.11 16.33% 16.33% 96.39% 40.56% 79.30% 94.08%
Copper Ro Tail 0.09% 6.35% 1.20% 0.21 83.67% 83.67% 3.61% 59.44% 20.70% 5.92%
13.4.9 Leaching
No leaching Testwork was conducted.
13.4.10 Possible Pyrite Concentrate Production
Based on initial Testwork, a pyrite concentrate may be produced from the cleaner scavenger tailings stream.
This stream contains a large portion of the non-recovered gold and to a lesser extent copper. Treating of pyrite
concentrates to recover gold via oxidative leaching and cyanidation, and copper potentially by SX-EW methods
or precipitation to produce a high grade oxide copper concentrate could potentially enhance overall gold and
copper recovery. In future Testwork programs, it is recommended that pyrite concentrates be produced from
the cleaner scavenger tailings and subjected to oxidative leaching and gold cyanidation.
Based on the Locked Cycle Testwork it may be possible to produce a Pyrite Concentrate as per the Flow Sheet
depicted in Figure 13.4.3
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Figure 13.4.3: Proposed Pyrite Recovery Circuit
At this time, it is assumed that the pyrite concentrate will be refractory and require further treatment. One
option has been investigated to treat the potential refractory nature of the pyrite concentrate: Oxidative
Leaching via the Albion Process. (A pyrite concentrate is currently undergoing Albion testing.)
For the purposes of performing a mass balance on the above circuit the following assumptions have been
made with respect to the metallurgical outcomes of producing a pyrite concentrate:
1. A high portion of the copper and gold in the cleaner scavenger tails will report to a pyrite concentrate.
2. A high-grade pyrite concentrate can be produced.
3. Gold grade in the pyrite concentrate will be equivalent to the gold grade of the cleaner scavenger
concentrate produced during the locked cycle testing.
4. Gold will be recoverable to dore via conventional cyanidation and carbon in pulp after the Albion process.
5. Copper will be recoverable to cathode via conventional solvent extraction and electrowinning after the
Albion process.
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The following information is presented below in Table 13.4.7 and Table 13.4.8.
1. Simulated Mass Balances (Based on limited Locked Cycle Testwork Results).

2. Assumptions with respect to recovery and grade.
3. Copper and gold recovery curves to the pyrite concentrate (fit from data generated by mass balances).
4. Pyrite concentrate, gold in dore and cathode copper production rates.
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Table 13.4.7: Simulated Mass Balance - Pyrite Concentrate Recovery and Grade
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Table 13.4.8: Pyrite Concentrate - Copper and Gold Recovery
Production rates for the 50 Mt/a Fast Ramp Up case are presented in Table 13.4.9.
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Table 13.4.9: 50 Mtpa Case - Fast Production Ramp Up: Recoveries to Copper Cathode and to Dore Based on Conceptual Production of Pyrite Concentrate
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13.4.11 Ore Sorting / Pre-concentration Options
No ore sorting or pre-concentration tests were conducted. It is recommended that ore sorting and pre-
concentration tests be conducted during future stages of the project.
13.4.12 Supplementary Testwork
No supplementary Testwork was conducted.
It is recommended that materials handling, concentrate thickening and filtration tests and tailing thickening,
paste and filtering/compaction tests be conducted in future stages of the project.
13.5 Recovery Estimates

dominant porphyry deposits. The following recovery functions for copper, gold and silver are considered to be
a reasonable approximation of performance copper concentrate and align with the locked cycle test results:
90.0 × (1 + 33.5 × 𝐶𝑢𝑓 )

(1 + 31.1 × 𝐶𝑢𝑓 ) + (1 − 𝑒 −33.6 × 𝐶𝑢𝑓 )
𝐴𝑢 𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 = 85.5 × (1 − 𝑒 −5 × 𝐴𝑢𝑓 )
The concentrate produced will be affected by both the bornite to chalcopyrite ratio and the pyrite content of
the deposit. At the current stage of evaluation there is insufficient information to incorporate these factors. The
concentrate grade equation has been developed to align with Testwork. It is recommended that a
The opportunity exists to increase recovery by production of a separate pyrite concentrate. Based on copper
cleaner scavenger tailing retreatment this performance will be affected by pyrite content of mill feed, as well
as recoveries in the copper flotation circuit.
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Results from the Locked Cycle Tests indicate that the cleaner scavenger tailings stream has more contained
gold at a higher grade than the rougher tailings for lower feed grade ore. Therefore, it makes the most sense
to recover gold from this stream.
13.6 Metallurgical Variability

The comminution tests conducted to date indicate significant variability for comminution.
At the current stage of the project it is uncertain when variability will occur during operation.
It is recommended that further SMC, BWI and Ai tests be conducted in future stages of the project.
In addition, it is recommended Bond Rod Mill Work Index (RWI) tests, unconfined compressive strength (UCS)
and Bond Crusher Work Index tests be conducted in future stages of the project.
Flotation tests indicated little variability, based primarily on the copper head grade. The concentrate produced
will be affected by both the bornite to chalcopyrite ratio and the pyrite content of the deposit. At the current
stage of evaluation there is insufficient information to determine the effect these factors will have on
performance.
It is recommended that further variability and locked cycle tests be conducted in future stages of the project
to allow further evaluation of variability from both spatial and geometallurgical aspects.
13.7 Deleterious Elements

On the basis of drill core results, extended sample head assays and metallurgical Testwork carried out to date,
no penalty elements are anticipated in the copper concentrate.
It is recommended that once locked cycle copper concentrates are produced in the current and future test
programs this be confirmed.

Based on limited testing to date, the Alpala deposit appears to be competent from a SAG mill perspective and
moderately hard from a ball mill perspective. Based on average results the comminution circuit would consist
of SAG and ball mills. Elevated RQD values indicate that once the mine approaches nameplate capacity, pebble
crushing will be required. The comminution tests indicate significant variability and secondary crushing may
potentially need to be implemented in latter stages of operation. Abrasion is moderate.
of the cleaner scavenger tailing.
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• A split flotation circuit should be tested to determine if enhanced recoveries and kinetics can be achieved.
• Cleaner Testwork kinetic testing should be conducted to optimise flotation times.
• Future flotation Testwork should be conducted in duplicate runs to ensure that results are significant.
Future locked cycle Testwork should be as per Figure 13.8.1.
Figure 13.8.1: Locked Cycle Circuit
• Cleaner scavenger concentrate will be reground before feeding the First Cleaner. Sighter tests regrinding
Second and Third Cleaner Tails should be conducted to see if improved grade / recovery can be
accomplished.
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• Additional pyrite concentrates should be produced in the current and future test programs to allow gold
cyanidation and thio-sulphate recovery tests to be conducted.
• Undertake limited vendor concentrate regrind tests in the PFS. In the DFS sufficient sample should be
generated to allow larger scale vendor tests.
• Undertake limited vendor concentrate thickening in the PFS. In the DFS sufficient sample should be
generated to allow larger scale vendor tests. Representative tests should be repeated with site sourced
water.
• Undertake limited vendor concentrate filtration in the PFS. In the DFS sufficient sample should be
generated to allow larger scale vendor tests. Threshold Moisture Levels (TML) should be evaluated.
• Further variability and locked cycle flotation tests be conducted to allow evaluation of variability from both
spatial and geometallurgical aspects. Tests should be aligned to the proposed mine schedule, including
lower grade samples. Representative tests should be repeated with site sourced water.
• Thickened, paste and filtered tailing options be more fully evaluated at the PFS stage, including laboratory
tests to characterise tailing.
• Representative concentrate samples should be dispatched to potential smelters.
• Considering the material required for DFS testing a pilot plant campaign should be considered.
• For low copper head grade material to be mined in the latter stages of the project, evaluate addition of
lime to the primary grinding circuit to determine if increased copper concentrate grade can be achieved.
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Section 14 – Mineral Resource Estimate
14. Mineral Resource Estimate

14.1 Summary
MRE#2 comprises 2,050 Mt grading 0.60% copper equivalent (“CuEq”) of Indicated Mineral Resources for a
contained metal content of 8.4 Mt copper (“Cu”) and 19.4 Moz gold (“Au”) and 900 Mt grading 0.35% CuEq of
Inferred Mineral Resources for 2.5 Mt Cu and 3.8 Moz Au, using a 0.2% CuEq cut-off grade (Table 1.14.1).
Mineral Reserves have not been declared at this time.
Table 14.1.1: Alpala Mineral Resource Statement Effective 07 November 2018*

Indicated 2,050 0.41 0.29 0.60 8.4 19.4 12.2
Inferred 900 0.27 0.13 0.35 2.5 3.8 3.2
*Notes:
3. Mineral Resource is considered to have reasonable prospects for eventual economic extraction by underground mass
mining such as block caving
5. The statement uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources and
Mineral Reserves (May 2014) as required by NI 43-101
Within the deposit and included in the above total MRE figures, a higher-grade core exists, totalling 400 Mt
grading 1.49% CuEq of Indicated Mineral Resources for a contained metal content of 3.6 Mt Cu and 11.9 Moz
Au and 20 Mt grading 1.05% CuEq of Inferred Mineral Resources for a contained metal content of 0.2 Mt Cu
and 0.4 Moz Au, using a 0.9% CuEq cut-off grade (Table 14.1.2).
Equivalent Cut-Off Grades*
Classification CuEq Cut- Tonnes (Mt) Grade Metal
off Cu Au CuEq Cu Au CuEq
(%) (g/t) (%) (Mt) (Moz) (Mt)
Indicated 0.1 2,460 0.36 0.26 0.52 8.9 20.2 12.9
0.15 2,290 0.38 0.27 0.55 8.8 19.9 12.7
0.2 2,050 0.41 0.29 0.60 8.4 19.4 12.2
0.3 1,500 0.49 0.37 0.73 7.4 17.8 10.9
0.45 810 0.66 0.57 1.03 5.4 15.0 8.3
0.7 490 0.84 0.83 1.37 4.1 13.0 6.7
0.9 400 0.90 0.93 1.49 3.6 11.9 5.9
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Equivalent Cut-Off Grades*
Classification CuEq Cut- Tonnes (Mt) Grade Metal
off Cu Au CuEq Cu Au CuEq
(%) (g/t) (%) (Mt) (Moz) (Mt)
1.1 200 1.13 1.36 1.99 2.2 8.7 3.9
1.5 120 1.35 1.77 2.47 1.7 7.0 3.0
Inferred 0.1 1,380 0.22 0.11 0.28 3.0 4.7 3.9
0.15 1,140 0.24 0.12 0.32 2.8 4.3 3.6
0.2 900 0.27 0.13 0.35 2.5 3.8 3.2
0.3 490 0.34 0.16 0.45 1.7 2.5 2.2
0.45 150 0.49 0.26 0.65 0.7 1.2 1.0
0.7 50 0.67 0.41 0.93 0.4 0.7 0.5
0.9 20 0.72 0.52 1.05 0.2 0.4 0.2
1.1 10 0.76 0.70 1.20 0.1 0.1 0.1
1.5 - - - - - - -
*Note: refer to the Notes under Table 14.1.1 for description and qualifications that pertain to the resource statement.
The November 2018 MRE update (MRE#2) is reported using a cut-off grade of 0.2% copper-equivalent (CuEq)
which SolGold and SRK Consulting consider to be reasonable, reflecting the potential for economic extraction
by high production rate mass mining methods such as block caving. The central portions of the deposit present
an opportunity for early extraction of higher-grade material.
The updated resource estimate represents an increase in the overall reported resource of 108% (by metal
content) from 7.4 Mt CuEq in Dec 2017 Maiden MRE (MRE#1) using at 0.3% CuEq cut-off, to the current 15.4
Mt CuEq using a 0.2% CuEq cut-off.
14.2 Introduction
The Mineral Resource statement presented herein is reported from an updated MRE prepared for the Alpala
deposit in accordance with CIM and NI 43-101. This MRE is an update to the previously reported maiden MRE
effective December 2017 (reported in January 2018).
This update, prepared by the Company and verified by SRK, was estimated from 68,173 assays, with 66,739
assays representing diamond drill core samples and 1,434 assays representing rock-saw channel samples cut
from surface rock exposures. Drill core samples were obtained from total of 133,576 m of drilling comprising
128 diamond drill holes, including 75 drill holes (holes 1-75), 34 daughter holes, 8 re-drills and 11 over-runs
and represents full assay data from holes 1-67 and partial assay data received from holes 68 to 75. Rock-saw
samples were obtained from 2743 m of rock-saw cuts from 262 surface rock exposure trenches. In contrast,
the December 2017 Maiden MRE was estimated from 26,814 assays obtained from 53,616 m of drilling
comprising 45 drill holes (holes 1-33) including 10 daughter holes and 5 re-drills.
The MRE was reviewed and verified by Mr Martin Pittuck, CEng, FGS, MIMMM an “independent qualified
person” as defined in NI 43-101. The Effective Date of the Mineral Resource statement is 07 November 2018.
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This section describes the MRE methodology and summarises the key assumptions considered by SRK. In the
opinion of SRK, the Mineral Resource statement reported herein is a reasonable representation of the Alpala
deposit based on current sampling data. The Mineral Resource has been estimated using generally accepted
CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines (2014). Mineral Resources
are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any
part of the Mineral Resource will be converted into Mineral Reserve.
To the best of SRK’s knowledge, there are no environmental, permitting, legal, title, tax, socio-economic,
market, political or other relevant factors that would affect the Mineral Resource presented in this Technical
Report.
SolGold supplied SRK with an export of the geological database, available geological interpretations and
geological model which were reviewed and validated by SRK. SRK is of the opinion that the information
supplied is sufficiently reliable to interpret with confidence the boundaries for copper and gold mineralisation
and that the assay data is sufficiently reliable to support the MRE.
SolGold used Leapfrog Geo Version 4.3 Modelling Software (“Leapfrog”) for geological modelling,
geostatistical analysis (variography) and block modelling. SRK used X10-Geo (“X10”) and Snowdon Supervisor
Version 8.7 software for was used for statistical analysis. Datamine Studio Version 3 (“Datamine”) was used to
generate a check block model estimate and tabulate the Mineral Resource statement.
14.3 Resource Estimation Procedures

The Mineral Resource estimation methodology involved the following procedures:
• Database compilation and verification
• Construction of wireframe models for the lithologies described in Section 6
• Construction of wireframe models for the mineralisation extents
• Definition of resource estimation domains
• Data conditioning (compositing and capping review) for statistical analysis
• Geostatistical analysis (variography)
• Block modelling and grade estimation
• Resource classification and validation
• Assessment of “reasonable prospects for economic extraction” and selection of appropriate reporting cut-
off grades
• Preparation of the Mineral Resource statement.
14.4 Resource Database

SRK was supplied with a Microsoft Excel format database, which had been exported from SolGold’s main
database as maintained on site. The data was checked and cleaned to some extent to ensure all interval
information was entered correctly and to ensure no erroneous values affected the estimate. SRK is satisfied
with the quality of the database for use in the construction of the geological model and associated MRE.
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The lithological information was a simplified version of the detailed logging performed on site, providing
grouped lithological codes which gave sufficient information for 3D modelling.
A log of vein type and intensity was also provided along with individual vein orientations.
A multi-element assay database was produced for the 2 m core samples. These were composited to 10 m
lengths to assist with visualisation in the modelling software. In addition, surface channel sampling information
from trenches with copper and gold assays were used to supplement the drilling data for 3D interpretation of
the mineralisation.
A database of density readings was provided which recorded determinations taken at 20 m intervals or better
for the majority of the core.
14.5 3D Lithological and Mineralisation Modelling

14.5.1 Lithological Model
Based on the genetic understanding of the deposit and the drill core logs prepared by SolGold, SRK and
SolGold have jointly developed a 3D model of the multi-phase intrusions. The earlier, better mineralised phases
were modelled as they would have formed originally; this allowed good confidence to be gained in the original
geometry and continuity of these well mineralised bodies before their continuity was interrupted by
subsequent intrusion of later phases each of which was progressively less well mineralised. The resultant
lithological domains are complex in places but nevertheless have a logical genetic process underlying them to
explain much of the complexity that presents itself today. The lithological domains, in order of age, comprise:
• Pre-mineral Volcano-sedimentary host rocks (V)
• Early mineralised Diorite 10 and Quartz Diorite 10 (D10 and QD10)
• Intra-mineral Diorite 15 and Quartz Diorite 15 (IM and QD15)
• Late-mineral Diorite 20 and Quartz Diorite 20 (LM and LM QD)
• Post-mineral dykes (PM)
• Hydrothermal breccia (BX).
Figure 14.5.1 below shows the resultant lithological domains in plan view and on cross-sections in Figure 14.5.2,
Figure 14.5.3 and Figure 14.5.4.
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Figure 14.5.1: Level Plan (500 masl) Through the Alpala Deposit Showing Lithology Mand Cross-section Locations
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Figure 14.5.2: Cross-section A-A’ Looking Northwest
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Figure 14.5.3: Cross-section B-B’ Looking Northwest
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Figure 14.5.4: Cross-section C-C’ Looking Northwest
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Most of the intrusion phases have a similar dominant dip and strike to each other; this was used to elongate
the wireframes to ensure that intersections from adjacent drill holes joined together correctly and that the
extensions of the model beyond the drilled area were pushed in an appropriate direction. For each intrusion
wireframe, the shape was fine-tuned using manually digitised polylines to connect neighbouring intersections
where necessary and to ensure successful realisation of the multiple thin steep dipping dyke interpretation and
to manage the often very low drilling intersection angles.
Alteration assemblages have been modelled for use in the on-going geotechnical engineering technical work
as part of the PEA; however, they were not used as part of the MRE process. There are very few post-
mineralisation faults encountered in the drill core, none of those encountered lie on the same plane and
therefore no attempt was made to model any post mineralisation faulting. The majority of core is fresh rock,
therefore there was no need to model weathering domains; the thin layer of soils logged at surface currently
has not been modelled as it is considered immaterial to the Mineral Resource.
14.5.2 Mineralisation Model
The intensity of mineralised veining is stronger inside of and in proximity to the mineralising intrusions but
also stronger near the steep dipping structures that provided the original pathways for the intrusions, for some
distance above the dyke tips. Veining is also noted to be focussed in the parting planes at the contacts of
intrusions with each other and the host volcano-sedimentary rocks.
As a result of the arrangement of different intrusion lithologies and the pre-existing structures affecting the
source and propagation of mineralisation, there was generally a concentric zonation of copper and gold grades
with the higher-grade core, centred on the remnant early intrusions, fingering upward into the overlying host
rocks.
Mineralisation domains have been developed based on concentric modelling of vein intensity and copper
equivalent (“CuEq”) grade calculated using [copper grade (%)] + [gold grade (g/t) x 0.63] based on the following
general criteria:
• Low-grade - where CuEq exceeds 0.15%
• Medium-grade - where B vein intensity exceeds 4% or CuEq grade exceeds 0.7%
• High-grade - where CuEq grade exceeds 1.5%.
The mineralisation domains shown in Figure 14.5.6, Figure 14.5.7 and Figure 14.5.8 were created using grade
data from only the Volcanics, the D10, the QD10 and the IM dykes, ignoring any influence from later intrusions;
the objective being to envisage the mineralisation before it was later affected by the later lower grade
intrusions and breccia. The concentric mineralisation shells so created were later interrupted by low-grade
dykes and breccias and this has been captured in subsequent stages of the geological model development.
The geological model domains are a combination of the lithologies and the concentric grade zones so that the
original concentric grade distribution can be modelled as well as the later low-grade dykes and breccias which
overprint this.
The low-grade mineralised domain defines a lobate-lens shape with a 2,450 m strike extent dipping sub-
vertically to the northeast with a width of up to 800 m; it spans a 1,900 m vertical interval from the relatively
small mineralised outcrop at around 1,650 masl to the current base of mineralisation at -250 masl. The
mineralisation has a distinct, relatively high-grade keel plunging to the northwest as shown in Figure 14.5.9.
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Figure 14.5.5: Level Plan (500 masl) Through the Alpala Deposit Showing Grade Domains
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Figure 14.5.6: Section A-A’ Through the Alpala Deposit Showing Grade Domains
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Figure 14.5.7: Section B-B’ Through the Alpala Deposit Showing Grade Domains
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Figure 14.5.8: Section C-C’ Through the Alpala Deposit Showing Grade Domains
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Figure 14.5.9: 3D Image of the Mineralisation Model Looking Northeast
14.5.3 Domain Coding
The drill holes were coded based on the 3D domains that resulted from combining the lithological and
mineralisation models. Thirty-six (36) possible domains were defined and are presented in Table 14.5.1 below.
Table 14.5.1: Model Domains and Codes

Lithological Mineralisation Domains
Domain and Unmineralised Low-grade Medium-grade High-grade
LITHCODE
MINCODE 0 MINCODE 1 MINCODE 2 MINCODE 3
100 = V 100 101 102 103
200 = D10 200 201 202 203
300 = QD10 300 301 302 303
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Table 14.5.1: Model Domains and Codes

Lithological Mineralisation Domains
Domain and Unmineralised Low-grade Medium-grade High-grade
LITHCODE
MINCODE 0 MINCODE 1 MINCODE 2 MINCODE 3
400 = QD15 400 401 402 403
500 = IM 500 501 502 503
600 = LM 600 601 602 603
700 = LMQD 700 701 702 703
800 = PM 800 801 802 803
900 = BX 900 901 902 903
14.6 Statistical Analysis

14.6.1 Domain Evaluation
A statistical analysis was undertaken on the domain-coded 10 m-composited drill hole data to determine which
of the domains are viable for grade estimation and to assess how best to recombine the domains for
subsequent analysis and estimation. The statistical analysis was based on general statistical characteristics
(mean, variance etc.) and histograms, probability plots and box-and-whisker plots.
Log-histograms for copper and gold in all domains combined are displayed in Figure 14.6.1 and Figure 14.6.2.
A natural population break can be seen, particularly in the copper data. The various populations evident in
these histograms need to be dealt with separately when block modelling.
Figure 14.6.1: Histogram of Copper (%) for All Composited Drill Hole Intervals
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Figure 14.6.2: Histogram of Gold (g/t or ppm) for All Composited Drill Hole Intervals
14.6.1.1 Mineralisation Domains
Figure 14.6.3 through to Figure 14.6.6, present histograms for the different mineralisation domains (MINCODE)
and clearly show how grade populations have been effectively separated just by the concentric mineralisation
domaining. The gold histograms do not show such a clear population break, however, the mineralisation
modelling clearly shows the good correlation between elevated copper and gold grades, as displayed in the
scatter plot in Figure 14.6.7. SRK notes that the ratio of gold over copper is highest in the core of the deposit
and that the ratio gradually reduces outwards towards the low-grade edge of the deposit.
Figure 14.6.3: Histogram of Cu (%) for Composites Split by Mineralisation Code (MINCODE)
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Figure 14.6.4: Box-and-Whisker Plots of Cu (%) for Composites Split by Mineralisation Code (MINCODE)
Figure 14.6.5: Histogram of Au (g/t or ppm) for Composites Split by Mineralisation Code (MINCODE)
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Figure 14.6.6: Box-and-Whisker Plots of Au (g/t or ppm) Composites Split by Mineralisation Code (MINCODE)
Figure 14.6.7: Scatter Plot Gold (g/t or ppm) and Copper (%) Values in Composites Coloured by Mineralisation
Code (MINCODE)
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14.6.1.2 Lithological Domains
Box-and-whisker plots for copper and gold in each of the lithological domains (not split by mineralisation
domain) are shown in Figure 14.6.8 and Figure 14.6.9; the LITHCODE codes are sequential in terms of age of
emplacement, details are provided in Table 14.5.1. The plots show that the lithologies have distinctly different
grade populations and a large spread of grades. This provides further support for utilising a combined lithology
and mineralisation domain approach for the grade estimation.
Figure 14.6.8: Box-and-Whisker Plots of Cu (%) for Composites Split by Lithology Code (LITHCODE)
Figure 14.6.9: Box-and-Whisker Plots of Au (g/t or ppm) for Composites Split by Lithology Code (LITHCODE)
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From the box-and-whisker plots, it is clear that the host volcanics have the largest range of grades with only a
small proportion exceeding 0.2% copper. The QD10 is most strongly mineralised followed by D10 and QD15.
The later intrusion phases are on a progressively less well mineralised trend except for LMQD which is distinctly
higher than the trend. The breccia is youngest but not the least mineralised, this is due to some mineralised
clasts being incorporated in the breccia.
14.6.1.3 Combined Mineralisation and Lithology Domains
The statistics for each of the combined domains are provided in Table 14.6.1; due to the large number of
histograms produced, they are not provided here, however box-and-whisker plots are shown in Figure 14.6.11
and for copper and gold. In general, most combined domains exhibited a positively-skewed log-normal
distribution for both copper and gold, as expected for the style of mineralisation. The higher-grade domains
showed populations exhibiting more normal distributions. The coefficient of variation (CoV = standard
deviation / mean) values are generally low (<1), demonstrating successful domaining (low spread of values).
Table 14.6.1: Statistics of Composited Drill Holes by Combined Domain

Domain Assay No. Min Grade Max Grade Mean Stand Dev CoV
Samples Grade
100 Cu (%) 2818 0.001408 1.99 0.04 0.06 1.75
Au (g/t) 2818 0.0025 2.38 0.03 0.09 3.02
101 Cu (%) 1621 0.007178 0.94 0.22 0.14 0.62
Au (g/t) 1621 0.0044 2.57 0.11 0.12 1.10
102 Cu (%) 105 0.023312 1.38 0.57 0.22 0.39
Au (g/t) 105 0.0598 1.54 0.50 0.28 0.57
103 Cu (%) 7 0.40328 1.72 1.03 0.45 0.44
Au (g/t) 7 0.1448 3.21 1.36 0.99 0.73
200 Cu (%) 1 0.3284 0.33 0.33
Au (g/t) 1 0.2266 0.23 0.23
201 Cu (%) 558 0.03654 1.62 0.36 0.14 0.40
Au (g/t) 558 0.0178 1.80 0.20 0.14 0.70
202 Cu (%) 706 0.048542 2.38 0.69 0.24 0.34
Au (g/t) 706 0.0626 5.63 0.58 0.40 0.69
203 Cu (%) 273 0.1568 3.16 1.31 0.50 0.38
Au (g/t) 273 0.1818 8.26 1.50 0.95 0.63
301 Cu (%) 5 0.1692 0.51 0.33 0.12 0.37
Au (g/t) 5 0.0926 0.26 0.20 0.06 0.30
302 Cu (%) 132 0.19734 1.39 0.70 0.20 0.29
Au (g/t) 132 0.1608 1.75 0.61 0.26 0.42
303 Cu (%) 211 0.47478 6.18 1.47 0.70 0.47
Au (g/t) 211 0.5232 16.76 2.23 1.53 0.69
400 Cu (%) 15 0.04024 0.11 0.07 0.02 0.28
Au (g/t) 15 0.0152 0.05 0.03 0.01 0.31
401 Cu (%) 369 0.03364 0.91 0.29 0.14 0.48
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Samples Grade
Au (g/t) 369 0.0114 0.68 0.17 0.11 0.66
402 Cu (%) 130 0.1625 1.17 0.56 0.17 0.30
Au (g/t) 130 0.1386 2.41 0.47 0.26 0.54
403 Cu (%) 10 0.4656 1.62 0.79 0.33 0.42
Au (g/t) 10 0.4892 1.67 0.96 0.40 0.41
500 Cu (%) 262 0.009327 0.43 0.07 0.04 0.62
Au (g/t) 262 0.003241 0.43 0.03 0.04 1.14
501 Cu (%) 2643 0.011026 1.98 0.28 0.14 0.49
Au (g/t) 2643 0.0036 1.44 0.12 0.09 0.77
502 Cu (%) 206 0.205704 1.30 0.64 0.18 0.29
Au (g/t) 206 0.1206 1.57 0.38 0.17 0.44
503 Cu (%) 6 0.49056 2.13 0.98 0.57 0.58
Au (g/t) 6 0.3574 1.42 0.78 0.38 0.48
600 Cu (%) 540 0.003728 0.46 0.04 0.04 0.94
Au (g/t) 540 0.0025 0.70 0.04 0.06 1.50
601 Cu (%) 479 0.012759 0.70 0.13 0.10 0.75
Au (g/t) 479 0.0025 1.06 0.07 0.09 1.21
602 Cu (%) 27 0.01377 0.27 0.11 0.07 0.64
Au (g/t) 27 0.009 1.15 0.13 0.19 1.42
603 Cu (%) 11 0.1552 0.37 0.24 0.06 0.25
Au (g/t) 11 0.1196 0.38 0.22 0.08 0.36
700 Cu (%) 23 0.012084 0.09 0.05 0.02 0.46
Au (g/t) 23 0.0056 0.24 0.05 0.06 1.12
701 Cu (%) 40 0.03336 0.32 0.17 0.08 0.47
Au (g/t) 40 0.0148 0.54 0.09 0.08 0.90
702 Cu (%) 10 0.03279 0.80 0.30 0.20 0.66
Au (g/t) 10 0.068 0.69 0.28 0.17 0.59
703 Cu (%) 26 0.12972 0.37 0.24 0.07 0.28
Au (g/t) 26 0.0826 0.56 0.21 0.11 0.52
800 Cu (%) 3 0.003344 0.04 0.02 0.02 1.03
Au (g/t) 3 0.0073 0.04 0.02 0.01 0.70
801 Cu (%) 5 0.001158 0.04 0.02 0.01 0.64
Au (g/t) 5 0.0025 0.01 0.01 0.00 0.67
802 Cu (%) 6 0.00457 0.33 0.08 0.12 1.45
Au (g/t) 6 0.0025 0.13 0.03 0.05 1.44
900 Cu (%) 1250 0.002186 0.32 0.05 0.04 0.80
Au (g/t) 1250 0.0025 0.94 0.03 0.04 1.19
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Samples Grade
901 Cu (%) 1136 0.002034 0.74 0.12 0.10 0.81
Au (g/t) 1136 0.0032 0.92 0.07 0.07 1.01
902 Cu (%) 20 0.067252 0.59 0.31 0.18 0.59
Au (g/t) 20 0.0234 0.43 0.19 0.11 0.61
Figure 14.6.10: Box-and-Whisker Plots of Copper (%) for Composites Split by Combined Domain
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Figure 14.6.11: Box-and-Whisker Plots of Gold (g/t) for Composites Split by Combined Domain
14.6.2 Final Estimation Domain Coding
Due to the complexity of the interactions and cross-cutting nature between the intrusive phases, a number of
domains are relatively small and have a limited number of samples, which would not represent viable domains
for grade estimation on their own. These domains have been merged with larger domains and following the
analysis above, domains were further grouped on the basis of mineralisation event timing and statistical
characteristics to form estimation domains (KZONE) to be used in the grade estimation. The final kriging
domains (KZONE) and their contributing domains are shown in Table 14.6.2.
Table 14.6.2: Grouped Lithological and Mineralisation and KZONE Values

Mineralisation Domains
Lithological Domains
Unmineralised Low-grade Medium-grade High-grade
V 1 2
3
D10 4 5
QD10 6 7
QD15
8 9
IM 0
LM
10
LMQD
PM
N/A
BX
The declustered composited sample statistics from the resulting kriging domains are provided in Table 14.6.3,
with box-and-whisker plots and probability plots shown in Figure 14.6.12, Figure 14.6.13, Figure 14.6.14 and
Figure 14.6.15 respectively. The results show that each of the populations are approximately log-normal with
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reasonable CoV values (standard deviation divided by the mean) allowing for robust grade estimation for each
kriging domain.
Table 14.6.3: Statistics of Rotated Declustered* Composited Drill Holes by Kriging Domain (KZONE)
KZONE Assay No. Min Grade Max Grade Mean Grade Stand Dev CoV
Samples
0 Cu (%) 2818 0.001408 1.99 0.04 0.07 1.98
Au (g/t) 2818 0.0025 2.38 0.03 0.09 2.61
1 Cu (%) 1621 0.007178 0.94 0.22 0.14 0.63
Au (g/t) 1621 0.0044 2.57 0.10 0.10 0.99
2 Cu (%) 105 0.023312 1.38 0.55 0.24 0.43
Au (g/t) 105 0.0598 1.54 0.47 0.28 0.60
3 Cu (%) 280 0.1568 3.16 1.29 0.50 0.39
Au (g/t) 280 0.1448 8.26 1.39 0.91 0.66
4 Cu (%) 558 0.03654 1.62 0.36 0.14 0.40
Au (g/t) 558 0.0178 1.80 0.20 0.14 0.68
5 Cu (%) 706 0.048542 2.38 0.69 0.23 0.34
Au (g/t) 706 0.0626 5.63 0.55 0.40 0.73
6 Cu (%) 137 0.1692 1.39 0.72 0.25 0.35
Au (g/t) 137 0.0926 1.75 0.55 0.26 0.47
7 Cu (%) 211 0.47478 6.18 1.55 0.73 0.47
Au (g/t) 211 0.5232 16.76 2.08 1.32 0.64
8 Cu (%) 3012 0.011026 1.98 0.26 0.14 0.53
Au (g/t) 3012 0.0036 1.44 0.12 0.09 0.78
9 Cu (%) 352 0.1625 2.13 0.63 0.20 0.32
Au (g/t) 352 0.1206 2.41 0.41 0.21 0.51
10 Cu (%) 1760 0.001158 0.80 0.13 0.10 0.79
Au (g/t) 1760 0.0025 1.15 0.07 0.08 1.09
*Note: Samples declustered using a rotated grid of 150 mX by 10 mY by 10 mZ
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Figure 14.6.12: Box-and-Whisker Plots of Cu (%) for Composites Split by KZONE
Figure 14.6.13: Log Probability Plots of Cu (%) for Composites Split by KZONE
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Figure 14.6.14: Box-and-Whisker Plots of Au (g/t) for Composites Split by KZONE
Figure 14.6.15: Log Probability Plots of Au (g/t) for Composites Split by KZONE
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14.6.3 Evaluation of Outliers
High-grade capping is occasionally undertaken where data is considered to sit outside of the main population.
SolGold undertook an exercise to identify any high-grade outliers and understand the geological reasoning for
each case. A total of 10 samples were identified as outliers (generally where CuEq > 10%). The majority of these
results have sound geological reasoning, for example, drill hole CSD-18-025 from 848 to 850 m grading 18.03%
Cu and 0.98 g/t Au (18.6% CuEq) seen in Figure 14.6.16 is close to the tip of a QD10 dyke where particularly
high proportions of chalcopyrite are associated with in the UST style of mineralisation.
SRK considers that the compositing process (averaging 2 m samples to 10 m composites) and the detailed
geological domaining has adequately smoothed these high values and constrained them; there is no evidence
of these outliers materially effecting the mean grades of the domain populations and therefore no capping
was undertaken for grade estimation.
High-grade caps were applied to the data in a number of kriging domains during the geostatistical analysis in
order to improve the structures observed in the semi-variograms.
Figure 14.6.16: Drill Hole CSD-18-25 (848-850 m) Showing High-Grade Copper (Source: SolGold, 2018)
14.7 Geostatistical Analysis

Variography was used to assess grade continuity and spatial variability of an attribute in the resultant
estimation domains and to determine sample search and kriging parameters for block grade estimation.
Leapfrog was used for geostatistical analysis.
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After completing the variogram map analysis for each estimation domain (within the plane of the general dip
and strike of the deposit – dipping 80° towards 040°), experimental semi-variograms were calculated in the
principal (major – direction of longest continuity), semi-major and minor axis orientations, with a downhole
variogram calculated to characterise the nugget effect.
Directional variograms were generated for all zones. Where the resultant experimental semi-variograms were
poorly defined, such as zone 7 (high-grade QD10), variogram search neighbourhoods were increased to give
an essentially omni-directional variogram for fitting of the final variogram models.
An example of the directional semi-variograms modelled for KZONE 1 for copper and gold are shown in Figure
14.7.1 and Figure 14.7.2. The final variogram parameters are displayed in Table 14.7.1.
Figure 14.7.1: Variogram Map and Modelled Semi-Variograms for KZONE 1 for Copper
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Figure 14.7.2: Variogram Map and Modelled Semi-Variograms for KZONE 1 for Gold
Table 14.7.1: Variogram Parameters

Element KZONE Pitch Cap Nugget Structure 1 Structure 2
Effect% Sill% Range (m) Sill% Range (m)
Maj Sem Min Maj Sem Min
Maj Maj
Au 0 60 0.30 29% 26% 80 50 50 46% 600 400 300
1 105 - 38% 10% 45 40 15 52% 60 60 55
2 100 - 17% 42% 100 100 25 41% 180 200 40
3 70 4.00 23% 37% 16 20 22 39% 170 180 70
4 65 - 8% 61% 25 25 25 30% 65 80 40
5 130 3.00 33% 49% 75 35 50 18% 240 310 200
6 60 1.40 21% 59% 120 115 60 20% 200 300 85
7 70 4.00 5% 69% 50 50 35 26% 170 145 120
8 65 1.40 31% 27% 90 55 50 41% 370 360 80
9 65 1.50 10% 44% 60 30 30 46% 180 180 60
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Table 14.7.1: Variogram Parameters

Element KZONE Pitch Cap Nugget Structure 1 Structure 2
Effect% Sill% Range (m) Sill% Range (m)
Maj Sem Min Maj Sem Min
Maj Maj
10 110 - 17% 2% 105 145 120 80% 530 530 400
Cu 0 60 - 28% 40% 50 55 55 33% 365 400 180
1 45 - 17% 36% 55 35 45 47% 235 230 230
2 155 - 11% 38% 35 20 30 50% 180 90 50
3 100 2.00 40% 31% 15 15 15 29% 110 135 100
4 115 - 40% 42% 30 130 30 18% 330 370 45
5 130 - 56% 23% 30 35 20 21% 320 280 220
6 60 - 30% 41% 20 20 25 29% 225 220 80
7 50 - 14% 36% 15 20 30 50% 200 230 70
8 65 - 24% 25% 60 60 70 52% 200 200 200
9 65 - 12% 59% 20 25 25 29% 95 60 50
10 110 - 17% 22% 105 145 120 61% 530 530 400
14.8 Block Model and Estimation

A block model encapsulating the entire model has 10 m x 10 m x 10 m blocks for grade estimation with no
sub-blocks used. Table 14.8.1 provides details of the block model dimensions for the grade estimation. The
blocks are relatively small compared with drill hole spacing however they do allow for relatively fine domain
coding in the model which is important given how narrow domains can be and the significant changes in
grades from one domain to the next in places.
Table 14.8.1: Details of Block Model Dimensions

Dimension Origin Block Size (m) Number of Blocks Minimum Sub-
(Bottom Left) block Size (m)
X 795,500 10 352 -
Y 8,2000 10 352 -
Z -1,000 10 320 -
14.8.1 Grade Estimation
Ordinary Kriging (“OK”) was used for the grade estimation for copper and gold (and silver). All major domain
boundaries have been treated as hard boundaries during the estimation process. For the maiden MRE, in order
to optimise the block model grade estimation, SRK undertook a quantitative Kriging neighbourhood analysis
(“QKNA”) for domains with large quantities of samples. This was not repeated for this update, as the results
from the maiden MRE demonstrated the model was relatively insensitive to changing parameters.
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The analysis highlighted the following:

• Block estimates are not sensitive to changing block size; meaning that using small blocks relative to the
drilling data density does not cause bias in the global grade interpolation, however, small blocks may not
be appropriate for short-term mine planning in future.
• A minimum of 10 and maximum of 30 produces good quality estimates for the majority of domains
analysed. Using <10 samples produced lower quality estimates and using >30 samples has no further
benefit in terms of improving estimate quality. However, for the domains with fewer samples, the minimum
was reduced to 2 or 4 to allow for reasonable estimation.
• Block estimates are not sensitive to search ellipse dimensions over distances greater than the drill spacing.
• Discretisation only improves quality after increasing from 1 x 1 x 1 to 2 x 2 x 2 with minor improvements
thereafter. All block estimates used 4 x 4 x4.
As a result of the analysis, the maximum number of samples per drill hole was generally set to 5 to ensure that
at least 2 holes were used to estimate blocks in domains with high data density (minimum samples of 10 and
max per hole of 5 = >2 drill holes).
The search ellipse radii are generally based on distances 2/3 of the total variogram range (rounded), with minor
adjustments to ensure adequate samples able to be selected during interpolation. The orientation of the search
ellipse is determined by the dip and dip direction of the variography major, semi-major and minor axes.
A multi-pass kriging routine was used; most classified blocks were estimated in the first pass using search radii
in the plane of the deposit ranging from 40 m to over 350 m depending on variography results per domain.
The second search generally doubled the size of the search ellipse radii and reduced the minimum and
maximum number of samples required to estimate each block. A third search of dimensions approximately 10x
the size of the first search was utilised to ensure all blocks in the model were assigned grades and densities.
The search pass dimensions and parameters used in the grade estimate are presented in Table 14.8.2.
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Table 14.8.2: Search Ellipse Dimensions and Parameters

Element KZONE 1st Search 2nd Search 3rd Search
Radii (m) Min Samp Max Max per Radii Min Max Max Radii Min Max Max
Maj Sem-Maj Min Samp DH Multiple Samp Samp per DH Multiple Samp Samp per DH
Au 1 40 40 40 8 30 4 2 8 30 4 40 4 20 -
2 120 130 30 8 30 4 2 6 30 3 10 2 20 -
3 110 120 50 10 30 5 2 8 30 4 10 4 20 -
4 40 50 30 8 30 4 2 6 30 3 20 4 20 -
5 160 200 130 10 30 5 2 8 30 4 10 4 20 -
6 130 200 60 10 30 5 2 8 30 4 10 4 20 -
7 110 100 80 10 30 5 2 8 30 4 10 4 20 -
8 240 240 50 10 30 5 2 8 30 4 10 4 20 -
9 120 120 40 10 30 5 2 8 30 4 10 4 20 -
10 350 350 260 10 30 5 2 8 30 4 4 4 20 -
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Table 14.8.2: Search Ellipse Dimensions and Parameters

Element KZONE 1st Search 2nd Search 3rd Search
Radii (m) Min Samp Max Max per Radii Min Max Max Radii Min Max Max
Maj Sem-Maj Min Samp DH Multiple Samp Samp per DH Multiple Samp Samp per DH
Cu 1 150 150 150 10 30 5 2 8 30 4 15 4 20 -

2 120 60 30 8 30 4 2 6 30 3 10 2 20
3 70 90 70 10 30 5 2 8 30 4 10 4 20 -
4 220 240 30 10 30 5 2 8 30 4 10 4 20 -
5 220 200 150 10 30 5 2 8 30 4 10 4 20 -
6 150 150 50 10 30 5 2 8 30 4 10 4 20 -
7 140 120 40 10 30 5 2 8 30 4 10 6 20 -
8 140 140 120 10 30 5 2 8 30 4 10 4 20 -
9 60 40 30 8 30 4 2 6 30 - 15 2 20 -
10 350 350 260 10 30 5 2 6 30 3 4 4 20
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14.8.2 Density Estimation
Specific gravity analysis has been undertaken using a wax method on selected sections of whole core
approximately 10 cm in length as discussed in Section 10.2.4 of this report.
The current project database contains 9,150 specific gravity measurements (8,405 within geological model
boundary at the time of modelling) which have been composited into 7,451 composite samples (10 m) and
used to inform the tonnage estimation. Table 14.8.3 and Figure 14.8.1 outline the density statistics by lithology.
It should be noted that a minor number of anomalous values were removed from the estimate, with a lower
limit of 2 and upper limit of 3.4 used to ensure that only reasonable values were used.
SRK did not find any significant spatial trends within the density data when compared to grade; however, SG
values typically marginally increased with depth. The drill holes at the furthest extents along strike tended to
show lower SG values than that in the core of the deposit.
The density was estimated undomained using an anisotropic IDW2 method with a first pass search ellipse
orientated 200 m along strike, 200 m down dip and 100 m across strike (then a second and third pass based
on a radii multiplier of x2 and x10, respectively). A minimum of 1 and maximum of 5 samples were used to
inform each block.
Table 14.8.3: Statistics of Density Samples by Lithology (Uncomposited)

