FS Mina Justa

APPENDIX V TECHNICAL REPORT ON THE MINA JUSTA PROJECT
China Sci-tech Holdings Limited
Marcona Project ± Mina Justa Definitive

Feasibility Study
Technical Report to Hong Kong Stock Exchange
Document No. 60254-00000-00-002-001
AMEC Minproc
19 April 2010
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Marcona Project ± Mina Justa Definitive Feasibility Study

Approved
Revision Date Description Prepared Reviewed
Study
Sign-off Client
Manager
R.Oliver
A 02/03/10 Issued for review D.Greig D.David B.Grbovic
G.Kalivitis
R.Oliver
D.David
0 04/03/10 Issued to client D.Greig B.Grbovic
G.Kalivitis
D Pether
G.Kalivitis
1 16/03/10 Final Issue D.Greig B.Grbovic
D.Pether
2 11/04/10 Minor Corrections Incorporated D.Greig P,Nofal B.Grbovic
3 15/04/10 Minor Corrections Incorporated D.Greig D.Pether B.Grbovic
4 16/04/10 Minor Corrections Incorporated D.Greig B.Grbovic
5 19/04/10 Reissued for HKSE D.Greig D.Pether B.Grbovic
Item Page Section Comments
* Use after Rev. 0
Rev 5 ± Issued to Client ± 19 Apr 2010
60254-00000-00-002-001
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Disclaimer
This Technical Report (Report) has been prepared for China Sci-tech Holdings Limited by
AMEC Minproc Limited (AMEC Minproc), based on assumptions as identified throughout the text and
upon information and data supplied by others.
The Report is to be read in the context of the methodology, procedures and techniques used,
AMEC Minproc¶V DVVXPSWLRQV DQG WKH FLUFXPVWDQFHV DQG FRQVWUDLQWV XQGHU ZKLFK WKH 5HSRUW ZDV
written. The Report is to be read as a whole, and sections or parts thereof should therefore not be
read or relied upon out of context.
AMEC Minproc has, in preparing the Report, followed methodology and procedures, and exercised
due care consistent with the intended level of accuracy of the Technical Report, using its professional
judgment and reasonable care. However, no warranty should be implied as to the accuracy of
estimates or other values and all estimates and other values are only valid as at the date of the Report
and will vary thereafter.
Parts of the Report have been prepared or arranged by third party contributors, as detailed in the
document. While the contents of information supplied by others has been generally reviewed by
AMEC Minproc for inclusion into the Report, it has not been fully audited or sought to be verified by
AMEC Minproc. AMEC Minproc is not in a position to, and does not, verify the accuracy or
completeness of, or adopt as its own, the information and data supplied by others and disclaims all
liability, damages or loss with respect to such information and data.
This disclaimer must accompany every copy of this Report, which is an integral document and must be
read in its entirety.
60254-00000-00-002-001
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Table of Contents
Disclaimer....................................................................................................................... i
1. INTRODUCTION AND PROJECT OVERVIEW .......................................................... 1
2. EXECUTIVE SUMMARY .......................................................................................... 3