LITHCODE No. of Samples Minimum Maximum Mean COV
100 3,269 1.18 11.39 2.76 0.1
200 853 1.37 12.03 2.82 0.13
300 214 2.12 3.24 2.81 0.03
400 345 2.26 3.47 2.79 0.04
500 1,464 1.07 4.38 2.8 0.05
600 510 1.26 14.53 2.8 0.2
700 50 2.54 2.97 2.77 0.03
800 5 2.66 2.73 2.69 0.01
900 1,695 1.39 6.01 2.78 0.06
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Figure 14.8.1: Histogram Plot of Density Values per Lithology
14.9 Model Validation and Sensitivity

SRK has validated the block model using the following techniques:
• Visual inspection of block grades in comparison with drill hole data
• Sectional validation of the mean samples grades in comparison to the mean model grades
• Comparing inverse distance to ordinary kriged estimates
• Comparison of block model statistics
• Comparison to Datamine grade estimate.
14.9.1 Visual Validation
Visual validation provides a comparison of the interpolated block model on a local scale. A thorough visual
inspection has been undertaken in section and 3D, comparing the sample grades with the block grades, which
demonstrates in general good comparison between local block estimates and nearby samples, without
excessive smoothing in the block model.
Figure 14.9.1 shows an example of the visual validation checks and highlights the overall block grades
corresponding with composite sample grades in plan view, with two cross-sections in and Figure 14.9.3.
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Figure 14.9.1: Plan View at 600 m RL, Showing Composites and Block Model Grade Estimates Coloured by CuEq
(%) and Cross-section Locations (below)
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Coloured by CuEq (%)
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Coloured by CuEq (%)
14.9.2 Sectional Validation
As part of the validation process, the input composite samples were compared to the block model grades in
sectional slices in the easting (X), northing (Y) and elevation (Z) directions. The results of which are then
displayed on charts (swath plots) to check for material differences between grades and to visualise the level of
smoothing.
Figure 14.9.4 and Figure 14.9.5 shows example swath plot results comparing composites and block model
grades for copper and gold in KZONE 4 (for the first search volume only).
The validation exercise shows a reasonable correlation between the block model grades and the composite
grades, with the block model showing a typically smoothed profile of the composite grades as expected. SRK
notes that in less densely sampled areas, minor grade discrepancies do exist on a local scale which is normal.
In addition, due to the sub-vertical nature of the majority of holes and high intersection angles compared to
the mineralisation, the elevation swath plots provide the truest comparison. Overall, SRK is confident that the
interpolated grades reflect the available input sample data and the estimate shows no sign of material bias.
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KZONE 3
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KZONE 7
14.9.3 Statistical Validation
The block estimate mean grade values have been compared to the declustered composite sample means for
each KZONE (Table 14.9.1). The drill holes have been rotated by 45° to an east-west strike orientation and in
alignment the declustering grids (150 mX x 150 mY x 10 mZ). This global (entire domain) difference between
the two values typically vary between 1 to 20% in terms of the OK estimates versus the composites, which SRK
deems to be within acceptable levels. Such global grade differences can occur when drill hole spacing is variable
as is the case in most domains. The highest percentage differences occur in the KZONEs with the lower grade
gold.
Based on the visual, sectional and statistical validation results SRK considers the grades in the block model to
be well estimated overall, with no material biases but variable confidence in some areas due to irregular or
wider sample spacing.
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Table 14.9.1: Differences Between Estimated Block Model and Declustered Composite Sample Mean Grades*
KZONE Grade Block Model Declustered Difference Percentage
Mean Composited Mean* Difference
1 Cu (%) 0.21 0.22 0.01 4%
Au g/t) 0.09 0.10 0.01 9%
2 Cu (%) 0.60 0.55 -0.05 -9%
Au g/t) 0.46 0.47 0.01 2%
3 Cu (%) 1.28 1.29 0.01 1%
Au g/t) 1.47 1.39 -0.09 -6%
4 Cu (%) 0.38 0.36 -0.02 -6%
Au g/t) 0.15 0.20 0.05 23%
5 Cu (%) 0.71 0.69 -0.03 -4%
Au g/t) 0.55 0.55 0.00 -1%
6 Cu (%) 0.68 0.72 0.04 5%
Au g/t) 0.57 0.55 -0.03 -5%
7 Cu (%) 1.44 1.55 0.11 7%
Au g/t) 2.15 2.08 -0.07 -3%
8 Cu (%) 0.25 0.26 0.01 3%
Au g/t) 0.11 0.12 0.00 4%
9 Cu (%) 0.64 0.63 0.00 -1%
Au g/t) 0.40 0.41 0.01 2%
10 Cu (%) 0.14 0.13 -0.02 -12%
Au (g/t) 0.08 0.07 0.00 -4%
*Note: samples declustered using a grid of 150 mX by 150 mY by 10 mZ
14.9.4 Datamine Check Estimate
SolGold created their block model using Leapfrog Geo’s module (‘EDGE’) which is a relatively recent addition
to the software. SRK has checked that the outcome is in-line with other commonly utilised software packages
by completing a check grade estimation in Datamine Studio RM software.
SRK produced check estimates for all KZONES for copper and gold matching estimation parameters as closely
as possible, there were no issues identified between Leapfrog and Datamine. Examples of the close
comparisons are shown in the grade-tonnage curves for copper in Figure 14.9.6 and Figure 14.9.7 for KZONEs
3 and 7, respectively.
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Figure 14.9.6: Grade-Tonnage Curve Comparing Cu (%) Estimates in Leapfrog (CU_SOL) and Datamine (CU_PCT)
for KZONE 3
Figure 14.9.7: Grade-Tonnage Curve Comparing Cu (%) Estimates in Leapfrog (CU_SOL) and Datamine (CU_PCT)
for KZONE 7
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14.10 Mineral Resource Classification

Block model tonnage and grade estimates have been classified according to the CIM Definition Standards for
Mineral Resources and Mineral Reserves.
Mineral Resource classification is typically a subjective concept considering the confidence in the geological
continuity of the mineralised structures, the quality and quantity of exploration data supporting the estimates
and the geostatistical confidence in the tonnage and grade estimates. Appropriate classification criteria should
ideally integrate these concepts to delineate contiguous areas with similar resource classification.
Overall the low and medium grade domains have very good continuity in the northwest-striking steep north-
easterly dipping plane of the deposit; some of the high-grade domains are relatively smaller scale and more
variable in terms of drill hole spacing with respect to their size but most high-grade features are well defined
by several drill hole intersections allowing confident interpretation of their true thickness, dip extent and strike
continuity.
14.10.1 Indicated Mineral Resources
Indicated Mineral Resources are confined to the core of the drilling coverage, they comprise contiguous areas
with several intersections spaced up to 75 m across strike and up to 150 m apart along strike. The outer limit
is 75 m to 150 m from the intersections across and along strike respectively.
The Indicated classification shows reasonable continuity for both mineralisation and geological wireframes. In
these volumes SRK has reasonable to good confidence in the suitability of the model for long term mine
planning.
SRK considers there to be further potential to increase the Indicated Mineral Resource with carefully targeted
infill drilling, as was achieved by the drilling completed between the maiden MRE and this MRE#2.
14.10.2 Inferred Mineral Resources
Inferred Mineral Resources are where we have reasonable to low confidence in geological geometry, continuity
and the block grade estimates. Inferred status has been assigned to contiguous areas which contain several
intersections spaced approximately 100 m apart across strike and 200 m apart along strike with the outer limit
drawn between 100 m and 200 m from the intersections across and along strike respectively.
SRK considers there to be a reasonable expectation that infill drilling in the Inferred Mineral Resource areas
will result in Indicated Mineral Resources, as was achieved by the drilling completed between the maiden MRE
and this MRE#2.
14.10.3 Classification Summary
Data quality, drill hole spacing and the interpreted continuity of grades controlled by the mineralisation
domains have allowed SRK to classify portions of the deposit in the Indicated and Inferred Mineral Resource
categories. No Measured classification has been applied at this time due to the complex cross-cutting
relationships and resulting geometries of the higher-grade intrusions. The current drill hole spacing also
inhibits a high confidence to be attributed to the smaller and more complex domains. This is complicated by
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the depth of the deposit and sub-vertical dipping nature of the mineralisation, which results in difficulty in
accurately targeting drilling.
SRK has drawn classification outlines on multiple level plans to limit and classify the MRE. Figure 14.10.1 and
Figure 14.10.2 show the classification wireframes created by SRK to delineate Indicated and Inferred Mineral
Resources within the block model.
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Figure 14.10.1: 2D Level Plan (550 masl) Showing Block Model Coloured by CuEq (%) and Mineral Resource Classification Outlines
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Figure 14.10.2: Cross-section 1 Showing Bmodel Coloured by CuEq (%) and Mineral Resource Classification Outlines (40 m clipping)
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Figure 14.10.3: 3D View Looking North Showing Classification Wireframes and Drill Holes
14.10.4 Unclassified Exploration Potential of the Model
The geological model has been built to satisfy a number of objectives, primarily the MRE but also to assist with
drill hole targeting. The block model therefore contains estimated blocks in a greater volume than the classified
Mineral Resource. The unclassified parts of the model represent opportunities for future drilling to grow the
deposit model in several directions.
The exploration potential of the Alpala deposit and larger Cascabel Project is discussed in more detail in Section
14.15 below.
14.11 Cut-off Grade

A cut-off grade of 0.2% CuEq has been used for the Mineral Resource statement, the deposit has very good
continuity at this cut-off grade.
The copper equivalent calculation is displayed below, the multiplier for gold is an established factor for the
project based on long term metal prices and basic recovery factors for copper and gold:
CuEq = (copper grade (%) + (gold grade (𝑔/𝑡) x 0.63)
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The Mineral Resource cut-off value is derived from a first principles calculation using parameters circulated by
PEA authors at an early stage of the drafting and using long term market forecast metal prices of USD 3 /lb Cu
and USD 1,300 /oz Au.
Operating costs are based on USD 5 /t for block cave mining and USD 5.82 /t for mineral processing
(conventional milling and flotation at a rate of 40Mtpa including G&A).
Copper and gold metal recovery are based on formulae relating recovery to head grade which resulted from
early metallurgical testwork results summarised in Section 13, Mineral Processing; for example, a head grade
of 0.5% Cu and 0.5 g/t Au would result in recoveries of 85% and 78% respectively.
A concentrate transport and shipping cost of USD 110 /dmt concentrate is assumed.
Smelter terms are based on an assumption of producing a clean and conventional concentrate incurring a
refining charge of USD 0.07 /lb Cu, 96.5% for copper payability and 95% gold payability and a concentrate
treatment charge of USD 70 /dmt.
A 5% royalty is assumed to be payable on copper and gold.
The selected cut-off grade value compares well with other large-scale underground copper-gold projects with
Mineral Resource statements published in recent years, such as Andina, Borska Reka, Chuquicamata, El
Teniente, Olympic Dam, Salvador and Wafi-Golpu.
14.12 Mineral Resource Statement

SRK has produced the Mineral Resource statement using the terminology, definitions and guidelines given in
the CIM Standards on Mineral Resources and Mineral Reserves. The statement is reported using a copper
equivalent grade cut-off of 0.2% which SRK considers appropriate given the reasonable prospects for economic
extraction by underground mass mining such as block caving. The statement is accompanied by grade tonnage
curves (below) in which the high-grade portions are known to mostly occupy the deeper parts of the model
presenting an opportunity for early extraction of higher-grade material. The statement is presented on a 100%
basis and has an Effective Date of 07 November 2018.
The Mineral Resource has increased by 108% (by metal content) from 7.4 Mt CuEq in the December 2017
Maiden MRE (at a cut-off of 0.3% CuEq) to the current 15.4 Mt CuEq (at a cut-off of 0.2% CuEq), as described
in Section 14.14 below.
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Table 14.12.1: SRK Alpala Mineral Resource, 07 November 2018

Indicated 2,050 0.41 0.29 0.60 8.4 19.4 12.2
Inferred 900 0.27 0.13 0.35 2.5 3.8 3.2
Notes:
3. Mineral Resource is considered to have reasonable prospects for eventual economic extraction by underground
mass mining such as block caving
5. The statement uses the terminology, definitions and guidelines given in the CIM Standards on Mineral Resources
and Mineral Reserves (May 2014) as required by NI 43-101.
14.13 Grade Sensitivity Analysis

The results of grade sensitivity analysis are shown in Table 14.13.1 and as grade-tonnage curves in Figure
14.13.1. They demonstrate the tonnage and grade of the block model estimates at various cut-off increments
and the sensitivity of the Mineral Resource to changes in cut-off grade. The tonnages and grades provided in
these tables are provided to describe the sensitivity of the Mineral Resource statement and should not be
interpreted as Mineral Resources.
Table 14.13.1: Block Model Grade-Tonnage Sensitivity Data

Classification CuEq Cut-off Tonnes (Mt) Grade Metal
Cu Au CuEq Cu Au CuEq
(%) (g/t) (%) (Mt) (Moz) (Mt)
Indicated 0.1 2,460 0.36 0.26 0.52 8.9 20.2 12.9
0.15 2,290 0.38 0.27 0.55 8.8 19.9 12.7
0.2 2,050 0.41 0.29 0.60 8.4 19.4 12.2
0.3 1,500 0.49 0.37 0.73 7.4 17.8 10.9
0.45 810 0.66 0.57 1.03 5.4 15.0 8.3
0.7 490 0.84 0.83 1.37 4.1 13.0 6.7
0.9 400 0.90 0.93 1.49 3.6 11.9 5.9
1.1 200 1.13 1.36 1.99 2.2 8.7 3.9
1.5 120 1.35 1.77 2.47 1.7 7.0 3.0
Inferred 0.1 1,380 0.22 0.11 0.28 3.0 4.7 3.9
0.15 1,140 0.24 0.12 0.32 2.8 4.3 3.6
0.2 900 0.27 0.13 0.35 2.5 3.8 3.2
0.3 490 0.34 0.16 0.45 1.7 2.5 2.2
0.45 150 0.49 0.26 0.65 0.7 1.2 1.0
0.7 50 0.67 0.41 0.93 0.4 0.7 0.5
0.9 20 0.72 0.52 1.05 0.2 0.4 0.2
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1.1 10 0.76 0.70 1.20 0.1 0.1 0.1

1.5 - - - - - - -
Figure 14.13.1: Grade-Tonnage Curves for All Indicated and Inferred Blocks in Model
14.14 Comparison to Previous Mineral Resource Estimates

This MRE (MRE#2) is an update the maiden MRE released in December 2017 by SRK ES. Subsequent to this
maiden MRE, SolGold has continued a vigorous drilling campaign over the last year with the effect of over
doubling the quantity of drilling metres and assayed intervals. In addition, MRE#2 used data from trenches
whereas the maiden MRE did not, which adds additional confidence to near-surface interpretations. This had
led to a re-interpretation of the geological model and update to the tonnage and grade estimate, as described
herein.
The results of the additional data can be seen in Figure 14.14.1, where the changes to mineralisation models
are shown for the low-, medium- and high-grade domains. Overall, as can be seen from the low-grade model
changes, the volume of modelled mineralisation has increased significantly due to extensional drilling.
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Figure 14.14.1: Model Changes from Maiden MRE to MRE#2 (Looking Northeast)
Low-grade maiden MRE Low-grade MRE#2
Medium-grade maiden MRE Medium-grade MRE#2
High-grade maiden MRE High-grade MRE#2
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In addition to the modelling changes, the following have also been updated:
• Estimation methodology: utilising Leapfrog Geo EDGE (this has been checked using Datamine Studio RM
which produces a very similar estimate).
• Domaining: the same methodology has been applied to generate estimation domains with a combination
of mineralisation and lithology solids/wireframes used to define domains with similar statistical
populations, which were combined into “KZONES” for grade estimation domains. Due to the additional
data, the geometry and number of samples per domain has changed significantly.
• Variography: as the data with the domains has been updated, so too have the variograms used to assign
weighting during the kriging estimation.
• Estimation parameters: the changes in variograms resulted in changes to orientations and geometries of
the search ellipses used for grade estimation.
• Classification: the increased level of confidence in the geological model and resulting tonnage and grade
estimation has led to an increase in the proportion of the block model classified as Indicated compared to
Inferred (and unclassified). Figure 14.14.2 shows the changes in classification wireframes between the
maiden MRE and MRE#2, which demonstrates both the increase in drilling metres and increased proportion
of Indicated.
• Reporting: cut-off grade changed from 0.3% to 0.2% CuEq due to improved economic viability, which is
driven by the greater scale of the mining and revised cost and recovery assumptions following the
commencement of a PEA study.
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Figure 14.14.2: Classification Wireframe Changes from Maiden MRE to MRE#2 (Looking South)
Inferred maiden MRE Inferred MRE#2
Indicated Maiden MRE Indicated MRE#2
The resulting difference in Mineral Resource statements for various cut-off grades is tabulated in Table 14.14.1.
The main effect of the MRE update has been to increase the volume and contained metal significantly along
with report a high proportion within the Indicated category.
Table 14.14.1: Comparison of Mineral Resource Statements from Maiden MRE to MRE#2*
CuEq% Classification December 2017 Maiden MRE November 2018 MRE#2
Cut-off Tonnes Cu Au CuEq Tonnes Cu Au CuEq
(Mt) (%) (g/t) (%) (Mt) (%) (g/t) (%)
0.2 Indicated 500 0.48 0.38 0.71 2,050 0.41 0.29 0.60
Inferred 900 0.37 0.24 0.52 900 0.27 0.13 0.35
0.3 Indicated 430 0.53 0.43 0.79 1,500 0.49 0.37 0.73
Inferred 650 0.44 0.30 0.62 490 0.34 0.16 0.45
0.7 Indicated 180 0.78 0.77 1.24 490 0.84 0.83 1.37
Inferred 180 0.73 0.65 1.12 50 0.67 0.41 0.93
0.9 Indicated 120 0.89 0.97 1.48 400 0.90 0.93 1.49
Inferred 100 0.85 0.87 1.37 20 0.72 0.52 1.05
*Note: maiden MRE reported using 0.3% CuEq cut-off, MRE#2 reported using 0.2% CuEq cut-off.
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14.15 Resource Extension and Exploration Potential

In addition to the several exploration targets on the Cascabel licence, many of which require follow-up work,
SolGold’s main focus will be to continue drilling in the Alpala cluster.
Phase 4 drilling is now underway, with a primary focus on further resource growth. SolGold believes that there
remains good potential for further growth with the 2019 drilling campaign which is aimed at continuing to
expand the deposit at Alpala Southeast, Alpala Northwest, Trivinio and Alpala Western Limb.
The majority of the currently defined medium- and high-grade mineralisation is confined to the Indicated
Mineral Resource, SRK agrees that there is further potential to increase the size of the higher-grade domains,
particularly up- and down-plunge as shown in Figure 14.15.1 which illustrates the current mineralisation model
above 0.7% CuEq, the extent of the current drilling programme and the areas which will be tested by the
ongoing drilling programme.
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Figure 14.15.1: Extent of Current Drilling and Polygons Representing Targets for Further Drilling in 2019
SRK notes that the lower grade mineralisation remains open in several directions as illustrated by the
unclassified parts of the block model shown in Figure 14.15.2. The unclassified and Inferred areas have been
interpreted from relatively wide spaced drilling which require further drilling in order improve confidence from
Inferred to Indicated and from unclassified to Mineral Resource. It should be noted that there is no guarantee
that additional drilling will grow the model or improve confidence in the model if unexpected complexities are
encountered.
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SRK has identified key drilling targets which are described and illustrated below; the locations of the cross-
sections provided are displayed on Figure 14.15.3.
Figure 14.15.2: Long Section (Looking Northeast) Showing Block Model Coloured by Classification
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Figure 14.15.3: Exploration Potential Cross-section Location Map
A’
B’
C’
14.15.1 Alpala Northwest
Figure 14.15.4 shows an area at depth in the northwest part of the deposit where there is potential to increase
higher-grade material down-plunge; Indicated and Inferred parts of the model are shown as green and purple
outlines, respectively. Currently the deepest hole in this area (CSD-18-064 – highlighted in pink in the image)
shows a thick intercept of >0.5% CuEq material. This target area known as Alpala Northwest is flagged as a
high priority area and will be drill tested during the 2019 campaign.
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Figure 14.15.4: Cross-section A-A’ (Looking Northwest) Highlighting the Alpala Northwest Drilling Target
14.15.2 Drilling Gap
Figure 14.15.4 shows a gap in the current drilling where the model remains unclassified. Although this area is
slightly off the main trend, adding holes in this gap targeting the lower main mineralised zone would serve
two purposes: adding information to a current unexplored area and providing infill drilling at deeper levels.
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Figure 14.15.5: Cross-section A-A’ (Looking Northwest) Highlighting a Drilling Gap
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14.15.3 Western Limb
Figure 14.15.6 shows the upper western part of the deposit where there is potential to increase medium-grade
material up-dip. Two holes on the edge of the current model show reasonable intercepts of >0.5% CuEq
material. This was an area of focus for the 2018 drilling and will continue to be drilled in 2019.
Figure 14.15.6: Cross-section B-B’ (Looking Northwest) Highlighting Western Limb Drilling Target
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14.15.4 Alpala Southeast
Figure 14.15.7 shows an area up-plunge from the southeast area of the deposit highlighting potential to
increase medium-grade material up-plunge. The hole highlighted in the image (CSD-17-024) intercepted
>160 m (down-hole not true thickness) of >0.5% CuEq material (including >80 m of >1% CuEq) within D10
units. The modelled medium-grade mineralisation currently extends outside the Inferred boundary in this area.
Figure 14.15.7: Cross-section C-C’ (Looking Northwest) Highlighting Alpala Southeast Up-Plunge Target
14.15.5 Other Satellite Deposits
Several corridors of Cu-Au mineralisation are currently recognised within the Cascabel Project area which are
based on topographic expression and mapping of quartz veins, sulphide veinlets and fractures. The mapping
was completed using the Anaconda Method. Three major veinlet- and fracture-orientations exist, north-
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westerly, northerly and north easterly, which are similar to the orientations expressed by the intrusions and
faults. Many of the targets lie near the intersection of the mineralised corridors.
Fifteen Cu-Au targets were initially defined by geological mapping, soil and rock-chip geochemical anomalies
and magnetic expression. A sixteenth target is recognised at Urbina.
The main targets comprise the Alpala porphyry cluster, with satellite targets at Moran, Tandayama,
Chinambicito, Aguinaga, Paramba, Cristal and Urbina. The Alpala porphyry cluster itself comprises: Alpala
(Central), Carmen, Alpala West, Trivinio, Alpala NW, Alpala North, Alpala East, Alpala Southeast, and Alpala
South.
Figure 14.15.8: Cascabel Distribution of Intrusions, Mineralised Corridors and Copper-Gold Targets
The discoveries of the porphyry mineralisation at Cascabel to date are a result of target acquisition in a
prospective geological setting within an underexplored region. The early recognition of a large and structurally
controlled, hydrothermal alteration lithocap allowed for the focused exploration of porphyry mineralisation in
an area known for gold-bearing epithermal veins. The discovery outcrop was located by geologists who had a
clear idea as to their target and walked all major streams in the focus area.
The early drilling beneath Cu-Au-rich surface exposures and magnetic highs modelled in 3D at Alpala led to
the discovery of the deep high-grade zone in CSD-05, about 18 months after the discovery of surface
mineralisation. The recognition of geochemical element zoning has assisted in tenement-wide exploration and
drilling. This zoning is characterised by central Cu-Au; proximal Mo; proximal to distal Bi, Se and Te; and distal
As, Mn and Zn.
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The applications of the Anaconda Method to geological mapping and drill-core logging have facilitated the
identification of several major intrusion stages and a vein paragenesis that allows for the prediction of copper-
gold grade. The most important indicators of high-grade include the presence of causal quartz diorite
intrusion(s), increased B-vein abundance and a chalcopyrite-pyrite ratio >1.
The geophysical modelling and spatial coincidence of magnetite to copper-gold mineralisation suggests that
other high-grade zones may exist peripheral to the Alpala Deposit area.
Deep seated intrusions of late tonalite and extensive occurrence of shallower hydrothermal breccia that occupy
the northern flank of the Alpala Deposit, could represent a barren core to what may be a larger system at
Cascabel, with the Alpala Deposit representing a single flank of that larger system. Current interpretations
suggest the potential for a second ore zone may lie further north and/or northwest in the Moran vicinity.
Figure 14.15.9: Schematic Illustration of the Principal Areas of Sulphide Mineralisation in the Lowell-Gilbert
Model of Porphyry Deposits, Showing a Barren (Low-Grade) Core and Annular Ore Shells (after Lowell &
Gilbert, 1970)
The subdued magnetic signatures in the south-eastern portion of the Greater Alpala mineralised corridor,
inferred to be caused by late phyllic alteration, may indicate that the magnetically ‘quiet’ targets at Alpala
Southeast and Cristal also require significant drill testing.
The potential for significant structural offsets by dip-slip faults, normal faults and thrust faults may also play a
role in displacement of mineralisation within the tenement, and SolGold intends to drill test a number of
interpreted displacement targets, including the Urbina target in the coming year.
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Section 15 – Mineable Reserve Estimate
15. Mineral Reserve Estimate

No Mineral Reserve Estimate has been prepared for the Alpala deposit at this stage of the study.
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Section 16 – Mining Method
16. Mining Method

16.1 Summary
This section describes the conceptual mine plan used in this PEA. The mine plan uses the block caving method
which is considered to be the appropriate method due to the size, grade, ground conditions and depth of the
Alpala deposit. High level studies have highlighted some areas of the deposit that may be mined using other
bulk underground methods, such as sublevel caving, but that these are small and not material to the plan at
this early stage of study.
This approach is in line with SolGold’s corporate strategy which is to maximise extraction of the Alpala deposit
while still optimising the economics of the project. Targeting the high value material in the first phase ensures
and optimises the project economics. Mining the lower value second phase later maximises extraction without
compromising the economics of the project.
16.2 Geotechnical Considerations

Geotechnical characterisation of the orebody is required to understand and predict the geotechnical behaviour
of the various domains in the ore body. To a large extent this will determine the mining method selection and
mine design criteria.
A 3D geotechnical domain model has been developed in Leapfrog that takes into consideration the geology,
alteration and structural features of the deposit. These considerations will impact on the mine design criteria
for the mine planning and design.
16.2.1 Geotechnical Database
The rock mass assessment is based on a database provided by SolGold containing data logged into the
following categories:
• Hardness
• Fractures per interval
• Fractures per meter
• Fracture orientation
• Fracture type
• RQD
• Recovery.
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Rock mass was assessed using the Rock Mass Rating (Laubscher, 1990) (RMR) system. Rock Quality Designation
(RQD), hardness and total core recovery (TCR) and Fracture Frequency were used as inputs to determine rock
mass rating (RMR).
To facilitate this study, geotechnical inputs not recorded in the database were estimated from core
photography or using common engineering assumptions. Joint conditions were not assessed in the field and
were evaluated based on assumed worst, average and best-case scenarios. In areas of faulting or broken core,
reduced joint condition values were used to determine RMR.
Diamond drill holes were drilled in a single barrel configuration using P, H and N core diameters. Geotechnical
logging was undertaken at the core facility after transportation from drill site. It is recognised that
transportation may reduce RQD. Geotechnical logging did not differentiate between drilling induced and
natural fractures resulting in an over estimate of fractures and potentially an artificially low RMR.
Mining Plus recommends that SolGold’s methodology for recording fractures is updated to account for drilling
induced and natural fractures.
A summary of the rock mass assessment for each lithological unit recorded in the database is presented in
Table 16.2.1.
Table 16.2.1: Summary of Geotechnical Database by Lithology*

Lithology Percentage of Total Drilled Metres Suitable Data for RQD Suitable Data for RMR
BX 15.6% 75.9% 68.5%
D10 7.5% 87.2% 79.9%
IM 16.6% 84.8% 66.9%
LM 6.3% 77.3% 57.8%
LMQD 0.7% 61.8% 49.2%
PM 0.2% 83.0% 78.6%
QD10 1.8% 83.1% 77.7%
QD15 3.1% 74.3% 62.8%
SOI 0.5% 53.3% 14.2%
V 28.8% 67.8% 59.2%
None 18.9% N/A N/A
*The above table is based on 191,693 m of drill core of which 139,697 m were considered suitable for RQD assessment
and 118,990 m was considered suitable for RMR calculations.
16.2.2 Geotechnical Domains
The rock mass assessment determined that there was minimal differentiation between rock lithologies.
The weathering profile consists of an upper oxidised layer, a transition layer and fresh or unaltered rock. The
upper and oxidised layers accounted for 0.4% of all material logged on site. The upper oxidised and transition
layers were determined to negatively impact the RMR, however the weathering is largely confined to within
35 m of surface and has no material impact on the ability of the rock mass to cave or the rock mass support
assessment.
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Rock hardness and RQD do not substantially differ across lithologies units. Investigation of the database found
that the global RMR typically ranges between 32 and 47.
Figure 16.2.1 presents the cumulative distribution plot of the RMR distribution sorted by lithology.
Figure 16.2.1: Cumulative Distribution of Mean Rock Mass Ratings (Laubscher, 1990) Sorted by Lithology
Zones of high fracture intensity, low recovery and alteration are identified from the geotechnical logs.
Visualisation of these zones in section suggests they are related to a regional scale fault zone. This study
recognises the existence of some areas of poor ground and which will be identified in greater detail in further
geotechnical Testwork.
16.2.3 Geotechnical Risks
16.2.3.1 Geotechnical Data Collection
As is typical with exploration projects, geotechnical records were collected as an ancillary task to geology
logging. A large number of records included in the geotechnical database are absent or potentially unreliable
(and as such have been excluded from this analysis). The purpose of drilling was for exploration, and as such,
triple tube drilling was not used. Exploration drilling is not an ideal basis for geotechnical studies. Further, it is
understood that mechanical breaks were not differentiated from natural breaks during geotechnical
assessment and RQD measurements were determined after core transportation from the drill site.
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Joint condition is required to determine the shear strength of discontinuities but has not been recorded in the
geology logs to date. As such, the shear strength of discontinuities has not been determined. Rock strength
testing is required for more accurately modelling of caving and secondary fragmentation and is also a critical
input when determining adequate ground support.
It is recommended that detailed surface mapping (if possible) and acoustic televiewer data are used to build a
robust structural discontinuity dataset for subsequent studies.
16.2.3.2 Fines Migration
Fines contained in soil and weathered saprolite developed over bedrock in some areas, fault and gouge zones
and in clay altered rock can migrate along fractures. With percolating water, fines can migrate to draw points
and impact draw conditions. Once cave breakthrough occurs, faulted and sheared structural features combined
with water may present the risk of mud rush. Further study on the abundance and mineralogy of fines with
respect to its impact of caveability, production and mud rush potential is required for subsequent geotechnical
studies.
16.2.3.3 Micro Seismicity
As common in block cave operations, the mining process will produce micro-seismic activity within the cave
back and in the mining horizon. Micro-seismicity in the cave back is indicative of the controlled failure of the
cave back and can be used to track cave propagation. However, micro-seismicity along mining horizons may
pose a risk to miners and mine operations if not properly managed. Micro-seismic monitoring and rock bursts
risk management should be implemented at the mine to ensure safe and continuous mining operations.
16.2.3.4 Surface Subsidence
As typically experienced in block cave mining operations, surface subsidence will occur over the cave area. The
magnitude of subsidence and the impact of the subsidence on: slope stability, water courses and any existing
surface infrastructure, and risk of landslides will be further assessed in future studies and was not included in
the geotechnical study.
16.3 Hydrology Considerations

16.3.1 Site Characterisation
The Alpala mine site is situated within the Rio Parambas and Rio Cristal drainage systems. The Rio Parambas
drains from south to north and discharges into the Rio Mira, while the Rio Cristal drains from east to west,
discharging into the Rio Lita. Both major river systems ultimately discharge into the Pacific Ocean. The
catchments and sub-catchments associated with the site are listed in Table 16.3.1.
Table 16.3.1: Catchments and Sub-Catchments Associated with the Site

Catchment Sub-catchment Area (km2)
Rio Parambas Qda. Moran 1.6
Qda. Arellano 0.7
Qda. Parambas 1.0
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Table 16.3.1: Catchments and Sub-Catchments Associated with the Site

Catchment Sub-catchment Area (km2)
Rio Cristal Qda. El Carmen 0.7
Qda. Alpala 1.4
Qda. Malte 0.7
Surface water flow monitoring has been undertaken within the vicinity of the study area and have been
reported in previous studies. Flow rates for catchments and sub-catchments within the study site are listed in
Table 16.3.2
Table 16.3.2: Flow Measurements for Catchments and Sub-catchments in Study Area
Study Point Coordinates River/Stream Flow
Measurement
Easting Northing Elevation (L/s)
ENSA (2012) T1 796042 86451 1262 Qda. Tandayama 147
ENSA (2012) T2 797704 86774 1233 Qda. Aguinaga 50
ENSA (2012) T3 797025 84495 1507 Qda. Moran 130
ENSA (2012) T4 797959 84539 1498 Qda. Arellano 50
ENSA (2012) T5 797453 83283 1707 Qda. Alpala 280
ENSA (2017) PC1 798652 83856 N/A Qda. Parambas 20
ENSA (2017) PC2 796870 86529 N/A Qda. America 18
ENSA (2017) PC3 797052 87306 N/A Rio Parambas 527
ENSA (2017) PC4 798064 88285 N/A Qda. Chinambicito 1.2
ENSA (2017) PC5 796363 83106 N/A Qda. El Carmen 58
ENSA (2017) PC6 796669 83257 N/A Qda. El Carmen 3.1
ENSA (2017) PC7 797723 82092 N/A Rio Cristal 502
ENSA (2017) PC8 797648 82574 N/A Qda. Malte 16
ENSA (2017) PC9 797102 82903 N/A Qda. Alpala 56
1 ENSA (2012), flow measurements taken during Nov-Dec/2012
2 ENSA (2017), flow measurements shown are the average of two campaigns taken during Oct-Nov/2016
The runoff coefficient values for average conditions for the sub-catchments within the vicinity of the Alpala
deposit are provided in the Environmental Impact Study of the Exploration Phase of the Cascabel Project
(Cardno ENTRIX, 2013). These runoff coefficient values were obtained empirically and ranged between 0.83 to
0.9 (for twelve sub-catchments); while one sub-catchment was identified to have a runoff coefficient of 0.61.
Rainfall monitoring records provided for the Cascabel Project comprised average monthly records that did not
provide daily rainfall events or rainfall intensity. A preliminary review of public domain databases was unable
to identify a more detailed data set of rainfall records; therefore, an assessment of design storm events and
associated storm durations were unable to be undertaken.
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16.3.2 Surface Water Management Strategies
Surface water management will be required to reduce the impact of inflows from upstream catchments into
the subsidence/cave zone. Proposed strategies for the surface water management are listed in Table 16.3.3.
Table 16.3.3: Surface Water Management Strategies

Strategy Description
Surface Water Diversion Diversion of surface water courses around the subsidence zone area
Surface Reticulation Collection and reticulation of upstream surface water course around the subsidence zone
area
Runoff Mitigation Limiting upstream runoff onto the subsidence zone
16.4 Hydrogeological Considerations

16.4.1 Site Characterisation
An overview of the prominent geological features that relate to the hydrogeology can be found in Section 7.3.
Limited hydrogeological monitoring and testing has been undertaken on the geological units across the
deposit area, however, it is interpreted that limited primary porosity would be observed within the identified
rock units, due to the anticipated crystalline and massive nature of these units. Secondary porosity of these
units, potentially comprising fractures that have resulted from brittle deformation, may provide the opportunity
for groundwater storage. It is anticipated that these fractures may have resulted during intrusion emplacement
and / or fault movement. Due to the anticipated localised nature of the fracturing, the groundwater system
associated with the Alpala deposit is interpreted to be discrete and localised (i.e. not regional / laterally
extensive).
The identified faults across the deposit area are also likely to influence the groundwater flow system. These
faults are likely to occur as groundwater flow barriers or conduits to groundwater flow. As groundwater flow
barriers (i.e. low hydraulic conductivity flow planes that limit groundwater flow across the structure),
groundwater flow can be limited by the fault plane, potentially resulting in a steep hydraulic gradient across
the fault structure. As a conduit to groundwater flow, preferential groundwater flow can occur along the fault
plane resulting in the potential transfer of storage between hydrostratigraphic units and / or recharge from
the surface.
As a result of the anticipated discrete nature of the potential hydrostratigraphic units across the Alpala deposit
(i.e. secondary porosity and faulting), the hydraulic conductivity and storage of these units are also anticipated
to be discrete. Relatively high hydraulic conductivities and storage values are anticipated within the vicinity of
these discrete units, while beyond the extents of these units these values are anticipated to be several orders
of magnitude lower.
Recharge to the groundwater system would likely occur via two mechanisms: infiltration from incident rainfall;
and seepage from water courses that traverse the deposit area. Infiltration from incident rainfall would occur
in areas where fractures and/or faults are exposed at the surface, which provides a preferential pathway for the
rainfall to infiltrate into the groundwater system. Beyond the exposed zone of fractures and/or faults at the
surface, rainfall infiltration may still occur, but to a lesser extent as the lower hydraulic conductivity away from
these zones and the associated weathered profile (interpreted to be up to 35 m below ground surface) would
limit recharge infiltration. Similar to rainfall infiltration, infiltration from surface water courses that traverse the
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deposit would occur predominantly in areas where fractures and/or faults underlie the water courses. However,
as a number of these surface water courses (Qda. Alpala, Qda. Alpala 2, Qda. Malte and Rio Cristal) are perennial
systems the contribution of recharge to the groundwater system would be higher due to the permanent source
of water contributing to the recharge.
16.4.2 Block Cave Inflow Components
Inflow into the proposed underground works currently being assessed for the Alpala deposit can be broadly
categorised into two components:
• Inflows associated with the block cave
• Inflow associated with other underground mine infrastructure.
These components are provided in the following sections, while schematics of the various groundwater flux
contributions, over the duration of the block cave operations, are identified in Figure 16.4.1.
16.4.2.1 Block Cave Inflow Components
Groundwater inflows associated with the area of the block cave will vary relative to the timing of the operations,
as subsidence fracturing propagates towards the surface as the mine progresses. This results in the increase in
the hydraulic conductivity of the block cave area; and, increases the hydraulic connection between the block
cave area and the surface, resulting in the increased surface recharge potential to the block cave.
During the early stages of the block cave operation groundwater inflow into the workings would result from
(refer to Figure 16.4.1):
• Surface groundwater recharge from incident rainfall and surface water infiltration (Q1 and Q2)
• Inflow from adjacent wall rock in the subsidence zone (Q3)
• Inflow from rock mass groundwater storage loss (Q4)
• Inflow from the block cave development floor (Q5).
As the block cave develops, with increasing subsidence fracture density and fracture propagation, the
characteristics of the above underground inflow fluxes will change and an additional flux contribution will
result, particularly when the subsidence fracturing propagates to the surface. The following provides a summary
of changes to the groundwater inflow fluxes associated with the block cave development and the additional
flux that will result when subsidence fracturing reaches the surface:
• Surface infiltration (Q1 and Q2).
• Surface infiltration to the block cave will increase when the subsidence fracturing reaches the surface as
hydraulic connection between the surface and the block cave development will be established. Due to the
fracture density and the likely slumping of the surface within the subsidence zone (5.8 km2), the recharge
factor within the subsidence zone can be conservatively estimated at 100% - i.e. incidence rainfall, runoff
and stream flow within the subsidence zone will infiltrate into the block cave development. The surface
infiltration fluxes are a concern for any block cave development as infiltration resulting from high intensity
storm events may induce mud rush into the underground development.
• Inflow from adjacent walls and rock mass storage losses (Q3 and Q4).
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• An increase in groundwater inflow flux contributions from the adjacent fractured wall rock and from rock
mass storage loss would continue during the block cave development as additional zones of the block
cave are developed.
• Surface ponding within subsidence zone (Q6).
• Subsidence of the surface topography typically occurs as the block cave development approaches the
surface, resulting in the formation of surface depressions within the subsidence zone. As a result, ponding
of water within these depressions may occur following rainfall events, causing a surface hydraulic head to
develop, which increases the potential for surface infiltration / groundwater recharge.
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Figure 16.4.1: Schematic of Groundwater Inflow Fluxes Associated with Block Cave Developments
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16.4.2.2 Design Storm Event Inflows
Rainfall monitoring records provided for the Cascabel Project, as part of the background data review comprised
average monthly records as the most detailed of records. A preliminary review of public domain databases was
unable to identify a more detailed data set of rainfall records; therefore, an assessment of design storm events
and associated storm durations were unable to be undertaken. As a result, the estimation of storm surge
contribution to the block cave, via infiltration through the subsidence zone, is unable to be undertaken. This
remains uncertain for the estimation of the block cave inflow assessment, as the storm surge inflow to the
block cave is a key contributor to mud rush events in block cave developments worldwide.
16.4.2.3 Inflows to Other Mine Infrastructure
Groundwater inflow from other underground mine infrastructure will contribute to the overall inflow into the
underground development. These inflows will be associated with the development mine access and / or ore
handling workings such as ramps, drives, drifts and / or stopes. Limited information is currently available to
estimate the groundwater inflow associated with the non-block cave underground development, however, in
comparison to the potential peak inflows associated with the block cave development, these inflows are
considered easily manageable.
16.4.3 Conceptual Estimates of Underground Inflow
The following table provides a summary of the description and estimated average flow components that will
reach the operating level of the block cave and summarised in Table 16.4.1.
Inflow Description Flow Rate Calculation Approach
Component (L/s)
Q11 Inflows for design storm event. Does TBC2 Based on subsidence zone extent on
not form part of the ‘base’ inflows. surface, incident rainfall amount, storm
duration and an assumed recharge of 100%.
Q2 Rainfall infiltration through cave into ~60 Mass balance with mean annual rainfall
underground development. (MAR) of 1,600 mm. Assumed average
recharge of 20% MAR and 5.8 km2 recharge
area.
Q3 Seepage through walls at lateral ~40 Assumed 50 m wetted face. Width of
extents of cave zone. Comprises: (a) dilation zone = 50 m, with 5% specific yield,
seepage from wetted rock face and (b) effective thickness of 2,000 m, perimeter of
storage loss due to dilation. 9.9 km and assumed mining duration of 40
years.
Q4 Storage loss from within cave zone as ~460 Specific yield from rock mass = 5%.
fracturing propagates vertically. Water
that is ‘hung up’ within the cave zone
after water table is drawn down.
Q5 Inflows to operating levels through ~25 Assumed. Although the basal wells will
floor. dewater below operating levels localised
gradients will likely exist with associated
minor seepage.
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Inflow Description Flow Rate Calculation Approach
Component (L/s)
Q6 Potential infiltration from permanent NA Captured as part of storm event
surface ponding within the subsidence contribution (Q1) as 100% of incident
zone at surface. rainfall is assumed to infiltration into block
cave.
Total (Q2 – Q6) ~585
1 Calculated based on the assumption that surface water courses originally traversing the subsidence zone will be
diverted / reticulated around the subsidence zone during block cave operation
2 Resolution of available rainfall monitoring records is unsuitable to allow assessment of design storm events and
associated inflow contributions. A subsequent assessment / analysis is required to calculate the design storm events and
block cave inflow contribution.
16.4.4 Groundwater Management Strategies
To reduce the impact of groundwater on the cave draw and mining levels, ground water management
strategies will need to be adopted. Table 16.4.2 summarises management strategies that have been adopted
at block cave operations around the world to manage inflow into the operations.
Table 16.4.2: Groundwater Management Strategies

Strategy Description Project Example
Basal Dewatering sump pumping at the base of block cave operations where North Parkes, Australia
Wells/Sumps inflow infiltrates by gravity towards the base of the block cave
Water Tunnels tunnels established within key levels of the underground Kimberly, South Africa
development (may be based on aquifer characteristics or
predicted flow volumes at key elevation) to direct water
towards intermittent sumps for pumping discharge
Drain Hole specifically, for the dewatering/depressurisation of structures Grasberg, Indonesia
Dewatering within and adjacent to the block cave development, where
holes are drilled from the surface or within drifts to allow
gravity drainage of stored water within the structure towards
the base of operations
Although the above water management strategies have been applied and are successful at the management
of mine inflows at a number of block cave operations around the world, underground mine evacuation
procedures are still in place at a number of operations for inflow associated with storm event. High intensity
storm events may result in infiltration and associated inflows into the block cave that may exceed the capacity
of the various adopted water management / dewatering systems. Under these circumstances a mine evacuation
strategy may be required.
16.5 Design Parameters

16.5.1 Geotechnical Parameters
The following geotechnical parameters are important drivers of the conceptual mine plan:
• Caveability and critical span/hydraulic radius (HR) required for caving
• Stability of long-term excavations
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• Primary and secondary cave fragmentation

• Stand-offs required for underground infrastructure
• Surface subsidence zone.
16.5.1.1 Caveability and Critical Span
The critical span/hydraulic radius (HR) required for caving has been established using the MRMR system.
Geotechnical analysis (Mining Plus, 2019) has established a modified rock mass rating (MRMR) in the range
22-37. This leads to a critical maximum HR of 18 m, that empirically has shown to produce caving conditions.
All footprints in the concept design have spans larger than this critical HR (shown in Table 16.5.1 and Figure
16.5.1). Footprints 1-1 to 6-1 are part of the first phase while 8-4 to 12-4 are part of the second.
Table 16.5.1: Hydraulic Radius by Footprint

Footprint Perimeter (m) Area (m2) HR (m)
1-1 1,234 88,150 71
2-1 1,048 57,200 55
3-1 1,135 76,800 68
4-1 909 51,200 56
5-1 1,417 121,600 86
6-1 1,085 70,800 65
8-4 1,407 112,600 80
9-4 1,518 103,200 68
10-4 964 46,000 48
11-4 889 44,200 50
12-4 895 42,000 47
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Figure 16.5.1: Plan View Showing Footprints and HR
16.5.1.2 Excavation Stability
Apart from the drives used to drill and blast the undercut, most of the development is long term and so must
be adequately supported to remain open and serviceable. Based on the findings of the geotechnical study
(Mining Plus, 2019), it is anticipated that the ground support for the extraction level and mine development
will be typical for a large modern block cave. Cost estimation of the development has allowed for this level of
support.
16.5.1.3 Fragmentation
No geotechnical information specific to the lithologies within the cave zone was available for a primary
fragmentation analysis. Suitable, but limited, data was available within the lithology units but outside of the
cave zone was available for primary fragmentation analysis. The initial findings show that the primary
fragmentation compares to those found in modern block caving operations (Butcher and Thin, 2007).
Given the level of geotechnical detail at the time of the study, in depth analysis of secondary fragmentation is
not warranted. Oversize in draw points is likely in the initial draw development sequence up to a height of
approximately 100 m. Once the draw heights are in excess of 100 m, higher fragmentation at the draw points
is likely due to block attrition from the drawing. The mining cost estimation has accounted for secondary break
requirements, while the impact of secondary breakage on draw rates has been accounted for in the production
schedule.
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16.5.1.4 Stand-offs and Surface Subsidence
The mine design has been developed on the assumption that all infrastructure is stood off the cave abutment
zone by 100 m. The proposed decline portal and vent raise collar positions inherently place the life of mine
access, materials handling and ventilation infrastructure away from potential subsidence zones, with
development drives accessing the deposit laterally rather than vertically (Figure 16.5.2).
Figure 16.5.2: View of Production Areas and Access Development looking NW
An empirical approach as per Laubscher (2000) was performed and benchmarked against other operations
detailed in Woo (2013). Cave parameters were based on available information on mining cave footprint widths,
depth of draw, draw point elevation and the modelled material density. The depth of the proposed mine and
height of draw of material may pose some challenges and a detailed study on surface subsidence is
recommended in the next phase of design.
From the empirical analysis a cave angle of 76 degrees and the extent of failure of 68 degrees was determined
at final cave draw. The magnitude of subsidence and the impact of the subsidence on slope stability, water
courses and any surface infrastructure was not included in the geotechnical study. Further, there exists large
scale fault features within the cave footprint; the empirical analysis is insensitive to large scale structural
features. Figure 16.5.3 outlines the extent of the cave angle (Red) and extent of the failure zone (yellow) and
extrapolates the major structural features to surface that may impact the caving zone (blue).
Locations for rises to surface and the portal have been placed outside of these subsidence zone.
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Figure 16.5.3: Surface Subsidence Surface Projections
16.5.2 Geological Parameters
The conceptual mine plan has been based on the MRE#2 Leapfrog 3D mineral resource estimation model.
This model was converted to a Datamine block model format and re-evaluated to check the conversion. Tonnes
and grades by resource category/cut-off grade were compared against those in the Updated Mineral Resource
Estimate (SRK 2018).
16.5.3 Hydrological/Hydrogeological Parameters
Hydrological conditions are not considered to materially affect mining development rates or pumping costs
relative to other block caving operations.
16.5.4 Dilution and Recovery Parameters
16.5.4.1 Vertical Mixing
It is expected that the main sources of dilution/loss of recovery in the block cave will be due to vertical mixing,
where material in a draw column is drawn down at different rates. The effect of this vertical mixing has been
modelled by assuming that for a height of draw (HOD) of 40 m material is actually drawn evenly over 120
vertical metres. Figure 16.5.4 shows an example 520 m column.
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Figure 16.5.4: Dilution and Recovery Model
Sensitivity of the recovered tonnes and grade to this assumption has been tested with further analysis. In this
analysis, a high vertical mixing and low vertical mixing case were compared to the base case. In the high case
40 m HOD is drawn evenly over 180 m while in the low case 40 m HOD is drawn over 60 m. The results of this
analysis are shown in Figure 16.5.5.
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Figure 16.5.5: Grade Sensitivity to Vertical Mixing
120%
Cumulative Grade Relative to 120 m case
100%
80%
60%
40%
20%
0%
60m 180m
The cumulative effect of significantly greater vertical mixing (50% greater) has a relatively small effect on the
ore grade drawn. This effect is greatest at the start of the plan and reduces with time. It is expected that the
effect of greater vertical mixing could be further reduced if it was accounted for in the design process.
16.5.4.2 Horizontal Mixing
Although horizontal mixing is not expected to be significant in a block cave the presence of large-scale faults
and fracture zones may impact horizontal mixing. Delineation of these zones and proper draw control around
these zones will be required. Within each footprint, the concept design maintains relatively even heights of
draw, which further limits horizontal mixing.
16.5.4.3 Edge of Cave
Dilution is expected to enter the draw columns on the sides of the cave. There will also be lost recovery on the
cave edges due to the cave not propagating vertically. Although not explicitly modelled, the effect of increased
dilution/loss of recovery is included by the large 40 m x 40 m discretised blocks which zigzag to follow the
diagonal edge of the cave (Figure 16.5.6).
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Figure 16.5.6: Plan View of Typical Footprint Showing Zigzag Edge
Zigzag edge along

footprint perimeter
Overall, this high-level dilution and recovery analysis indicates that the large vertical extents of the deposit
(where the high-grade core is surrounded by lower grade material rather than pure waste) will mitigate the
effect of vertical mixing and hence the major source of dilution. Because dilution and recovery are important
drivers of block cave success, a more detailed analysis in future studies is recommended.
16.5.5 Mining Parameters
Mining parameters used in the design are listed in Table 16.5.2.
Table 16.5.2: Concept Design Parameters

Parameter First Phase Second Phase
Maximum cave height above footprint 520 m Unconstrained
Maximum height of draw 520 m Unconstrained
Height of draw variation 80 m Unconstrained
Decline/Conveyor Max Gradient 1 in 6*
Average Development Decline Rate (using TBM) 390 m per month
Footprint Advance Rate 6000 m2 per month
Draw Column Draw Rate 70 m per year
*Further studies are being assessed towards decline development with a maximum gradient up to 1 in 5.6.
16.5.6 Economic Parameters
Economic parameters used to guide the design process are described below. These parameters were only used
for design purposes and a more detailed economic model was used to assess the overall project.
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16.5.6.1 Revenue
The value of material in the geological model was estimated using a net smelter return (NSR) model. This
valuation was traded-off against estimated costs to determine whether and when the material should be
included in the conceptual mine plan. Input parameters used to estimate the NSR for design trade-offs are
shown in Table 16.5.3 below.
Table 16.5.3: NSR Model Parameters

Grade Unit Unit Cu Au
% g/t
Metal Price US$ per lb or oz US$3.00 $1,300

Government Royalty Gross Revenue 5% 5%
Refining Charge US$ per lb or oz 0.07 5
Units Factor lb/t or grams per oz 2202 31.103
Smelter Payable 97.5% 98.0%
Smelting US$ per t concentrate $70.00
Shipping US$ per t concentrate $90.00
Concentrate Grade % or g per t 29% 36
Metallurgical Recovery 93% 85%
NSR/grade unit US$ $5,029 $32.9
Metallurgical modelling indicates that lower grades mined in the second phase of the mine plan may lead to
lower recoveries and concentrate grades. This leads to the lower NSR per insitu grade shown below. However,
the simpler linear relationship shown Table 16.5.3 has been used in the basis of design.
If future work shows that the metallurgical process cannot be improved for the lower grade feed in the second
phase of the mine plan, it is recommended that an iterative approach is used to calculate the nonlinear NSR
on each block depending upon when the block will be mined in the schedule.
16.5.6.2 Cost
Design costs used for trade-offs in the mine design process are shown in Table 16.5.4. These costs were used
for the design process, not for the overall cost estimation.
Table 16.5.4: Design Costs

Parameter Value
Mining Cost (US$/t) 5.0
Processing Cost (US$/t) 5.8
Site G&A (US$/t) 1.5
Break Even Shut-off (CuEq) 0.24%
The first phase of the concept plan was designed to a cut-off grade of 0.3% CuEq. A proportion of material
above 0.3% CuEq was excluded, because it delayed better value material and had a negative effect on project
NPV. The second phase targeted remaining material and was designed down to a cut-off grade of 0.2% CuEq.
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In this phase, as the shut-off grade in some cases is below the break-even shut-off grade, it may include some
material that reduces economic value. This phase addresses the maximum resource recovery mining scenario.
It should be noted, that although the second phase is not economically optimised at this stage, it is still
generating a positive cashflow.
16.5.7 Design Method
As described above, the conceptual mine plan is split into two phases to maximise project time discounted
value while not compromising recovery. The process for designing the first phase was as follows:
• In plan view, the deposit was divided into 6 approximately equal area groups.
• For each group, the best height of draw (BHOD) and best floor location was found, so that CuEq metal is
maximised for a 0.3% CuEq cut-off. To avoid long production tails, within each group, up to 80 m variation
in the BHOD between columns was allowed.
• The shapes of the groups were iteratively adjusted, grouping together areas with similar grades and
elevations.
• For each group, all combinations (in 40 m increments) of lift 1 elevation and height of draw, lift 2 elevation
and height of draw were tested. The combination of lift elevations and heights of draw, which yielded the
highest project discounted value, was selected. This typically involved removing material at the top and
bottom of the column which was above the 0.3% cut-off but reduced project discounted value.
Figure 16.5.7 shows the factors driving the lift positions in a typical column.
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Figure 16.5.7: Position of Lifts Within a Column
For the second phase, material above a 0.2% CuEq shut-off was added by extending existing footprints beyond
the 520 m HOD limit and by adding new footprints around the perimeters of the first phase design. The new
footprint RLs and BHOD were selected to maximise the metal above the 0.2% CuEq shut-off.
16.5.8 Design Summary
Application of the parameters and design process described above results tonnes and grades for mine
scheduling shown in Table 16.5.5. Note that this is not a reserve and that the total includes some inferred and
diluting material as shown in Table 16.6.3 through to Table 16.6.6. Also note that within the schedules, there
are slight variations from this design total, due to a varying production ramp down that is not recovered.
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Table 16.5.5: Production Design Summary (Mill feed tonnes and grade for mine schedule)
Value
Tonnes (Bt) 2.4
Average Grade Cu (%) 0.38
Average Grade Au (g/t) 0.26
Average Grade Ag (g/t) 1.08
The above tonnages to be used in the mine production schedule include:

• Indicated Mineral Resources of 1.83Bt @ 0.61% CuEq ROM (0.41% Cu, 0.31g/t Au and 1.2 g/t Ag) which
constitutes approximately 89% of the MRE#2 Indicated Mineral Resource at a 0.2% CuEq cutoff grade
• Inferred Mineral Resources of 0.55Bt @ 0.36% CuEq (0.27%Cu, 0.13g/t Au and 0.8g/t Ag) which constitutes
approximately 61% of the MRE#2 Inferred Mineral Resource at a 0.2% CuEq cutoff grade
16.6 Production Schedule

16.6.1 Mine Production Scenarios
Based on the geological characteristics of the Alpala orebody, grade distribution, geotechnical and
hydrogeological characterisation, size of the mining footprint and other technical and economic
considerations, four Block Cave mine production cases have been pre-selected and assessed as part of the PEA.
It is recommended that these pre-selected production rates are optimised and refined as part of a pre-
feasibility study.
These scenarios present environmentally sound project development options aimed at optimising the
economics of the project while maximising extraction of the Alpala resource.
• Case 1 – 40 Mtpa Mine Production Rate (Steady State), Life of Mine (LOM) 66 years.
• Case 2a – 50 Mtpa, Staged Ramp-up, LOM 57 years.
• Case 2b – 50 Mtpa, Fast Ramp-up, LOM 55 years.
• Case 3 – 60 Mtpa, LOM 49 years.
Scheduling of the mine plan was completed in Deswik mine planning software.
For the purpose of this PEA, the production scenario assumed as the base case is Case 2b: 50 Mt/a Fast ramp-
up.
Rates used in this schedule are shown in Table 16.6.1.
Table 16.6.1: Scheduled Activity Rates

Activity Rate/Duration
Average TBM development rate 390 m per month
High priority decline development 150 m per month
Vertical development 60 m per month
Crusher excavation and installation 1.5 years
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Undercutting 6,000 m2 per month

Draw rate tickle tonnes 9 months
Steady state draw rate 70 m HOD per year
16.6.2 Pre-production and Production Ramp-up Activity Sequence
Table 16.6.2 below shows the order and expected duration of the pre-production activities. Development of
the main access decline, establishment of the first units of the materials handling system, undercutting and
then dealing with drawpoint oversize (before the draw columns reach maturity ) are expected to be the critical
path activities.
Development of the main access decline is suited to a tunnel boring machine (TBM), due to its length and
straight-line orientation. However, use of a TBM is subject to ground conditions being suitable along its path,
which cannot yet be confirmed until a geotechnical drilling program has assessed the ground along the path
of the TBM decline. Development of the access decline using conventional drill and blast instead of a TBM
would be expected to add approximately 18 months to the start of the project.
Table 16.6.2: Pre-Production and Production Ramp up Activity Sequence

Period Activities
Year-4 Establishment and start of TBM decline
Year-3 TBM decline continues, with drill and blast used to mine parallel drives when sufficient separation
developed
Year-2 Access development continues, footprint accessed, work starts on MHS infrastructure and long critical path
footprint development
Year-1 Footprint development continues
Year 0 Some MHS capacity installed, footprint development (drives, drawbells and undercut) ramps up,
drawcolumns producing "tickle tonnes"
Year 1 First drawcolumns begin to mature, production rate ramps up as more drawcolumns reach maturity at the
same rate as new footprint is opened
Year 2 New footprint development continues, production rate ramps up as more drawcolumns reach maturity
Year 5 Full production achieved, undercutting of footprints to replace soon to be depleted ones continues
16.6.3 Production Schedule
Production schedules start modelling the drawcolumns from Year 1, when the first drawcolumns start to reach
draw maturity and produce at a steady state rate. Tonnes are produced before this date, but at very low rates,
with material created from development tunnels, long hole drill and blast and coarsely fragmented draw only.
The schedules prioritised the highest-grade footprints before lower grade ones and within each footprint
prioritised the blocks to maintain an even draw profile. This same principle is applied to all of the four schedule
scenarios.
Total tonnes and grades and their composition by resource category for the four cases are shown in Table
16.6.3, Table 16.6.4, Table 16.6.5 and Table 16.6.6. Note that this is not a reserve and that the total includes
some diluting material.
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16.6.3.1 50 Mt per Annum Case
Figure 16.6.1: Production Profile and Grades for 50 Mt per Annum Case
Table 16.6.3: Tonnes and Grades Schedule by Resource Category for 50 Mt per Annum Case
Year Total Indicated Inferred
Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag
(Mt) (%) (g/t) (g/t) (Mt) (%) (g/t) (g/t) (Mt) (%) (g/t) (g/t)
1 7.3 1.04 1.39 2.37 7.3 1.04 1.39 2.37 - - - -
2 21.4 0.91 1.16 2.01 21.4 0.91 1.16 2.01 - - - -
3 35.5 0.76 0.84 1.86 35.5 0.76 0.84 1.86 - - - -
4 48.4 0.67 0.62 1.94 48.4 0.67 0.62 1.94 - - - -
5 50.4 0.59 0.48 1.72 50.4 0.59 0.48 1.72 0.0 0.38 0.13 1.84
6 50.1 0.65 0.57 1.67 50.1 0.65 0.57 1.67 0.0 0.30 0.14 1.85
7 46.3 0.69 0.67 1.66 45.7 0.69 0.68 1.67 0.6 0.28 0.13 1.19
8 43.3 0.78 0.83 1.78 43.1 0.78 0.83 1.79 0.2 0.30 0.15 0.98
9 50.8 0.68 0.67 1.66 50.6 0.68 0.68 1.67 0.2 0.33 0.17 1.28
10 50.8 0.48 0.38 1.56 50.4 0.48 0.39 1.56 0.4 0.34 0.17 1.24
11 50.7 0.45 0.37 1.61 50.3 0.45 0.37 1.62 0.4 0.25 0.13 0.88
12 50.5 0.37 0.28 1.31 49.4 0.38 0.28 1.32 1.1 0.15 0.09 0.87
13 50.6 0.34 0.24 1.18 49.1 0.34 0.24 1.19 1.5 0.17 0.10 0.91
14 50.5 0.38 0.27 1.23 50.3 0.39 0.27 1.23 0.2 0.18 0.10 1.04
15 50.7 0.44 0.31 1.36 50.7 0.44 0.31 1.36 0.1 0.20 0.11 0.75
16 50.7 0.41 0.29 1.17 49.7 0.41 0.30 1.17 0.9 0.24 0.12 1.03
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17 50.6 0.43 0.32 1.19 48.8 0.44 0.33 1.19 1.8 0.28 0.13 0.94
18 50.3 0.41 0.30 1.17 48.4 0.42 0.30 1.18 1.9 0.29 0.13 0.85
19 50.1 0.40 0.26 1.13 47.8 0.40 0.26 1.14 2.3 0.31 0.13 0.78
20 50.1 0.37 0.22 1.08 47.0 0.38 0.23 1.11 2.6 0.31 0.14 0.75
21 50.4 0.37 0.20 1.10 46.3 0.37 0.21 1.14 3.3 0.37 0.19 0.84
22 50.3 0.39 0.20 1.15 39.1 0.38 0.20 1.18 10.7 0.45 0.24 1.07
23 48.5 0.39 0.19 1.05 33.4 0.38 0.19 1.10 14.3 0.41 0.20 0.92
24 48.6 0.39 0.19 0.88 35.4 0.38 0.19 0.91 12.4 0.40 0.18 0.78
25 46.9 0.39 0.21 0.80 34.3 0.39 0.23 0.85 11.7 0.35 0.15 0.63
26 46.6 0.40 0.24 0.83 28.6 0.42 0.27 0.94 16.0 0.35 0.18 0.66
27 49.4 0.39 0.23 0.89 32.0 0.40 0.26 0.95 16.2 0.37 0.19 0.77
28 50.4 0.38 0.22 0.90 35.2 0.36 0.23 0.91 14.4 0.43 0.21 0.87
29 51.1 0.34 0.18 0.87 34.4 0.32 0.17 0.87 15.7 0.38 0.20 0.89
30 51.2 0.30 0.13 0.89 43.8 0.29 0.13 0.87 7.1 0.35 0.15 0.97
31 51.2 0.28 0.13 0.87 43.3 0.28 0.13 0.86 7.9 0.27 0.12 0.92
32 51.0 0.26 0.12 0.78 37.8 0.27 0.13 0.75 13.1 0.22 0.10 0.88
33 51.1 0.23 0.12 0.67 35.7 0.23 0.12 0.60 14.9 0.21 0.12 0.85
34 50.9 0.22 0.12 0.59 36.1 0.22 0.13 0.54 14.4 0.20 0.12 0.71
35 50.7 0.24 0.15 0.63 35.6 0.25 0.16 0.61 14.8 0.20 0.12 0.70
36 50.3 0.25 0.17 0.70 32.6 0.27 0.19 0.68 17.6 0.22 0.13 0.74
37 50.8 0.27 0.18 0.82 29.3 0.26 0.18 0.81 20.5 0.28 0.18 0.84
38 50.7 0.26 0.16 0.86 26.7 0.24 0.14 0.85 22.1 0.28 0.17 0.84
39 47.2 0.24 0.13 0.82 24.8 0.24 0.12 0.87 19.2 0.23 0.12 0.74
40 50.5 0.23 0.11 0.69 24.6 0.25 0.12 0.82 20.3 0.21 0.09 0.61
41 50.6 0.24 0.10 0.69 22.8 0.27 0.11 0.81 23.0 0.22 0.09 0.63
42 50.5 0.24 0.10 0.73 23.7 0.26 0.10 0.79 24.5 0.22 0.09 0.68
43 50.5 0.23 0.09 0.72 27.2 0.23 0.09 0.73 22.0 0.22 0.09 0.71
44 48.2 0.23 0.10 0.78 19.9 0.21 0.10 0.75 24.9 0.24 0.10 0.81
45 47.6 0.24 0.11 0.84 10.5 0.25 0.12 1.07 32.7 0.24 0.10 0.78
46 46.3 0.26 0.11 0.90 11.3 0.29 0.13 1.30 32.4 0.25 0.10 0.76
47 45.9 0.28 0.12 0.96 15.7 0.32 0.13 1.32 28.5 0.26 0.11 0.76
48 45.6 0.30 0.12 0.99 22.3 0.34 0.14 1.16 22.4 0.26 0.11 0.82
49 43.8 0.31 0.13 0.96 30.5 0.33 0.13 0.99 12.8 0.27 0.12 0.90
50 39.5 0.33 0.13 0.96 30.2 0.34 0.14 0.96 8.5 0.28 0.12 0.97
51 22.7 0.32 0.13 1.09 15.1 0.33 0.13 1.13 6.9 0.30 0.13 1.06
52 12.8 0.30 0.13 1.27 8.2 0.30 0.12 1.30 4.4 0.31 0.15 1.26
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53 8.7 0.26 0.13 1.38 5.5 0.27 0.12 1.45 3.1 0.25 0.14 1.27
54 6.3 0.21 0.10 1.34 3.1 0.24 0.11 1.70 3.2 0.18 0.09 0.99
55 3.1 0.16 0.08 1.18 0.9 0.19 0.08 1.58 2.2 0.15 0.09 1.01
16.6.3.2 Staged Case, starting at 25 Mt per Annum then ramping up to 50 Mt per Annum Case
Figure 16.6.2: Production Profile and Grades for 25 Mt then 50 Mt per Annum Staged Case
Table 16.6.4: Tonnes and Grades Schedule by Resource Category for 25 Mt then 50 Mt per Annum Staged Case
1 7.3 1.04 1.39 2.37 7.3 1.04 1.39 2.37 - - - -
2 21.0 0.91 1.16 2.01 21.0 0.91 1.16 2.01 - - - -
3 25.4 0.78 0.90 1.79 25.4 0.78 0.90 1.79 - - - -
4 25.5 0.70 0.75 1.75 25.5 0.70 0.75 1.75 - - - -
5 25.5 0.59 0.59 1.63 25.5 0.59 0.59 1.63 - - - -
6 38.8 0.69 0.65 1.75 38.8 0.69 0.65 1.75 - - - -
7 50.2 0.73 0.72 1.89 50.2 0.73 0.72 1.89 - - - -
8 50.4 0.76 0.76 1.94 50.3 0.76 0.76 1.94 0.1 0.20 0.11 0.73
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9 50.2 0.68 0.63 1.68 49.8 0.68 0.64 1.68 0.4 0.25 0.12 0.92
10 50.7 0.57 0.47 1.67 50.2 0.58 0.47 1.67 0.4 0.34 0.15 1.50
11 50.9 0.53 0.47 1.66 50.6 0.53 0.47 1.66 0.2 0.36 0.19 1.27
12 50.7 0.44 0.34 1.52 50.1 0.44 0.34 1.52 0.6 0.28 0.14 1.08
13 50.7 0.37 0.25 1.34 49.0 0.38 0.25 1.36 1.7 0.17 0.10 0.88
14 49.8 0.39 0.26 1.24 48.0 0.40 0.27 1.25 1.8 0.19 0.11 0.87
15 50.4 0.46 0.31 1.40 49.2 0.46 0.32 1.42 1.2 0.28 0.12 0.81
16 50.9 0.47 0.32 1.47 49.8 0.47 0.32 1.48 1.1 0.32 0.12 0.83
17 50.8 0.42 0.27 1.33 48.7 0.43 0.28 1.35 2.1 0.31 0.12 1.00
18 50.6 0.45 0.28 1.44 48.4 0.45 0.29 1.46 2.1 0.32 0.13 0.96
19 50.3 0.43 0.23 1.34 48.8 0.43 0.23 1.35 1.5 0.34 0.13 0.84
20 50.2 0.42 0.22 1.23 46.2 0.42 0.22 1.26 4.0 0.41 0.20 0.95
21 50.7 0.39 0.20 1.13 38.2 0.38 0.20 1.16 12.1 0.42 0.22 1.05
22 50.5 0.39 0.20 0.96 35.7 0.38 0.20 0.98 14.0 0.42 0.20 0.92
23 50.8 0.39 0.20 0.81 39.8 0.38 0.20 0.82 10.4 0.42 0.19 0.73
24 50.5 0.38 0.21 0.77 38.0 0.38 0.22 0.82 11.5 0.35 0.15 0.63
25 50.3 0.40 0.24 0.82 33.4 0.41 0.27 0.89 14.9 0.36 0.18 0.67
26 50.3 0.41 0.27 0.88 34.7 0.41 0.30 0.92 14.3 0.40 0.21 0.78
27 50.4 0.39 0.24 0.88 35.9 0.37 0.25 0.87 13.8 0.45 0.22 0.90
28 50.5 0.37 0.23 0.98 37.7 0.34 0.23 0.94 12.2 0.46 0.23 1.11
29 51.0 0.31 0.21 0.84 44.7 0.31 0.21 0.83 6.0 0.35 0.15 0.89
30 50.7 0.28 0.17 0.79 46.2 0.28 0.17 0.78 3.5 0.32 0.18 1.04
31 50.8 0.28 0.13 0.88 42.7 0.28 0.14 0.88 7.5 0.25 0.11 0.92
32 48.8 0.24 0.12 0.78 37.4 0.25 0.12 0.73 11.2 0.22 0.11 0.96
33 48.3 0.22 0.12 0.68 36.7 0.22 0.12 0.60 11.3 0.22 0.12 0.96
34 50.1 0.20 0.11 0.58 33.9 0.21 0.12 0.56 15.8 0.17 0.11 0.63
35 50.5 0.20 0.11 0.58 32.5 0.21 0.11 0.57 17.7 0.18 0.11 0.60
36 50.1 0.20 0.12 0.61 31.7 0.20 0.12 0.58 18.2 0.19 0.11 0.66
37 50.6 0.22 0.14 0.70 33.9 0.22 0.14 0.68 15.9 0.23 0.12 0.73
38 50.6 0.23 0.14 0.75 35.0 0.23 0.15 0.76 15.1 0.23 0.11 0.71
39 50.7 0.25 0.15 0.77 35.3 0.26 0.17 0.79 14.8 0.23 0.11 0.71
40 50.6 0.26 0.15 0.79 33.0 0.29 0.18 0.84 16.3 0.22 0.11 0.69
41 50.8 0.27 0.15 0.76 27.0 0.30 0.16 0.87 19.1 0.24 0.14 0.69
42 50.2 0.27 0.14 0.76 23.0 0.27 0.12 0.81 22.4 0.26 0.15 0.75
43 50.4 0.25 0.11 0.71 22.7 0.24 0.10 0.70 23.6 0.24 0.12 0.71
44 48.4 0.22 0.09 0.69 22.2 0.20 0.09 0.64 23.5 0.23 0.10 0.72
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45 41.1 0.24 0.10 0.80 10.2 0.22 0.10 0.91 26.9 0.24 0.10 0.77
46 46.7 0.25 0.11 0.83 9.0 0.25 0.12 1.08 33.7 0.24 0.10 0.77
47 46.2 0.26 0.11 0.88 11.0 0.28 0.13 1.22 32.7 0.25 0.10 0.77
48 46.0 0.27 0.11 0.94 16.2 0.31 0.13 1.26 28.1 0.26 0.10 0.75
49 46.1 0.30 0.12 0.99 23.1 0.34 0.14 1.15 22.0 0.26 0.11 0.81
50 44.7 0.31 0.13 0.97 29.8 0.34 0.14 1.01 14.3 0.26 0.11 0.90
51 37.8 0.33 0.13 0.99 28.1 0.35 0.14 1.00 9.1 0.28 0.12 1.00
52 23.0 0.31 0.13 1.10 15.1 0.33 0.13 1.14 7.1 0.29 0.13 1.07
53 16.6 0.29 0.13 1.20 10.6 0.29 0.12 1.24 5.6 0.30 0.13 1.16
54 10.0 0.28 0.13 1.35 6.4 0.28 0.12 1.42 3.4 0.29 0.14 1.23
55 7.2 0.23 0.11 1.39 4.4 0.24 0.10 1.53 2.7 0.21 0.12 1.16
56 4.9 0.18 0.09 1.15 1.9 0.20 0.08 1.46 3.0 0.16 0.09 0.95
57 2.1 0.15 0.08 1.06 0.0 0.16 0.07 1.62 2.0 0.15 0.08 1.05
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1 7.3 1.04 1.39 2.37 7.3 1.04 1.39 2.37 - - - -
2 21.4 0.91 1.16 2.01 21.4 0.91 1.16 2.01 - - - -
3 35.5 0.76 0.84 1.85 35.5 0.76 0.84 1.85 - - - -
4 41.3 0.69 0.66 1.90 41.3 0.69 0.66 1.90 - - - -
5 41.1 0.58 0.50 1.67 41.1 0.58 0.50 1.67 - - - -
6 40.9 0.68 0.64 1.67 40.9 0.68 0.64 1.67 - - - -
7 40.8 0.74 0.76 1.72 40.6 0.74 0.77 1.73 0.2 0.20 0.11 0.63
8 40.8 0.77 0.79 1.79 40.6 0.77 0.79 1.79 0.2 0.26 0.13 0.88
9 40.9 0.70 0.67 1.72 40.6 0.70 0.68 1.72 0.3 0.31 0.13 1.46
10 40.7 0.60 0.54 1.84 40.6 0.60 0.54 1.84 0.2 0.39 0.17 1.71
11 41.0 0.50 0.45 1.71 40.9 0.50 0.45 1.71 0.1 0.35 0.21 1.17
12 40.9 0.44 0.35 1.48 40.7 0.44 0.35 1.48 0.2 0.40 0.22 1.20
13 40.8 0.38 0.24 1.33 39.9 0.39 0.25 1.34 0.9 0.23 0.11 1.00
14 40.3 0.38 0.23 1.34 38.4 0.39 0.24 1.36 2.0 0.17 0.10 0.90
15 40.2 0.41 0.29 1.40 39.4 0.42 0.29 1.41 0.7 0.18 0.10 0.97
16 40.8 0.51 0.37 1.69 40.6 0.51 0.37 1.69 0.2 0.19 0.11 0.79
17 40.9 0.48 0.34 1.55 40.3 0.48 0.35 1.56 0.6 0.24 0.11 0.89
18 40.6 0.43 0.28 1.33 38.8 0.43 0.28 1.34 1.9 0.29 0.13 1.02
19 40.7 0.43 0.26 1.31 38.9 0.43 0.26 1.33 1.8 0.31 0.13 0.91
20 40.6 0.42 0.23 1.22 38.6 0.42 0.24 1.24 2.0 0.34 0.13 0.82
21 40.6 0.41 0.22 1.18 38.4 0.41 0.23 1.21 2.2 0.34 0.15 0.78
22 40.4 0.39 0.21 1.17 37.9 0.39 0.21 1.19 2.4 0.38 0.18 0.86
23 40.6 0.42 0.21 1.23 31.4 0.41 0.21 1.27 8.9 0.46 0.23 1.12
24 40.6 0.40 0.19 1.10 27.9 0.40 0.19 1.16 12.0 0.40 0.19 0.98
25 40.8 0.40 0.19 0.92 30.2 0.39 0.19 0.96 10.0 0.40 0.18 0.83
26 41.0 0.41 0.21 0.85 32.1 0.41 0.22 0.88 8.3 0.42 0.19 0.71
27 41.0 0.40 0.22 0.83 30.9 0.41 0.24 0.90 9.4 0.35 0.15 0.62
28 40.5 0.41 0.25 0.89 27.0 0.43 0.28 1.00 11.9 0.34 0.17 0.66
29 40.5 0.40 0.24 0.91 26.7 0.41 0.26 1.01 12.5 0.38 0.20 0.73
30 40.6 0.37 0.18 0.92 27.0 0.33 0.17 0.95 12.8 0.43 0.21 0.86
31 40.7 0.37 0.19 1.05 25.4 0.32 0.17 1.06 14.6 0.44 0.22 1.04
32 40.8 0.32 0.18 0.80 32.3 0.29 0.17 0.74 8.0 0.46 0.23 1.06
33 41.0 0.28 0.16 0.66 38.1 0.28 0.16 0.65 2.8 0.38 0.17 0.68
34 40.7 0.31 0.19 0.72 37.9 0.31 0.19 0.69 2.8 0.33 0.19 1.07
35 40.5 0.32 0.21 0.90 36.1 0.33 0.22 0.87 4.3 0.28 0.14 1.09
36 40.4 0.29 0.21 0.89 31.6 0.31 0.24 0.87 8.7 0.22 0.09 0.97
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37 40.6 0.26 0.20 0.77 31.4 0.28 0.23 0.70 9.0 0.20 0.11 1.02
38 39.3 0.22 0.15 0.61 28.9 0.23 0.16 0.58 8.8 0.21 0.13 0.83
39 34.4 0.21 0.10 0.61 26.7 0.21 0.10 0.58 7.4 0.19 0.12 0.70
40 39.7 0.20 0.10 0.59 28.3 0.20 0.10 0.60 11.0 0.17 0.11 0.56
41 41.1 0.19 0.11 0.58 27.2 0.20 0.11 0.59 13.6 0.18 0.11 0.55
42 40.7 0.20 0.11 0.56 26.8 0.20 0.12 0.54 13.8 0.20 0.11 0.61
43 40.4 0.21 0.13 0.58 26.7 0.21 0.13 0.54 13.5 0.22 0.11 0.67
44 40.3 0.22 0.14 0.65 25.4 0.22 0.16 0.62 14.8 0.21 0.11 0.70
45 40.9 0.25 0.16 0.75 27.4 0.25 0.18 0.75 12.6 0.24 0.13 0.74
46 40.9 0.27 0.17 0.86 27.2 0.28 0.20 0.91 13.0 0.23 0.13 0.76
47 40.7 0.28 0.17 0.91 25.2 0.30 0.19 0.97 14.4 0.25 0.15 0.80
48 40.5 0.28 0.16 0.84 20.4 0.29 0.14 0.91 15.9 0.28 0.17 0.80
49 40.8 0.26 0.13 0.77 21.1 0.27 0.11 0.83 15.7 0.24 0.13 0.74
50 40.6 0.23 0.10 0.71 22.3 0.26 0.10 0.79 15.9 0.20 0.09 0.64
51 40.5 0.22 0.09 0.68 22.7 0.23 0.09 0.71 16.0 0.20 0.08 0.65
52 39.2 0.22 0.09 0.70 17.9 0.21 0.09 0.65 18.0 0.23 0.10 0.74
53 39.7 0.24 0.10 0.81 11.3 0.21 0.10 0.87 24.5 0.25 0.10 0.79
54 40.1 0.24 0.11 0.86 9.5 0.25 0.11 1.06 26.5 0.24 0.10 0.81
55 40.1 0.26 0.11 0.93 10.7 0.29 0.13 1.23 26.2 0.24 0.11 0.81
56 40.0 0.28 0.12 1.01 14.5 0.33 0.14 1.43 23.7 0.25 0.11 0.76
57 40.1 0.30 0.12 1.04 17.0 0.34 0.15 1.40 22.5 0.26 0.11 0.77
58 39.9 0.30 0.12 0.97 17.9 0.34 0.14 1.18 21.4 0.27 0.11 0.81
59 39.9 0.31 0.12 0.94 20.5 0.34 0.13 1.00 18.6 0.28 0.12 0.87
60 38.7 0.31 0.13 0.91 25.1 0.33 0.13 0.91 12.7 0.29 0.13 0.92
61 32.0 0.32 0.14 0.95 24.6 0.33 0.14 0.97 6.7 0.28 0.12 0.95
62 13.2 0.27 0.12 1.21 8.9 0.28 0.12 1.33 4.1 0.26 0.11 1.00
63 7.4 0.22 0.10 1.32 4.7 0.21 0.09 1.43 2.6 0.23 0.12 1.16
64 4.7 0.18 0.09 1.09 1.7 0.20 0.08 1.11 2.9 0.17 0.10 1.08
65 3.0 0.17 0.08 0.95 0.4 0.23 0.07 1.00 2.7 0.16 0.08 0.94
66 1.9 0.15 0.09 1.08 - - - - 1.9 0.15 0.09 1.08
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1 7.3 1.04 1.39 2.37 7.3 1.04 1.39 2.37 - - - -
2 21.4 0.91 1.16 2.01 21.4 0.91 1.16 2.01 - - - -
3 35.5 0.76 0.84 1.86 35.5 0.76 0.84 1.86 - - - -
4 48.4 0.67 0.62 1.94 48.4 0.67 0.62 1.94 - - - -
5 50.6 0.59 0.48 1.72 50.6 0.59 0.48 1.72 0.0 0.38 0.13 1.84
6 58.5 0.65 0.56 1.70 58.4 0.65 0.56 1.70 0.1 0.31 0.16 1.64
7 59.4 0.65 0.61 1.69 58.8 0.65 0.61 1.70 0.6 0.30 0.14 1.26
8 57.4 0.65 0.64 1.61 56.3 0.66 0.65 1.62 1.1 0.24 0.12 0.98
9 61.0 0.60 0.56 1.57 59.5 0.61 0.57 1.59 1.5 0.19 0.11 0.92
10 60.9 0.47 0.38 1.57 59.6 0.48 0.39 1.58 1.3 0.18 0.10 0.94
11 61.0 0.47 0.39 1.66 60.9 0.47 0.39 1.66 0.2 0.18 0.10 1.05
12 61.2 0.46 0.35 1.55 61.2 0.46 0.35 1.56 0.0 0.20 0.11 0.75
13 61.0 0.42 0.29 1.28 57.7 0.43 0.29 1.30 3.3 0.39 0.20 1.04
14 60.9 0.45 0.29 1.31 55.1 0.45 0.30 1.34 5.7 0.40 0.20 1.06
15 60.8 0.43 0.24 1.23 53.2 0.43 0.24 1.26 7.5 0.44 0.22 1.02
16 60.8 0.43 0.23 1.12 50.1 0.42 0.23 1.16 10.2 0.46 0.23 0.92
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17 61.2 0.40 0.21 1.04 50.4 0.39 0.21 1.10 10.1 0.45 0.21 0.76
18 60.5 0.37 0.19 0.98 48.2 0.37 0.20 1.06 11.4 0.37 0.15 0.69
19 60.0 0.33 0.17 0.86 39.3 0.32 0.17 0.94 18.5 0.34 0.16 0.73
20 59.6 0.35 0.19 0.83 41.0 0.34 0.20 0.86 17.1 0.38 0.19 0.78
21 60.6 0.38 0.23 0.83 45.3 0.36 0.23 0.82 14.4 0.43 0.22 0.87
22 60.7 0.40 0.26 0.87 47.6 0.38 0.27 0.84 12.5 0.46 0.24 1.00
23 61.0 0.37 0.25 0.80 55.0 0.37 0.26 0.81 5.7 0.36 0.17 0.75
24 60.9 0.36 0.23 0.85 57.1 0.36 0.24 0.86 3.5 0.31 0.15 0.75
25 60.8 0.31 0.17 0.81 54.9 0.32 0.18 0.82 4.6 0.28 0.14 0.85
26 60.4 0.27 0.13 0.83 53.5 0.27 0.13 0.82 6.7 0.27 0.13 0.90
27 61.3 0.23 0.11 0.79 46.9 0.24 0.11 0.82 13.8 0.20 0.11 0.69
28 61.2 0.22 0.11 0.74 41.5 0.23 0.11 0.74 19.4 0.19 0.10 0.72
29 61.1 0.21 0.12 0.70 38.0 0.22 0.13 0.63 22.7 0.20 0.11 0.82
30 60.8 0.21 0.13 0.68 38.0 0.22 0.14 0.61 22.5 0.21 0.12 0.80
31 60.9 0.23 0.14 0.73 39.7 0.23 0.15 0.72 20.5 0.21 0.12 0.75
32 60.8 0.24 0.15 0.77 40.0 0.25 0.16 0.80 20.1 0.22 0.11 0.72
33 60.8 0.25 0.15 0.74 35.0 0.28 0.18 0.83 21.6 0.22 0.12 0.64
34 60.0 0.26 0.14 0.74 28.5 0.29 0.15 0.84 25.7 0.25 0.14 0.70
35 60.5 0.26 0.13 0.80 24.5 0.27 0.11 0.83 30.5 0.26 0.13 0.79
36 60.5 0.25 0.11 0.81 26.2 0.25 0.10 0.81 30.5 0.24 0.11 0.79
37 60.5 0.23 0.10 0.76 25.6 0.22 0.10 0.75 31.4 0.23 0.10 0.78
38 53.5 0.24 0.11 0.79 16.9 0.22 0.11 0.93 33.6 0.24 0.10 0.73
39 46.4 0.26 0.11 0.86 13.6 0.26 0.12 1.21 30.6 0.25 0.10 0.70
40 46.0 0.27 0.11 0.88 15.6 0.30 0.12 1.09 28.4 0.26 0.10 0.75
41 45.2 0.29 0.12 0.92 21.8 0.33 0.13 1.01 22.1 0.26 0.11 0.82
42 43.5 0.31 0.13 0.95 28.5 0.35 0.14 0.99 14.2 0.25 0.11 0.89
43 33.3 0.33 0.14 1.01 24.3 0.36 0.14 1.06 8.2 0.26 0.12 0.92
44 19.5 0.32 0.13 1.19 13.7 0.34 0.13 1.23 5.2 0.29 0.14 1.16
45 16.1 0.31 0.13 1.23 11.0 0.31 0.13 1.24 4.8 0.31 0.15 1.25
46 10.6 0.29 0.13 1.35 7.1 0.29 0.12 1.37 3.5 0.31 0.15 1.32
47 7.3 0.25 0.11 1.43 4.7 0.26 0.11 1.54 2.6 0.22 0.12 1.25
48 5.1 0.19 0.08 1.31 2.5 0.22 0.09 1.60 2.6 0.17 0.08 1.03
49 2.3 0.15 0.08 1.09 0.3 0.16 0.07 1.47 2.0 0.15 0.08 1.04
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16.7 Mine Design