2.1 BACKGROUND .................................................................................................................................. 3
2.2 PROJECT SETTING ........................................................................................................................... 3
2.2.1 Location ............................................................................................................................... 3
2.2.2 Topography and Vegetation ................................................................................................ 3
2.2.3 Climate ................................................................................................................................. 5
2.2.4 Local Resources and Infrastructure ..................................................................................... 5
2.3 LAND OWNERSHIP ........................................................................................................................... 5
2.3.1 Mining Concessions ............................................................................................................. 5
2.3.2 Surface Rights ..................................................................................................................... 6
2.3.3 Construction Materials ......................................................................................................... 6
2.4 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT .............................................................. 6
2.4.1 Permitting ............................................................................................................................. 6
2.4.2 ESIA Studies ........................................................................................................................ 6
2.4.3 Community Relations ........................................................................................................... 7
2.4.4 Environmental Management ................................................................................................ 7
2.4.5 Mine Closure ........................................................................................................................ 7
2.5 GEOLOGY, MINERALISATION AND EXPLORATION ...................................................................... 8
2.5.1 Geological Setting ................................................................................................................ 8
2.5.2 Mineralisation and Alteration ............................................................................................... 9
2.5.3 Exploration ........................................................................................................................... 9
2.5.4 Logging, Sampling, Sample Preparation and Analysis ..................................................... 10
2.5.5 Data Verification ................................................................................................................ 10
2.6 MINERAL RESOURCE ESTIMATION.............................................................................................. 11
2.6.1 Introduction ........................................................................................................................ 11
2.6.2 Block Model Generation .................................................................................................... 11
2.6.3 Resource Modelling ........................................................................................................... 11
2.6.4 Mineral Resources ............................................................................................................. 12
2.7 MINING ............................................................................................................................................. 13
2.7.1 Introduction ........................................................................................................................ 13
2.7.2 Pit Optimisation .................................................................................................................. 13
2.7.3 Pit and Dump Design ......................................................................................................... 13
2.7.4 Mineral Reserve ................................................................................................................. 15
2.7.5 Mine and Process Schedules ............................................................................................ 16
2.7.6 Mine Fleet Assessment ..................................................................................................... 19
2.7.7 Mine Operating Cost .......................................................................................................... 20
2.7.8 Mine Capital Cost .............................................................................................................. 21
2.8 METALLURGY AND PROCESSING ................................................................................................ 23
2.8.1 Vat Leach Circuit ............................................................................................................... 23
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2.8.2 Sulphide Ore Processing ................................................................................................... 25

2.9 PLANT ENGINEERING .................................................................................................................... 27
2.9.1 Geotechnical Investigations ............................................................................................... 27
2.9.2 Oxide Plant ........................................................................................................................ 28
2.9.3 Sulphide Ore Plant ............................................................................................................. 32
2.10 INFRASTRUCTURE ......................................................................................................................... 35
2.10.1 Roads................................................................................................................................. 36
2.10.2 Buildings ............................................................................................................................ 36
2.10.3 Construction and Accommodation Camp .......................................................................... 38
2.10.4 Waste Treatment ............................................................................................................... 38
2.10.5 Project Water Supply ......................................................................................................... 38
2.10.6 Power Supply and Distribution .......................................................................................... 40
2.11 WASTE DISPOSAL .......................................................................................................................... 41
2.11.1 Mine and Ripios Waste Dumps ......................................................................................... 41
2.11.2 Magnetite Manto Waste Dump and Low Grade Stockpile Design .................................... 42
2.11.3 Tailings Storage Facility..................................................................................................... 42
2.12 FUEL SUPPLY .................................................................................................................................. 46
2.13 PORT AND ROAD TRANSPORT ..................................................................................................... 46
2.14 PROJECT IMPLEMENTATION ........................................................................................................ 46
2.15 CAPITAL COSTS .............................................................................................................................. 47
2.15.1 Cost Update from 1Q09 to 1Q10 ....................................................................................... 47
2.15.2 Initial Project Capital .......................................................................................................... 48
2.15.3 Sustaining Capital .............................................................................................................. 52
2.16 OPERATING COSTS........................................................................................................................ 52
2.17 MARKETING AND PRODUCT PRICING ......................................................................................... 57
2.17.1 Copper Cathode Sales ...................................................................................................... 57
2.17.2 Copper Concentrates Sales .............................................................................................. 57
2.17.3 Market Review (Copper and Sulphuric Acid)..................................................................... 57
2.17.4 Off-site Operating Costs (Transport, Marketing and Realisation) ..................................... 58
2.18 RISK AND OPPORTUNITY .............................................................................................................. 59
2.18.1 Hazard Identification .......................................................................................................... 59
2.18.2 Technical Risks.................................................................................................................. 59
2.18.3 Commercial Risks .............................................................................................................. 60
2.18.4 Legal Risks to Infrastructure Development........................................................................ 60
2.18.5 Opportunities ..................................................................................................................... 60
2.18.6 Cost and Implementation ................................................................................................... 62
2.19 POST-DFS ACTIVITIES ................................................................................................................... 62
2.19.1 Exploration Drilling ............................................................................................................. 62
2.19.2 Additional Mine Planning ................................................................................................... 62
2.19.3 Alternative Infrastructure Access Routes .......................................................................... 62
2.19.4 Revised Project Schedule.................................................................................................. 63
3. PROJECT RISK SUMMARY ................................................................................... 64