Figure 16.7.1, Figure 16.7.2 and Figure 16.7.3 show the overall mine layout. The mine is accessed via a twin
decline from a portal on the hanging wall side of the deposit (the path to the footprint of the first lift is
approximately 5 km in length). The twin decline crosses underneath the deposit to the footwall side on the up-
plunge eastern side, before following the plunge of the deposit on the footwall side. The first lifts are accessed
directly from the hanging wall side via a sacrificial twin decline which is later consumed by the lower lifts. In
this concept mine plan, a 1 in 6 gradient has been used for both the access decline and the conveyor decline.
A future trade-off is recommended to test whether the reduction in conveyor lengths with a steeper gradient
outweighs the reduced development rates expected at a steeper gradient. The majority of the currently defined
medium- and high-grade
Ventilation shafts are located to the north of the deposit along the access corridor. The northern location
reduces the required rise length due to favourable topography. Further geotechnical analysis is recommended
to test whether these rises can be moved closer to the deposit without compromising their long-term stability.
This will reduce the development required for ventilation drives. Ventilation development follows the path of
the access decline, using a series of shafts to reduce the lateral development metres.
The deposit is split into 6 footprints in the first phase, with 2 lifts in each footprint. The second phase includes
lower grade material around and above the first 6 footprints. The concept infrastructure design has been
designed with the aim of minimising the development required to mine footprints in the first phase without
being compromised by the mining of material in the second phase.
Figure 16.7.1: Plan View of Footprints and Access Infrastructure
Portal Conveyor and

access decline
paths
First phase Vent rise

footprints locations
Second phase
footprints
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Figure 16.7.2: Long Section Showing Access Infrastructure and First Phase Production Columns (Second Phase
Footprints Not Shown for Clarity)
Vent rise
Portal paths
Conveyor and
access decline
paths
First phase
footprints
Figure 16.7.3: Schematic View Looking South-east Showing Access Infrastructure and First Phase Production
Columns (Second Phase Footprints Not Shown for Clarity)
Vent rise
paths
Conveyor and
access decline
paths
Portal
First phase
Vent drives footprints
paths
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16.7.1 Footprint Layout
In this concept design an “El Teniente” extraction level and a “W” style advanced low undercut has been
assumed. In an “El Teniente” layout the draw point drives are aligned in straight rows. This allows them to be
used as an alternate travel way before the drawbell is fired. In a “W” style undercut, an upper undercut
development drive is mined at the top of the major apex and a lower one over the drawbells. Drill and blast
and swell loading activities are performed on the lower drive while the upper drive is used for monitoring and
ensures continuity of the undercut.
The best extraction level layout is a function of the ground conditions, footprint opening sequence and the
materials handling system. An “El Teniente” type layout provides flexibility in the development sequence. This
in turn enables a fast undercutting rate, which will expedite production ramp up.
Undercut method selection is primarily driven by geotechnical considerations. However, a post undercut has a
lower development requirement than a “W” advanced undercut which will enable a faster undercutting rate.
Deeper, higher stress footprints are more likely to require an advanced undercut.
A high undercut drill and blasts a larger volume of material which expedites the ramp up of the production
columns with less oversize in the early draw. However, this additional drill and blast can slow down the
undercutting rate (by area). With undercutting rate being a schedule constraint, it is expected that a low
undercut would better suit this concept design.
The undercut and extraction concepts are shown in the schematics in Figure 16.7.4 and Figure 16.7.5.
Figure 16.7.4: Plan View Schematic of the “El Teniente Style” Extraction Level
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Figure 16.7.5: Cross-section Schematic of the Undercut, Extraction and Ventilation Level Under Development
16.7.2 Materials Handling Layout
From draw point to crusher, the layout of the footprints and the expected fine fragmentation should allow
either perimeter located crushers or in-footprint ore passes. The high-level infrastructure design in this concept
plan has assumed that the crushers will be located on the perimeter.
16.7.3 Ventilation Layout
Extraction drives and crushers will be ventilated from a ventilation level located under the extraction level. The
extraction level will be connected to the ventilation level by multiple small diameter vertical rises. At this stage
it is planned that the ventilation levels will be connected to the main ventilation drives following the same path
as the lateral conveyor drives.
16.7.4 Mining Physicals
Key mining physicals (Table 16.7.1) for this design were calculated using Deswik mine planning software.
Mining physicals are calculated from the Deswik design, applying the appropriate factors where multiple drives
are required.
Table 16.7.1: Mining Physicals

Mining Physical Quantity Units
Lateral Development Metres (outside of footprint) 76,620 m
Vertical Development Metres (outside of footprint) 16,100 m
Footprint Area 1,692,800 m2
Production Tonnes 2,429 Mt
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16.8 Mining Equipment

16.8.1 Mobile Fleet
The mine plan assumes that development and production activities will be undertaken with a rubber tired,
diesel powered mechanised mining fleet. The mine layout, ventilation requirements and cost estimates have
been based on this assumption. The mining equipment numbers have been obtained using first principals and
then benchmarked against other block cave operations. Major mobile equipment for development and
production is noted below in Table 16.8.1 and Table 16.8.2. The estimated fleet size is for the 50 Mt per annum
cases in steady state, where the mine is both producing while developing a new mining area. The development
fleet is unchanged for the 40 Mt per annum and 60 Mt per annum cases, with the production fleet
proportionally smaller and bigger respectively.
Table 16.8.1: Major Development Mobile Fleet

Equipment Fleet Size Comment
Development drills (total) 10 Including Face drills, Bolting drills and Cable bolters.
Face drills Twin-boom, long round jumbo specialising in advance of long straight
drives
Bolting drills Twin-boom, bolting jumbo for installing ground support in development
drives
Cable bolters Integrated cable bolting drill for installation of cable bolts
Loaders 6 Load haul dump units for clearing development, drawbell and undercut
swell (17 m3 bucket capacity)
Longhole drills 5 Large, high productivity drill rig for blast holes in undercut and drawbell
excavation
Trucks 3 Short haul trucks to crusher or ore passes (60 t capacity)
Shotcrete sprayers 5 Shotcrete for development ground support
Agitator trucks 10 For shotcrete and civil concrete installations
Charge-up rigs 4 Explosive charge up for development, drawbells and undercut
Integrated tool carriers 4 Used for miscellaneous work and services installation
Boxhole 2 Will assist in drawbell development (1.1 m diameter)
Service truck 2 To transport items underground
Water truck 3 To assist in dust suppression
Grader 1 To maintain roadways
Table 16.8.2: Major Production Mobile Fleet

Equipment Fleet Size Comment
Loaders 30 Loaders to move material from drawpoint to crusher
(17 m3 bucket capacity)
Secondary break drill 4 Secondary break equipment
Charge-up rigs 2 Secondary break equipment
Integrated tool carrier 6 Secondary break equipment - Low profile IT will allow drives to be shorter
Water cannon 4 Secondary break equipment
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16.8.2 Materials Handling
The main method of materials handling underground will be via the conveying system. After access of each
footprint, the first crushing system will be established as soon as possible to enable the use of the conveyor to
move as much of the development, undercut and drawbell material as possible. Trucks will be used for longer
hauls to move material to the nearest installed crusher. Due to the high cost of trucking relative to conveying,
very little material will be classified as waste, with the exception of material mined before the first crusher has
been commissioned. At this stage it has been assumed that production loaders will tip directly into perimeter
crushers. A trade-off study of alternative materials handling systems (in footprint ore passes) is recommended
in further studies.
16.8.3 Ventilation
Ventilation requirements have been estimated (Table 16.8.3) for the purposes of sizing the ventilation
infrastructure and the ventilation power consumption. In the calculation it is assumed that the main conveyor
drive will be configured as a return, with the main access drive an intake. The remaining ventilation requirement
is met via shafts and ventilation drives.
Table 16.8.3: Ventilation Requirements

Parameter Value Flow (m3/s)
Productive Extraction Drives 44
Extraction Drive Airflow 25 1,100
Productive Crushers 5
Crusher Airflow 75 375
Lateral Conveyor Airflow 25 125
Ancillary Areas (fuel bay/workshop/pump station etc) 100
Development and Undercutting Work Areas 20
Development Airflow 25 500
Main Conveyor (configured as exhaust) 200
Total 2,400
Access Decline Flow 200
Shaft Flow 2,200
Number of Ventilation Shafts / Rises (intake + exhaust) 10
16.8.4 Dewatering
All ground and surface water entering the underground workings will be collected and pumped to surface. An
allowance for the cost of de-watering has been made in the cost estimation, based on benchmarks checked
against first principles analysis.
16.9 Manning Levels

The personnel numbers have been estimated through first principals, equipment matching and then
benchmarking against other block cave operations. It is assumed that the operation will run on an even time
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roster, with the numbers noted in Table 16.9.1 representing the total work force. These numbers represent the
steady state while the mine is both producing and developing new footprints to sustain production.
Table 16.9.1: Mining Personnel Numbers

Personnel Numbers
Management 20
Technical Services 80
Operations 500
Maintenance 400
Total 1,000
16.10 Mine Capital and Operating Costs

The capital cost for mining was undertaken by Mining Plus and includes the costs for:
• Tunnel boring machine fixed cost
• Tunnel boring machine variable cost
• Infrastructure lateral development (composed of):
Main access declines
Main conveyor declines
Main ventilation drives.
• Infrastructure vertical development (composed of):
Ventilation shafts.
• Footprint costs (composed of):
Extraction drive development
Drawpoint drive development
Undercut level development
Footprint materials handling development
Footprint ventilation development
Footprint dewatering development
Drawbell mining
Undercut mining
Preconditioning
Roadway installation
Ancillary infrastructure development (workshops, pump stations etc.).
• Production costs for the purchase of the mobile mining fleet required for
Secondary Breaking
Loading.
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Capital costs for purchase and installation of mechanical and civil infrastructure for the following are included
in the underground infrastructure cost, rather than the mining costs:
• Materials handling system - from the loader tipple upwards
• Underground dewatering system - from underground dams upwards
• Underground workshops, magazine and amenities
• Primary ventilation system
• Electrical/mechanical infrastructure to support the above.
Table 16.10.1: Mining Capital Cost Estimate Summary US$ Millions

Item 40 Mt/a 50 Mt/a Fast 50 Mt/a Slow 40 Mt/a
TBM fixed costs 63.13 63.13 63.13 63.13
TBM variable costs 28.01 28.01 28.01 28.01
Infrastructure lateral development 530.99 530.91 530.91 530.91
Infrastructure vertical development 212.26 212.26 212.26 212.26
Footprint 5,444.05 5,444.05 5,444.05 5,444.05
Production Mobile Fleet * 717.27 715.03 717.02 717.06
* Note that in the overall aggregation of the cost for the replacement portion of the production (mobile fleet) item has
been accounted for in the sustaining capital cost.
Table 16.10.1 shows the estimated capital cost summary for the four scheduled cases. Total mining capital
expenditure does not vary between the cases, with the higher production rates achieved by opening new
footprints sooner or later and incurring the capital costs at different times. Note the slight differences in
production (mobile fleet) due to the variation in tonnage where the different schedules stop production tail at
slightly different points.
16.10.1 Mine Operating Costs
The operating cost for mining was undertaken by Mining Plus and includes the production costs for:
• Secondary Breaking
• Loading
• Crushing
• Conveying
• Rehabilitation
• Ventilation/Dewatering
• Technical services and mine management.
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Table 16.10.2: Mining Operating Cost Estimate Summary (US$ Millions)

CASE 40 Mtpa 50 Mtpa Slow Ramp-up 50 Mtpa Fast Ramp-up 60 Mtpa
Production opexNote 1 9,607 9,577 9,604 9,605
mining capex and the underground mine infrastructure which is included in the Underground Infrastructure costs.
Table 16.10.2 shows the estimated operating cost summary for the four scheduled cases. Note the slight
differences in production opex due to the variation in tonnage where the different schedules stop production
tail at slightly different points.
16.10.2 Basis of Estimate
The mining costs have been estimated as follows:

• Cost data collated from Mining Plus experience of equivalent projects (operating and planned).
• Costs cross-checked using where possible a high level first principles and rules of thumb analysis.
• Costs extrapolated to the Cascabel project using the major mining physicals calculated from the mine
design in the mining schedule.
These cost estimates are considered suitably accurate for the PEA level of the study.
16.11 Comments on Section 16 (Including Discussion on Opportunity and Risk)

This mine plan is conceptual in nature and all elements require further study to refine the concepts and increase
the accuracy of the estimates. The recommended next step is a pre-feasibility study, which will test alternative
options, identify the preferred option and then study this preferred option in more detail. A pre-feasibility
study will also require more detailed data from the other disciplines (geotechnical, hydrogeological,
metallurgical etc) whose parameters effect the mine plan.
Some of the options and opportunities that have been identified during the course of this study, which should
be included in a prefeasibility study are described below.
16.11.1 Opportunities
16.11.1.1 Production Design Optimisation
As described in 16.5.7 the design of the production areas (footprints and draw columns) aimed to reduce the
effect of time discounting by mining high grade areas before low grade ones. Having completed a schedule, it
is expected that the design can be further improved by calculating the opportunity cost at all points in the
schedule and refining the design accordingly.
There is also scope to improve the layout by using different shapes of footprint for different lifts within the
same column.
16.11.1.2 Multiple Smaller Footprints versus Fewer Larger Footprints
This concept mine plan contains 17 footprints all at different elevations. Multiple small footprints at different
elevations allow high grade areas of the deposit to be targeted more precisely. However, it comes at a price of
a more complicated and potentially less efficient infrastructure design. The plan can be optimised by better
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trading off the simplicity of fewer larger footprints against the expedited high-grade benefits of multiple
smaller footprints.
16.11.1.3 In-footprint Materials Handling System versus Perimeter
This plan has assumed a perimeter located materials handling system. The deposit may be better suited to an
in-footprint materials handling system, which should be analysed in future studies.
16.11.1.4 Ore Sorting
Mechanical ore sorting between mining and metallurgical processing is a developing technology which may
benefit this project. Block caving is a bulk rather than selective mining method, so ore sorting into different
ore streams before processing has the potential to reduce the processing cost, thereby improving the
economics of low-grade material. This opportunity requires further Testwork and study to determine how well
the mined material can be sorted.
16.11.1.5 Campaign Mining and Stockpiling
Campaign mining, e.g. where high grade draw points are mined on day shift and low-grade ones on night shift,
followed by stockpiling is a strategy that can add value. This allows a smaller processing plant to be matched
with a higher mining rate. Only the highest-grade material is processed, while the lower grade is stockpiled
and processed later. Preliminary desktop analysis of the conceptual mine plan shows potential for this strategy
which should be analysed further in future studies.
16.11.2 Mining Risks
Key risks to the mining plan are:
16.11.2.1 Schedule Delays Due to Unexpected Events or Conditions
Schedule rates and durations used in this mine plan are based on industry experienced averages. However,
non-performance of the mining operation due to for example; unexpected ground conditions or major
(seismic) events are a risk to the mine plan. Further study will reduce this uncertainty, while schedule sensitivities
and simulations can be used to assess the effect of mining performance variability on the overall plan.
16.11.2.2 Cave Propagation Risks
Cave propagation represents a risk to the mine plan. Material must cave before it can be drawn, so if the cave
does not propagate or if it chimneys to surface, the plan will not be met. Within this plan the risk is mitigated
by using footprints larger than that required for caving and by scheduling with even cave draw to prevent
chimneying. Future geotechnical study and modelling will further reduce this risk.
16.11.2.3 Cave Draw Risks
The flow of broken material to the drawpoint not performing as expected is a risk to the mine plan. Within this
study a sensitivity has shown that the effect of differential flow rates (vertical mixing) is mitigated by the large
vertical extents of the deposit. However, further study (flow modelling) is recommended.
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16.11.2.4 Operational Risks
Typical risks associated with a block cave will exist in the project. These include mud rush, seismicity, inundation
and air blast. Further study along with standard block caving operational controls will manage these risks.
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Section 17 – Mineral Recovery Methods
17. Recovery Method

17.1 Summary
The dominant copper mineral in the Alpala deposit is chalcopyrite with accessory amounts of bornite.
Chalcopyrite forms free grains from ~1 µm to 500 µm in altered host rock. Partial chalcopyrite rimming of
pyrite, as well as chalcopyrite and bornite inclusions in pyrite exist, from below 10 µm in size.
bornite or pyrite.
The copper concentrator and gold recovery circuit proposed for each mine production scenario is as follows:
• Case 1: 40 Mt/a – LOM 66 years. Two parallel lines with one line built for Phase 1 (ramp up to 50%
nameplate capacity) and two lines in Phase 2 for 100% nameplate capacity.
• Case 2a: 50 Mt/a – (Staged Ramp-up) – LOM 57 years. Two parallel lines with one line built for Phase 1
(ramp up to 50% nameplate capacity) and two lines in Phase 2 for 100% nameplate capacity.
• Case 2b: 50 Mt/a – (Fast Ramp-up) – LOM 55 years: Two parallel lines with one line built for Phase 1 (ramp
up to 50% nameplate capacity) and two lines in Phase 2 for 100% nameplate capacity. In this case, the
second line will be commissioned three years earlier than in Case 2a.
• Case 3: 60 Mt/a – LOM 49 years: Three parallel lines with one line built for Phase 1. (ramp up to 33%
nameplate capacity) and three lines in Phase 2 for 100% nameplate capacity. (Modules identical to 40 Mt/a
case.)
The concentrator is anticipated to utilise the following principal process areas for the recovery of copper and
gold into copper concentrates:
• Crushed ore stockpile and reclaim
• Secondary crushing (deferred)
• Open circuit SAG milling
• Pebbles return to pebble crushers (deferred)
• Closed circuit ball milling and classification
• Copper rougher flotation
• Rougher concentrate regrind
• Three stages of copper cleaners and cleaner scavenger flotation
• Copper concentrate thickening and storage
• Copper concentrate thickening, concentrate pipeline, filtration and storage
• Tailings thickening, disposal and decant water return
• Process water storage and distribution
• Raw water storage and distribution
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• Reagent make-up and distribution

• High and low pressure air distribution.
The Cascabel flow sheet is assembled from unit processes used commonly throughout the minerals processing
industry. The configuration of the unit processes have been optimised to provide the most energy efficient
flow sheet, with enhanced metallurgical performance.
Simplified versions of the Cascabel flowsheet are shown in Figure 17.1.1. The 40 Mt/a will utilise two modules
while the 60 Mt/a option will utilise the same configuration with three modules. The 50 Mt/a option will utilise
two modules (larger modules than the 40 Mt/a or 60 Mt/a cases).
Figure 17.1.1: Cascabel Simplified Flowsheet
Site Plot Plans are presented in Figure 17.1.2, Figure 17.1.3 and Figure 17.1.4.
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Figure 17.1.2: Concentrator Plot Plan, 40 Mt/a
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17.2 Mineral Characterisation

Chalcopyrite is the dominant copper mineral, with varying amounts of bornite. Chalcopyrite forms free grains
from ~1 µm to 500 µm in altered host rock. Partial chalcopyrite rimming of pyrite, as well as chalcopyrite and
bornite inclusions in pyrite exist, from below 10 µm in size.
bornite or pyrite.
17.3 Comminution
17.3.1 Ore Storage and Reclaim
Underground ore will be transferred to the coarse stockpile conveyor which deposits the crushed material onto
the coarse ore stockpile. A provision will be made for future installation of partial secondary crushers and
screening should higher competency material present itself later in the mine life.
Coarse ore will be reclaimed from the stockpile by apron feeders installed in each of the reclaim tunnels, with
each one supplying one of the independent grinding lines at a rate principally defined by SAG mill demand.
Rock quality will be measured by a camera-based particle size analyser that is connected to a grinding expert
control system.
17.3.2 Grinding Circuit
The grinding circuit is proposed as a conventional SAG mill / Ball Mill / Pebble Crusher (SABC) configuration
for treatment of competent ores at elevated throughput. It should be noted that the pebble crusher may be
required only in later years.
17.3.2.1 Primary Grinding
Crushed ore will be reclaimed from the coarse ore stockpile, via variable speed apron feeders, directly to the
SAG mill feed conveyor which will transport the ore to the SAG mill feed chute. Process water will also be added
to the SAG mill, via the SAG mill feed chute. The variable speed SAG mill will operate with a nominal ball charge
of 10% v/v. The 125 mm steel balls will be loaded into the SAG mill ball storage hopper via a front-end-loader
(FEL). Media will be added to the SAG mill feed conveyor via a dedicated media charger.
The SAG mill feed rate will be controlled to optimise throughput and flotation feed grind size by the plant’s
expert control system. The SAG mill feed conveyors will be equipped with a weightometer for metallurgical
accounting.
The SAG mill product with a top size of 85 mm will discharge from the mill to a screen. The oversize will be
screened and washed over a double deck, vibrating screen. Oversize from the screen decks will discharge to
the pebble recycle conveyor which feeds the pebble crusher. The pebble crusher will be operated to maximise
power draw and to maintain a set chamber fill level, typically 60%. Self-cleaning electromagnets on the
conveying system protect the cone crushers from tramp metal and crushed pebbles will be transferred to a
surge bin before being fed proportionately to the SAG mill feed conveyors via belt feeders.
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Undersize from the screens will be combined in a pump box and will be transferred to two cyclone feed
hoppers.
Spillage originating within the SAG mill area will be collected in a drive-in sump. Oversize from the drive-in
sump will be collected and trucked back to the stockpile. Slurry from the drive-in sump will be pumped to one
of the cyclone feed hoppers.
17.3.2.2 Pebble Crushing
Comminution lines for both Phase 1 and Phase 2 will feed pebbles back to a common pebble recycle conveyor.
A self-cleaning metal tramp magnet would be located at the transfer point of the recycle conveyor. SAG mill
pebbles will return to the SAG mill feed conveyor.
17.3.2.3 Secondary Grinding and Classification
Each secondary grinding circuit will consist of two ball mills operating in parallel and in closed circuit with
cyclone clusters. The discharge from the SAG mill discharge pump box and ball mill trommel screen underflow
will discharge into a cyclone feed hopper, one per ball mill line. Each cyclone cluster will be fed by a cyclone
feed pump. During the initial Phase 1 ramp-up, only one ball mill-cyclone cluster may be required.
Each ball mill feed chute receives mill feed dilution water, grinding media and cyclone underflow. The ball mill
discharge is screened via a trommel screen. Each ball mill trommel screen undersize will gravitate to the cyclone
feed hoppers.
The slurry from the cyclone feed hopper is pumped to a dedicated cyclone cluster. The cyclone overflow will
gravitate to a combined cyclone overflow stilling box. Cyclone underflow from each cluster will return to its
respective ball mill for additional grinding. Trunnion magnets will remove ball chips from the ball mill discharge,
preventing a build-up of chips.
Auxiliary equipment in the grinding section of the plant will include a common kibble crane to service each
ball mill. There will be a single ball storage bunker for both Phase 1 and Phase 2. Each ball mill has a kibble
loading facility and ball charging system. Two ball mill feed chute removal systems and two liner handler
systems will be provided which will allow the servicing of two ball mills at the same time. Two liner bolt removal
tools will also be provided.
A particle size analyser is installed to monitor rougher circuit feed grind size.
17.4 Flotation
The copper flotation circuit will consist of rougher flotation with rougher concentrate regrind, three stages of
cleaning and a cleaner-scavenger.
17.4.1 Rougher Flotation
Each grinding circuit line will have its own dedicated roughing circuit and each line will be identical for each
phase. Copper concentrate is the only product that will be produced. Flotation reagents will be added to the
slurry at various stages.
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Concentrate from the rougher flotation circuit will be collected in a concentrate launder and will gravitate
through a static, dual-fin metallurgical sampler to the rougher concentrate hopper. The sample collected will
be pumped to an on-stream analysis (OSA) unit.
Tailing from the rougher flotation circuit will gravitate through a static, dual-fin metallurgical sampler to the
final tailing launder. The sample collected will be pumped to the OSA unit. The final tailing slurry will flow by
gravity to the tailing thickener.
Low-pressure air will be supplied to each flotation cell by a low-pressure blower system. The airflow to each
cell will be controlled by vendor-supplied instrumentation. Similarly, cell levels will be controlled by vendor
supplied instrumentation.
Froth cameras will be installed above dedicated cells, linked to an analysis system to monitor performance.
17.4.2 Concentrate Regrind Circuit
The combined rougher and cleaner scavenger concentrate will be pre-classified, via concentrate regrind
cyclone clusters. Cyclone underflow constitutes the feed to the concentrate regrind mill. The regrind section
consists of series of stirred vertical regrind mills arranged in a conventional closed-circuit configuration with
cyclones to produce the required feed size to optimise concentrate grade and recovery.
Dedicated storage bunkers, integrated with the tower mill foundations, will be available for dumping and
reloading regrind media before and after mill maintenance.
A particle size analyser is installed to monitor cleaner circuit feed grind size.
17.4.3 Cleaner and Cleaner Scavenger Flotation
Regrind cyclone overflow will be combined with second and third cleaner tailing and cleaned in the first cleaner
bank. Milk of lime will be added to the cleaner flotation circuit to depress pyrite. The first cleaner flotation bank
will be followed by cleaner scavenger flotation bank.
Concentrate from the first cleaner flotation circuit will be collected in a concentrate launder and will be sampled
through a static, dual-fin metallurgical sampler prior to discharging into the first cleaner concentrate hopper.
First cleaner concentrate will be pumped to the second cleaner flotation bank. Tailing from the first cleaner
flotation circuit will feed the cleaner scavenger flotation circuit.
The cleaner scavenger concentrate will be combined with rougher concentrate for regrinding. The cleaner
scavenger tailing will be sampled separately discharging to the final tailing launder, where it will be combined
with rougher tailings and will flow by gravity to the tailings thickeners. (Future optimisation may see the cleaner
scavenger tailings stream treated to produce a pyrite concentrate via flotation to improve primarily gold
recovery and secondary copper recovery.)
Concentrate from the second cleaner flotation circuit will be collected in a concentrate launder and will be
sampled through a static, dual-fin metallurgical sampler prior to discharging into the second cleaner
concentrate hopper. Second cleaner concentrate will be pumped to the third cleaner flotation bank. Tailing
from the second cleaner flotation circuit will feed the first cleaner bank.
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Concentrate from the third cleaner flotation circuit will be collected in a concentrate launder and will be
sampled through a static, dual-fin metallurgical sampler prior to discharging into the third cleaner concentrate
hopper. Third cleaner concentrate (Final copper Concentrate) will be pumped to the copper concentrate
dewatering circuit. Tailing from the third cleaner flotation circuit will feed the first cleaner bank.
Low-pressure air will be supplied to the three stage cleaner circuit and the cleaner scavenger circuit by a
dedicated low-pressure blower system. The airflow to each cell will be controlled by vendor-supplied
instrumentation. Similarly, cell levels will be controlled by vendor supplied instrumentation.
Froth cameras will be installed above dedicated cells, linked to an analysis system to monitor performance.
17.5 Flotation Concentrate Thickening and Pumping

Final concentrate and concentrate thickener area sump pump discharge will all report to the concentrate
thickening area trash screen. The flotation concentrate thickening area trash screen will control the ingress of
trash into the concentrate thickener, which could potentially damage the underflow.
Oversize from the flotation concentrate thickening area trash screen will be discharged into the flotation
concentrate area trash bunker. The undersize from the flotation concentrate area trash screen will report to the
flotation concentrate thickener feed box along with diluted flocculant, process water and any recirculation from
the underflow pumps.
Flocculant stock solution will be diluted and mixed with process water in a flocculant mixing box before being
added to the flotation concentrate thickener feed box, feed pipe and feed well to assist with density control of
the copper concentrate.
The final concentrate thickener overflow will gravitate to the return water tank from where it is returned to the
process water pond at the main plant site.
The final concentrate thickener underflow will be pumped to an agitated filter feed tank which will provide
surge capacity for the concentrate pipeline.
Concentrate will be pumped in batches to the port filtration facility.
17.6 Concentrate Filtration

The pumped copper concentrate will be stored at the port site in agitated tanks which will provide surge
capacity for the pressure filters.
The concentrate will be pumped from the filter feed tanks to the concentrate pressure filters. The filtered
concentrate will be discharged to a filter cake transfer conveyor and conveyed to the concentrate storage area.
Filtrate from the concentrate filter will feed the filtrate return tank and be pumped in batches back to the
Cascabel plant site.
The concentrate filter wash water tank will supply pressing water and spray water for the concentrate filter. The
copper filter wash water tank will be topped up with process water as required.
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17.7 Tailing Disposal

The combined rougher flotation tailing and cleaner scavenger tailing for both Phase 1 and Phase 2 will report
to the tailing thickener.
Flocculant stock solution will be diluted with process water in a tailing flocculant mixing box before being
added to the final tailing thickener feed box, feed pipe and feed well to assist with settling of the final tailings
slurry. The flocculant will be added in multiple locations in the final tailing thickener feed well due to the high
slurry flow rate.
Final tailing thickener underflow will be pumped to the tailings storage facility. The TSF decant water pumps
on a floating pontoon will reclaim the decant water from the TSF and will be pumped to the tailings reclaim
water pond which will act as buffer storage from where it is eventually pumped to the process water pond.
The final tailing thickener overflow streams will gravitate to dedicated tailing thickener overflow tanks. The
overflow water will be subsequently pumped to the process water tank. The make-up process water
requirement will be obtained from the raw water system.
Spillage sump pumps will be located within the final tailing thickener bunded area. Spillage originating from
the final tailing thickener area will be directed to a sump pump and will be subsequently pumped to the tailing
thickener area trash screens.
The options of producing final paste or filtered tailings is currently being reviewed and will be assessed in more
detail during the Pre-Feasibility Study.
17.8 On-Stream Analysis

The performance of the copper flotation circuit will be monitored by a dedicated OSA system. The major
metallurgical streams will be monitored by the OSA.
The samples reporting to the copper OSA will come from:

• Rougher feed
• Rougher tailing
• Cleaner scavenger tailing
• Final tailing
• Rougher concentrate
• Cleaner feed
• Cleaner concentrate
• Re-cleaner feed
• Re-cleaner concentrate.
From the metallurgical streams listed above, a full metallurgical mass balance is performed, calculating the
respective recoveries of copper.
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Minor process sample streams will not be sampled by any metallurgical sampler or sent to the OSA. These
samples will either be collected from pump dischargers or from open pipes/launders. These samples may be
collected by metallurgists for mass balancing or survey purposes.
Multi-fin multi-stage or dual-fin metallurgical samplers will be used for the major metallurgical streams. All the
samples collected by the samplers will be collected in their respective sample hoppers and will be pumped to
their respective OSA units.
All the return streams from the OSA will be collected in their respective sample return hoppers, from which
they will gravitate back to their respective points of origin.
17.9 Reagents and Consumables

17.9.1 Primary Collector
The primary collector, Potassium Amyl Xanthate (PAX), will be delivered in 1,000 kg bags and will be mixed in
an agitated mixing tank at the required concentration of 20% w/v. Primary collector solution will be transferred
to and will be stored in the PAX ring main tank. The PAX solution will be transferred from the PAX ring main
tank to the PAX header tank. Multiple variable speed dosing pumps will pump the PAX solution from the head
tank and will be delivered to the required locations within the flotation circuit.
Any spillage generated within the PAX mixing and storage area will be collected in the PAX area sump pump
and will be transferred to the final tailing thickener feed box.
The secondary collector, di-thio phosphate, will be delivered as liquid at a concentration of 95% w/v in IBC-
boxes or ISO-containers. The IBC box will gravitate into a secondary collector standpipe.
17.9.2 Secondary Collector
From the secondary collector standpipe, the secondary collector will be transferred to the secondary collector
header tank. The overflow from the secondary collector header tank will return to the secondary collector
standpipe. Multiple variable speed dosing pumps will pump the secondary collector from the secondary
collector header tank to the locations where it will be required within the flotation circuit.
Any spillage generated around the secondary collector area will be collected in the sump pump and transferred
to the final tailing thickener feed box.
17.9.3 Frother
Frother will be delivered as liquid at a concentration of 99% w/v in IBC-boxes or ISO-containers. The frother
will gravitate from the IBC-Box to a frother standpipe.
From the frother standpipe, the frother will be transferred to the frother header tank. The overflow from the
frother header tank will return to the frother standpipe. Multiple variable speed dosing pumps will pump the
frother from the frother header tank to the locations where it will be required within the flotation circuit.
Any spillage generated around the frother area will be collected in the sump pump and will be transferred to
the final tailing thickener feed box.
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17.9.4 Lime
Quicklime will be delivered to site in a tanker and will be pneumatically conveyed from the tanker to the new
lime storage silo.
The quicklime will be extracted from the lime storage silo via a screw feeder to a vibrating feeder which will
transport the lime to the lime slaking mill. The discharge from the slaking mill will be de-gritted using a de-grit
cyclone. The de-grit cyclone overflow will report to the lime storage tank, while the de-grit cyclone underflow
will report back to the slaking mill.
The “milk of lime” solution from the lime storage tank will be distributed throughout the process plant by a
ring main with take-offs distributing lime to the process as required.
Any spillage generated within the lime slaking and storage area will be collected in the lime area sump pump
and transferred to the final tails hopper.
17.9.5 Concentrate Flocculant
Concentrate flocculant will be delivered in 25 kg bags and will be mixed in a proprietary mixing system
consisting of a hoist, storage bin, screw feeder, flocculant blower, eductor, mixing tank and storage tank.
Flocculant will be diluted down to 0.25% w/v in the mixing tank before being transferred to a flocculant storage
tank.
Dedicated flocculant dosing pumps will deliver stock solution to the flocculant mixing box ahead of the copper
concentrate thickener feed boxes.
Any spillage generated within the flocculant mixing and storage area will be collected in the flocculant area
sump pump and will be transferred to the final tails thickener feed box.
17.9.6 Tailing Flocculant
Settling characteristics of the tailing may be different from the concentrate settling requirements and warrant
supply of a different flocculant. Tailing flocculant will be delivered in 1,000 kg bags and will be mixed in a
proprietary mixing system consisting of a hoist, storage bin, screw feeder, flocculant blower, eductor, mixing
tank and storage tank. Flocculant will be diluted down to 0.25% w/v in the mixing tank before being transferred
to a flocculant storage tank.
Dedicated flocculant dosing pumps will deliver stock solution to the flocculant mixing box, ahead of the final
tailings thickener feed box.
Any spillage generated within the flocculant mixing and storage area will be collected in the flocculant area
sump pump and will be transferred to the final tailing thickener feed box.
17.9.7 Grinding Media
The SAG mill grinding media, 125 mm diameter steel balls, will be delivered to site in containers and will be
stored in a SAG mill grinding area bin. The grinding media will be loaded into the SAG mill ball storages via a
front-end-loader (FEL) and will be added to the SAG mill feed conveyors, via media feeders.
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The ball mill grinding media, 65 mm diameter balls, will be delivered to site in containers and will be stored in
a ball mill grinding area bin. The grinding media will be transferred from the storage bin by a front-end loader,
to the ball mill grinding media kibble feeder. The kibbles will be manually loaded with the ball mill grinding
media. The kibble will be subsequently lifted to the ball mills by a ball loading hoist, to effect charging of the
grinding media to the ball mills.
17.10 Water Services

17.10.1 Raw Water
Raw water will be sourced via pipeline from a local water source and delivered to the raw water storage pond
then to a raw water tank located on the main plant site. Raw water will be used for, fire water, general
distribution, potable water treatment, gland service, cooling water and process water make-up.
Raw water for general use will be distributed to the various process points from the raw water storage tank.
The raw water storage tank will have a dedicated fire water reserve.
The cooling water system will operate in a closed circuit. Cooling water will be used in grinding, concentrate
regrind, concentrate filtration and air blowers. The cooling water will return to the cooling water storage tank,
via the cooling water tower.
Dedicated low and high pressure gland water pumps will deliver gland seal water to the various process gland
water consumers via a series of online self-cleaning sand filters to prevent grits from potentially damaging
glands.
Fire water will be distributed throughout the process plant via a dedicated jockey pump and electric fire water
pump. A diesel-powered fire water pump will also be installed as emergency back-up to the electric fire water
system.
Potable water will be provided by treating the raw water in a raw water treatment facility. Water from the
water treatment plant will be stored in the potable water storage tank from which it will be distributed to the
various user points as required.
17.10.2 Process Water
The primary source of process water will be the overflow from the various thickeners. However, process water
will also be reclaimed from the TSF utilising the TSF decant water pumps. The decant pontoon pumps will
transfer reclaim water from the TSF to the tailings water pond and then on to the process water pond.
The overflow from the various thickeners will report to the process water tank, along with the process water
from the process water pond. Make-up water will also be added to the process water tank to maintain the
process water tank level. Process water from the process water tank will be distributed by the process water
pumps.
17.11 Air Services

17.11.1 High Pressure Air
Plant service air and instrument air will be delivered from a number of air compressors. A portion of the high
pressure air supply will be dried to suit instrumentation air requirements. The high pressure air will be stored
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in an air receiver, from which the air will be distributed to the process plant as required. The underground
crushing area and filtration area will be serviced by their own dedicated air compressors.
17.11.2 Low Pressure Air
Low pressure air will be distributed to the flotation circuit by a bank of low pressure blowers. The various cell
sizes in the flotation circuit have different air volume and air pressure requirements and thus each circuit will
be serviced by dedicated variable-speed blowers.
Low pressure air will also be required to assist cake discharge from the filters. It will be serviced by its own
small air compressor.
17.12 Process Design Criteria

The process design criteria form the basis for the design of the processing facilities and required site services.
Together with the Process Flow Schematics, this data is the basis for definition of the mass balance, process
description and equipment specifications.
The design criteria and the associated mass balances are used to derive capital cost estimates and schedules
for operating requirements such as power, reagents and consumables, etc.
17.12.1 General Processing and Ore Characteristics
The following sections describe the general processing and ore characteristics parameters.
17.12.1.1 Operating Days and Throughput
Table 17.12.1: Operating Days and Throughput

Criteria Units Value Reference Revision
Annual Throughput Cases Mt/a 40 / 50 /60 1 C
Number of Days per Annum days 365 8 A
Public Holidays days 0 8 A
Number of Operating Days per Annum days 341 8 A
Hours per Day hrs 24 8 A
17.12.1.2 Ore Characteristics
Table 17.12.2: ROM Grade

Copper
Design % 0.38 2 C
Maximum % 1.04 2 C
Gold
Design g/t 0.26 2 C
Maximum g/t 1.39 2 C
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Table 17.12.2: ROM Grade

Silver
Design g/t 1.08 2 C
Maximum g/t 2.37 2 C
Table 17.12.3: Comminution Characteristic

Design for 75th Percentile Ore
Bond Crushing Work Index kWh/t 21.3 2 C
Bond Rod Mill Work Index (1180 µm) kWh/t 18.0 2 C
Bond Ball Mill Work Index (150 µm) kWh/t 14.4 2 C
Bond Abrasion Index 0.14 2 C
80th Percentile JK Parameters
SMC Drop Weight Index kWh/t 8.2 2 C
A 76.5 2 C
b 0.74 2 C
Axb 48.0 2 C
17.12.2 Crushed Ore Stockpile and Reclaim
Table 17.12.4: Crushed Ore Stockpile

Phase 1 Phase 2
Number of Stockpiles Installed No. 1 8 A
Live Capacity Residence Time
40 Mt/a Option h 48 24 8 C
Live Capacity - Design Dry t 25,000 8 A
Total Capacity - Available Dry t 100,000 8 A
Angle of Repose - Design deg 42 9 A
Angle of Drawdown - Design deg 60 9 A
Table 17.12.5: Stockpile Reclaim

Criteria per Module Value Reference Revision
No of Reclaim Feeders No. 3 8 C
Minimum No of Operational Reclaim Feeders No. 2 8 C
Reclaim Feeder Maximum for Design Throughput Dry t/h 1,500 8 C
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Table 17.12.6: Secondary Crushing Plant (Future) Availability Note 1

Ore Receiving and Crushing Availability % 67.5 8 C
Ore Receiving and Crushing Operating Hours hrs 5,913 8 C
Ore Receiving Required Throughput
40 Mt/a Option t/h 6,765 8 C
Table 17.12.7: Secondary Crusher Circuit Design Criteria at 50 Mt/a Design Capacity
Secondary Crusher Feed
Underground Crushed Ore Particle Size P80 mm 625 9 C
Secondary Crusher Feed Ore Bin
Number of Feed Ore Bin Installed No. 2.0 8 C
Feed Ore Bin Capacity m3 1,652 8 C
Feed Ore Bin Capacity t 2,643 8 C
Live Capacity Residence Time min 30 8 C
Load % 83 8 C
No. of Reclaim Belt Feeder Installed No. 4 8 C
No. of Reclaim Belt Feeder, Operating No. 2 8 C
Belt Feeder - Throughput t/h 4,228 8 C
Belt Feeder - % of Maximum Installed % 75 8 C
Secondary Crusher Feed Sizing Screen
Secondary Crusher Feed Sizing Screen Type Single Deck 8 C
Secondary Crusher Feed Sizing Screen, W m 2.2 9 C
Secondary Crusher Feed Sizing Screen, L m 4.9 9 C
Secondary Crusher Feed Sizing Screen - Deck mm 178 9 C
Aperture
Secondary Crusher Feed Sizing Screen % 30 9 C
Open Area
Secondary Crusher Feed Sizing Screen - Screen L/sec/m2 239 9 C
Specific Drainage Rate - as % of OA
Secondary Crusher Feed Sizing Screen Operating Flux dtph/m² 522 9 C
- as % of OA
Secondary Crusher Feed Sizing Screen Oversize - % 60 9 C
Nominal
Secondary Crusher Feed Sizing Screen Oversize - % 70 9 C
Maximum for Design
Secondary Crusher Feed Sizing Screen Oversize % % w/w 5 9 C
Moisture
Number of Screens Required No. 6 8 C
Number of Screens Installed No. 8 8 C
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Table 17.12.7: Secondary Crusher Circuit Design Criteria at 50 Mt/a Design Capacity
Spray Water per Screen m /h
3
46 8 C
Secondary Crusher
Crusher Type Type Cone 8 C
Crusher Rated Throughput t/h 6,296 5 C
Number of Crushers Required No. 2 8 C
Number of Crushers Installed No. 2 8 C
Crusher, Maximum Allowable Top Size mm 200 4 C
Crusher Top Size mm 200 4 C
Crusher CSS mm 3 4 C
Crusher Product Size P100 mm 120 4 C
Crusher Product Size P80 mm 70 4 C
Not to Exceed Reduction Ratio No. 4 8 C
Installed Reduction Ratio No. 2.5 8 C
Spray Water per Crusher m3/h 85 8 C
Note 1: Secondary crushing is only envisioned to be required during later stages of the project after year 10.
17.12.3 Grinding Circuit
Table 17.12.8: Milling Availability and Circuit Arrangement

Milling Availability % 93.5 8 A
Milling Available Hours per Annum hrs 8,760 8 A
Milling Operating Hours per Annum hrs 8,191 8 A
Grinding Circuit Product P80 - Nominal µm 150 2 A
Number of SAG Mills Installed per Module No. 1 8 A
Number of Ball Mills Installed per Module No. 2 8 A
Table 17.12.9: SAG Mill Design Criteria

SAG Mill Feed
SAG Mill Feed F100 mm 250 8 A
SAG Mill Feed F80 mm 150 8 A
SAG Mill Product Transfer Size (T80) µm 2,000 8 A
Mill Discharge Density % Solids % w/w 72 8 A
SAG Mill Equipment
SAG Mill Drive Speed Type Variable 9 A
Type of Variable Speed Drive Type SER 9 A
SAG Mill Rotation Direction Uni-directional 9 A
SAG Mill Drive Speed - Maximum for Design % crit 85 8 A
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Table 17.12.9: SAG Mill Design Criteria

SAG Mill Drive Speed - Minimum for Design % crit 65 8 A
SAG Mill Drive Speed - Nominal % crit 78 8 A
SAG Mill Discharge Grate Aperture - Installed mm 20 9 A
SAG Mill Pebble Port Aperture mm 70 9 A
SAG Mill Grinding Media
SAG Mill Media Consumption kg/t 0.49 9 A
Grinding Media Size mm 125 9 A
SAG Mill Oversize Classification
Screen Type (Trommel/Screen) Type Screen 9 A
Number of Screen per Mill No. 1 9 A
Spray Water Addition m3 / tore 0.01 9 A
Trommel O/S (% SAG Discharge) % 40 9 A
Trommel Efficiency % 78 9 A
Trommel O/S Density % 80 9 A
SAG Mill Discharge Screen
SAG Mill Discharge Screen O/S (%Trommel Screen % 30 9 A
O/S)
SAG Mill Discharge Screen O/S Moisture % 5 9 A
SAG Mill Discharge Screen Spray Water Addition m3 / tore 0.02 9 A
Table 17.12.10: Pebble Crusher Design Criteria

Pebble Recycling
Pebble Circulating Load - Nominal % 24 8 A
Pebble Circulating Load - Maximum % 35 8 A
Pebble Circulating Load % Moisture % w/w 5 9 A
Pebble Crushing Equipment
Number of Crushing Circuits No. 1 9 A
Number of Crushers No. 1 9 A
Max Feed Size mm 90 9 A
Crusher CSS mm 16 8 A
Crusher Product Size P80 mm 12 8 A
Pebble Feed to Crusher, Nominal mm 70 8 A
(New Grates)
Pebble Feed to Crusher, Nominal mm 90 8 A
(Worn Grates)
Pebble Crusher Product Size, P80 mm 12 5 A
Dust Suppression Spray HP Process Water m3 /m3 slurry 0.075 9 A
Crusher Surge Bin Storage Capacity mins 10 8 A
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Table 17.12.11: Ball Mill Design Criteria

Ball Mill Feed
Ball Mill Feed F100 mm 10 8 A
Ball Mill Feed F80 µm 2,000 8 A
Ball Mill Product Size, P80 µm 150 2 A
Ball Mill Equipment
Number of Operating Ball Mills per Circuit No. 2 8 C
Ball Mill Drive Speed Fixed 8 A
Ball Mill Rotation Uni-directional 8 A
Ball Mill Drive Speed - Design % crit 75 8 A
Mill Discharge Density % Solids % 20 8 A
Ball Mill Circulating Load % 70 8 A
Ball Mill Discharge Arrangement Type Overflow 8 A
Ball Mill Grinding Media
Ball Mill Media Consumption kg/t 0.70 9 A
Grinding Media Size mm 65 9 A
Table 17.12.12: Classification Cyclone Design Criteria

Classification Cyclone Feed Density % w/w 58 8 A
Classification Cyclone Underflow Density % w/w 78 8 A
Classification Cyclone Overflow Density % w/w 33 2 A
Classification Cyclone Equipment
Cyclone Distributor - Number of Nozzles No. 12 8 A
Number of Cyclones Fitted in Mill Cluster No. 12 8 A
Number of Operating Cyclones in Mill Cluster No. 10 8 A
Number of Standby Cyclones in Mill Cluster No. 2 8 A
Cyclone Operating Pressure kPa 88 8 A
Cyclone Size mm 650 8 A
Vortex Finder mm 200 8 A
Spigot mm 160 8 A
17.12.4 Copper Flotation and Regrind
Table 17.12.13: Rougher Flotation

Number of Rougher Trains per Module No. 1 9 C
Minimum No of Flotation Cells Installed per Train cells 5 9 C
Laboratory Residence Time min 9.0 9 C
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Table 17.12.13: Rougher Flotation

Scale-Up Factor No. 3 9 A
Rougher Mass Pull (% of RFeed) % 15.1 9 A
Concentrate from Launder % Solids % 25 9 A
Rougher Concentrate SG t/m3 3.10 9 A
Rougher Maximum Lip Loading t/m/h 1.50 9 A
Rougher Maximum Carry Rate t/m²/h 1.50 9 A
Internal Launder Sprays per Flotation Cell 2 9 A
Internal Launder Spray Water Flow per Spray m3/h 1.50 9 A
Table 17.12.14: Regrind Circuit

Number of Regrind Mills per Module No. 6 9 C
Regrind Cyclone Feed Split to Underflow % 60 9 A
Regrind Cyclone Underflow Density % 51 9 A
Regrind Cyclone Overflow Density % 30 9 A
Cyclone Distributor - Number of Nozzles No. 8 8 A
Number of Cyclones in Cluster No. 8 8 A
Number of Operating Cyclones in Cluster # 6 8 A
Number of Standby Cyclones in Cluster # 2 8 A
Regrind Cyclone Feed Pressure kPa 76 8 A
Cyclone Size mm 400 8 A
Vortex Finder mm 150 8 A
Spigot mm 32 8 A
Estimated P80 Product Size µm 25 8 A
Regrind Mill Feed Density % 50 8 A
Concentrate Regrind Mill Feed F80 µm 106 8 A
Number of Operating Regrind Mills No. 1 9 A
Regrind Mill Type Type Vertical 9 A
Concentrate Regrind Specific Energy kWh/t of 154 9 A
con
Regrind Media Size mm 12 8 A
Regrind Media High chromium balls A
Regrind Mill Media Consumption kg/ t of 0.01 9 A
mill feed
Table 17.12.15: First Cleaner Flotation

Number of First Cleaner Trains per Module No. 1 9 C
Minimum No of Flotation Cells per Train cells 5 9 A
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Table 17.12.15: First Cleaner Flotation

First Cleaner Feed % Solids % 20 9 C
Laboratory Residence Time min 5.0 9 A
Scale-Up Factor No. 3.0 9 A
Required Residence Time min 15.0 9 A
First Cleaner Mass Pull (% of Unit Feed) % 31.84 9 C
First Cleaner Concentrate Over Lip % Solids % 25 9 C
First Cleaner Concentrate SG t/m3 3.3 9 A
First Cleaner Maximum Lip Loading t/m/h 1.5 9 A
First Cleaner Maximum Carry Rate t/m²/h 1.5 9 A
Internal Launder Sprays per Flotation Cell No. 1 9 A
Table 17.12.16: Cleaner Scavenger Flotation

Number of Cleaner Scavenger Trains per Module No. 1 9 C
Laboratory Residence Time min 3 9 A
Scale-Up Factor No. 3 9 A
Re-Cleaner Mass Pull (% of Unit Feed) % 15 9 A
Concentrate from Launder % Solids % 25 9 A
Re-Cleaner Concentrate SG t/m3 3.20 9 A
Re-Cleaner Maximum Lip Loading t/m/h 1.5 9 A
Re-Cleaner Maximum Carry Rate t/m²/h 1.5 9 A
Internal Launder Sprays per Flotation Cell 1 9 A
Table 17.12.17: Second Cleaner Flotation

Number of Second Cleaner Trains per Module No. 1 9 C
Minimum No of Flotation Cells per Train cells 5 9 C
Second Cleaner Feed % Solids % 20 9 C
Scale-Up Factor No. 3.0 9 C
Required Residence Time min 12.0 9 C
Second Cleaner Mass Pull (% of Unit Feed) % 78.35 9 C
Second Cleaner Concentrate Over Lip % Solids % 25 9 C
Second Cleaner Concentrate SG t/m3 3.55 9 C
Second Cleaner Maximum Lip Loading t/m/h 1.5 9 C
Second Cleaner Maximum Carry Rate t/m²/h 1.5 9 C
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Table 17.12.17: Second Cleaner Flotation

Internal Launder Sprays per Flotation Cell No. 1 9 C
Internal Launder Spray Water Flow per Spray m3/h 1.5 9 C
Table 17.12.18: Third Cleaner Flotation

Number of Third Cleaner Trains per Module No. 1 9 C
Minimum No of Flotation Cells per Train cells 5 9 C
Third Cleaner Feed % Solids % 20 9 C
Scale-Up Factor No. 3.0 9 C
Required Residence Time min 9.0 9 C
Third Cleaner Mass Pull (% of Unit Feed) % 96.42 9 C
Third Cleaner Concentrate Over Lip % Solids % 25 9 C
Third Cleaner Concentrate SG t/m3 3.8 9 C
Third Cleaner Maximum Lip Loading t/m/h 1.5 9 C
Third Cleaner Maximum Carry Rate t/m²/h 1.5 9 C
Internal Launder Sprays per Flotation Cell No. 1 9 C
Internal Launder Spray Water Flow per Spray m3/h 1.5 9 C
17.12.5 Copper Concentrate Thickening and Filtration
Table 17.12.19: Concentrate Thickener

Criteria Units Value
Thickener Type % High Rate
Unit Area Thickening Rate t/m2/h 0.2
Thickener Design Underflow Slurry Density % w/w 60
Table 17.12.20: Copper Concentrate Filtration

Filter Type Type Pressure Filter 9 A
Number of Filters Installed No. 4 9 C
Filter Availability % 80 9 A
Filter Operating Hours per Annum hrs 7,008 9 A
Cycle Time - Design min 11 9 A
Filter Cake Thickness mm 45 9 A
Filter Cake Bulk Density - Design t/m³ 2.2 9 A
Filtration Rate - Design kg/m²h 200 9 A
Final Filter Cake Moisture % 8 9 A
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17.12.6 Tailing
Table 17.12.21: Tailing Thickener

Thickener Type Conventional 9 A
Unit Area Thickening Rate - Nominal t/m2/h 0.57 9 A
Thickener Feed Density % w/w 30 9 C
Thickener Design Underflow Slurry Density % w/w 50 9 A
17.12.7 Reagents and Process Consumables
Table 17.12.22: Primary Collector

Supply Form Solid
Type Xanthate
Quality - Minimum Activity % 90
Packaging Bulk Bag
Packaged Net Weight - Bulkibox m³ 1
Mixture Strength %w/v 20
Solution Specific Gravity t/m³ 1.08
Collector Addition g/t 23
Table 17.12.23: Secondary Collector

Supply Form Liquid
Type Di-Thio-Phosphate
Packaging Drum or Iso-container
Packaged Net Weight - Iso-container m³ 20
Solution Specific Gravity at 20°C t/m³ 1.01
Collector Addition - Total g/t 27
Table 17.12.24: Frother

Supply Form Liquid
Type Interfroth
Packaging Bulkibox or Iso-container
Packaged Net Weight - Bulkibox m³ 1
Packaged Net Weight - Iso-container m³ 20
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Table 17.12.24: Frother

Solution Specific Gravity at 20°C t/m³ 1.026
Frother Addition - Total g/t 20
Table 17.12.25: Lime

Supply Form Powder
Type Quicklime
Quality - % CaO % 85
Mixture Strength %w/w 20
Particle Size P100 mm 10
Solids SG (CaO) t/m³ 2.9
Bulk Density t/m³ 0.95
Lime Addition - Expected kg/t 0.3
Lime Slaker Media Size mm 25
Lime Slaker Media Steel Balls
Table 17.12.26: Flocculant - Copper Concentrate Thickener

Supply Form Powder
Type Magnafloc 10
Packaging Bags
Packaged Net Weight kg 25
Flocculant Addition Rate g/t 30
Mixture strength - Stock solution %w/v 0.25
Mixture strength - Dilute solution %w/v 0.02
Flocculant Solution Specific Gravity at 20°C t/m³ 1
Table 17.12.27: Flocculant - Tailings Thickener

Supply Form Powder
Type Magnafloc 10
Packaging Bags
Packaged Net Weight kg 1,000
Flocculant addition rate g/t 33
Mixture strength - Stock solution %w/v 0.25
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Table 17.12.27: Flocculant - Tailings Thickener

Mixture strength - Dilute solution %w/v 0.05
Flocculant Solution Specific Gravity at 20°C t/m³ 1
17.12.8 Air Services
Table 17.12.28: Low Pressure Blower Air

Number of Blowers for Roughers No. 3 8 A
Duty Blowers for Roughers No. 2 8 A
Standby Blower for Roughers No. 1 8 A
Maximum Blower Supply Pressure Roughers kPag 67 5 A
Number of Blowers for Cleaner and Cleaner- No. 2 8 A
Scavengers
Duty Blowers for Cleaners and Cleaner- No. 1 8 A
Scavengers
Standby Blower for Cleaners and Cleaner- No. 1 8 A
Scavengers
Maximum Blower Supply Pressure for Cleaners kPag 46 5 A
and Cleaner-Scavenger
Number of Blowers for Roughers No. 3 8 A
Duty Blowers for Roughers No. 2 8 A
Standby Blower for Roughers No. 1 8 A
Maximum Blower Supply Pressure Roughers kPag 67 5 A
Table 17.12.29: Compressed Air

No of Compressors Installed No. 5 9 A
No of Compressors Operating No. 4 9 A
No of Compressors Standby No. 1 9 A
Capacity Each Nm3/hr 2,500 9 A
Supply Pressure kPag 750 9 A
17.12.9 Water Services
Table 17.12.30: Process Water, Storage and Distribution

Source Tailing Thickener, Concentrate Thickener, Tailing
Storage Facility
TSF Reclaim % 35
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Table 17.12.30: Process Water, Storage and Distribution

Process Water Storage Method Type Pond
Pond Storage Capacity hrs 24
Table 17.12.31: Raw Water Storage

Raw Water Storage Method Type Tank
Tank Storage Capacity hrs 8
17.13 Process Flow Sheet and Mass Balance

Schematics summarising the comminution, flotation, concentrate and tailing dewatering circuit, together with
their simplified mass balances are shown in Figure 17.13.1, Figure 17.13.2 and Figure 17.13.3.
The associated overall concentrator water balance is shown in Table 17.13.1, Table 17.13.2 and Table 17.13.3.
Table 17.13.1: Overall Concentrator Water Balance - 40 Mt/a Design Case

Description Total Water In Total Water Out
m3/hr m3/day m3/hr m3/day
Process Water
Tailing Thickener Overflow 8,722 188,406
Concentrate Thickener Overflow 721 15,566
TSF Reclaim Water 1,616 34,916
Process Water Required 12,252 264,643
Make-Up Water Required 1,192 25,755
Process Water (Total) 12,252 264,643 12,252 264,643
Raw Water
Cooling Water 1,509 32,585 1,509 32,585
Gland Service Water 162 3,508
Raw Water to Other Process Area 230 4,973
Process Make-Up Water 1,192 25,755
Raw Water (Total) 3,094 66,821 3,094 66,821
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m /hr
3
m /day
3
m /hr
3
m3/day
Process Water
Concentrate Thickener Overflow 899 19,422
Raw Water
Cooling Water 2,268 48,985 2,268 48,985
Raw Water (Total) 4,283 92,508 4,283 92,508

m3/hr m3/day m3/hr m3/day
Process Water
Concentrate Thickener Overflow 1,031 22,261
Raw Water
Cooling Water 1,509 32,585 2,268 48,985
Make-Up Water Required
Raw Water (Total) 1,509 32,585 4,580 98,933
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Figure 17.13.1: Comminution Circuit Flowsheet and Mass Balance – 40 / 50 / 60 Mt/a
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Figure 17.13.2: Flotation Circuit Flowsheet and Mass Balance – 40 / 50 / 60 Mt/a
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Figure 17.13.3: Concentrate Dewatering Circuit Flowsheet and Mass Balance – 40 / 50 / 60 Mt/a
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17.14 Site Plot Plans

Site Plot Plans are presented in Figure 17.14.1, Figure 17.14.2 and Figure 17.14.3.
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17.15 Design Margins

Design values are the nominal hourly or average flows multiplied by the appropriate design factors for the
specific process section or equipment. They include operating time factor.
Design values are the instantaneous values that take into account variability in process parameters, flows that
operate for less than 24 hours in an operating day, or where additional capacity is required to allow for
maintenance or catch-up capability.
Design values do not relate to annual production nor are they cumulative to represent a metallurgical balance.
While actual flows might be forced to exceed the design values, performance would be degraded. For example
grind could be coarser, recovery reduced, underflow % solids reduced in thickener, etc.
The peak capacity is the maximum capacity for a piece of equipment, which may or may not be under an upset
condition. The peak capacity at an hourly rate excludes any operating time factors.
Table 17.15.1: Design Margins and Consideration

Process Equipment Unit Margin
Screens % 25
Conveyors % 20
Primary Cyclone Feed Pumps % 10
Other Slurry Pumps % 10
Reagents Pumps % 100
Water Pumps - Comminution % 50
Water Pumps - General Plant % 20
Air % 20
17.16 Major Equipment Summary

Table 17.16.1 provides details on the major equipment in the concentrator.
Table 17.16.1: Major Equipment Summary

Description Number Specification Installed kW
per Unit
Stockpile Reclaim Apron Feeder 6 1600 x 8000 185
Secondary Crusher Feed Conveyor 2 248 m long, Belt width 2.4 m 315
Secondary Crusher Bypass Conveyor 2 100 m long, Belt width 1.8 m 210
Secondary Crusher 2 MP2500 2,200
Secondary Crusher Apron Feeder 2 2.40 m x 10 m 300
Sacrificial Conveyor 2 60 m long, Belt width 1.8 m 150
SAG Mill Feed Conveyor 2 60 m long, 19 m lift, 2.1 m/s, Belt 250
width 1.8 m
SAG Mill 2 12.81 m Dia x 6.76 m EGL 25,424
SAG Mill Liner Handling Machine 2 6T
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Table 17.16.1: Major Equipment Summary

Description Number Specification Installed kW
per Unit
Pebble Crusher 2 MP 800 600
Ball Mill Cyclone Cluster 4 8 X 650 CVX 6 Duty/2 Standby -
Ball Mill 4 9.15 m Dia x 11.08 m EGL 22,014
Ball Mill Lube System and Cooling Fans 4 1,200
Ball Mill Liner Handling Machine 4
Rougher Flotation Cells 12 200 m3 225
Regrind Cyclone Cluster Feed Pump 4 619
Regrind Cyclone Cluster 2 10 X 500 CVX ,8 Duty/2 Standby -
Regrind Mills 8 VTM 4500 4,500
Cleaner Flotation Cells 10 150 m3 175
Cleaner Scavenger Flotation Cells 6 150 m3 150
Recleaner Cell 2 E4232/10 Jameson Cell 30
Copper Concentrate Thickener 2 30 m Dia 15
Copper Concentrator Pipeline Storage Tanks 2
Copper Concentrate Filter Feed Tank 2 -
Copper Concentrate Filter Feed Pump 4 95
Copper Concentrate Filter 4 144 m2 75
Tailing Thickener 2 High Rate 80 mDia 45
Tailing Thickener Underflow Pump 4 849
Tailing Booster Pump 4 849
Process Water Distribution Pump 4 862
Raw Water Pond Pump 4 180
Raw Water Tank 2 -
Flotation Air Blower 4 72 kPa(g) 450
Plant Site Air Compressor 4 750 kPa(g) 260
17.17 Production Summary

The copper concentrator and gold recovery circuit proposed for each mine production scenario is as follows:
• Case 1: 40 Mt/a – LOM 66 years. Two parallel lines with one line built for Phase 1 (ramp up to 50%
nameplate capacity) and two lines for 100% nameplate capacity.
• Case 2a: 50 Mt/a – (Staged Ramp-up) – LOM 57 years. Two parallel lines with one line built for Phase 1
(ramp up to 50% nameplate capacity) and two lines for 100% nameplate capacity.
• Case 2b: 50 Mt/a – (Fast Ramp-up) – LOM 55 years: Two parallel lines with one line built for Phase 1 (ramp
up to 50% nameplate capacity) and two lines for 100% nameplate capacity. In this case, the second line
will be commissioned three years earlier than in Case 2a.
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• Case 3: 60 Mt/a – LOM 49 years: Three parallel lines with one line built for Phase 1 (ramp up to 33%
nameplate capacity) and three lines for 100% nameplate capacity. (Modules identical to 40 Mt/a case.)
A summary of the estimated production performance, for 40 Mt/a, 50 Mt/a and 60 Mt/a is given in Table
17.17.1 to Table 17.17.4.
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Table 17.17.1: Estimated Production Performance
SOL GOLD - CASCABEL PROJECT - 40 Mtpa Case

Tonnes By
YEAR Assay By Year Recovery By Year Concentrate By Year
Year Tonnes of Con
Cu Au Ag Cu Con - Cu Cu Con - Au Cu Con - Ag Produced
TOTAL 2,429,835,784 0.38 % Cu 0.26 g/t Au 1.08 g/t Ag
Recovery Recovery Recovery Grade Grade Grade
Y1 7,261,457 1.04 % Cu 1.39 g/t Au 2.37 g/t Ag 93.9% 85.4% 85.4% 29.4% Cu 35.7 g/t Au 60.8 g/t Ag 241,876 tpa
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SOL GOLD - CASCABEL PROJECT - 50 Mtpa Case - Slow Production Ramp Up

Tonnes By
Year Tonnes of Con
Y7 50,211,939 0.73 % Cu 0.72 g/t Au 1.89 g/t Ag 92.7% 83.2% 83.2% 29.1% Cu 25.8 g/t Au 67.4 g/t Ag 1,170,362 tpa
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SOL GOLD - CASCABEL PROJECT - 50 Mtpa Case - Fast Production Ramp Up

Tonnes By
Year Tonnes of Con
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SOL GOLD - CASCABEL PROJECT - 60 Mtpa Case

Tonnes By
Year Tonnes of Con
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The anticipated degree of comminution variability and competent sections in parts of the ore body could
represent a risk that production throughputs will not be fully achievable with the proposed equipment. Further
Testwork is required in subsequent stages to more fully evaluate this.
Wood see the potential for the generation of additional revenue from the Cascabel Project. To determine what
of the project:
1. Pyrite Concentrate: The cleaner scavenger tailings represent the single largest loss of gold (and a large
copper loss) from the flotation process. Flotation Testwork has indicated that it is possible to produce a
gold rich pyrite concentrate from the first cleaner scavenger tailings stream It is postulated that this
concentrate may be amenable to the Albion process (fine grinding – atmospheric oxidative leach) or
alternative hydrometallurgical processes to produce gold in the form of dore and copper in the form of
cathode. (The cleaner scavenger concentrate – a pyrite concentrate – is currently undergoing Albion
testing.)
of the sulfur credits.
in the near future.
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Section 18 – Project Infrastructure
18. Project Infrastructure

18.1 Summary
The Cascabel Project is considered most likely to consist of an underground mining operation and a surface
processing plant, with associated service facilities. The service facilities (on-site and off-site) considered in the
PEA study, include the following:
• Roads and logistics
• Concentrate pipeline from Cascabel process plant to Esmeraldas port and water return pipeline
• Tailings storage facilities and associated infrastructure
• Surface facilities
• Underground mine infrastructure facilities
• Concentrate shipping facilities at the Esmeraldas port
• Water supply system
• Power supply system
• Communications, process control and instrumentation system
• Other services.
Infrastructure facilities have been designed for an ore production capacity of 40 Mt/a, with factoring used to
estimate the facilities required for 50 Mt/a (both slow and fast ramp up) and 60 Mt/a cases.
18.1.1 Roads and Logistics
During both construction and operation, it is assumed that workers may be transported daily to and from the
project to the city of Ibarra. The PEA assumes workers will reside in Ibarra, which lies approximately 50 km east
of the project site.
The general approach for transport is to use existing national roads. There may be construction of new roads
to access facilities inside the concession property. There may also be a new road outside the concession
property to access the new power transmission line connecting Cascabel to the international line to Colombia.
18.1.2 Concentrate Transport
Various concentrate transport options were considered including trucking, rail and pipeline options.
The favoured option at this stage of the project is considered to be transport by pipeline through a 200 mm
diameter pipeline from the process plant to the concentrate filter plant at the Esmeraldas port. The pipeline
would be constructed parallel to the alignment of roads E-10 and E-15, over a 217 km long route, including
two pumping stations.
A water return pipeline from the filter plant in Esmeraldas to the process plant is considered, following the
same route.
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18.1.3 Waste Storage Facilities
Waste rock produced by the proposed underground mine at Alpala is considered to be very limited, amounting
to no more than 360,000 m3, which may be used as fill material for plant and/or stockpile pads and for starter
walls of the water process pond and/or the first tailings dam.
18.1.4 Tailings Storage Facilities
The Cascabel project area has favourable topography with natural valleys in the proximity of the process plant
which provide potentially viable location options for tailings storage facility sites.
Site inspection and initial investigations have identified several suitable sites in the vicinity of the project
facilities which would provide sufficient storage capacity to sustain production from the Alpala operation as
currently proposed in the mining schedule. The sites were all located near the process plant and utilise rockfill
dam walls.
A more detailed assessment of the tailings management facilities is currently in progress in preparation for the
pre-feasibility study. To optimise the process, the following options will be investigated:
• Cycloned tailings as construction material for the dam walls
• Paste thickened tailings for deposition
• Filtered tailings for dry stacking.
Furthermore, opportunities exist to introduce ore sorting practices in the underground mining operation in
order to reject some waste material in the mine thus improving ROM ore grades and reducing the volume of
tailings produced. Initial ore sorting Testwork will be conducted during the PFS stage.
Water be captured upstream from each TSF and channelled downstream through deferral channels. An
evacuation shaft for each site will be constructed, each one connected to its own evacuation tunnel. Due to the
limited hydrological information available, it is advisable for the following phase of engineering, to obtain
detailed information for this area.
Water coming to the tailing dams will be pumped back to the Cascabel process plant as required or sent to a
treatment plant for discharge to the environment.
18.1.5 Surface Facilities
During both construction and operation, workers may be transported daily to and from the project to the city
of Ibarra eliminating the need for construction and operational accommodation camps at site.
A large multi-purpose two-story building is proposed near the process plant. This complex would house and
service administrative staffing for the mine, plant, infrastructure and general administration. It will also house
the central operations control room and other ancillary facilities.
There will be mine, plant and infrastructure maintenance, repair and warehousing facilities, internal roads,
parking areas, and storage areas will be incorporated in the internal road design.
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18.1.6 Underground Mine Infrastructure Facilities
The following underground mine infrastructure facilities have been considered:

• Conveyor belt system to transfer ore from the mine to the concentrator
• Underground crushing stations
• Underground transfer stations
• Power supply and distribution
• Water supply and distribution
• Water drainage and pumping
• Main ventilation
• UG facilities:
Powder magazine
Maintenance shop bays
Office and toilets
Dining hall
Fuel and lubricant bays.
18.1.7 Port
Two port locations were considered for the project: San Lorenzo which is 90 km away and Esmeraldas which is
217 km away. The Esmeraldas port was selected based on:
• Existing infrastructure and due to the ability to receive large tonnage vessels required to transport the
concentrate to Asia.
• San Lorenzo is a river port with limited infrastructure and cannot receive large vessels.
The Esmeraldas Port has a water depth of 12 m on low tide, allowing a draft of 11 m for vessels operating in
the port. The port handles a volume slightly over 1,000,000 t of cargo with an average of 320 vessels each year.
The Esmeraldas pier has a total length of 350 m. It is a plain berth with no specific superstructure or equipment
installed. It appears there is land available for copper concentrate receiving and storage systems.
Concentrate will be transported by pipeline from the process plant to a filter plant, where it will be dewatered
and transported by conveyor belt to a storage building. Ship loading system would include front end loaders
and dozers for stacking and reclaiming, hoppers, telescopic link conveyor belts and an inclined lattice boom
ship loader.
18.1.8 Security Considerations
All the project areas would be delimited by a perimeter fence, with possibility of multiple levels of security
if/where required.
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18.1.9 Water Supply System and Water Management
A number of water supply systems for the project were assessed in relation to the various catchment areas in
the area
The selected option pumps water from the Mira River to the process plant. Fresh water requirements total 0.50
m3/s (1% of the river´s minimum flow). The water is pumped through a 5.6 km long carbon steel pipeline (450
mm diameter) to the process plant. There is one pumping station (elevation 780 masl) to pump the water to
elevation 1,340 masl where it then flows by gravity to the Santa Cecilia plant elevation at 1,100 masl.
A conceptual water balance indicates an annual average of 0.30 m3/s excess water in TSF, before process water
return to the plant. The excess water can be recycled to the process plant or to a water treatment plant. Excess
water may be stored for recycling in during periods of low rainfall or may be treated and discharged into the
environment when conditions allow environmentally sound and clean discharge.
Water recovered at the filter plant located near the Esmeraldas port will be recycled via a pipeline to the process
plant.
Preliminary evaluation indicates there is little advantage in the use of ground water as a source of raw water,
however, ground water infiltration into mine and its associated developments may require appropriate
management strategies.
18.1.10 Power Supply System
The estimated Cascabel project overall power demand, including mine, process plant and other service
facilities, is 200-250 MVA for the 40 Mt/a scenario and 300-350 MVA for the 50-60 Mt/a scenarios.
Various supply sources were considered including self-generation. Connection to the Ecuadorian “Sistema
Interconectado Nacional” (SIN, National Transmission Grid) was the selected option.
The electrical power supply and distribution system for the Cascabel site will consist of the following main
items:
• Tap-off substation from the 230 kV international line
• New substation (located north of Pimampiro)
• Overhead transmission 230 kV line (30 km) from the tap-off station to the Cascabel site
• Cascabel main power substation 230/23 kV
• Cascabel distribution power system at 23 kV and low voltage distribution substation.
The electrical power supply and distribution system for the Esmeraldas port facility will consist of the following
main items:
• Esmeraldas facility substation 23 kV
• Distribution lines and substations for pumping stations to be fed from Cascabel.
Site emergency power (in the event of a utility power failure) will be provided by a standby power plant rated
at 15 MVA (40 Mt/a case) and 25 MVA (50-60 Mt/a cases).
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To minimise installation costs, the electrical rooms will be distributed around the site and located as close as
possible to the major electrical loads.
18.1.11 Communication, Process Control and Instrumentation System
Process control for the plant will use a network of distributed controllers and human–machine-interface (HMI)
stations. The control system, HMI stations and all associated communications equipment will be of current
technology that has been proven to be efficient and reliable in similar installations. The system will be capable
of direct expansion to control all equipment required to meet possible future project requirements.
Instrumentation and control will consist of equipment for measurement and control of process variables
(e.g. pressure, level, flow, temperature, density, weight, speed, etc.). The degree of instrumentation will be
optimised to ensure safe operation of the mine, plant and infrastructure, and efficient control of the processes,
while using a minimum number of operators.
18.1.12 Other Services
Fuel will be delivered to the mine site using tanker trucks. The fuel storage tanks around the site will be single-
walled within a lined containment berm.
It is assumed that solid wastes will be trucked to an approved landfill and recycling facilities. Waste lubricates
and hydraulic oils from vehicle maintenance will be stored in dedicated tanks and sent to a recycling facility off
site. Their disposal will be contracted to an approved treatment contractor.
18.2 Roads and Logistics

18.2.1 Assumptions
During the construction period materials and equipment will be transported from the point of origin to the
project. During the operation of the mine and plant consumables and supplies such as fuel, explosives, grinding
media, process reagents, equipment spares, etc. will be transported to the plant site.
The copper concentrate will require transport from port to the final markets.
Existing national roads will be used for transport requirements to the Cascabel Site. Newly constructed roads
will allow access to facilities inside the concession property along with access to the power transmission line
connecting Cascabel to the international transmission line to Colombia.
18.2.2 Roads
Access roads from the project site to the main urban centres of Esmeraldas and Ibarra, correspond to routes
E15 and E10, respectively. These roads are in good condition and are asphalted. The roads will be evaluated (in
consultation with the Ministry of Transport and Public Works of Ecuador) during subsequent study stages to
determine specific improvement works that may be required.
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The supply of consumables has been considered using three road options for transportation:
1. Along routes E15 and E10 from Esmeraldas (220 km)
2. Along routes E28B, E35 and E10 from Quito (190 km)
3. Along routes E49, E491, E28A, E28B, E35 and E10 from Guayaquil (600 km).
The public roads from Quito and Esmeraldas to Cascabel site are shown in Figure 18.2.1: Transport Routes.
They are minimum two-lane roads (3.50 m wide lanes) with 1.50 m shoulders and a maximum slope of 8%.
For the concentrate slurry pipeline option two pipelines for concentrate transport and water return will be
constructed alongside Routes E10 and E15 from Esmeraldas to site. A 3 m wide easement beside the routes
will be required for installation of the pipelines.
During construction and operation staff will be transported by bus from the Ibarra to the various work sites.
Figure 18.2.1: Transport Routes
Source: Road Network of Ecuador - Ministry of Transport and Public Works; modified by Wood 2018.
18.3 Mill Feed

Mill feed will utilise a belt conveyor to transport ore from the primary stock pile (located on surface near the
mine conveyor tunnel portal) to the process plant.
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18.4 Concentrate Transport

Concentrate will be transported from the process plant to the port of export as follows.
• Concentrate will be transported in a concentrate pipeline from the process plant to the Esmeraldas port.
This pipeline will be constructed parallel to the alignment of roads E10 and E15, in the 3.00 m wide
easement strip.
• Concentrate will be shipped from the port to the smelter.
18.4.1 Concentrate Pipeline
A trade-off study was completed to investigate the methods available to transport copper concentrate from
the process plant to the Esmeraldas port. The following transport options were investigated:
• Transport by truck
• Transport by train
• Transport by slurry pipeline.
The recommended option was transport by slurry pipeline:

• The concentrate transport capacity has a profile consisting of a ramp-up from years 1 to 9, reaching 1.24
Mt of concentrate per year at the end of this period for the 60 Mt/a case.
• One pipeline to handle the entire capacity.
• Slurry pipeline diameter was based on the slurry having a solids content of 60 wt/wt%.
Concentrate will be transported from the process plant as follows:

• Concentrate will be transported in a slurry pipeline from the process plant to the Esmeraldas port. This
pipeline will be constructed parallel to the alignment of roads E10 and E15 in the 3.00 m wide easement.
• At the Port the concentrate will be filtered to lower the moisture content to below the Transportable
Moisture Limit.
• Dewatered concentrate will be stockpiled at the port until shipment to the treatment smelter.
• Filtrate from the dewatering process will be returned to the Cascabel site in a separate water return pipeline
adjacent to the concentrate slurry pipeline.
The 217 km slurry pipeline (see Figure 18.4.1) follows Route E10 from the Cascabel site to San Lorenzo detour
and Route E15 from the detour to Esmeraldas port. The existing roads will provide:
• Access to the pipeline for periodical inspections and maintenance.
• A smooth slope with no singularities, allowing for safe and reliable operation.
Route optimisation will be carried out in subsequent studies. For CAPEX purposes the route is considered
conservative. Permits and other studies in relation to land use were not analysed.
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Figure 18.4.1: Concentrate Pipeline Route and Profile
Due to the conditions imposed by the ramp-up period, batch operation will be required in this period, and
storage tanks at the beginning and at the end of the pipeline have been considered. For safe operation, two
emergency ponds are included.
Water recovered in the filter plant at the port area is pumped back to the process plant in Cascabel with a
separate pipeline included for this purpose. The concentrate pipeline and the return water pipeline will be
installed at the same time and will share the same trench.
A summary of main components of the pipeline system, for a production of 1.24 Mt/year of concentrate, is
presented in Table 18.4.1.
Table 18.4.1: Main Components of the Concentrate and Return Water Pipelines
Concentrate Pipeline from Cascabel Plant Site to Esmeraldas Port
One (1) Carbon Steel Pipeline of 81.5 km, API 5L X42, 150 mm diameter – thickness 10.97 mm, HDPE internal lining,
thickness of 12 mm (Cascabel to San Lorenzo detour)
One (1) Carbon Steel Pipeline,135 km, API 5L X60, 150 mm diameter – thickness 12.7 mm, HDPE internal lining,
thickness 10 mm (San Lorenzo detour to Esmeraldas)
Cascabel pump station, 2 pumps (1 duty / 1 stand-by). Power, 1,800 kW each one
Pump station in road detour to Esmeraldas, 2 pumps (1 duty / 1 stand-by). Power, 1,800 kW each one
Emergency Pond of 700 m3 at km 30
Emergency Pond of 1,200 m3 at km 81,5
Emergency Pond of 3,000 m3 in Esmeraldas
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Table 18.4.1: Main Components of the Concentrate and Return Water Pipelines
Return Water Pipeline from Cascabel Plant Site to Esmeraldas Port
Pipeline of 217 km, ASTM A53 Gr.B, size 200 mm, Sch. Std
4 pumping stations:
ET1: Vertical pump (1 duty / 1 stand-by), Q= 115 m3/h P=300 kW for each pump
ET4: Vertical pump (1 duty / 1 stand-by) , Q= 115 m3/h P=120 kW for each pump
Emergency pond 5,000 m3 capacity at ET1 site
Emergency pond 600 m3 capacity at ET3 site
18.4.2 Conclusions about the Concentrate Pipeline
• Slurry transport of the concentrate from the plant site to Esmeraldas port is technically feasible.
• The pipe installation is the most expensive item of the total cost. By optimizing the slurry pipeline route
costs can be reduced.
• The route of the pipeline going to Esmeraldas port could be improved by following a straight line:
topography, power supply and environmental issues must be considered along with increased installation
costs.
• Cost is roughly proportional to the length of pipeline.
18.5 Waste Storage Facilities

The waste rock produced by the underground mine is estimated at less than 360,000 m3, which could be used
as fill material for the plant pads and for the starter wall of the first tailings dam.
A temporary storage area will be utilised during construction to temporarily hold waste material until it is used
wither as construction aggregate of as rock fill for TSF dam walls. Once the waste has been depleted from the
temporary storage the area will be rehabilitated.
18.6 Tailings Storage Facilities

18.6.1 Site Selection
Initial investigations have identified a number of sites, having sufficient LOM capacity, which have suitable
topography (natural valleys) for the tailings storage facilities. The sites were all located near the process plant
and utilise rockfill dam walls.
To optimise the tailings storage facilities additional site identification is in progress. A detailed assessment of
tailings storage facilities is in progress for preparation for the prefeasibility study. The following studies are
proposed to optimise the tailings storage facilities by using:
• Cycloned tailings as construction material for the dam walls.
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• Paste thickened tailings for deposition.