3.1 INTRODUCTION............................................................................................................................... 64
3.2 PROJECT RISK ................................................................................................................................ 64
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3.3 RISK MITIGATION FACTORS ......................................................................................................... 70
4. PROJECT DETAILS ............................................................................................... 73

4.1 PROJECT LOCATION, CLIMATE AND REGIONAL INFRASTRUCTURE ...................................... 73
4.1.1 Location ............................................................................................................................. 73
4.1.2 Topography and Vegetation .............................................................................................. 73
4.1.3 Climate ............................................................................................................................... 73
4.1.4 Local Resources and Infrastructure ................................................................................... 73
4.2 LAND OWNERSHIP ......................................................................................................................... 74
4.2.1 Mining Concessions ........................................................................................................... 74
4.2.2 Surface Rights ................................................................................................................... 76
4.2.3 Construction Materials ....................................................................................................... 80
4.3 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT (ESIA) ................................................ 80
4.3.1 Legal Framework ............................................................................................................... 80
4.3.2 Permitting ........................................................................................................................... 81
4.3.3 ESIA Scope ....................................................................................................................... 81
4.3.4 Baseline Studies ................................................................................................................ 81
4.3.5 Community Relations and Public Consultation.................................................................. 82
4.3.6 Identification and Evaluation of Effects .............................................................................. 83
4.3.7 Environmental Management .............................................................................................. 83
4.3.8 Mine Closure ...................................................................................................................... 84
4.3.9 Socio-economic Conditions ............................................................................................... 84
4.4 GEOLOGY, EXPLORATION AND DATA QUALITY ......................................................................... 85
4.4.1 Geology.............................................................................................................................. 85
4.4.2 Deposit Type ...................................................................................................................... 86
4.4.3 Mineralisation ..................................................................................................................... 86
4.4.4 Exploration History............................................................................................................. 87
4.4.5 Adjacent Properties ........................................................................................................... 88
4.4.6 Drilling ................................................................................................................................ 90
4.4.7 Sampling Method and Approach ....................................................................................... 92
4.4.8 Sample Preparation, Analysis and Security ...................................................................... 93
4.4.9 Data Verification ................................................................................................................ 94
4.5 MINERAL RESOURCE ESTIMATE.................................................................................................. 95
4.5.1 Introduction ........................................................................................................................ 95
4.5.2 Database and Block Model ................................................................................................ 95
4.6 GEOTECHNICAL STUDIES ........................................................................................................... 115
4.6.1 Introduction ...................................................................................................................... 115
4.6.2 Open Pit Geotechnical Design Parameters ..................................................................... 118
4.6.3 Site Geotechnical Investigations: Tailings Storage and Process Facility Areas ............. 120
4.6.4 Borrow Materials .............................................................................................................. 121
4.6.5 Groundwater .................................................................................................................... 121
4.6.6 Site Stability ..................................................................................................................... 121
4.6.7 Seismic Risk Analysis ...................................................................................................... 121
4.7 MINING ........................................................................................................................................... 122
4.7.1 Introduction ...................................................................................................................... 122
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4.7.2 Pit Optimisation ................................................................................................................ 124