• Filtered tailings for dry stacking.
TSF site location is greatly dependent on the following factors:

1. Process plant location
2. Quality of the dam (measured by the storage volume to rock wall volume ratio)
3. Ease of tailings transportation
4. Land tenure
5. Environmental considerations.
The adopted TSF solution for this PEA is conservative and there are ongoing studies to optimise the best TSF
solution for the project, with regard to the location of sites, more precise information, industry standards and
the best technology available for building the dam walls.
18.6.2 Design Considerations
Table 18.6.1 presents the geotechnical design criteria applied for the conceptual design of the TSF of the
Cascabel Project utilising rockfill dams Figure 18.6.1 presents a typical section of a rock filled tailings dam.
Table 18.6.1: Conceptual Geotechnical Design Criteria of Tailings Storage Facility

Description Unit Value Criteria Source
STARTER DAM
Upstream global Slope V:H 1:1.5 Wood Experience
Downstream global Slope V:H 1:2.0 Wood Experience
Crest width m 10 Wood Experience
Construction material - Compacted Rockfill Project knowledge
Construction method - Downstream raising Wood Experience
ROCKFILL DAM
Upstream global Slope V:H 1:1.5 Wood Experience
Downstream global Slope V:H 1:2.0 Wood Experience
Crest width m 10 Wood Experience
Construction material - Compacted Rockfill Project knowledge
Construction method - Downstream raising Wood Experience
THICKENED TAILINGS
Tailings beach slope % 2 Wood Experience
Solids content % 65 Wood Experience
Tailings dry density t/m3 1.65 Assumed
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Table 18.6.1: Conceptual Geotechnical Design Criteria of Tailings Storage Facility

Description Unit Value Criteria Source
SLOPE STABILITY ANALYSIS
Static factor of safety - 1.5 CDA, 2013
Pseudo-static factor of safety - 1.0 CDA, 2013
Peak ground acceleration (PGA) g 0.4 NEC, 2011
Seismic Coefficient - 1/2 Hynes-Griffin & Franklin AG, 1984
Figure 18.6.1: Tailings Dam – Typical Section for Rockfill Dam
18.6.3 Conceptual Geotechnical Analyses
As part of PEA, Wood has developed twelve stability analyses considering conceptual geotechnical parameters
to show the viability of a rockfill dam. The rockfill dams for selected sites have been evaluated under static and
pseudostatic conditions, utilising a seismic coefficient of 0.2, corresponding to 50% of estimated peak ground
acceleration.
Slope stability analysis, based on the Spencer’s method for slope stability analysis, was performed to assess
the safe design of human-made or natural slopes (e.g. embankments, road cuts, excavations, landfills etc.) and
the equilibrium conditions of such.
The properties of the materials are summarised in Table 18.6.2. These values have been obtained from the from
Wood’s experience of similar projects and technical literature. The freeboard used in all seepage analyses is 2
metres.
Table 18.6.2: Conceptual Geotechnical Properties

Material Description Properties
Bedrock Intrusive rock, medium weathered Unit Weight: 24 kN/m3
Uniaxial Compressive Strength: 175 MPa
Geological Strength Index GSI: 50
Intact Rock Coefficient mi: 25
Factor of Disturbance D: 0
Hydraulic Conductivity k: 10-6 cm/s
Rockfill Rockfill material from intrusive rock, average curve Unit Weight: 23 kN/m3
from Leps (1970). Compacted. Hydraulic Conductivity k: 10-1 cm/s
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Table 18.6.2: Conceptual Geotechnical Properties

Material Description Properties
Thickened Tailings Global tailings, loose. Unit Weight: 16.5 kN/m3
From Process Plant Undrained Strength Su: 15 kPa
Hydraulic Conductivity k: 5x10-6 cm/s
Table 18.6.3 shows a summary of geotechnical analyses results.
Table 18.6.3: Conceptual Stability Analyses Results – Safety Factors

Site Scenario Static Pseudo-Static
First Dam Rock fill 1.84 1.20
Remaining Dams Rock fill 1.93 1.27
18.6.4 Rockfill Material for Dams Construction
A large volume of rockfill material is needed to construct the TSF dams. Several quarries have been identified
as a possible source of rock fill material.
18.6.5 Water Diversion
The construction of water management systems for surface runoffs captures upstream water flows for each
TSF and diverts these flows downstream through deferral channels. Additionally, an evacuation shaft for each
site will be constructed, each one connected to its own evacuation tunnel.
The first site will utilise bypass channels with:

• An average slope of 1%, with a trapezoidal section 1.5 m high and 1.5 m at the base with 1H:1V slope
• A steep section with an average slope of 15%, with a rectangular section 1.5 m high and 2.0 m at the base
• Both channels are concrete lined.
Subsequent sites consider the construction of bypass channels with an average slope of 1%, with a trapezoidal
section 1.5 m high and 1.5 m at the base with 1H:1V slope. All channels are concrete lined.
Estimated maximum flows were obtained from the hydrological study of the Mira River by the National Institute
of Meteorology and Hydrology of Ecuador, October 2005. The study includes maximum flows for previous 100
years from Station H00111 Mira in LITA located in the Mira River basin. Due to limited hydrological information
existing in the Project area, it is recommended to complete a specific hydrological study for the Project area
utilising existing hydrological stations in the Mira River basin. Historical data of daily rainfall would be used to
estimate maximum flows.
18.6.6 Water Reclaim
Decant water from the TSF areas is pumped back to the Cascabel process plant.
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18.6.7 Closure Considerations
Contained in Section 20 Environmental Considerations.
18.7 Surface Facilities

18.7.1 Maintenance Facilities
There will be a multipurpose service building to house mine, plant and infrastructure maintenance facilities.
The first floor will contain three maintenance bays for minor repairs and maintenance of mine light mobile
equipment, two bays for concentrator equipment repair and two bays for infrastructure and electrical repairs.
The second floor will house office space for maintenance staff, meeting and training room, a small parts area,
a tool crib, a storage area for safety equipment and an instrumentation and electronic repair area.
A truck/mobile equipment will be placed on the first of the building and will be allocated to a qualified
maintenance contractor for regular maintenance and possible repair of the mobile equipment. It was assumed
that all the required equipment and tools for this operation would be supplied by the contractor.
18.7.2 Warehouse
The preliminary site layout is designed to take advantage of the local topography to minimise earthworks. The
warehouse will be a steel framework building. One-third of the building will be dedicated to warehouse storage
and the remainder will be allocated to fire water, the potable water tank and a fire pump skid.
Forklifts, pallet racking, bins and carousels will be provided for handling materials. Flammable products such
as solvents and paints will be stored separately.
18.7.3 Ancilliary Site Building and Facilities
There will be a multi-purpose building near the process plant. This complex will house administrative staffing
of mine, plant, infrastructure and general administration. It will also house the central operations and control
room and other ancillary facilities.
A building will house the ancillary facilities. The building will be provided with potable water, electricity, and
amenities connected to the sewage treatment plant. Modular construction will be employed to the fullest
practicable extent to minimise site erection time and costs associated with stick-built construction. The office
area will also include fire protection, potable water, and service water systems, and a modular sewage treatment
plant.
Ancillary areas that will be located in adjacent areas and will include:
• Administrative building
• Central operations room
• Assay laboratory and small metallurgical laboratory
• Change house for operations personnel
• Polyclinic with an ambulance
• Fully-equipped rescue unit
• Dining hall
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• Parking for buses and light vehicles

• Potable water system
• Sewage treatment plant.
The potable water supply will initially be designed to support on site personnel. At this stage of the project,
the water supply is assumed to be sourced from wells.
A modular sewage treatment system will be installed.
18.7.4 Accomodation Camp
A trade-off study was completed to analyse accommodation camps for construction and operation workers of
the project as compared to commuting daily to the city of Ibarra (population 130,000 inhabitants), which is 50
km away. Results show:
1. Daily commuting option is more convenient
2. Daily commuting is Less expensive
3. Daily commuting offers a higher quality of family life
4. Daily commuting will offer the economic development of Ibarra.
Notwithstanding the above an allowance has been made for a 1,000-bed camp at the Cascabel site.
18.8 Underground Mine Infrastructure Facilities

The following underground mine infrastructure facilities have been considered and their capital costs have
been benchmarked from similar operations:
• Conveyor belt from underground to plant
• Conveyor transfer stations
• UG crushing stations (two stations for the 40 Mt/a case and 3 stations for the 50 and 60 Mt/a cases)
• Power supply and distribution
• Water supply and distribution
• Water drainage and pumping
• Main ventilation
• UG facilities:
Powder magazine
Maintenance shop bays
Office and toilets
Meal rooms
Fuel and lubricant bays
Safety refuge.
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18.9 Port
18.9.1 Port Locations
Two port locations: San Lorenzo and Esmeraldas have been considered for the Project. Port suitability for the
project is based on the following key parameters:
• Water depth to accommodate ocean going ships

• Existing berth suitable for vessels with 12 meters draft
• Services such as tug boats and pilots
• Industrial area availability for product receiving, storage and ship loading.
Figure 18.9.1: Port Locations
18.9.1.1 San Lorenzo Port
The existing San Lorenzo marine dock is accessible from the Pacific Ocean with water depth varying from 3.4
to 4.6 meters and is not suitable for bulk cargo vessels. The San Lorenzo pier can accommodate small vessels
up to 150 meters long with a water depth of 7.6 meters. The dock trestle may not be able to accommodate a
conveyor or vehicular traffic.
Due to limited water depth the San Lorenzo Port is not a suitable option as water depth limits ship type and
capacity.
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Figure 18.9.2: Approach Channel for San Lorenzo Port
18.9.1.2 Esmeraldas Port Evaluation
The Port Authority of Esmeraldas (APE) is both the proprietor and operator of the Esmeraldas Port.
The Esmeraldas Port has a water depth of 12 meter on low tide, allowing a draft of 11 m for vessels operating
in the port. In the last four years, the port has handled over 1 million tons of cargo with an average of 320
vessels calling the port each year. Esmeraldas is a multipurpose terminal handling cargo including bulk liquid,
general cargo, vehicles and containers. Containers storage occupies approximately 30% of the total terminal
capacity with containers vertically stacked 4 units high. A TEREX reach stacker is employed to handle full
containers. The take-off capacity is approximately 80 containers per day. There are two warehouses (7,200 m²
and 1,500 m²) used for the storage of steel coils and cement. Grain cargo is bagged for storage and directly
trucked out for shipment. The terminal can also accommodate Roll-on/Roll-off vessels.
The Esmeraldas pier has a length of 350 meters. It is a plain berth with no specific superstructure or equipment
such as dockside cranes or container gantries for container operations and other cargo. In addition to the main
pier, there is a 105 m service pier for feeders / coasters with a maximum draft of 5 meters. Two tugs are available
with freshwater available directly from the berth.
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It appears that there is land available for a copper concentrate receiving, dewatering and storage system.
Discussion with the Port Authority is required to confirm land availability for the copper concentrate storage
development and dock availability.
18.9.2 Project Port Requirements
18.9.2.1 Vessels
Copper concentrate shipment will be carried out in vessels ranging from 20,000 DWT to 60,000 DWT as outlined
in the Table 18.9.1.
Table 18.9.1: Ship Parameters

Ship Ship Capacity (DWT) Load Distribution (%)
Panamax 60,000 15
Handymax 45,000 70
Handy size 20,000 15
Total — 100
18.9.2.2 Product Parameters for Ocean Shipment
Key metrics for the copper concentrate, concentrate stockpile and shipping requirements are included in Table
below.
Table 18.9.2: Key Metrics for the Copper Concentrate, Concentrate Stockpile and Shipping
Concentrate Characteristic Value
Moisture 8–9 %
Density - stock pile 2.0 t/m3
Density - conveyors 2.5 t/m3
Repose angle 34 to 36º
Surcharge angle 15°
Product will need to be store in a fully covered storage building.
18.9.2.3 Port Shipping Volume
Based upon current copper concentrate production requirements, the maximum required annual port shipping
capacity is 1.24 Mt/a.
Based on the maximum annual production of 1.24 Mt and assumed average shipping parcel of 40,000 t; the
required number of vessels calling the port is 31. This estimated number of vessels will change accordingly to
annual copper concentrate production and an average shipping parcel.
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Table 18.9.3: Maximum Annual Concentrate Production (Mt/y)

Year 40 Mt/y ore 50 Mt/y ore 50 Mt/y ore 60 Mt/y Ore
Production Production, Fast Production, Slow Production
kt concentrate Ramp-up Ramp-up kt Concentrate
kt Concentrate kt Concentrate
1 242 242 242 242
2 618 610 618 618
3 859 630 861 861
4 903 572 1,041 1,041
5 771 486 955 959
6 889 851 1,044 1,210
7 962 1,170 1,015 1,237
8 994 1,220 1,070 1,192
9 916 1,089 1,100 1,169
10 789 937 802 945
11 673 871 757 941
12 599 737 643 925
13 531 645 598 864
14 516 659 660 899
15 556 760 736 868
16 680 787 690 862
17 643 716 723 830
18 576 749 698 764
19 577 714 669 702
20 567 698 640 723
21 558 670 636 783
22 537 667 669 812
23 574 673 639 771
24 546 649 637 747
25 545 674 613 675
26 569 696 626 607
27 550 670 657 550
28 553 641 653 533
29 550 570 604 528
30 509 515 546 526
31 512 517 526 544
32 466 457 495 563
33 427 425 455 580
34 448 412 441 594
35 462 414 464 598
36 427 414 482 570
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Table 18.9.3: Maximum Annual Concentrate Production (Mt/y)

Year 40 Mt/y ore 50 Mt/y ore 50 Mt/y ore 60 Mt/y Ore
Production Production, Fast Production, Slow Production
kt concentrate Ramp-up Ramp-up kt Concentrate
kt Concentrate kt Concentrate
37 398 447 510 546
38 345 462 496 495
39 291 482 437 450
40 325 500 453 462
41 334 506 473 477
42 334 498 470 484
43 344 474 451 389
44 352 423 432 222
45 385 378 446 179
46 407 440 449 113
47 421 448 468 69
48 414 467 488 41
49 397 493 486 16
50 371 497 454
51 357 439 256
52 345 256 139
53 365 176 86
54 376 102 54
55 388 64 22
56 410 38
57 430 14
58 434
59 438
60 430
61 364
62 133
63 65
64 37
65 23
66 13
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18.9.3 Concentrate Receiving and Storage Facilities at the Port
18.9.3.1 Filter Plant and Pipeline Facility at the Port
The selected option for copper concentrate transportation from a processing plant to the port is a slurry
pipeline. Copper concentrate will be filtered in a filter plant and transported by a conveyor belt from the filter
plant to a storage building.
The filter plant characteristics are described in the process plant section.
18.9.4 Concentrate Stacking, Reclaim and Storage
Buffer storage of 80,000 tonnes will be required for Phase 2 production of 2 Mt/a of copper concentrate. Since
the commencement date of Phase 2 production volumes is not known it is proposed to develop the storage
to cover the full production capacity of the mine.
Based on the assumed ship loading rate of 1,200 tonnes per hour, two CAT 988 front end loaders are required
to reclaim the material through a hopper and feeder, located parallel to the side of the building. The hopper
will travel along the wall to minimise FEL travel distance. Additionally, a dozer (CAT 844) will assist with pile
management during regular stacking and reclaiming operations.
A-frame storage warehouses and buildings utilise an “A” shape profile to allow rectangular storage techniques.
This results in a long and narrow structure that provides the ability to store multiple product grades that can
be separated by providing internal concrete separation walls. The structures are typically constructed using
deep transverse steel girders field spliced at the centerline of the building. Each successively erected bay creates
the A-shape profile of the building, with secondary longitudinal beams or cross-braces provided to join the
frames to resist longitudinal loads and provide additional stiffness.
Metal cladding systems are utilised for the roof and vertical walls. Various type of cladding can be used to
provide additional longevity and reduce maintenance. The primary functions of the cladding systems are to
separate the enclosed space from the external environment, transfer load to the secondary steelwork and to
provide thermal and acoustic insulation.
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Figure 18.9.3: Typical A-Frame Storage Building
Figure 18.9.4: Typical A-Frame Storage Building
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As depicted above, vertical and lateral loads are distributed through the steel frame into the foundation
through external walls and vertical steel columns. External walls are usually constructed using pre-cast concrete
panels to retain bulk material around the internal perimeter of the building. Foundations typically consist of
concrete or pipe piles for soils with low bearing pressures or shallow spread footings for soils with higher
bearing capacities. Foundation design is subject to a detailed geotechnical investigation.
Salient features of the copper concentrate storage building are listed below:
• Footprint size: 51 m x 160 m
• Interior building space: 8160 m2
• Light structural steel trussed roof (A-frame)
• Steel beam columns with metal cladding exterior
• Two front end loaders and wheel dozer for concentrate pile management
• Overhead stacking conveyor and tripper
• Travelling reclaim feeder and hopper
• Dust collector / suppression system
• Control room, electrical room
• Copper concentrate hopper and interior conveyor
• 2 – 40,000 tonnes piles (17,778 m3) of concentrate or 1 – 80,000 tonnes (35,555 m3) pile; based on 40˚ angle
of repose and 2.0 t/m3 storage density.
Figure 18.9.5: Typical Stockpile Storage Building
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18.9.4.1 Ship Loading of Concentrate
Mobile equipment systems are utilised offering the advantages of flexibility, capital cost savings and high ship
loading rates of up to 2,000 t/h.
Inclined lattice boom ship loaders are available with a range of outreach and free-board dimensions for loading
Handy Size to Panamax bulk carriers. The ship loader will be equipped with longitudinal travel and slewing
capability to complete trimming of each hatch. The ship loader will be equipped with:
1. In-line powered travel with rear steering axles
2. Twin tandem front axles.
The ship loader can complete three modes of travel using the power train system:
1. Parallel travel
2. Radial travel
3. In-line travel.
The unit will have an outreach to load up to two hatches (20 m x 15 m typical dimension) from a fixed point at
the berth by turning the machine using the rear steering axles to manually slew the ship loader into position
over the next hatch. The end of the boom will be equipped with a telescopic chute that will allow copper
concentrate to be discharged well inside the hatch to minimise material losses from crosswinds.
Three mobile telescopic link conveyors with radial travel will provide 150 m of additional longitudinal travel
from the fixed transfer point. Each link conveyor will be equipped with a retractable conveyor system that can
retract or extend as required to reach the final travel length along the quay. The number of link conveyors
added to the system will be dependant on the size of ship being loaded. After completion of ship loading
operations the link conveyors and the mobile ship loader will be disconnected from the system and parked at
a designated area. This area must be well away from the loading berths to allow other operations at the Multi-
Purpose Terminal.
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Figure 18.9.6: Typical Ship Loading System
18.9.5 Recommended Option
The Esmeraldas Port is the recommended location for further assessment and discussions with the Port
Authority due to the following:
• Esmeraldas can accommodate Panamax vessels whereas San Lorenzo cannot accommodate any bulk
carriers due to water depth
• Esmeraldas has existing operating berths that can accommodate a mobile ship-loader
• It appears onshore land is available for copper concentrate receiving, dewatering and storage facilities
• Existing port warehouses may be available for copper concentrate storage.
18.10 Site Security Considerations
The copper concentrate receiving, dewatering and storage facilities will be delimited by a perimeter fence.
Three levels of security will be utilised:
• Low-level security will consist of manned security huts and boom gates to control vehicle access to the
mine area
• Medium-level security will consist of security fencing around key Project infrastructure with security huts,
boom gates and turnstiles to control vehicle and personnel access. Areas to be encompassed by medium-
level security include the mine workshop, facilities and administration buildings
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• High-level security will consist of a double security fence, with digital closed-circuit cameras to monitor
the treatment plant and associated facilities. Access will be limited to plant personnel via the main security
and change house facility.
18.11 Water Supply System and Water Management

18.11.1 Assessment of Water Supply Alternatives
The Project is located within the hydrographic network of the Parambas River micro watershed and the main
basin tributary of the Mira River. Based on existing information and assumptions considered by Wood the best
alternative for the supply of water is the Mira River. The Mira River is formed by several important tributary
rivers (the Apaque, Mataqui, Ambi and Chota Rivers) and is one of the most important rivers in the region due
to its extension.
Due to limited hydrological information in the Project area, it was necessary for Wood to utilise information
from:
1. The National Institute of Meteorology and Hydrology of Ecuador (INAMHI - via the internet) which
provided data from the H0011 Mira Station in LITA (located in the Mira River basin)
2. The Forecasting and Hydrometeorological Alerts Newsletter - November 2018.
The H0011 Mira Station encompasses a surface runoff area of approximately 4,958 km2. Data from January to
November 2018 registered a minimum flow of 49 m3/s and a maximum flow of 398 m3/s. The water demand
for the plant is estimated to be 0.5 m3/s which represents approximately 1% volume of the minimum flow
available in the Mira River. This low volume will have minimal effect on the Mira River System.
The proposed water supply selected at this stage for the project considers an uptake flow of approximately
0.5 m3/s from the Mira River through a lateral intake. A proposed pumping station will deliver the flow from
elevation 780 MAMSL to elevation 1340 MAMSL through a 3.4 km long, 450 mm diameter carbon steel line.
the steel line will discharge into a reinforced concrete transition box, (2 m long, 2 m wide and 1.5 m high), to
feed a 2.2 km long 450 mm diameter HDPE pipeline, which delivers the flow by gravity to the plant. Figure
18.11.1 shows a plan view and a longitudinal profile of the preliminary route.
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Figure 18.11.1: Proposed Water Delivery Route from the Mira River
18.11.2 Surface Water
Surface water management was defined based on a conceptual water balance using:
1. Climate information from past environmental studies
2. Meteorological bulletins from Ecuador´s meteorological service (INAMHI)
3. Surface and drainage areas from the tailings storage facilities (from Wood Design)
4. Processing data flows (from Wood Design).
Surface water management was defined for the TSF and processing plant, considering non-contact water
(natural runoff), contact water (water in tailings and TSF decant water) and fresh water for processing plant
supply.
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Non-contact water from the TSF drainage area and the processing plant drainage area will be conducted by
channels to nearby creeks located downstream of the facilities.
Contact water is contained in the TSF pond from where it is recycled for use in the process plant.
Conceptual water balances indicate an excess flow of approximately 1,084 m3/hr (0.30 m3/s) exists at the TSF.
This flow will be pumped to a water treatment process, before discharging to the environment (when safe to
do so).
18.11.3 Groundwater
Hydrogeological analysis completed by Cardno (2013) defined the lithological units in the project area and
established the basic features of potential aquifer zones. Cardno classified lithological units regarding their
hydrogeological behaviour, as seen in Table 18.11.1:
Table 18.11.1: Hydrostratigraphy (Cardno), 2013

Unit Porosity Permeability Aquifer Type
Alluvial deposits Intergranular High High yield – Local
San Juan de Lachas Secondary in fractures Low-Medium Very fractured sectors
Low yield springs
Low yield springs
Tortugo, Pilatón Intergranular Low Very discontinuous
Low yield
Granitoid In fractures Very Low No aquifer
Based on the Cardno information:

• There is a lack of water sources monitoring networks in the Cascabel Project area.
• The hydrological study was made using basic information covering a two-month period that represents
the same hydrological period.
Wood recommends:
• The installation and operation of a minimum of four observation points in each local catchment area to
register surface flow discharges and monitor water quality. Flow gauging and hydrometric stations
operating on a monthly or more frequent basis.
No hydrogeological studies were available for inclusion in this report. The available information is based on
regional scale information.
18.11.4 Reclaim Water
Reclaim water will be taken from the TSF water pond according to processing plant requirements. Mass
balances from the processing plant indicate the 1,117 m3/hr of process water is required, of which the TSF
could supply most of this requirement.
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18.11.5 Diversions
Diversion channels will be constructed to divert surface runoff water from upstream of the TSF facilities to a
point downstream of the TSF facilities. (See Section 18.6.4.)
18.12 Power and Electrical

Electric power will be supplied to the Cascabel site through a new Main Substation fed from the Ecuadorian
“Sistema Interconectado Nacional (SIN, National Transmission Grid) through a 230 kV, 60 km long, double-
circuit power transmission line connected to the new Pimampiro SNT substation. This line will provide power
for each production scenario evaluated as part of the PEA.
The estimated Cascabel site overall power demand, including Mine, Process Plant and other service facilities,
is as follows:
• 40 Mt/a scenario 200-250 MVA
• 50-60 Mt/a scenario 300-350 MVA.
Cascabel main substation will include power transformers as follows:

• 40 Mt/a scenario three 90/125 MVA, ONAN/ONAF, 230/23 kV
• 50-60 Mt/a scenario four 90/125 MVA, ONAN/ONAF, 230/23 kV.
Power to process plant, mine and other service facilities will be supplied through radial feeders originating at
the main substation, which will be routed to site using overhead distribution lines and/or cable trays on pipe
racks. The distribution system will consist of electrical rooms that will be distributed through the site, located
as close as possible to the major electrical loads.
Emergency power will be provided via a stand-by power station that will be sized to provide power in event of
a utility power failure to the administration facilities, mine, and critical process equipment requiring electric
power, estimated at 20 MVA.
Power to pumping stations and other remote facilities will be provided at 23 kV from the Cascabel Main
Substation. Distribution lines will bring power supply to pumping station through 23 kV overhead lines, with
an estimated length of 86 km.
Power to the Esmeraldas port facilities will be provided at 23 kV from the local utility at Esmeraldas port.
Distribution lines will be fed from a distribution substation at the Esmeraldas site to local and nearby facilities
through 23 kV overhead lines, with an estimated length of 2.5 km.
18.12.1 Power Demand
At this conceptual level of study, power demand estimates for the mine and plant equipment are based
on experience on similar operations and actual consumption from existing mines.
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Power requirements are from two sources:

• On site: at Cascabel site and near Cascabel site
• Off site: at Esmeraldas port and near to Esmeraldas.
18.12.1.1 On-Site Power Requirements
Cascabel operations will include:
Table 18.12.1: On-site Power Requirements

Scenario
Facility % 40 Mt/a 50-60 Mt/a
Mine 24 60 MVA 74 MVA
Milling and Crushing 54 135 MVA 189 MVA
Concentration Plant 22 55 MVA 77 MVA
Total Power Demand 100 250 MVA 350 MVA
It has been estimated that Cascabel site average power demand during operations could be in an order of
magnitude of 200-250 MVA for 40 Mt/a production case and 300-350 MVA for 50-60 Mt/a production cases.
On site project facilities requiring power are located at the following sites:
• Mine, process plant site and tailings facility and associated infrastructure located at the Cascabel site.
18.12.1.2 Off-Site Power Demand
Cascabel off site facilities will include:

• Concentrate pipeline between Cascabel and Esmeraldas port, including intermediate pumping stations
• Port facilities at Esmeraldas.
Typical power demand at pumping stations and port facilities is as follows:

• Pumping stations 3 x 3 MVA
• Port facilities 15 MVA.
18.12.2 Power Supply Options
18.12.2.1 On-Site Generation
Power demand at the Cascabel site is between 200-250 MVA for the 40 Mt/a case and between 300-350 MVA
for the 50 Mt/a and 60 Mt/a cases. Local power plants to supply this range are rated between 260 to 360 MW
where big gas turbines or combined cycles power generation units are the preferred option due to improved
efficiency and reliability.
Potential hydroelectric schemes for a Cascabel owned hydroelectric power plant would require a transmission
line between the plant and Cascabel. A hydroelectric plant would be a separate project and constitute a
separate business case to the Cascabel operation.
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If local power generation (gas or fossil fuel) is utilised then a back-up by mean of a high voltage overhead
transmission line connected to the Ecuadorian national grid (Sistema Interconectado Nacional, SNI) may be
considered.
Estimated power demand at the Cascabel site is high, with the 40 Mt/a case being between 200-250 MVA. Site-
based power generation would require the installation of a large facility to supply required energy to the
facilities. The alternative of a site-specific stand-alone generating plant is considered not a feasible alternative
particularly when the requirements for the 50 Mt/a and 60 Mt/a cases are considered. Consequently,
emergency power generation systems will be installed for critical infrastructure and process equipment in case
of power outages.
At the Esmeraldas port area existing power plants are proposed to be used. In addition, the national grid is
being expanded to supply energy to Esmeraldas (230 kV Esmeraldas – Santo Domingo transmission system)
along with an expansion of the 230 kV Esmeraldas Substation to supply additional energy to the Esmeraldas
Refinery Expansion.
Enough power is available from existing sources in the Esmeraldas area for the Cascabel port facilities.
Emergency power generation will be will be installed for critical infrastructure and process equipment in case
of power outages.
18.12.2.2 Grid Connection
A high voltage power transmission line will be constructed to provide the energy required for the project.
Figure 18.12.1 shows the northern section of “Mapa de las Obras del Sistema de transmisión propuesto 2016
– 2020” as included in the Ecuadorian “Plan Maestro de Electricidad 2016 – 2025” issued by the Ministry of
Electricity and Renewable Energy.
The power for the Esmeraldas facilities and pumping stations will be supplied from the local distribution utility
at Esmeraldas, at 23 kV.
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Figure 18.12.1: Northern Ecuadorian National Grid 2016-202. Source: Electricity Master Plan 2016-2025, Ministry
of Electricity and Renewable Power
There are two options for power connection:

• The new Pimampiro substation project is in progress by the Ecuadorian transmission entity (Transelectric).
This substation is sectionalizing the 230 kV interconnection line with Colombia and is to be located near
Pimampiro, to the north of Ibarra. A transmission line from Pimampiro to Cascabel is approximately 60 km
long.
• A new 230 kV substation (Tap-off Substation) will be located to the north of Pimampiro. A transmission
line from this site to Cascabel is approximately 30 km long. This is the preferred option.
To provide service reliability to Cascabel, a double circuit power transmission line is required, complying with
an N-1 criteria. this provides full power capacity as required: when one of the circuits is out of service, caused
by a fault or maintenance works, power is supplied via the other circuit to the Project.
A double circuit using an AAAC conductor (aluminum alloy “Flint” conductors) is adequate to transmit
approximately 260 MVA through each circuit, providing sufficient power for the 40 Mt/a scenario, providing
100% back-up in case of a circuit fault.
The individual line capacity is lower than the total required for the 50-60 Mt/a scenarios (350 MVA). Reduced
operation is possible temporarily providing 75% of the power demand (260 MVA) if one of the circuits is out
of service, while the fault is repaired.
The double circuit is regarded as base design for the present PEA study which serves the 40 and 50-60 Mt/a
cases. The selected alternative taken forward to cost estimation was the direct connection to a new Tap-off
Substation through a double circuit 230 kV overhead transmission line.
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Tapping into the Ecuadorian National Grid (SIN) infrastructure will require early requests for power usage to
be lodged with the authority (Transelectric) and the local distribution company Emelnorte (delivers energy to
consumers at the northern area).
18.12.3 Power Supply and Distribution
The electrical power supply and distribution system for the Project will comprise main items as follows:
• Tap-off Substation
• Overhead transmission line at 230 kV
• Cascabel Main power substation 230/23 kV
• Cascabel Distribution power system at 23 kV and Low Voltage distribution substation
• Esmeraldas Facility Substation 23 kV
• Distribution Lines and Substations for pumping stations to be fed from Cascabel.
18.12.3.1 Overhead 230 kV Transmission Line
The power line will be approximately 30 km long, double circuit. It will commence at the Tap-Off power
substation and terminate at the Cascabel Main Substation.
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Figure 18.12.2: Single Line Diagram 230 kV Power Supply to Cascabel
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The proposed route of the line is shown in Figure 18.12.3.
Figure 18.12.3: Proposed Route of Overhead 230 kV Transmission Line and 23 kV to Pumping Stations
Steel latticed towers will be used to support the line. Conductors will be aluminium alloy (designated as “Flint”),
having a capacity to transport 260 MVA appropriate for the climatic conditions to be traversed.
18.12.3.2 Cascabel Main Power Substation
The location of the main substation will be closest to the largest loads, to minimise cabling costs and losses.
The 40 Mt/a case will have three power transformers rated at 230/23 kV, 90/125 MVA (ONAN/ONAF), 60 Hz,
with on-load tap changers for each transformer. Each of the transformers will be rated to carry one-third of the
plant and mine infrastructure load under normal operating conditions.
This arrangement will provide a uniform power flow from the transmission lines and flexibility for operations if
one of the transformers fails (N-1 scenario), in which case two transformers deliver 125 MVA each one, in ONAF
service.
For the 50-60 Mt/a cases, an additional transformer is required, therefore, the main power substation will
include four power transformers rated at 230/23 kV at 60 Hz and 90/125 MVA (ONAN/ONAF) with on-load tap
changers for each. Each transformer will be rated to carry one-quarter of the plant load and mine infrastructure
under normal operating conditions.
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This arrangement will provide a uniform growth plan using the same type of transformers and keeps flexibility
for operations if one of the transformers fails (N-1 scenario), in which case three transformers deliver 117 MVA
each in ONAF service.
The main power substation will include the following equipment:

• Incoming dead-end structure
• Power transformers, three or four depending of the production alternative (40 or 50-60 Mt/a)
• HV and MV Switchyard equipment.
18.12.3.3 Site Power Distribution
The process plant and mine facilities will be supplied with power through radial feeders originating at the main
substation, and which will be routed on site using cable trays on pipe racks, overhead distribution lines, and
duct-banks. The site distribution voltages will be:
• Primary distribution: 23 kV, 60 Hz
• Secondary distribution: 4.16 kV, 60 Hz.
The electrical distribution will consist of MV switchgears, distribution transformers, and electrical rooms.
Lighting and small power applications will be fed from transformers and power panels located in the electrical
rooms.
Power to be provided from Cascabel main substation will feed pumping station and facilities located near
Cascabel area through a 23 kV distribution line which will also include tap-off substations as required.
Each centre will have a consumer substation that will transform the voltage to the level required for distribution
and industrial voltage levels of service.
18.12.3.4 Distribution Power for Pumping Stations
To supply power to pumping stations, a 23 kV distribution line will have to be built from the Cascabel Main
Substation to pumping stations remote distribution substations. This line will have an estimated length of
about 86 km feeding each pumping station.
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Figure 18.12.4: Single Line Diagram 23 kV Power Supply to Pumping Stations
Distribution substations at pumping stations will include:

• 23 kV line Tap-off and disconnecting structure
• Distribution transformers 3 MVA, 23/4.16 kV
• MV Switchyard equipment
• MV Motor Control Centres
• 4.16/0.48 kV auxiliary service transformer
• LV 480 V and 120/208 V auxiliary services.
18.12.3.5 Distribution Power for Esmeraldas Facilities and Near Remote Facilities
To supply power to the Esmeraldas port facilities and other near remote facilities, 23 kV distribution lines will
be run from the utility substation located in Esmeraldas port, to the Esmeraldas facilities substation and from
this to other nearby remote facilities. See Figure 18.12.5. These lines will have an estimated length of about
2.5 km.
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Figure 18.12.5: Single Line Diagram 23 kV Power Supply to Esmeraldas Facilities
Concrete poles will be used to support the line, in a double-pole or “H” configuration. Conductors will be
aluminium alloy (“Flint”) having a capacity to transport 26 MVA appropriate for the climatic conditions and
geographic events to be traversed.
Expansion works will be required at Esmeraldas Utility substation to allow for this connection, including:
• New bay at the MV Esmeraldas substation yard
• Protection, measurement and control panels as required
• Electrical room expansion as required.
The Esmeraldas facilities substation will include:

• Incoming dead-end structure
• 23/4.16 kV Distribution transformers
• 23/0.48 kV Distribution transformer
• MV Switchyard equipment
• MV Motor Control Centres
• LV 480 V Motor Control Centres
• LV 480 V and 120/208 V auxiliary services.
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18.12.3.6 Emergency Stand-by Power
Site emergency power will be provided by a standby power plant rated for the maximum power required in
the event of a utility power failure, estimated at 15 MVA (40 Mt/a case) and 25 MVA (50-60 Mt/a cases).
The plant will consist of modular generator sets.
The control of the emergency power system will be through the SCADA electrical control system. This system
will be sized to keep process tanks properly agitated, to run thickener rake mechanisms, to run essential
equipment such as lubrication pumps on the large mills, and to provide for essential underground mine
services. The main requirements for standby power include:
• Mine loads (ventilation, dewatering)
• Process plant critical loads
• Administration facilities.
Uninterruptible power supplies (UPS) will be used to provide backup power to critical control systems. The UPS
equipment will be sized to permit operations to shut down and backup the computer and control systems to
facilitate start-up on restoration of normal (utility) power.
Emergency battery power packs will supply back-up power to the fire alarm system and emergency exit lighting
fixtures.
Emergency power will be provided to the Esmeraldas critical facilities, with a power capacity estimated at 3
MVA.
18.12.3.7 Power Quality
Some of the electrically-powered equipment will generate harmonic distortion and low power factors,
particularly gearless mill drives. To improve power quality and avoid penalties being imposed, the distribution
system will include harmonic filters tuned to eliminate higher harmonics and provide compensation for the
power factor as required to meet utility standards and Ecuadorian regulations.
18.12.3.8 Electrical and Control Rooms
To minimise installation costs, the electrical rooms will be distributed around the site and located as close as
possible to the major electrical loads.
The Electrical Rooms will be prefabricated (panelised and/or containerised) and will be mounted over structural
piles. Entrance for the electrical raceways will be through the bottom. These prefabricated units will include all
electrical and control equipment (MV & LV switchgears; dry transformers, variable speed drives,
communication panels, etc.), detection and fire extinguishing systems, HVAC and pressurised air equipment,
etc., as required.
All electrical controls and instrumentation equipment will be installed, wired, and completely tested before
shipment to site.
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The rooms will be built to meet a one-hour fire rating. All openings will be sealed and made water and dust
tight by using approved fire-retardant materials.
Electrical rooms will be designed to have two means of ingress/egress at opposite ends of the room. Doors to
the rooms will be supplied with panic exit-type hardware. Each room will also have an equipment door sized
to permit the largest piece of equipment to be installed/removed without removing the door from its hinges.
The electrical rooms and control rooms will be pressurised, air conditioned and designed in accordance with
occupancy regulations.
Non-process buildings will incorporate electrical rooms as required and shown on the layouts as integral part
of the building.
18.12.3.9 Process Control System
Process control for the plant will use a network of distributed controllers and human–machine-interface (HMI)
stations. The control system, HMI stations, and all associated communications equipment will be of current
technology that has been proven to be efficient and reliable in similar installations. The system shall be capable
of direct expansion to control all equipment required to meet possible future mine requirements.
18.12.3.10 Field Instrumentation
Instrumentation and control will consist of equipment used and applied for measurement and control of
process variables (e.g. pressure, level, flow, temperature, density, weight, speed, etc.).
The degree of instrumentation will be optimised to ensure safe operation of the plant and efficient control of
the process, while using a minimum number of operators.
All instrumentation furnished will be specified as standard off the shelf catalogue products wherever possible.
Efforts to ensure component interchangeability to minimise spare parts, simplify equipment servicing, and
facilitate repairs will be attempted wherever practical.
18.13 Transport, Storage and Handling of Explosives

It is anticipated that explosives for the Alpala project will be sourced and delivered to site via local suppliers.
Formal contracts would be required to ensure that the delivery of all explosives meets the site safety
requirements. Reliability of supply is also essential. Explosive deliveries would be on a biweekly/monthly basis,
depending on the project requirements and delivery schedules.
A surface magazine will be required for use during the early stages of the mining operation and for storage of
explosives during the production phase. An underground magazine will be installed to house detonators and
packaged explosives. The underground magazine storage will be designed to store sufficient explosives for
one week’s usage. Both surface and underground explosives magazines will need to comply with the local
regulations and ensure that the storage of bulk and packaged explosives are separated from detonators.
Both surface and underground magazines will need to be designed in further detail and located to ensure that
they are sufficiently separated from other mining infrastructure.
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The disposal process of old or deteriorated explosives is undertaken by a risk assessment (including input from
the supplier) and in conjunction with the manufactures methods of disposal. This process will detail a safe and
systematic approach for the disposal of either time expired or damaged explosives in order to meet the site
requirements.
18.14 Other Services

18.14.1 Fuel
Fuel will be delivered to the mine site using tanker trucks. The fuel storage tanks around the site will be single-
walled within a lined containment berm. Tank design will comply with appropriate regulatory requirements.
18.14.2 Waste Treatment
It is assumed that solid wastes (refuse) will be trucked to an approved landfill.
Waste lubricates and hydraulic oils from vehicle maintenance will be stored in dedicated tanks and sent to a
recycling facility off site. Their disposal will be contracted to an approved treatment contractor.
18.15 Summary and Comments on Section 18

Infrastructure facilities for a 40 Mt/a production option have been preliminary designed for this PEA study. Two
other options have been considered: 50 and 60 Mt/a. Quantities for CAPEX and OPEX estimations have been
estimated for the 40 Mt/a option and factored out for the 50 and 60 Mt/a options.
Infrastructure facilities considered are:

• Tailings storage and water return pipelines
• Construction and permanent accommodation
• Esmeraldas port facilities to ship concentrate
• Concentrate pipeline from Cascabel process plant to Esmeraldas port and water return pipeline
• Water supply system
• Power supply system
• Communications system
• Internal roads
• Mine surface facilities
• Mine underground facilities including materials handling from mine to plant and ventilation facilities.
The concentrate pipeline needs to be optimised in the next stage regarding path and operational mode. Test
data on the concentrate characteristics should be undertaken to refine designs.
Being an underground block cave mine, very little waste material is produced. Waste material will be limited
to the access tunnel material, which can be used as fill for the plant pad and for construction of the starter dam
at the TSF areas.
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To optimise the capital and operating costs associated with the TSF facilities additional site identification is
required. There is also the possibility to optimise the TSF storage facilities by using cycloned tailings as
construction material for the dam walls. These topics will be further developed in the next stage of engineering,
including more precise topographical information and tests for tailings characteristics determinations.
The LiDAR based topography inside the minerals rights concession should be matched with Ecuadorian maps,
and or extended to cover off site facilities such as concentrate pipeline, power line, water line and other possible
TSF sites.
Due to the limited hydrological information existing in the project area, it is advisable for the following phase
of engineering, to do a specific hydrological study for the project area with a network of existing hydrological
stations in the Mira River basin, with historical data of daily rainfall, needed to estimate maximum flows.
It has been assumed that workers will live in the city of Ibarra that is more than 60 km from Cascabel.
The concentrate shipping port selected is Esmeraldas, which can accommodate 20,000 to 60,000 dwt vessels
to transport concentrate overseas. Concentrate will come from Cascabel by pipeline to a filter plant. Next phase
of engineering requires contact with the port authorities to define the project and start negotiations.
Electric power will be sourced form the International 230 kV line connecting to Colombia, which requires a new
substation at the nearest connecting point. Estimated demand is 250 MVA for the 40 Mt/a option and 350 MVA
for the 50-60 Mt/a options. Next phase of engineering requires contact with the power authorities to define
the project and start negotiations.
Site emergency power will be provided by a standby power plant rated for the maximum power required in
the event of a utility power failure, estimated at 15 MVA (40 Mt/a case) and 25 MVA (50-60 Mt/a cases).
Closure considerations for the project are treated in the environmental section.
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Preliminary Economic Assessment (PEA)
Section 19 – Marketing Studies and Contracts
19. Marketing Studies and Contracts

19.1 Summary
19.2 Market Studies

No formal market studies concerning supply and demand of copper-gold concentrate have been conducted
at this stage.
19.3 Alpala Concentrate Products and Sales

Metallurgical Testwork carried out to date indicate that the copper-gold-silver concentrate products from the
Alpala deposit will be of high quality with no contaminants and medium to high copper and gold grades as
shown in Table 19.3.1. It is anticipated that the Alpala concentrate will be a desirable product for most copper
smelters worldwide.
Table 19.3.1: Alpala Cu-Au-Ag Concentrate Grade Estimate

Product Years 1-5 Years 1-15 LOM (55-60 years)
Copper (%) 29.0% 28.2% 26.0%
Gold (g/t) 26.5 g/t 22.1 g/t 13.2 g/t
Silver (g/t) 67.6 g/t 65.7 g/t 49.2 g/t
Sulphur 29.3% 28.5% 26.2%
Based on the above preliminary specifications, the TC/RC terms listed in Table 19.3.2 are representative of
market conditions and are considered reasonable assumptions for the PEA study.
Table 19.3.2: Preliminary Estimate of TC/RC Terms

Cu-Au-Ag Concentrate Product TC/RC Estimate
Cu-Au-Ag Concentrate Product TC/RC Estimate
Grade Deduction per DMT of Concentrate
- Copper (%) 1.0
- Gold (g/t) 1.0
- Silver (g/t) 30
Resulting Payable Metal Factor
- Copper (%) 96.5% (Y1-Y15), 96% (LOM)
- Gold (%) 95% (Y1-Y15), 90.8% (LOM)
- Silver (%) 54.7% (Y1-Y15), 33.6% (LOM)
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Table 19.3.2: Preliminary Estimate of TC/RC Terms

Smelting & Refining Charges
- Conc. Treatment (US$/t. conc) 70
- Copper Refining (US$/lb of payable copper) 0.07
- Gold Refining (US$/oz of payable gold) 8.0
- Silver Refining (US$/oz of payable silver) 0.50
In addition to the above Cu-Au-Ag concentrate product (chalcopyrite), the Alpala project will produce gold
and copper bearing pyrite concentrate which will be further processed through fine grinding (10-12µ) followed
by oxidising atmospheric leach to ultimately produce gold in dore form. Additional copper will be recovered
from the pyrite concentrate in the form of cathode copper metal by using SX-EW or alternatively as high-grade
oxide copper concentrate for blending with the chalcopyrite concentrate.
Preliminary metallurgical Testwork indicates grades up to 7.8 g/t and 1.2% Cu in the pyrite concentrate.
Testwork is currently in progress to further determine the specifications of this product. The impact of the
pyrite concentrate on the project’s economics will become more relevant in later years towards the end of mine
life as the proportion of pyrite in the ore increases.
The potential production of sulfuric acid as a by-product in the smelting process is likely to generate additional
revenue and will be investigated further as metallurgical Testwork and the study enter the next phase.
19.4 Commodity Price Projections

Figure 19.4.1 shows the historical copper price and long-term trend increasing for the period from 1960 to
present. Figure 19.4.2 provides an indicative forecast of copper prices to year 2030, showing a predicted
continuation in the upward trend in the copper price from year 2020 and beyond.
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Figure 19.4.1: Historical Copper Prices (US$/lb) (Macrotrends LLC, 2019)
Figure 19.4.2: Indicative Forecast of Copper Prices to Year 2030. (World Bank Group, 2018, p. 43)
Copper price forecast

7,500
7,000
6,500
6,000
US$/mt
5,500
5,000
4,500
4,000
2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Year
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In line with most projections for future metal prices around the time the Alpala project is scheduled to start
commercial production, the following copper, gold, and silver prices have been assumed for the purposes of
this PEA.
Table 19.4.1: Assumed Copper, Gold and Silver Prices

Metal Price Scenarios
Copper (US$/lb) 3.0 - 3.3
Gold (US$/oz) 1,300
Silver (US$/oz) 16.0
19.5 Contracts
No sales contracts or off-take agreements for the sale of concentrate products from the Cascabel project are
in place at the time of writing this PEA report.

Comprehensive market studies and information on future off-take agreements will be provided in upcoming
Preliminary Feasibility or Defined Feasibility studies.
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Section 20 – Environmental Considerations
20. Environmental Studies, Permitting and Social or Community

Impact
SolGold has made considerable efforts to undertake environmental studies and community engagement in
order to facilitate the advancement of the project. Dedicated environmental and social outreach departments
based at each project camp are staffed with qualified and experienced practitioners, who undertake a robust
and integrated program. The following presents a summary of the environmental aspects, permitting and social
or community impacts of the work program to date.
20.1 Summary
SolGold has conducted environmental studies in the project area using qualified practitioners for a number of
years, which contributes to a defensible baseline. An experienced project team is leading meaningful social
engagement programs to support appropriate Corporate Social Responsibility.
successful conclusion of an Environmental Impact Assessment and permitting from the Ministry of
Environment. This is a recognised process with successful precedent in Ecuador. There are no known
environmental issues that could materially impact the ability of SolGold to extract the mineral resources at the
Cascabel project.
20.2 Project Permitting

20.2.1 Legal Framework
Mining activities in Ecuador are mainly regulated by the Ministry of Mining, the Mining Regulation and Control
Agency (ARCOM), the Ministry of Environment, and the Water Secretariat (SENAGUA). The principal
environmental laws that apply to the mining industry are the Constitution, the Mining Law (Ley de Minería),
the Environmental Regulation for Mining Activities (Reglamento Ambiental para Actividades Mineras, or
RAAM), the Unified Text of Secondary Environmental Legislation (Texto Únificado de la Legislación Secundaria
de Manejo Ambiental, or TULSMA), the Water Act (Ley Orgánica de Recursos Hídricos, Usos y Aprovechamiento
Del Agua) ,and the Environmental Code (Código Orgánico del Ambiente, or COA), which entered into force in
April 2018 and encompasses all the environmental legislation in one single body of law.
The Ministry of Environment issues an environmental licence for mining following approval of an Environmental
Impact Assessment (EIA) and management plan. The Ministry of Mining, created in February 2015, is
responsible for mine planning in Ecuador, including the negotiation of contracts for the exploitation of
minerals. ARCOM is responsible for supervising mining activities, while the Ministry of the Environment is
responsible for the Environmental Impact Assessment and environmental license. The SENAGUA grants
authorisations for the use of water, typically for the duration of the mining project. Other permits required for
mining activities include those for explosives use, special labour shifts, fire department, and construction
permits from ARCOM and the municipalities.
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20.2.2 Environmental Impact Assessment
In order to comply with the EIA submission necessary to obtain mining permits, SolGold will prepare and submit
an EIA with the following general inclusions:
• Detailed description of the project, including an Alternatives Analysis
• Determination of the Area of Influence on the environmental and social landscape
• Characterisation of the physical and biological baseline condition
• Characterisation of the socio-economic baseline condition
• Identification, Prediction, and Evaluation of Environmental Impacts
• Risk Assessment
• Environmental Management Plan, which includes:
Mitigation Plan
Waste Management Plan
Communication, Training, and Environmental Education Plan
Community Relations Plan
Contingency Plan
Worker Health and Safety Plan
Monitoring Plan
Rescue and Protection Plan (for species of concern that need relocation)
Closure and Abandonment Plan
Rehabilitation Plan.
The specific requirements for the Cascabel Project EIA will be elaborated in a Terms of Reference document
produced by the Ministry of Environment. The public is provided the right to participate in environmental
assessment of projects, including through consultations, public open houses, and other initiatives.
In addition to Ecuadorian requirements, SolGold will ensure that the EIA is compliant, or could be made to be
compliant, with appropriate international standards. At minimum, these would include the Equator Principles,
and the International Finance Corporation Performance Standards and Environmental, Health, and Safety
Guidelines.
20.2.3 Current Permitting
The Cascabel Project conducts its current exploration activity under a valid Environmental License, granted as
Resolución 0618 from the Ministry of Environment in August 2013 upon the successful conclusion of an
exploration phase EIA (Cardno Entrix, 2013). The Environmental License remains valid for the duration of the
exploration and evaluation phases of the project, subject to fulfillment of monitoring report submissions. The
SENAGUA has similarly granted authorisation for all exploration water extraction from local surface sources.
In fulfillment of the Environmental License requirements, the project currently submits semi-annual reports to
the Ministry of Environment that report on internal monitoring of water, soil, noise, air, flora, fauna, and effluent.
This is supported by periodic environmental audits and site inspections by government authorities to
demonstrate compliance.
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SolGold have implemented very strict Environmental Management Plan during the exploration drill program.
The construction of trails, roads, drill platforms or other infrastructure are assessed according to their potential
impact on water courses and flora and fauna. Adjustments to the placement or alignment are conducted at the
planning stage in order to minimise potential impacts, and sensitive plants or animals are relocated prior to
clearing activities. Drill platform size is limited to 400 m2, and requires enhanced mitigation where infrastructure
is located close to water, or on a slope, including water diversion ditching, and blanketing with geomembrane.
Trails are limited to a width of 1.5 m, and vehicle access roads are limited to a width of 6 m. A comprehensive
monitoring plan of abiotic and biotic parameters is conducted semi-annually by qualified external consultants
in order to confirm efficacy of the mitigation program.
20.3 Environmental Studies

The project is located in the Very Wet Premontane climate zone of Ecuador (Valencia et al, 1999), with
elevations of 600 m in the valley bottom to 2,200 m in the higher exploration zones. The topography is
moderate to steep, incised by dendritic drainage complexes within the tributary watersheds of the Mira River
basin.
Primary drainages include the Río Parambas, the Río Verde, and the Río Cachaco (Figure 20.3.1). Flows in these
catchments are bi-modal, with peaks seen in association with the rainy seasons of December and March.
Average high flows range from 1 to 3 m3/s, and during low flow or dry seasons can become dry or almost dry.
During storms and periods of high rainfall, flows can peak at several orders of magnitude higher than their
average high flow.
20.3.1 Current Environmental Program
SolGold has been collecting water samples for chemical analysis semi-annually at five sites throughout the
concession since 2012 (Figure 20.3.1). Samples are analysed at a third-party accredited laboratory (Gruentec
Cía. Ltda.) in Quito. Analytes include physical parameters, anions, organics, and total metals.
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Figure 20.3.1: Water Quality Sampling Locations
Water quality parameters are generally found in concentrations below those specified for human consumption,
domestic use, and conservation of flora and fauna, as specified in the TULSMA. Some elevated levels of faecal
coliforms were noted, especially near populated areas (e.g. at CA2 and CA3), where limited sewage treatment
is available. Additionally, some spikes of aluminium values were periodically noted.
Air quality and noise data were collected as part of the 2013 EIA and have subsequently been monitored as
part of the management plan. Air quality measurements include PM10, PM2.5, and Total Settleable Particulates,
as well as ozone, carbon monoxide, sulphur oxides (SOx) and nitrogen oxides (NOx). None of these parameters
exceed acceptable government norms in the baseline condition.
Noise measurements collected at site are compared to TULSMA limits. In the baseline condition, the primary
source of noise was determined to be flowing water, rainfall, or wildlife such as birds and insects. These sources
produced peak noise measurements of up to 48.7 dB(A).
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Vegetation and wildlife of the Cascabel concession was described in the Environmental Impact Assessment
prepared in 2013 for the exploration phase. The study area is characterised as having a patchwork of remnant
mature tropical forest interspersed with disturbed forest and cleared/agricultural land. Mammal species of
conservation significance that were identified in the baseline program included ocelot and red brocket (Cardno
Entrix, 2013). Avifauna is diverse and includes one endangered species (Penelope ortoni), which is not frequent
in the area, and an additional six species of management concern (Cardno Entrix, 2013). One species of endemic
frog (Pristimantis surdus) is present in the area and listed as Endangered (Cardno Entrix, 2013). SolGold
implements semi-annual monitoring for biodiversity at discrete locations proximate to the mineralised zone,
which includes for a broad range of vegetation, vertebrates, invertebrates, and aquatic biota.
Fish species were detected in very low abundance and diversity throughout the project area, however one
Critically Endangered species of catfish (Astroblepus ubidiai) was identified as present.
20.3.2 Environmental Program Development
Ongoing environmental studies contribute to the project database and will inform ongoing planning. As the
project definition increases, the environmental studies will expand to ensure adequate baseline characterisation
of all planned infrastructure. In preparation for the eventual EIA and permitting requirements, SolGold will be
expanding environmental studies in 2019.
Rainfall data has been collected at the Rocafuerte and Alpala camps in manual gauges since October 2017,
which provides a calibration to data collected from regional stations. The climate data collection program will
be enhanced with the installation of two full meteorology stations; one at the lower elevation Rocafuerte
Camp, and a second at the higher elevation Alpala Camp. The stations will meet the World Meteorological
Organisation (2010) standards for instrumentation and data collection including automated datalogging of
temperature, relative humidity, wind speed, wind direction, and precipitation.
To complement the climate data studies, an enhanced surface hydrology program will be implemented in order
to develop a fulsome hydrometeorological dataset. This will include installation of automated hydrometric
stations to record continuous water level data. Collection of stage level and discharge data at the hydrometric
stations will allow development of rating curves, which will be necessary to develop a long-term synthetic flow
series. The long-term flow series will be used in the water balance and water management design, water quality
modelling, and subsequent effects assessment of the project on fish and fish habitat. The site data will be
correlated with meteorological stations to develop the long-term synthetic flow series.
Groundwater quality and quantity characterisation will be initiated, which will include determination of
hydraulic properties of aquifer units and hydraulic head measurements, to support development of a water
balance (e.g. water egress from the underground) and water management planning, and identify surface
water–groundwater interactions that could affect the use of water by local communities and aquatic biota. The
hydrogeological monitoring program will be designed to have sufficient spatial and vertical coverage to
characterise the three-dimensional groundwater flow regime at both the site and off-site in the receiving
environment. Purpose-built monitoring wells will be installed to be used for water level monitoring and pump
tests as required. Designated wells will also be developed for water quality sampling.
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The existing soil characterisation program will be expanded to include possible surface infrastructure footprint
areas, such as the tailings storage facility, processing plant, laydown areas, etc. The program will be designed
to support assessment of general surface instability, erosion and/or sedimentation potential. Material
characterisation of the soils will also be necessary to identify soil conservation measures (e.g. segregation,
proper placement and stockpiling of clean soils and overburden material) for site remediation. Finally, baseline
soil conditions, including soil chemistry, will be required in order to set a baseline against the impact
assessment and future monitoring programs.
A phased geochemical program will be initiated to evaluate the potential for Acid Rock Drainage and Metal
Leaching (ARD/ML) in all materials likely to be disturbed. Results of these studies will aid in the development
of mitigation and management plans. Test procedures will include static tests, total elements, acid-base
accounting, mineralogy, and kinetic tests. Acid-base accounting (ABA) and total element analyses will be
completed as the first phase to inform the second phase of kinetic tests (laboratory-based humidity cells, on-
site leach pads).
The spatial extent of the ongoing vegetation and wildlife studies will be expanded to assess natural habitats or
species populations within the proposed footprint, and to help direct reclamation planning. New baseline
investigations will be conducted in areas proposed for infrastructure developments such as the tailings facility,
access road and transmission line. Fisheries and habitat surveys will be included in the faunal surveys within
the rivers and creeks that will be within the footprint of the project and in areas downstream.
20.4 Social and Community Requirements

20.4.1 Local Socio-Economy
The project is located within the Lita and La Carolina parishes, within the Ibarra Canton, Imbabura Province.
According to the 2010 census conducted by the National Institute of Statistics and Census (INEC, or Instituto
Nacional de Estadísticas y Censos), the Lita parish has of a population of 3,349, while La Carolina has a
population of 2,875. The communities most proximate to the project include Santa Cecila, Rocafuerte and
Parambas.
Each community is relatively young, all having been founded in 1900s. They are populated primarily with
descendants of workers brought in the 1950s to construct the now defunct Ibarra – San Lorenzo railroad.
Workers settled in the area work camps, which now form local communities. Principal economic activity of the
area is farming of naranjilla, a fruit-bearing shrub, and cabuya, an agave plant grown for production of fibers
used to make twine (Figure 20.4.1).
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Figure 20.4.1: Cabuya Plantation
20.4.2 Outreach Activities
SolGold operates a robust community engagement program, with an office available to the public and used as
a base of outreach activities. Interviews with representatives of organisations, local governments, community
leaders and members of the public in the local communities are conducted often to continually educate
communities on the project activities. Open houses and community presentations are conducted regularly
(Figure 20.4.2), and community members are invited to participate with ongoing environmental monitoring
(Figure 20.4.3).
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Figure 20.4.2: Local Community Meeting
Figure 20.4.3: Local Participation in Environmental Monitoring
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SolGold has made it a priority to emphasise good Corporate Citizenship, with a number of social programs
implemented. This includes preferential employment and training for local residents. Over 400 Ecuadorian
nationals are employed at the project, representing approximately 97% of the total workforce. Financial support
of school, health care and social events is provided, but the focus is on training, capacity building, and
community strengthening.
SolGold constructed an agro-forestry nursery in 2013, which is managed by qualified agrologists (Figure 20.4.4).
The nursery produces approximately 30,000 plants of native commercial and horticultural species, which are
dispersed to the community along with professional advice to farmers, education on sustainable agriculture,
and assistance with planting. Community members are also employed to work at the nursery.
Figure 20.4.4: SolGold Agro-Forestry Nursery
Other initiatives include development of local aquaculture, road maintenance assistance, and business bursary
support. With the assistance of training and investment from SolGold, local entrepreneurs in Santa Cecelia have
opened a successful bakery (Figure 20.4.5).
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Figure 20.4.5: Bakery in Santa Cecelia
These ongoing outreach activities will continue as part of the Corporate Social Responsibility (CSR) activities,
and to remain transparent as the project develops, in keeping with public participation requirements of the
Environmental Act.
20.4.3 Indigenous Communities
There are no indigenous individuals or communities within the concession or the immediate surroundings.
To the east and outside of the mine concession in the Lita parish, there are known settlements of the Awá
people. The Awá are native to northern Ecuador and southern Colombia, and have largely integrated to modern
agrarian society, yet still have unique customs and beliefs, and are identified as Indigenous People. SolGold
has commissioned an anthropological study to examine the ability of the Awá people to carry out their way of
life, including traditional customs, and access to culturally important sites. The planned study will include
participatory methodology that incorporates criteria established by the Indigenous and Tribal Peoples
Convention 169 of the International Labour Organization (ILO, 1989).
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20.4.4 Archaeology and Culture
An archaeological study was completed as part of the 2013 EIA, where sites pertaining to the pre-Incan
Caranqui culture were identified in the project area. During the study, four sites were found that contained
fragments of ceramics, further supporting the theory that there is archaeological value in the region.
SolGold, through their community consultation program, has additionally identified culturally important sites
in the region. Many of these are associated with their importance to support to the community, including water
collection tanks, sports fields, and churches, but also include natural areas such as waterfalls.
All archaeological and cultural attributes will be incorporated to project planning in order to minimise potential
impacts.
20.5 Mine Closure

20.5.1 Closure and Bonding Requirements
The Mining Law (Ley de Minería) specifies that a Closure Plan is required as part of the environmental
management plan submitted as part of the EIA. The Closure Plan will include an estimated closure cost, upon
which a financial guarantee or insurance policy in favour of the government will be required, which must remain
in force until the final closure of operations.
20.5.2 Closure Planning
The Closure Plan will be developed as part of the EIA; however, the approach will be designed to ensure long
term stability of both physical and chemical properties of the site, and to return the landscape to its pre-mining
capability where possible. Specific closure items will include:
• All openings to underground workings will be sealed with cement plugs or barricades.
• Access will be restricted to the subsidence zone with the use of berms, road closures, and warning signs to
restrict access of personnel and vehicles, and to prevent unsafe utilisation.
• The tailings facility will have a sufficient combination of flood storage and routing capacity to safely pass
flood flows.
• The tailings embankment will have an appropriate allowance to withstand settlement from a Maximum
Credible Earthquake (MCE) event.
• All Potentially Acid Generating (PAG) material will be isolated from possible oxidation, either in the
underground, encapsulated in inert material, or stored sub-aqueously.
• Access to the tailings facility will be restricted with the use of berms, road closures, and warning signs to
restrict access of personnel and vehicles.
• Reagents and supplies will be removed and will be returned to suppliers, sold to other operations, disposed
of in approved waste facilities, or transported to a certified company for disposal.
• Equipment, conductors and other above ground facilities for the electrical supply will be dismantled or
demolished.
• All foundations will be demolished and covered to approximate as closely as possible the pre-mining
landscape topography.
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The approach will also incorporate community involvement to ensure that remaining infrastructure closure
methods end land use objectives are socially acceptable and in keeping with the broader land use planning of
the area.
Progressive rehabilitation is currently integrated to the exploration phase (Figure 20.5.1) and will be an
important aspect of concurrent programs during operations in order to minimise final disturbance areas upon
cessation of mining. The current program of successfully rehabilitating drill pads and other unused disturbance
areas will form the basis of the approach for revegetation during operations. The experience gained from the
ongoing monitoring of rehabilitated plots, as well as from the utility of the agro-forestry nursery, will be applied
to the concurrent reclamation program.
Figure 20.5.1: Revegetated Drill Pad
Closure activities will include all active closure required to prepare the site for abandonment, as well as a post-
closure monitoring program. It is estimated that the active closure phase will require two years, and the post-
closure monitoring will continue for a further five years, or until acceptable closure metrics are achieved.
20.5.3 Closure Cost
In advance of the Closure Plan development, a conceptual closure allowance of US$80 Million has been
assigned for the project, as outlined in Table 20.5.1. This cost will be more defined and developed in the Closure
Plan included in the EIA, which will be informed by feasibility level design inputs.
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Table 20.5.1: Preliminary Closure Cost Estimate

Closure Aspect Unit Quantity Unit Cost Total (US$)
(US$)
Dismantling of equipment and structures, demolition of ha 10 1,500,000 15,000,000
structure and foundations
Access control / safety berm around subsidence zone m 3000 500 1,500,000
Miscellaneous control, signage, and restrictions Lump Sum 1 500,000 500,000
Plugging and restriction to underground Lump Sum 1 2,000,000 2,000,000
Contouring and cover TMF surface ha 200 70,000 14,000,000
Scarification and contouring of the footprint km 50 15,000 750,000
Retrainment of water management structures km 10 20,000 200,000
Dismantling of electrical transmission line km 40 15,000 600,000
Water treatment and discharge Lump Sum 1 1,000,000 1,000,000
Detailed closure engineering and planning Study 1 900,000 900,000
Active closure monitoring year 5 300,000 1,500,000
Post closure monitoring year 10 300,000 3,000,000
Misc. (Waste management and disposal, specialist contracts, Lump Sum 1 4,000,000 4,000,000
etc)
TOTAL DIRECT COSTS 44,950,000
INDIRECT COSTS
Contractor Fees (25% of 25% 11,237,500
Direct Costs)
Administration (15% of 15% 6,742,500
Direct Costs)
SUBTOTAL OF INDIRECT COSTS 17,980,000
SUBTOTAL 62,930,000
Contingency 30% 18,879,000
TOTAL CLOSURE COST (US$) 81,809,000

SolGold has conducted environmental studies in the project area using in-house teams and qualified
consultants for a number of years, which contributes to a defensible baseline. The work is conducted in a
transparent manner with the local communities, supported with a strong community outreach and support
program.
successful conclusion of an Environmental Impact Assessment and permitting. This is a recognised process
with successful recent precedent in Ecuador. There are no known environmental issues that could materially
impact the ability of SolGold to extract the mineral resources at the Cascabel Project.
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Section 21 – Capital and Operating Cost Estimate
21. Capital and Operating Cost Estimate

21.1 Summary
The total life of mine estimate is summarised in Table 1.21.2.
Table 21.1.1: Life of Mine Estimate Summary US$ Millions

Pre-Production Capital Cost 2,538 2,715 2,448 2,849

Post Establishment Capital Cost Note 1 7,525 7,572 7,798 7,662
Operating Cost 25,930 25,631 25,741 25,470
Total LOM Capex & Opex 35,993 35,919 35,987 35,981
Note 1: Includes Sustaining Capital Cost
21.2 Capital Cost Estimate

21.2.1 Basis of Estimate
The estimate base date is 4th quarter 2018 and is expressed in US Dollars. Exchange rates used in the estimate
are shown in Table 21.2.1 and are based yearly average exchange rates in September 2018.
Table 21.2.1: Exchange Rates

Country Currency US$ per Unit
Australia AUD 0.73
China CNY 0.15
European Union EUR 1.16
Great Britain GBP 1.30
Thailand THB 0.03
USA US$ 1.00
Canada CAD 0.77
Table 21.2.2 shows the consultants and their area of estimate contribution.
Table 21.2.2: Estimate Responsibility

Consultant Scope
Wood Process Plant
Crushed Ore Stockpile (COS) – Tailing Discharge to TSF
Wood Surface Infrastructure
Port - ship loading and unloading
Tailings storage facility (TSF)
Waste rock dump (WRD)
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Table 21.2.2: Estimate Responsibility

Consultant Scope
Concentrate transport/storage
Water (process, raw, storm, TSF decant, potable)
Power
Roads and Buildings – temporary and permanent
Mobile equipment
Ore conveying
Wood Underground Infrastructure
Crushing system → Crushed Ore Stockpile (Primary Crusher, feeders, conveyors,
Mining Plus Mining
Decline portal through to ore transfer into Primary Crusher
Mining specific surface and underground infrastructure – heavy vehicle workshop/s, fuel/lubrication
storage, ventilation, air cooling, underground dewatering
Mobile equipment
Mine roads
Wood Owners Costs (in consultation with SolGold)
The capital cost estimate has been developed in accordance with Wood’s capital cost estimating procedure
(PRJ-340-05) for a Conceptual study to meet the requirements of the National Instrument NI 43-101 for a
Preliminary Economic Assessment (PEA) study and is consistent with “AACE International” cost estimating
guidelines for a Class 5 estimate for the Process Industries.
The estimate accuracy range of -/+ 35% is defined by the level of project definition. The accuracy of the total
cost estimate has been assessed to comply with the above guidelines.
The capital cost estimates are allocated to initial capital and sustaining capital. Due to the long mine life, it is
not expected that significant salvage values will be gained.
21.2.2 Mining Capital Cost
The capital cost for mining was undertaken by Mining Plus and includes the costs for:
• Tunnel boring machine fixed cost
• Tunnel boring machine variable cost
• Infrastructure lateral development (composed of):
Main access declines
Main conveyor declines
Main ventilation drives.
• Infrastructure vertical development (composed of):
Ventilation shafts.
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• Footprint costs (composed of):

Extraction drive development
Drawpoint drive development
Undercut level development
Footprint materials handling development
Footprint ventilation development
Footprint dewatering development
Drawbell mining
Undercut mining
Preconditioning
Roadway installation
Ancillary infrastructure development (workshops, pump stations etc.).
• Production costs for the purchase of the mobile mining fleet required for
Secondary Breaking
Loading.
Capital costs for purchase and installation of mechanical and civil infrastructure for the:
• Materials handling system - from the loader tipple upwards
• Underground dewatering system - from underground dams upwards
• Underground workshops, magazine and amenities
• Primary ventilation system
• Electrical/mechanical infrastructure to support the above.
Are included in the underground infrastructure cost, rather than the mining costs.
Table 21.2.3: Mining Capital Cost Estimate Summary US$ Millions

Item 40 Mt/a 50 Mt/a Fast 50 Mt/a Slow 60 Mt/a
TBM fixed costs 63.13 63.13 63.13 63.13
TBM variable costs 28.01 28.01 28.01 28.01
Infrastructure lateral development 530.99 530.91 530.91 530.91
Infrastructure vertical development 212.26 212.26 212.26 212.26
Footprint 5,444.05 5,444.05 5,444.05 5,444.05
Production Mobile Fleet * 717.27 715.03 717.02 717.06
* Note that in the overall aggregation of the cost for the replacement portion of the production (mobile fleet) item has
been accounted for in the sustaining capital cost.
Table 16.10.1 shows the estimated capital cost summary for the four scheduled cases. Total mining capital
expenditure does not vary between the cases, with the higher production rates achieved by opening new
footprints sooner or later and incurring the capital costs at different times. Note the slight differences in
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production (mobile fleet) due to the variation in tonnage where the different schedules stop production tail at
slightly different points.
21.2.3 Process Plant Capital Cost
The capital cost for the process plant and site infrastructure was undertaken by Wood and includes all costs
associated with the process plant from the crushed ore stockpile to the tailing discharge. The estimate includes:
• Crushed Ore Stockpile, Reclaim, and Secondary Crusher
• Grinding
• Flotation
• Concentrate thickening
• Filtration (filter plant at port)
• Reagents
• Utilities (plant air and water services)
• Plant buildings
• Mobile equipment.
The estimated total capital costs related to the process plant are summarised Table 21.2.4.
Table 21.2.4: Process Plant Capital Cost Estimate Summary US$ Millions
Crushed Ore Stockpile, Reclaim, and Secondary 105.32 120.41 120.41 134.33
Crusher
Grinding Circuit 319.25 364.98 364.98 407.18
Flotation Circuit 112.88 129.05 129.05 143.97
Concentrate Thickening and Filtration 40.21 45.97 45.97 51.28
Tailing Thickener 19.52 22.32 22.32 24.89
Utilities (Plant air and water distribution) 18.31 20.93 20.93 23.35
Reagents 4.74 5.41 5.41 6.04
Buildings 13.14 15.02 15.02 16.76
Total 633.36 724.10 724.10 807.80
The process plant is not expected to reach nameplate capacity during the first 4 years of mining ramp-up,
therefore a staged construction approached has been considered to defer capital to post production and
minimise the pre-production capital cost of the project. A start up plant module and associated infrastructure
will be installed initially then followed by additional modules in line with the projected mining production
schedule ramp-up. Secondary crushing installation is planned for year 10 of production as harder ore reports
to the mill. Some common facilities will be installed initially for the future ramp-up equipment.
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21.2.3.1 Basis of Estimate
Estimated costs have been benchmarked against projects of similar process, size and complexity based on the
engineering material take-offs produced in previous work by Wood. The Capital Cost Estimate was adjusted
and amended through engineering / project management reviews.
A priced mechanical equipment list is the basis of the process plant estimate. Multiple suppliers were approached
for budgetary pricing of the major process equipment. The selected suppliers have experience with major copper
mines in South America and could service the Cascabel operation. The majority of process equipment can be
supplied from South America which can minimise freight costs and support local content. The budget quotations
received were evaluated for technical compliance. 80% of the mechanical equipment costs are based on quotations
obtained specifically for the Cascabel project. Where quotations were not essential for this level of estimate, the
equipment costs were sourced from the Wood equipment cost database, having been received within 6 months
of the capital cost estimate date.
21.2.4 Infrastructure Capital Cost
The estimated total capital costs related to site infrastructure are summarised in Table 21.2.5.
Table 21.2.5: Infrastructure Capital Cost Estimate Summary US$ Millions

Port Facilities 41.03 46.91 46.91 52.33
Roads 3.34 3.34 3.34 3.34
Tailings Storage Facility 65.00 80.00 80.00 80.00
Underground Mine Infrastructure 242.88 277.68 277.68 309.78
Total Infrastructure Capital Cost 642.29 738.64 738.64 814.07
21.2.5 Contingency
A probabilistic range analysis was carried out to determine the overall contingency allowance. A P50 was
selected by SolGold and an allowance of 10.8% has been applied to the total capital cost estimate.
21.2.6 Owners Costs
A separate provision for owner’s costs has been made which typically includes, but is not limited to the
following:
• Owner's team and associated expenses (accommodation, travelling, vehicles, etc.)
• Insurances, and site works
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• Owner’s contingency to make provision for risk items such as inclement weather, acts of God, industrial
disturbances
• Foreign currency rate of exchange variation
• Land cost, right of way, royalties
• Business readiness
• Site accommodation and messing.
21.2.7 Pre-Production Capital Cost
The pre-production capital cost estimate is summarised in Table 21.2.6.

Underground Mine 1,189.30 1,190.21 965.02 1,189.58

Process Plant 316.68 362.05 357.75 399.10
Tailings Storage Facilities 65.00 80.00 80.00 80.00
(Pipeline)
Port Facilities 26.00 29.72 29.72 33.16
Roads 3.34 3.34 3.34 3.34
EPCM 107.29 123.18 122.67 135.65
Owners 104.17 110.84 99.36 116.00
Contingency 243.39 264.68 238.60 277.74
Total 2,538.25 2,715.44 2,447.87 2,849.41
21.2.8 Post Establishment Capital Cost
The post establishment capital cost (including sustaining capital cost) includes ongoing costs for facilities and
equipment required to maintain production for the mine. No expansions are considered after the initial ramp
up. The tailings storage facility wall lifts post production are considered sustaining capital costs. Sustaining
capital cost over the life of mine are shown below in Table 21.2.7.
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Table 21.2.7: Post Establishment Capital Cost Estimate Summary US$ Millions
Underground Mine 5,132.39 5,136.27 5,344.25 5,136.96
Process Plant 435.43 470.66 474.97 529.88
Infrastructure 1,845.41 1,835.81 1,848.30 1,849.20
Indirects 112.18 129.27 130.55 145.64
Total Post Establishment Capex 7,525.40 7,572.01 7,798.07 7,661.68
21.3 Operating Cost Estimate

21.3.1 Basis of Mine Operating Costs
The operating cost for mining was undertaken by Mining Plus and includes the production costs for:
• Secondary Breaking
• Loading
• Crushing
• Conveying
• Rehabilitation
• Ventilation/Dewatering
• Technical services and mine management.
Table 21.3.1: Mine Operating Cost Estimate Summary

Cost (US$) 40 Mtpa 50 Mtpa Fast 50 Mtpa Slow 60 Mtpa
Ramp-up Ramp-up
Production Opex Note 1 9,607 M 9,604 M 9,577 M 9,605 M
mining capex and the underground mine infrastructure which is included in the underground infrastructure costs.
Table 21.3.1 shows the estimated operating cost summary for the four scheduled cases. Note the slight
differences in production opex due to the variation in tonnage where the different schedules stop production
tail at slightly different points.
21.3.1.1 Basis of Estimate
The mining operating costs have been estimated as follows:

• Cost data collated from Mining Plus experience of equivalent projects (operating and planned).
• Costs cross-checked using where possible a high level first principles and rules of thumb analysis.
• Costs extrapolated to the Cascabel project using the major mining physicals calculated from the mine
design in the mining schedule.
These cost estimates are considered suitably accurate for the PEA level of the study.
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21.3.2 Basis of Process Plant Operating Costs
The operating cost estimate for the concentrator was developed from a number of sources. The sources of
data are detailed in Table 21.3.2.
Table 21.3.2: Concentrator Operating Cost Source Data

Cost Centre Source of Cost Data
Power Consumption from mechanical equipment list load estimate. Power cost from
benchmarking of similar operations.
Labour Manning schedules based on labour list. National and expatriate salaries and wages
provided by SolGold.
Reagents Consumption rates from ALS Test and unit prices from supplier budget prices and Wood
database.
Consumables Consumptions predicted from similar operations and unit prices from AMEC data from
suppliers (grinding media). Liner consumption predicted from similar operations.
Maintenance Materials Predicted from unit costs for similar scale operations.
Laboratory Predicted from unit costs for similar scale operations.
Mobile Vehicles Predicted from unit costs for similar scale operations.
21.3.3 Process Plant Operating Costs
Operating costs for the process plant are summarised in the below Table 21.3.3:
Table 21.3.3: Process Plant Operating Cost Summary – US$ per Tonne
Utilities 2.339 2.322 2.342 2.322
Labour and Administration 0.618 0.515 0.532 0.453
Reagents 0.475 0.475 0.477 0.475
Consumables 2.264 2.264 2.265 2.264
Maintenance 0.203 0.203 0.203 0.203
Laboratory 0.050 0.050 0.050 0.050
Mobile Equipment / Misc. 0.072 0.072 0.072 0.072
Total (US$/t) 6.021 5.901 5.940 5.840
21.3.4 Infrastructure Operating Costs
The total infrastructure cost associated with the mining operations and process plant is summarised in below
Table 21.3.4.
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Table 21.3.4: Infrastructure Unit Operating Cost Estimate Summary (US$/t)

Concentrate Transportation (Pipeline) 0.07 0.07 0.07 0.07
Roads 0.01 0.01 0.01 0.01
Closure 0.03 0.03 0.03 0.03

Total (US$/t) 0.71 0.71 0.71 0.70
21.3.5 General and Administrative Operating Costs
Line item included in the Concentrator Operating Costs.
21.3.6 Operating Cost Summary
The total LOM operating cost estimate is summarised in below in Table 21.3.5:
Table 21.3.5: Operating Cost Estimate Summary (US$/t)

Underground Mine Note 1 4.00 4.00 4.00 4.00
Process Plant 6.08 5.97 6.01 5.91
(Pipeline)
Roads 0.01 0.01 0.01 0.01
Closure 0.03 0.03 0.03 0.03

Total (US$/t) 10.80 10.68 10.73 10.61
mining capex and the underground mine infrastructure which is included in the Underground Infrastructure costs.
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Section 22 – Economic Analysis
22. Economic Analysis

Readers are cautioned that the projected mining method, potential production profile and plan and mine plan
referred to in this PEA are conceptual in nature. There is no certainty that an economic outcome will be realised
or that a production decision will be made.
The preliminary economic assessment of the Cascabel Project includes Inferred Mineral Resources that are
considered too speculative geologically to have the economic considerations applied that would enable them
to be categorized as Mineral Reserves and there is no certainty that the preliminary economic assessment will
be realised.
22.1 Introduction
The Cascabel Project is located in the Imbabura province of northern Ecuador. The project is 85% owned and
operated by SolGold, and 15% owned by Cornerstone Capital Resources Inc. The deposit is reported at 100%.
Current exploration activity is permitted and in good standing. Mine development is subject to a successful
Environmental Impact Assessment and permitting from the Ministry of Environment.
The focus of this PEA is the Alpala Copper-Gold-Silver deposit. The Indicated and Inferred mineral resource at
Alpala is shown in Table 22.1.1 (the full disclosure statement is listed in Section 14 Mineral Resource Estimate).
Table 22.1.1: Alpala Mineral Reserve

Category (Mt) Cu (%) Au (g/t) Cu (Mt) Au (Moz)
Indicated 2,050 0.41 0.29 8.4 19.4
Inferred 900 0.27 0.13 2.5 3.8
Total 10.9 23.2
The Cascabel Project will consist of an underground mining operation and a surface processing plant, with
associated on-site and off-site service facilities.
Infrastructure facilities have been designed for an ore production capacity of 40 Mt/a, with factoring used to
estimate the facilities required for the 50 Mt/a and 60 Mt/a cases.
Based on the geological characteristics of the Alpala orebody, grade distribution, geotechnical and
hydrogeological characterisation, size of the mining footprint and other technical and economic
considerations, four mine production cases have been pre-selected and assessed as part of the PEA:
• Case 1: 40 Mt/a – (Steady State) – LOM 66 years
• Case 2a: 50 Mt/a – (Staged Ramp-up) – LOM 57 years
• Case 2b: 50 Mt/a – (Fast Ramp-up) – LOM 55 years
• Case 3: 60 Mt/a – LOM 49 years.
These cases present environmentally sound project development options aimed at optimising the economics
of the project while maximising extraction of the Alpala resource (Section 16.6.1).
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For the purpose of this PEA, the Production Scenario assumed as the base case is Case 2b: 50 Mt/a Fast ramp-
up.
Santa Barbara Resources holds a NSR of 2% on the Alpala deposit. However, SolGold has the option to purchase
the NSR by paying US$4 M following the completion of a feasibility study. The NSR relating to Santa Barbara
and the contingent NSR relating to Cornerstone (see Section 4.4) was not included in the economic analysis.
basis. The analysis assesses the economics of the project from commencement of project execution.
The economic modelling was done on a post-tax basis and the results are presented herein. The economic
results are summarised in Table 22.2.1 below and indicate an after-tax NPV from US$4.1 B to US$4.5 B at an
8% discount rate for the four scheduled cases. The project’s Internal Rate of Return (IRR) is between 24.8% and
26.5%, with payback periods after production commencement from 3.5 to 3.8 years. This is based on a copper
price of US$3.30/lb, silver price of US$16/oz and gold price of US$1,300/oz. The IRR and payback periods have
been calculated before interest given the uncertainty of the capital structure of the Project’s financing.
Sensitivity analyses were conducted on the discount rate and copper and gold prices, as well as copper and
gold grade, operation costs (OPEX) and capital expenditures (CAPEX) as shown in Section 0.
Closure costs of US$80 M are included in the model.
22.2 Summary
The financial evaluation presents the determination of the Net Present Value (NPV), payback period (time in
years to recapture the initial capital investment), and IRR for the project.
Annual cash flow projections were estimated over the life of the mine based on the estimates of capital
expenditures and production cost and sales revenue. The sales revenue is based on the production of copper,
gold and silver as shown in Table 22.2.1 below:
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Table 22.2.1: Project Economic Summary and Sensitivity Analysis of the Project (100% ownership basis)
Metal Prices 40 Mt/a 50 Mt/a 50 Mt/a 60 Mt/a
Slow Fast
Copper ($/t) USD/t 7,268 7,268 7,268 7,268
Gold ($/oz) USD/oz 1,300 1,300 1,300 1,300
Silver ($/oz) USD/oz 16.00 16.00 16.00 16.00
Income
Copper revenue $M Real 57,698 57,692 57,682 57,687
Gold revenue $M Real 16,180 16,180 16,199 16,215
Silver revenue $M Real 322 319 318 321
Total revenue $M Real 74,200 74,191 74,199 74,223
Expenses
Royalties $M Real (3,835) (3,835) (3,836) (3,838)
Treatment & refining charges $M Real (3,561) (3,560) (3,557) (3,558)
Shipping $M Real (3,122) (3,121) (3,117) (3,117)
Underground Mine $M Real (9,607) (9,605) (9,604) (9,605)
Process Plant $M Real (14,602) (14,430) (14,333) (14,185)
Infrastructure $M Real (843) (842) (842) (842)
Port Facilities $M Real (534) (520) (508) (494)
Other $M Real (344) (344) (344) (344)
EBITDA $M Real 37,752 37,934 38,057 38,240
Profit Share (Labour Tax) $M Real (4,327) (4,274) (4,246) (4,235)
Corporate Tax $M Real (5,978) (5,960) (5,949) (5,936)
Capex
Pre-production Capex $M Real (2,538) (2,448) (2,715) (2,849)
Post-establishment Capex $M Real (7,525) (7,798) (7,572) (7,662)
Total Capex $M Real (10,064) (10,246) (10,287) (10,511)
Closure costs (Opex) $M Real (80) (80) (80) (80)
Cash Flow
Post-tax, undiscounted cash flow $M Real 17,384 17,453 17,574 17,557
Tax rate assumption % 25% 25% 25% 25%
Post-tax cash flow (discounted) (7%) $M Real 4,922 4,841 5,102 5,329
Post-tax IRR % 26.5% 24.8% 25.9% 25.7%
Payback period (project commencement) Years 8.5 8.8 8.6 8.8
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22.3 Basic Assumptions

The inputs to the discounted cash flow analysis were prepared based on technical and cost inputs as detailed
elsewhere in the PEA. The financial evaluations over the four scheduled cases were performed using an 8%
discount rate. Additional NPV’s were calculated using 7% and 9% discount rates as shown in Table 22.2.1 above.
22.3.1 Metal Prices
The Project’s metal price assumptions were provided by SolGold and relied upon by EY without review. The
prices used in the NPV calculations are summarised in Table 22.3.1 below.
Table 22.3.1: Metal Prices

Copper USD/t 7,268
Gold USD/oz 1,300
Silver USD/oz 16
The majority (77.7%) of the Project’s revenue will be generated from copper with gold providing 21.8% of the
revenue. Silver is a lesser economic component, responsible for only 0.4% of the total life of mine revenue.
PEA and at the time of writing this report the Company has not entered into any formal off-take agreements
for the sale of concentrate products from the Alpala deposit. Metal prices used in the economic analysis of
the Project are uncertain and actual metal prices may significantly impact the economics of the Project.
22.3.2 Recoveries
The Project’s metallurgical recovery assumptions are summarized in Section 13. The mill recovery factors over
the life of the mine for Case 2b (50Mt/a – Fast) are summarized in Table 22.3.2 below.
Table 22.3.2: Mill Recovery

Low Average High
Copper 0.82 0.89 0.94
Gold 0.29 0.54 0.85
Silver 0.29 0.54 0.85
22.3.3 Smelter Return Factors
Smelter and refining treatment charges are generally agreed to by long-term agreements between the
Company and smelter customers, the terms of which are renewed annually to reflect market conditions for
copper, gold and silver concentrates.
A smelter may impose a penalty either expressed in higher treatment charges or in metal deductions to treat
concentrates that contain higher than specified quantities of certain elements.
Metallurgical test work carried out to date indicate that the copper-gold-silver concentrate products from the
Alpala deposit will be of high quality with no contaminants and medium to high copper and gold grades as
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shown in Table 19.3.1. It is anticipated that the Alpala concentrate will be a desirable product for most copper
smelters worldwide.
Treatment and refining costs terms are listed in Table 19.3.2.
22.3.4 Operating Costs
The Project’s operating costs are summarised in Section 21.3.
Operating activities and costs are differentiated for development in the underground mine. All development
completed in the pre-production period is included in initial capital cost. Once production starts, development
is segregated as operating costs for development of production, and capital costs for development for access
to new areas. Once areas have entered into production, all further development becomes operating costs.
A sensitivity analysis was performed on OPEX for Case 2b (50Mt/a – Fast) in Section 0.
22.3.5 Capital Costs
Total LOM capital costs are estimated between US$10.1 B and US$10.5 B under the four development cases as
outlined in Table 22.3.3 below.
Table 22.3.3: Life of Mine Capital and Operating Cost

40 Mt/a 50 Mt/a Slow 50 Mt/a Fast 60 Mt/a
Pre-production Capex 2,538 2,448 2,715 2,849
Post-establishment Capex * 7,525 7,798 7,572 7,662
Total Capex 10,064 10,246 10,287 10,511
Operating Cost 25,930 25,741 25,631 25,470
Total 35,993 35,987 35,919 35,981
* Includes sustaining capital costs
A sensitivity analysis was performed over CAPEX for Case 2b (50Mt/a – Fast) in Section 0.
22.3.6 Depreciation and Amortisation
Depreciation rate for new and existing assets is allocated on a straight-line over 10 years.
22.3.7 Corporate Tax and Other Government Payments
The model assumes a corporate tax rate of 25% (current Ecuadorian corporate tax rate), a profit share of 15%
on earnings before tax (12% government, 3% employee), a government royalty of 5% to 8% depending on the
type of mineral, and a straight-line depreciation rate of 10%.
The model also includes a sovereign adjustment levy where project contributions to government (royalties,
income tax, government profit share) fall below 50% of cumulative economic project benefits – noting under
the scenarios considered no sovereign adjustments are required.
The model assumes depreciation and amortization for tax purposes approximately equals depreciation and
amortisation for accounting purposes.
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The Ecuadorian government has various taxes, duties and levies that may or may not be applicable to future
mining operations depending on the mining exploitation contract established between SolGold and the
Ecuadorian government and the laws in force at that time.
Tax cashflows were calculated as US$5.9 B, whilst profit share contributions were calculated as US$4.2 B over
the life of the mine.
22.3.8 Royalties
The royalties are payable to the Ecuadorian government and are calculated on a percentage of revenues per
resource net of TC/RC charges and shipping costs. The royalty rates are summarised in Table 22.3.4 below:
Table 22.3.4: Royalty Payments

Royalty Rate 40 Mt/a 50 Mt/a Slow 50 Mt/a Fast 60 Mt/a
Copper 5% 2,610 2,610 2,609 2,610
Gold 8% 1,202 1,202 1,204 1,205
Silver 8% 23 23 23 23
Total 3,835 3,835 3,836 3,838
22.4 Cash Flow Summary

The estimated annual LOM cash flows for the Project are summarised in Figure 22.4.1. The project under each
development case requires an initial construction period of 4 years. After this period, the four different
development cases have operating mine lives ranging from 49 to 66 years. The annual production schedule for
Case 2b (50Mt/a – Fast) is presented in Table 13.4.9.
Cashflows are shown in below in Figure 22.4.1 which represents the Case 2b (50Mt/a – Fast).
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Figure 22.4.1: Cashflow for 50 Mt/a Fast Ramp-up
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22.5 Sensitivity Analyses

Sensitivity analyses were conducted against the base case (Case 2b 50 Mt/a – Fast Ramp-up) on the discount
rate and copper and gold prices, copper and gold grades, operation costs (OPEX) and capital expenditures
(CAPEX).
22.5.1 Commodity Prices and Discount Analysis
The potential fluctuation in Copper and Gold prices were assessed against a range of discount rates. The
following table illustrates the sensitivity results:
Table 22.5.1: Metal Price and Discount Rate Sensitivity Analysis

NPV of Project Copper Price
-10% -5% 0% 5% 10%
Discount Rate 6% 4,968 5,484 5,998 6,510 7,020
7% 4,223 4,663 5,102 5,539 5,975
8% 3,592 3,970 4,349 4,726 5,102
9% 3,053 3,382 3,711 4,039 4,367
10% 2,592 2,881 3,168 3,456 3,743
NPV of Project Gold Price
-10% -5% 0% 5% 10%
Discount Rate 6% 5,614 5,806 5,998 6,190 6,381
7% 4,763 4,932 5,102 5,271 5,440
8% 4,048 4,198 4,349 4,499 4,649
9% 3,443 3,577 3,711 3,845 3,979
10% 2,928 3,048 3,168 3,288 3,409
22.5.2 Commodity Grade Analysis
The following table illustrates the sensitivity results for different resource grades:
Table 22.5.2: Copper Grade and Gold Grade Sensitivity Analysis

NPV of Project Copper Grade
-0.050% -0.025% 0.000% 0.025% 0.050%
Gold 5% 3,847 4,175 4,498 4,818 5,136
Grade 3% 3,772 4,100 4,423 4,743 5,061
0% 3,697 4,026 4,349 4,669 4,986
-3% 3,622 3,951 4,274 4,594 4,912
-5% 3,547 3,876 4,199 4,519 4,837
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22.5.3 TC/RC Analysis
The following table illustrates the sensitivity results when changing the TC/RC cost assumptions:
Table 22.5.3: TC/RC Sensitivity Analysis – Case 2b (50 Mt/a fast ramp-up)
TC/RC Charges
Variance -30% -20% -10% 0% 10% 20% 30%
NPV (US$ M) 4,485 4,439 4,394 4,349 4,303 4,258 4,212
22.5.4 OPEX and CAPEX Analysis
The following table illustrates the sensitivity results when changing the OPEX and CAPEX cost assumptions:
Table 22.5.4: OPEX and CAPEX Sensitivity Analysis

NPV of Project OPEX
-10% -5% 0% 5% 10%
CAPEX 10% 4,317 4,190 4,061 3,933 3,804
5% 4,461 4,333 4,205 4,076 3,947
0% 4,604 4,477 4,349 4,220 4,091
-5% 4,747 4,620 4,492 4,364 4,235
-10% 4,890 4,763 4,635 4,507 4,379
The Project exhibits positive financial returns across a range of metal price, resource grade, OPEX and CAPEX
scenarios as illustrated in the spider graph in Figure 22.5.1.
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Figure 22.5.1 - Spider graph illustrating sensitivity of metal price, OPEX and CAPEX, and Discount Rate.
7,000
6,000
5,000
NPV ($USm)
4,000
3,000
2,000
1,000
0
(25.0%) (20.0%) (15.0%) (10.0%) (5.0%) 0.0 % 5.0 % 10.0 % 15.0 % 20.0 % 25.0 %
Adjustment (%)
Gold Price Copper Price OPEX CAPEX Discount rate
22.6 Economic Results

Using a long-term copper price of US$7,268/tonne, the post-tax cash flow of the Project using an 8% discount
rate is estimated in a range from US$4.1 B to US$4.5 B. Potential internal rate of return (IRR) estimates range
from 24.8% to 26.5% and payback periods after production commencement are estimated to range from 3.5
to 3.8 years, as shown in Table 22.6.1 below.

40 Mt/a 50 Mt/a 50 Mt/a 60 Mt/a
Slow Fast
Post-tax IRR % 26.5 24.8 25.9 25.7
The results of the analysis show the Cascabel Project to be potentially viable, warranting further study.
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Section 23 – Adjacent Properties
23. Adjacent Properties

23.1 Summary
No information from Adjacent properties has been relied on in this report.
23.2 Use of Information

This report does not include information from adjacent properties. Information relied on in this study includes:
• Data collected by SolGold through various exploration activities
• Public information e.g. topographic information, roads, rail and rivers and other information from various
departments of the Ecuador Government
• Published industry information.
Areas of this report that have utilised external information have been cited where appropriate.
In the absence of measured values, estimates have been used that in the considered opinion of the qualified
person responsible for that subject matter, reflect an appropriate value for the purposes of this report. Any
estimates that have been used have been identified as estimates.
23.3 Concessions
The concessions surrounding Cascabel project are listed in Table 23.3.1. The three main holders are:
• Carnegie Ridge Resources SA (a SolGold subsidiary),
• Hanrine Ecuadorian Exploration and Mining SA (reported as Hancock subsidiary)
• Exploraciones Mineras Andinas Ecuador S.A. (a Codelco subsidiary).
Table 23.3.1: Major Holders Surrounding Cascabel

Holder Concessions Name Concession Number Status
Carnegie Ridge Resources SA Blanca 40000320 GRANTED
Carnegie Ridge Resources SA Nieves 40000314 GRANTED
Carnegie Ridge Resources SA Chical 1 40000179 GRANTED
Carnegie Ridge Resources SA Rio Mira 40000190 GRANTED
Carnegie Ridge Resources SA Lanisport 40000470 IN PROCESS
Hanrine Ecuadorian Exploration and Mining SA Amadores 40000372 GRANTED
Hanrine Ecuadorian Exploration and Mining SA Dayana 40000486 IN PROCESS
Hanrine Ecuadorian Exploration and Mining SA IMBA01 40000153 GRANTED
Hanrine Ecuadorian Exploration and Mining SA IMBA 05 40000315 GRANTED
Hanrine Ecuadorian Exploration and Mining SA IMBA 06 40000316 GRANTED
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Section 23 – Adjacent Properties
Table 23.3.1: Major Holders Surrounding Cascabel

Holder Concessions Name Concession Number Status
Exploraciones Mineras Andinas Ecuador S.A. CACHACO 40000485 IN PROCESS
Exploraciones Mineras Andinas Ecuador S.A. CACHACO1 40000487 IN PROCESS
Figure 23.3.1: Map Showing the Adjacent Properties
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Section 24 – Project Execution
24. Other Relevant Data and Information

24.1 Summary of Project Execution
This section describes how the Cascabel Project may be designed, constructed, commissioned and ultimately
handed over to the owner’s operations team.
Project implementation should proceed in the following phases:

• Prefeasibility study – next phase
• Feasibility study
• Execution phase including commissioning and production ramp-up.
The objectives for the Cascabel Project are:

• To meet and exceed the safety targets for SolGold and the projects
• To maximise overall project NPV while maximising recovery of the Alpala Mineral Resource
• Design and construct the facilities using known and proven technology
• Develop plant designs that achieve the lowest “life cycle” cost
• Develop and maintain good relationships with the local community, making decisions that are both socially
and environmentally responsible
• To complete the project as early as practically possible
• Complete all stages of the project on schedule and within budget.
24.2 Project Execution Strategy

Following completion of the PEA in 2019, it is expected that the project will progress to the Pre-Feasibility
Study (PFS) stage to further define and assess various mining, processing, materials handling and infrastructure
options, and ultimately select a preferred option for further evaluation at the Definitive Feasibility Study (DFS)
level with capital and operating cost estimates at an accuracy of +/- 10 to 15%. The PFS is expected to be
completed in 2019 with a DFS scheduled for completion at the end of 2020.
Following DFS and upon project approval, project execution will follow consisting of Detailed Engineering and
Design, Procurement and Construction (EPCM / EPC).
SolGold will appoint EPCM / EPC consultants to engineer and design the new mine facility, to manage the
process of procuring (or procuring on behalf of SolGold) all tagged equipment and bulk materials, to manage
the logistics relating to equipment and materials, to enter construction contracts on behalf of SolGold and to
manage the construction and commissioning of the facilities required for the project. The strategy adopted for
project execution is based on an EPCM or EPC model.
During the execution, SolGold will self-perform certain activities which are best done by the owner and where
extensive local knowledge is essential. SolGold will also manage all aspects of preparation for the new plant
start up and operation phase.
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24.2.1 Prefeasibility and Feasibility Studies
The Prefeasibility phase is about identifying a go-forward option and improving the project cost estimate to
+/- 20 to 25%, while the feasibility phase will further refine the estimate to +/- 10% to 15% and include
planning for the execution phase. Both phases will include engineering tasks and deliverables to varying
degrees of detail:
• Data collection to improve orebody knowledge with respect to a cave mining operation by:
Geological and geotechnical drilling and logging to collect relevant data for a cave mining operation
including re-logging of all historical drill holes.
Future resource drilling planned to satisfy the resource, geotechnical and hydrogeological purposes.
Deposit and regional structural geological review and use of downhole acoustic televiewers to collect
high confidence structural data to improve confidence in the current structure model.
A full suite of geomechanical testing to understand material strength parameters and classify the
various rock types for block cave mining operation.
• A trade off study to assess of suitability of tunnel boring machines for mine access using representative
hydrogeological and geotechnical assessment of the proposed route and bespoke equipment design with
alternative access options (drill and blast decline and / or shaft access).
• A trade off study to determine preferred locations for shaft infrastructure including geotechnical and
hydrogeological assessment with drilling to the full depth of shafts.
• Mining engineering block caving studies to determine appropriate extraction horizons, production
sequence and production rate with due consideration of requirements for mine access, construction and
development; undercutting strategies; ore handling infrastructure; ventilation design; equipment selection
and approach to operational management including mud rush and air blast risk assessment.
• Preparation of mine design and production schedule.
• Development of a resource plan, scope, strategies, processes, deliverables, budget, schedule and a Value
Improvement Practices Plan.
• Review output from prefeasibility phase activities including existing data relating to the project scope,
budget, schedule and execution strategies.
• Development of design criteria including technical, environmental and statutory requirements.
• Finalisation of a plot plan for the general site.
• Finalisation of process flow sheets, material balance data and sizing criteria for major items of equipment
and materials.
• Development of an electrical distribution concept and preparation of electrical single line diagrams.
• Development of instrumentation and control concepts and preparation of Piping & Instrumentation
Diagrams.
• Preparation of general arrangement drawings for the facilities defined in the Project Scope.
• Participation in risk analysis and develop Risk Management Plan.
• Manage geo-technical field investigations and assessments.
• Develop equipment lists.
• Develop major equipment drawings and specifications.
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• Define utilities requirements and site impact.

• Define scopes of work for all facilities.
• Participate in preparation of the Operating Plan, including start up sequence, operating strategies,
requirements and deliverables.
• Participate in preparation of the Maintenance Plan, including sparing strategy, maintenance strategies,
requirements and deliverables.
• Conduct 3D model design reviews hazard and risk reviews.
• Conduct design reviews for plant reliability, accessibility, maintainability, buildability and operability
(RAMBO).
• Development of engineering manpower schedules for the execution design phase of the Project Scope.
• Participate in the development of contracting strategies and plans.
• Participate in the development of procurement strategies and plans.
• Develop Detail Design Plan.
• Participate in the development of commissioning planning.
• Participate in the development of project cost estimate (bottom up estimate for all facilities) for the
execution phase to the required accuracy.
• Participate in the development of project schedule for all facilities.
In addition to the definition phase engineering preliminary scope of services defined above, it may be beneficial
that certain activities that are critical to the project schedule be undertaken during the feasibility phase. Of
particular importance in this regard will be the identification of a potential contractor for site earthworks and
preparation work and the identification of suppliers of various items of major equipment that have long lead-
times, so that such contracts and purchase orders may be executed at the earliest possible date as required to
ensure the integrity of the Project schedule is maintained.
24.2.2 Environmental and Social Impact Assessment
In parallel to the PFS and FS, SolGold will undertake an ESIA including:
• Scoping with stakeholder consultation and development of specialists’ terms of reference
• Baseline field work to ensure full seasonal coverage followed by reporting
• Impact assessment and reporting
• Feedback to stakeholders
• Finalisation of ESIA
• Development of an Environmental and Social Management Plan and implementation of the Environmental
Management System.
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24.2.3 Project Delivery
For the EPCM / EPC project delivery model, the EPCM / EPC contractor is responsible for the construction
management of the project. Key objectives of the construction delivery model will include:
• Instigation of a safe working environment and safety culture on project site
• Strict adherence to SolGold’s environmental plans and the promotion of exemplary community relations
• Actively engaging in promoting the welfare of the workforce and putting in place strategies to enhance
labour productivity
• Cost and schedule risk minimisation through rigorous on-site quality control and other delivery techniques
such as possibly pre-assembly and modularisation
• Maintaining the focus on the planned strategy based on completed engineering and early procurement
such that construction is never constrained
• Supporting the Project during construction, pre-commissioning through to ramp-up and beyond handover
to successful and rapid production.
24.3 Project Execution Schedule

The project schedule assumes handover of the mine to operations by December 2025. Construction of the
process plant and associated infrastructure is expected to be completed prior to commencement of mining
operations, with commissioning of these facilities to be completed as ore becomes available.
The schedule developed for the PEA shows the development of the underground mine and associated
infrastructure is the longest duration therefore the sequence of activities is organised to delay expenditure and
completed just in time to meet the mine start-up date.
Development of construction and environmental permitting is required during the feasibility study to reduce
the overall schedule duration and in turn allow for construction to commence and award of long lead items
associated with mine development to take place shortly after execution funding approval.
The project assumes that the project will be stick built at this point in time. It is however most likely that some
parts of the plant will be ideally suited to pre-assembly. This concept of pre-assembly will be considered in
detail during the feasibility phase.
The basis of schedule is driven by the following key elements:

• Pre-Feasibility Study finishing December 2019
• Definitive Feasibility Study finishing December 2020
• Metallurgical Testwork continuing throughout study periods
• 48 month duration for the underground mine development
• Decline design to be completed to allow for procurement of tunnel boring equipment
• Process plant 26-month construction duration
• First stage tailing storage facility 24-month construction duration
• 3-month project review period for funding and approvals decision
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• Underground mine construction commencing shortly after project approval

• Processing plant and infrastructure to be completed ready for mining operations
• Tailing storage facility to be constructed in stages over the life of mine
• 2 to 3 month commissioning of facilities.
There are a number of key stages that will be required to meet statutory and design requirements for the
project:
• Confirmed site selection and land acquisition
• Social impact implications
• Obtaining permits and approvals for mining and construction
• Completing the EIS and obtaining the necessary permits
• Land use permits.
The table below details expected key project milestone dates:
Table 24.3.1: Preliminary Project Dates

Activity Nominal Date
Pre-Feasibility Study December 2019
Definitive Feasibility Study December 2020
Procurement Tunnel & Shaft Sinking Equipment January 2021
Environmental License August 2021
Project Approval & Financing April 2021
Construction Permit June 2021
Detail Engineering June 2022
Construction Completed March 2025
Commissioning June 2025
Handover to Operations July 2025
24.4 Workforce Considerations

The total estimated construction workforce for Cascabel peaks at approximately 3,500 during the underground
mine development. Figure 24.4.1 manning requirements for the three production scenarios.
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Figure 24.4.1: Construction Manning Requirements
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Year -5 Year -4 Year -3 Year -2 Year -1 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Estimated Personnel 40 Mtpa Estimated Personnel 50 Mtpa Fast Ramp up
Estimated Personnel 60 Mtpa Estimated Personnel 50 Mtpa Slow Ramp up
24.4.1 Personnel Requirements and Training
A regional workforce will be used for construction of the facilities and supplemented by fly-in/fly-out labour.
South America has a long history of mining developments and operations and has a good skills base, including
in Ecuador. However, the Cascabel development is expected to put pressure on the local pool of skilled
employees.
The risk of not being able to identify suitably trained personnel is regarded as low. SolGold intends to
contribute to the training and development of local unskilled workers by establishing training programs and
HR policies and processes that negate the potential risks.
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Section 25 – Interpretation and Conclusions
25. Interpretation and Conclusions

25.1 Geology and Mineralisation
The Cascabel Project hosts numerous porphyry centres interpreted from airborne geophysical surveys as well
as distinct molybdenum, copper/zinc and manganese soil geochemical anomalies and surface kaolinite and
paragonite alteration halos. The most pronounced of these is the Alpala cluster and Aguinaga.
SRK consider the Alpala deposit, which is part of the Alpala cluster within the Cascabel Project, to be an
Advanced Exploration Property that has demonstrated 3D continuity of economic grade copper/gold
mineralisation which is now well defined by drilling culminating in the Mineral Resource estimate as reported
on here. Alpala hosts a high-grade copper gold porphyry deposit centred on the confluence between a
northeast and northwest striking structural trend. Alpala has been the focus of deep diamond core drilling
since September 2013. This has resulted in a total of 173,076 m from 115 completed drill holes used for MRE#2.
Drilling has successfully delineated the base of mineralisation throughout the central portion of the deposit
and demonstrates a sharp grade decrease between the mineralised an unmineralised material, forming a bowl-
shaped keel to the mineralisation. In terms of exploration potential, SRK notes that the mineralisation currently
remains open in several directions, particularly along strike and down plunge to the northwest of the deposit,
in the western limb and up plunge to the southeast.
25.2 Exploration, Drilling and Analytical Data Collection

SRK have reviewed the exploration processes and the channel and core sampling procedures and consider
them to be of industry standard and have made a number of recommendations to optimise these practises as
the project develops. SRK have also audited the exploration and sample database held by SolGold and consider
this robust. Both the procedures utilised, and the database validity, is considered sufficient for the use in the
MRE.
25.3 Mine Planning

The conceptual mining assessment conducted for this study indicates that the Alpala deposit lends itself to
underground mining using low cost mining methods such as block caving or panel caving. Other methods
reviewed as part of the study included sub-level caving and sub-level open stoping in isolated pockets of high
grade mineralisation. However, for the purpose of this study, these methods have not been considered.
This approach would provide environmentally sound project development options and optimise the economics
of the project whilst attempting to maximise recovery of the Alpala mineral resource. It targets the high value
material in the first phase to ensure optimisation of the project economics. Mining the lower value second
phase later maximises extraction without compromising the economics of the project.
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Mine production scenarios preselected and assessed as part of the PEA include:
• Case 1 – 40 Mtpa Mine Production Rate, Life of Mine (LOM) 66 years
• Case 2a – 50 Mtpa, Fast Ramp-up, LOM 55 years
• Case 2b – 50 Mtpa, Slow (Staged) Ramp-up, LOM 57 years
• Case 3 – 60 Mtpa, LOM 49 years.
25.4 Metallurgical Testwork

Based on the samples tested, the Cascabel deposit is competent from a SAG mill perspective (average DWi -
7.06 kWh/m3; average A*b - 42.7), moderately hard from a ball mill perspective (average BWI – 13.7 kWh/t)
and moderately abrasive (average Ai – 0.139). Based on average results the comminution circuit would consist
of SAG and ball mills. Elevated RQD values indicate that once the mine approached nameplate capacity pebble
crushing will be required. The comminution tests indicate significant variability and secondary crushing may
potentially need to be implemented in latter stages of operation.
dominant porphyry deposits. A flotation circuit would consist of roughing with a feed P80 of 150 µm, a three
stage cleaner circuit, incorporating a regrind section to reduce the cleaner feed P80 to 25 µm. Deleterious
elements are not present in the final concentrate. Rejection of pyrite in the cleaner circuit results in a loss in
gold and consideration should be given to retreatment of the cleaner scavenger tailing.
25.5 Mineral Resource Estimate

MRE#2 resulted in a Mineral Resource Estimate of 2,050 Mt grading 0.60% copper equivalent of Indicated
Mineral Resources for a contained metal content of 8.4 Mt copper and 19.4 Moz gold and 900 Mt grading
0.35% CuEq of Inferred Mineral Resources for 2.5 Mt Cu and 3.8 Moz Au, using a 0.2% CuEq cut-off grade.
Within the deposit, a higher-grade core exists totalling 400 Mt grading 1.49% CuEq (Indicated) and 20 Mt
grading 1.05% CuEq (Inferred) using a 0.9% CuEq cut-off. The 400 mt is contained in the total Mineral Resource
tonnages given above. This highlights the reasonable prospects for eventual economic extraction by
underground mass mining methods such as block caving.
25.6 Mineral Reserve Estimate

No Mineral Reserve estimates have been undertaken to date.
25.7 Mineral Recovery Plan

The process plant configuration is developed as two parallel lines with one line built for Phase 1 (ramp up to
50% nameplate capacity) and two lines for 100% nameplate capacity for the 40 Mtpa and 50 Mtpa Cases. For
the 60 Mtpa Case the concentrator is designed to consist of three parallel lines with one line built for Phase 1
(ramp up to 33% nameplate capacity) and three lines for 100% nameplate capacity.
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25.8 Infrastructure
The Cascabel Project will consist of an underground mining operation and a surface processing plant, with
associated service facilities. The proposed service facilities (on-site and off-site) considered in the PEA study,
include the following:
• Tailings storage facilities (TSF) and associated infrastructure
• Accommodation camps (permanent facilities may be based in the city of Ibarra)
• Concentrate shipping facilities have been proposed to utilise the Esmeraldas port
• Concentrate pipeline from Cascabel process plant to port and water return pipeline
• Water supply system (from existing river systems onsite)
• Power supply system (from the Ecuadorian “Sistema Interconectado Nacional” (SIN, National Transmission
Grid) through a 230 kV, 60 km long, double-circuit power transmission line)
• Communication system
• Internal roads (Access roads from the project site to the main urban centres of Esmeraldas and Ibarra,
correspond to routes E15 and E10, respectively).
25.9 Environmental, Permitting and Social Considerations

SolGold has conducted environmental studies in the Project area using in-house teams and qualified
consultants for a number of years, which contributes to a defensible baseline. The work is conducted in a
transparent manner with the local communities, supported with a strong community outreach and support
program.
successful conclusion of an Environmental Impact Assessment and permitting. This is a recognised process
with successful recent precedent in Ecuador. There are no known environmental issues that could materially
impact the ability of SolGold to extract the mineral resources at the Cascabel Project.
25.10 Markets and Contracts

No formal market studies concerning supply and demand of copper-gold concentrate have been conducted
at this stage.
25.11 Financial Analysis

basis.
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The results of the analysis show the Cascabel Project to be potentially viable, warranting further study. With
considering a long-term copper price of US$7,268/tonne, the post-tax cash flow of the Project using an 8%
discount rate estimates a range from US$4.094 B to US$4.548 B. Potential internal rate of return (IRR) ranges
from 24.8% to 26.5% and payback periods after production commencement are estimated to range from 3.5
to 3.8 years.

40 Mt/a 50 Mt/a 50 Mt/a 60 Mt/a
Slow Fast
Post-tax cash flow (discounted) (8%) $m Real 4,195 4,094 4,349 4.548
Post-tax IRR % 26.5% 24.8% 25.9% 25.7%
25.12 Risk and Opportunity

25.12.1 Mineral Resource Estimate
SRK is not aware of any significant risks and uncertainties that could be expected to affect the reliability or
As with all mineral projects, there is an inherent risk associated with mineral exploration. As such, there is no
guarantee that additional drilling will grow the model or improve confidence in the model. SRK are confident
the Mineral Resource can be further upgraded in confidence with more drilling and that there is some potential
to grow the deposit model further.
The potential for the existing Mineral Resource and any future extensions to be converted to a Mineral Reserve
however, will only become well demonstrated following completion of a Prefeasibility study.
25.12.2 Mining
Mining Plus has identified several opportunities to improve the project that should be studied in more detail
in a pre-feasibility study. These include:
• Campaign mining and stockpiling to expedite further the processing of higher grade
• Mechanical ore sorting to remove uneconomic material from the mill feed
• Production design optimisation
• Footprint layout design optimisation
• Materials handling optimisation.
Mining Plus has identified that typical risks for a large block caving project (including seismicity, mudrush and
cave performance) exist in this project. However, based on the available data, it is expected that these can be
managed to acceptable levels through further study and operation strategies, which would be typical for a
large block caving project of this nature.
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25.12.2.1 Production Design Optimisation
The design of the production areas (footprints and draw columns) aimed to reduce the effect of time
discounting by mining high grade areas before low grade ones. Having completed a schedule, it is expected
that the design can be further improved by calculating the opportunity cost at all points in the schedule and
refining the design accordingly. There is also scope to improve the layout by using different shapes of footprint
for different lifts within the same column.
25.12.2.2 Multiple Smaller Footprints versus Fewer Larger Footprints
This concept mine plan contains 17 footprints all at different elevations. Multiple small footprints at different
elevations allow high grade areas of the deposit to be targeted more precisely. However, it comes at a price of
a more complicated and potentially less efficient infrastructure design. The plan can be optimised by better
trading off the simplicity of fewer larger footprints against the expedited high-grade benefits of multiple
smaller footprints.
25.12.2.3 In-footprint Materials Handling System versus Perimeter
This plan has assumed a perimeter located materials handling system. The deposit may be better suited to an
in-footprint materials handling system, which should be analysed in future studies.
25.12.2.4 Ore Sorting
Mechanical ore sorting between mining and metallurgical processing is a developing technology which may
benefit this project. Block caving is a bulk rather than selective mining method, so ore sorting into different
ore streams before processing has the potential to reduce the processing cost, thereby improving the
economics of low-grade material. This opportunity requires further Testwork and study to determine how well
the mined material can be sorted.
25.12.2.5 Campaign Mining and Stockpiling
Campaign mining, e.g. where high grade draw points are mined on day shift and low-grade ones on night shift,
followed by stockpiling is a strategy that can add value. This allows a smaller processing plant to be matched
with a higher mining rate. Only the highest-grade material is processed, while the lower grade is stockpiled
and processed later. Preliminary desktop analysis of the conceptual mine plan shows potential for this strategy
which should be analysed further in future studies.
25.12.3 Mining Risks
25.12.3.1 Schedule Delays Due to Unexpected Events or Conditions
Schedule rates and durations used in this mine plan are based on industry experienced averages. However,
non-performance of the mining operation due to for example; unexpected ground conditions or major
(seismic) events are a risk to the mine plan. Further study will reduce this uncertainty, while schedule sensitivities
and simulations can be used to assess the effect of mining performance variability on the overall plan.
25.12.3.2 Cave Propagation
The potential risk to caving is mitigated by using footprints larger than that required for caving and by
scheduling with even cave draw to prevent chimneying. Future geotechnical study and modelling will further
reduce this risk.
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25.12.3.3 Cave Draw
The flow of broken material to the drawpoint not performing as expected is a risk to the mine plan. Within this
study a sensitivity has shown that the effect of differential flow rates (vertical mixing) is mitigated by the large
vertical extents of the deposit. However, further study (flow modelling) is recommended.
25.12.3.4 Operational
Typical risks associated with a block cave will exist in the project. These include mud rush, seismicity, inundation
and air blast. Further study along with standard block caving operational controls will manage these risks.
25.12.4 Infrastructure
From an infrastructure prospective Wood anticipate no obstacles being present to hinder the progressing of
the project to the next phase. The project is located at a relatively low elevation when compared to other
copper operations located in the Andes, is close to a major city and established national road and power
transmission infrastructure. Further work is required with the tailings storage facility to optimise the storage
capacity and reduce the capital costs.
25.12.5 Mineral Recovery Methods
From a mineral processing prospective Wood anticipate no obstacles being present to hinder the progressing
of the project to the next phase. Recoveries and concentrate grades are representative of a copper-gold
porphyry deposit of this nature with no deleterious elements reporting to the copper-gold concentrate. Wood
see the following mineral processing opportunities for the project:
1. Production of a gold rich pyrite concentrate that may be sold or processed on site to produce gold bullion,
enhancing gold recovery.
2. Implementation of ore sorting to upgrade the concentrator feed grade.
Wood see the potential for the generation of additional revenue from the Cascabel Project. To determine what
of the project:
1. Pyrite Concentrate: The cleaner scavenger tailings represent the single largest loss of gold (and a large
copper loss) from the flotation process. Flotation Testwork has indicated that it is possible to produce a
gold rich pyrite concentrate from the first cleaner scavenger tailings stream. It may be possible to produce
a pyrite concentrate from the cleaner scavenger tailings stream. It is postulated that this concentrate may
be amenable to the Albion process (fine grinding – atmospheric oxidative leach) or alternative
hydrometallurgical processes to produce gold in the form of dore and copper in the form of cathode. (The
cleaner scavenger concentrate – a pyrite concentrate – is currently undergoing Albion testing.)
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of the sulfur credits.
in the near future.
25.12.6 Capital and Operating Cost Estimates
Wood see the Capital and Operating Costs for the Cascabel Project to be in the same range as similar copper
porphyry projects.
25.13 Conclusions
• SRK is not aware of any significant risks and uncertainties that could be expected to affect the reliability or
• The conceptual mining assessment conducted for this study indicates that the Alpala deposit lends itself
to underground mining using low cost mining methods such as block caving or panel caving.
• From an infrastructure prospective Wood anticipate no obstacles being present to hinder the progressing
of the project to the next phase. The project is located at a relatively low elevation when compared to other
copper operations located in the Andes, is close to a major city and established national road and power
transmission infrastructure.
• From a mineral processing prospective Wood anticipate no obstacles being present to hinder the
progressing of the project to the next phase. Recoveries and concentrate grades are representative of a
copper-gold porphyry deposit of this nature with no deleterious elements reporting to the copper-gold
concentrate.
• Wood see the Capital and Operating Costs for the Cascabel Project to be in the same range as similar
copper porphyry projects.
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Section 26 – Recommendations
26. Recommendations
26.1 Pre-Feasibility Study
26.1.1 Exploration
Phase 4 drilling is now underway, it has a primary focus on further resource growth at Alpala and in the
surrounding areas, as well as infill drilling to increase the Mineral Resource confidence level and geotechnical,
hydrogeological and sterilisation drill testing ahead of Pre-Feasibility studies. The drilling program envisaged
for the coming year comprises 95,000 - 125,000 m of drilling utilising 10-14 machines.
26.1.2 Survey
The completion of the LiDAR survey at the end of 2018 means that accurate ground control tied to the national
grid system is available. This information needs to be incorporated in future studies and used to correct historic
surface sampling elevations where dgps has not been used. This will particularly apply to the continuous rock
saw channel sampling/trench data.
26.1.3 Geotechnical
26.1.3.1 Geotechnical Program
Geotechnical drilling is planned to focus on delineating fracture zones, shear zones, and fault zones and fault
zones within or peripheral to the Alpala orebody and associated underground development to provide detailed
geotechnical engineering information for future mining:
• Down hole geotechnical surveying utilising televiewer technology should be performed.
• High confidence 3D in-situ stress measurements will also be performed.
26.1.3.2 Geotechnical Logging
• Geotechnical logging should be performed at the drill site with NQ3 or HQ3 drill hole diameter.
• RQD and Fracture Frequency logging should differentiate between mechanical and natural features.
• Point Load Strength Index testing should be completed on each drilled run to build a robust strength
dataset.
26.1.3.3 Optical Televiewer
Geotechnical drill holes should be surveyed with an optical televiewer and should be processed to provide dip
and dip direction for discernible features. The results of the optical televiewer log should be compared to the
manually measured geotechnical logs.
Televiewer survey data will target 3 major items:

• Surface to 100 m depth for the understanding of engineering requirements of surface infrastructure and
surface stability.
• Specific targets defined by the 3D structural model which defines geological structures modelled across
the project area.
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• Intersections of interpreted structures and the proposed underground decline, block cave area and
associated underground infrastructure.
26.1.3.4 Surface Subsidence
The area in and around the subsidence zone is to be assessed to determine the impact of subsidence on the
stability of the surrounding mountain slopes. Hazards are to be identified and the consequence of failure
assessed.
26.1.3.5 Instrumentation
Cave Monitoring Instrumentation installation should be performed while drill holes are open and accessible.
26.1.3.6 Laboratory Testing
• Rock strength and elastic property testing is to be performed on all lithologies codes to provide a robust
intact strength database. Unconfined and triaxial testing is to be performed.
• Direct shear testing on discontinuity sets is to be performed such that a range of shear strength values for
the sets is obtained.
• Unified Soil Classification testing is to be performed on soils and gouge fault zones.
• Cerchar Hardness Index testing (or equivalent) is to be performed on lithologies encountered along the
decline to assist in continuous mining equipment selection.
26.1.3.7 Numerical Modelling
• Conceptual 2D or 3D numerical modelling should be performed to determine the expected induced stress
conditions at the mining horizons.
• Discrete Fracture Network modelling (or equivalent) should be performed to determine the primary
fragmentation.
• Cave draw modelling should be performed to optimise drawpoint spacing, drawbell design, and draw
strategy.
26.1.4 Hydrogeology
Hydrogeological testing utilising and SWiPS and/or IPI packer technology should be undertaken across all
intersections of interpreted structures and the proposed underground decline, block cave area and associated
underground infrastructure.
The following provides a summary of recommended studies to be undertaken to address data gaps associated
with the hydrological understanding across the Alpala deposit that will support the inflow assessment to the
block cave.
26.1.4.1 Rainfall Monitoring Records
The statistical analyses of rainfall records provided in previous investigations (e.g. minimum precipitation,
maximum precipitation) do not correlate with the observed monthly average rainfall records, therefore, some
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errors may be present in the analyses of these records or the records themselves. It is recommended that a
detail rainfall assessment is undertaken, incorporating both public domain and project site monitoring records.
Following the review and compilation of the available rainfall records, an assessment of design storm events,
including rainfall and storm duration should be undertaken. Design storm events should be calculated for 24-
hour maximum precipitation period for a range of return periods from 1 in 2 years up to 1 in 100 years.
Installation of a meteorological station at the Cascabel project should also be undertaken, as this would support
both the hydrological and hydrogeological assessments; as well as confirm the precipitation magnitudes at the
site.
26.1.4.2 Hydrology
Continuous flow monitoring of surface water courses in each of the sub-catchments within the extent of the
anticipated subsidence zone is recommended to be undertaken. Monitoring results from the proposed network
would support the calculation of the sub-catchment runoff coefficients, allow the assessment of flow
seasonality and support the calibration of the hydrology models to estimate inflow contribution to the block
cave.
26.1.5 Hydrogeology Components
The review of the available background information provided for this study relating to the hydrogeology for
the Alpala deposit indicated that limited hydrogeological data is available across the study area. Furthermore,
specific hydrogeological monitoring, investigations or testing has not been undertaken at the site. As a result,
the conceptualisation of the hydrogeological system and estimation of potential inflow into the block cave
development, provided in this document, has been based on generalised interpretation of the geological and
structural units; assumptions of aquifer hydraulic parameters and experience with other block cave
developments around the world. Improvement in the understanding of the hydrogeological system and
potential block cave inflow rates is required to establish a block cave and underground water management
strategy to a design level adequate for implementation as part of the mine design. To achieve this improvement
in the understanding of the hydrogeological system, it is recommended the implementation of the following
generalised forward works program. Further assessments of the site and geological conditions is required to
confirm details/quantities (e.g. number of drill holes, number of hydrogeological tests, number of monitoring
installations) associated with the proposed works program.
26.1.5.1 Hydrogeological Field Investigation Recommendations
Conduct a hydrogeological drilling and testing program to specifically assess groundwater levels, confirm
hydrostratigraphic units across the project site and identify hydraulic parameters to support inflow assessments
(the drilling and testing program can be coupled with subsequent resource definition and geotechnical drilling
programs to minimise the costs associated with undertaking a specific hydrogeological drilling program).
The hydrogeological site investigation, drilling and testing program should comprise:
• Spring/seep reconnaissance survey
• Surface infiltration testing
• Groundwater level monitoring instrumentation installation – e.g. monitoring wells, vibrating-wire
piezometers (VWP)
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• Packer testing – downhole targeted hydraulic conductivity testing

• Well hydraulic conductivity testing – e.g. falling-head/rising-head testing
• Production well installation and test pumping program
• Groundwater quality characterisation.
Update the conceptual understanding of the hydrogeological system (i.e. confirmed hydrostratigraphic units;
hydraulic parameters; groundwater levels, flow directions and flow gradient; recharge/discharge mechanisms,
groundwater quality) to support numerical groundwater model development for estimation of block cave
inflow and identification potential groundwater/inflow risks associated with the proposed block cave
development.
26.1.6 Mining
Options and opportunities that have been identified during the course of this study should be included in a
prefeasibility study as described below:
• Production rates and ramp-up profiles
• Materials handling layouts
• Extraction level layouts
• Undercut methods
• Auxiliary mining methods to supplement the main block caving method
• Multiple macro block footprints versus fewer larger footprints
• Campaign mining and stockpiling
• Underground ore sorting.
The concentrate pipeline needs to be optimised in the next stage regarding path and operational mode. Test
data on the concentrate characteristics should be undertaken to refine designs.
Being an underground block cave mine, very little waste material is produced. Waste material should be limited
to the access tunnel material, which can be used as fill for the plant pad and for construction of the starter dam
at the TSF areas. Further investigations into sourcing suitable rock fill material is required.
To optimise the capital and operating costs associated with the TSF facilities additional site identification is
required. There is also the possibility to optimise the TSF storage facilities by using cycloned tailings as
construction material for the dam walls. These topics should be further developed in the next stage of
engineering, including more precise topographical information and tests for tailings characteristics
determinations.
The LiDAR based topography should be extended to cover off site facilities such as concentrate pipeline, power
line, water line and other possible TSF sites.
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Due to the limited hydrological information existing in the project area to complete a specific hydrological
study for the project area with a network of existing hydrological stations in the Mira River basin, with historical
data of daily rainfall, needed to estimate maximum flows for diversions and surface water flow estimates.
26.1.8 Metallurgical Testwork
The following Testwork is recommended for the PFS:

• Further SMC, BWI and Ai tests.
• Bond Rod Mill Work Index (RWI) tests.
• Gravity gold recovery tests.
• Pyrite concentrates be produced to allow gold and copper recovery methods (Diagnostic Leach / Oxidative
leach / Cyanidation) to be evaluated.
• Undertake vendor concentrate regrind tests.
• Undertake vendor concentrate thickening tests.
• Undertake vendor concentrate filtration tests.
• Further variability and locked cycle flotation tests be conducted to allow evaluation of variability from both
spatial and geometallurgical aspects. Tests should be aligned to the proposed mine schedule, including
lower grade samples. Representative tests should be repeated with site sourced water.
• Thickened, paste and filtered tailing options be more fully evaluated, including laboratory tests to
characterise tailing.
• For very low copper head grade material evaluate addition of lime to the primary grinding and regrinding
circuit to determine if increased copper concentrate grade can be achieved.
As further information becomes available the following design options should be considered and/or re-
evaluated:
• Determine the suitability and potential capital savings using Woodgrove Staged Flotation Reactors. If
warranted an SRF pilot should be conducted.
• Conduct trade off studies on the use of HPGR, SAB, SABC, SCSABC circuits on competent ore.
• Conduct trade off studies on the use of mechanical cells and flotation columns in the cleaner circuit.
• Conduct trade off studies on the use ballmills, vertical stirred mills and horizontal stirred mills for
concentrate regrind.
• Conduct trade off studies on the potential options for treatment of pyrite concentrate.
26.1.9 Environmental
It is recommended that the environmental and social programs be continued and are calibrated to the Project
as its design evolves. Data collection should be suitable to be used for baseline in an Environmental Impact
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Assessment, and to provide a reference against future monitoring programs. Additional baseline, study
analyses, and reporting to support the Environmental Impact Assessment are required.
26.2 Definitive Feasibility Study

26.2.1 Geotechnical
Advanced numerical modelling that assess the rock mass performance and seismic risk at the undercut level,
surface subsidence, and cave draw strategy should be complete once a robust geotechnical understanding of
the rock mass is obtained.
26.2.2 Hydrogeology
Develop a numerical model of the hydrogeological system and the proposed underground development to
quantify the potential inflows into the block cave over time for the duration of the development. Results from
this modelling will allow the establishment of a water management strategy that can be implemented in
accordance with the timing of the block cave development. Furthermore, the model results will help define the
dewatering / depressurisation requirements of the block cave.
26.2.3 Mining
A mining feasibility study which refines the go-forward option identified at pre-feasibility study and refines the
mine plan, its accuracy, and integrates further findings of the other disciplines.
Further investigations be carried out for the tailings storage facilities with respect to optimisation of tailings
deposition methods.
Further optimisation of the concentrate pipeline should be undertaken.
26.2.5 Metallurgical Testwork and Process Design
Further Ore, Concentrate and Tailings Characterisation with respect to:

• Ore sorting
• Primary grinding properties
• Secondary grinding properties
• Materials handling properties
• Setting Properties
• Filtration properties.
All of the above testing regimes will require large bulk samples to be produced.
26.2.6 Concentrate Samples for Smelter Evaluation
There is a need to generate sufficient copper concentrate for smelter evaluations with objective of securing
offtake agreements with the smelters.
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This will require large bore drill holes to obtain sufficient samples for the metallurgical processing to produce
concentrate.
26.2.7 Environmental
The Environmental Impact Statement should be advanced during this stage.
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SolGold Plc and Cornerstone Capital Resources Inc

Cascabel Project, Northern Ecuador

NI 43-101 Technical Report on

Document No. 653060-0000-BA00-RPT-0003 Effective Date: 25-Mar-2019

CERTIFICATE OF QUALIFIED PERSON

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CERTIFICATE OF QUALIFIED PERSON

1.11 Sample Preparation, Analysis and Security ........................................................................... 35

1.25 Interpretation and Conclusions ............................................................................................... 52

3. Reliance on Other Experts ....................................................................................... 59

4. Property Description and Location ........................................................................ 60

5. Accessibility, Climate, Local Resources, Infrastructure and Physiography ....... 68

6.3 Noroccidente Project (1980-1984) .......................................................................................... 76

7. Geological Setting and Mineralisation .................................................................. 79

8. Deposit Types ........................................................................................................... 96

9. Exploration .............................................................................................................. 104

9.4 Geological Mapping ................................................................................................................ 109

9.6 Geophysics ................................................................................................................................ 110

9.7 Petrology, Mineralogy, and Research Studies ..................................................................... 113

10. Drilling ..................................................................................................................... 116

10.3 Collar Surveys ........................................................................................................................... 118

11. Sample Preparation, Analyses and Security ........................................................ 123

11.4 Metallurgical Sampling........................................................................................................... 125

11.8 Databases.................................................................................................................................. 129

12. Data Verification .................................................................................................... 133

12.2 Verifications by SolGold ......................................................................................................... 133

12.3 Verifications by SRK ................................................................................................................ 153

12.4 Verifications by Wood ............................................................................................................ 154

12.5 Verifications by Knight Piésold ............................................................................................. 155

12.6 Verifications by Mining Plus .................................................................................................. 155

12.7 Comments................................................................................................................................. 156

13. Mineral Processing and Metallurgical Testing ................................................... 157

13.4.8 Flotation .................................................................................................................................................................................... 166

13.5 Recovery Estimates.................................................................................................................. 178

14. Mineral Resource Estimate .................................................................................... 182

14.6 Statistical Analysis ................................................................................................................... 196

14.7 Geostatistical Analysis ............................................................................................................ 208

14.9 Model Validation and Sensitivity .......................................................................................... 216

14.10 Mineral Resource Classification ............................................................................................. 227

14.11 Cut-off Grade ........................................................................................................................... 231

14.13 Grade Sensitivity Analysis ...................................................................................................... 233

15. Mineral Reserve Estimate ...................................................................................... 248

16. Mining Method ....................................................................................................... 249

16.3 Hydrology Considerations...................................................................................................... 252

16.4 Hydrogeological Considerations ........................................................................................... 254

16.5 Design Parameters .................................................................................................................. 259

16.6 Production Schedule ............................................................................................................... 270

16.7 Mine Design ............................................................................................................................. 281

16.8 Mining Equipment ................................................................................................................... 285

16.9 Manning Levels ........................................................................................................................ 286

17. Recovery Method ................................................................................................... 292

17.4 Flotation .................................................................................................................................... 298

17.5 Flotation Concentrate Thickening and Pumping ................................................................ 300

17.10 Water Services.......................................................................................................................... 304

17.11 Air Services ............................................................................................................................... 304

17.12 Process Design Criteria ........................................................................................................... 305

17.13 Process Flow Sheet and Mass Balance .................................................................................. 317

18. Project Infrastructure............................................................................................. 336

18.2 Roads and Logistics ................................................................................................................. 340

18.3 Mill Feed ................................................................................................................................... 341

18.5 Waste Storage Facilities .......................................................................................................... 344

18.6.3 Conceptual Geotechnical Analyses ................................................................................................................................ 346

18.7 Surface Facilities ...................................................................................................................... 348