4.7.3 Pit and Dump Design ....................................................................................................... 124
4.7.4 Mineral (Ore) Reserve ..................................................................................................... 127
4.7.5 Mine and Process Schedules .......................................................................................... 127
4.7.6 Mine Fleet Assessment ................................................................................................... 131
4.7.7 Mine Operating Cost ........................................................................................................ 131
4.7.8 Mine Capital Cost ............................................................................................................ 133
4.8 METALLURGY ................................................................................................................................ 135
4.8.1 Oxide Ore ........................................................................................................................ 135
4.8.2 Sulphide Ore .................................................................................................................... 140
4.9 PROCESS PLANT DESIGN ........................................................................................................... 147
4.9.1 Oxide Ore Plant ............................................................................................................... 147
4.9.2 Sulphide Ore Plant ........................................................................................................... 157
4.10 GENERAL INFRASTRUCTURE ..................................................................................................... 163
4.10.1 Access Roads .................................................................................................................. 164
4.10.2 Internal Roads ................................................................................................................. 164
4.10.3 Buildings .......................................................................................................................... 164
4.10.4 Communications .............................................................................................................. 165
4.10.5 Construction and Accommodation Camp ........................................................................ 167
4.10.6 Waste Treatment ............................................................................................................. 167
4.11 WATER SUPPLY SYSTEM ............................................................................................................ 168
4.11.1 Project Water Balance ..................................................................................................... 168
4.11.2 Hydrological Testwork and Studies ................................................................................. 169
4.11.3 Water Supply System ...................................................................................................... 172
4.12 POWER SUPPLY SYSTEM............................................................................................................ 175
4.12.1 Power Supply and Distribution ........................................................................................ 175
4.12.2 Site Power Supply ........................................................................................................... 176
4.12.3 Control Systems .............................................................................................................. 177
4.13 WASTE DISPOSAL ........................................................................................................................ 177
4.13.1 Mine and Ripios Waste Dumps ....................................................................................... 177
4.13.2 Tailings Storage Facility (TSF) ........................................................................................ 181
4.14 DIESEL FUEL SUPPLY .................................................................................................................. 186
4.15 PORT AND TRANSPORT .............................................................................................................. 186
4.15.1 Port Facilities ................................................................................................................... 186
4.15.2 Transport ......................................................................................................................... 189
4.16 PROJECT IMPLEMENTATION PLAN ............................................................................................ 189
4.16.1 Implementation Schedule ................................................................................................ 189
4.16.2 Schedule Risks ................................................................................................................ 193
4.16.3 Post-DFS Developments ................................................................................................. 193
4.16.4 Contracting Strategy ........................................................................................................ 194
4.16.5 Implementation Scope of Work ....................................................................................... 194
4.16.6 Organisation .................................................................................................................... 195
4.16.7 Health, Safety, Environment and Community.................................................................. 195
4.16.8 Project Management........................................................................................................ 196
4.16.9 Project Phases ................................................................................................................. 196
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4.17 PROJECT OPERATIONAL PLAN .................................................................................................. 200

4.17.1 Operational Labour Levels and Sourcing ........................................................................ 200
4.17.2 Closure/Post-closure Plan ............................................................................................... 201
4.18 CAPITAL COST .............................................................................................................................. 201
4.18.1 Preamble ± Cost Escalation from 1Q09 .......................................................................... 201
4.18.2 Project Capital ................................................................................................................. 202
4.18.3 Estimation Methodology .................................................................................................. 206
4.18.4 Sunk Costs ...................................................................................................................... 207
4.18.5 Sustaining Capital ............................................................................................................ 207
4.19 OPERATING COSTS...................................................................................................................... 208
4.19.1 Mining Cost ...................................................................................................................... 209
4.19.2 Oxide Plant ...................................................................................................................... 209
4.19.3 Sulphide Plant .................................................................................................................. 210
4.19.4 Transport ......................................................................................................................... 210
4.19.5 General and Administration ............................................................................................. 210
4.19.6 Environmental .................................................................................................................. 210
4.20 MARKETING AND PRODUCT PRICING ....................................................................................... 214
4.20.1 Copper Cathode Sales Contract ...................................................................................... 214
4.20.2 Copper Concentrates....................................................................................................... 214
4.20.3 Market Review (Copper and Sulphuric Acid)................................................................... 216
4.20.4 Transport, Marketing and Realisation Costs ................................................................... 217
4.21 DFS RISK ASSESSMENT .............................................................................................................. 218
4.21.1 Hazard Identification ........................................................................................................ 218
4.21.2 Technical Risks................................................................................................................ 220
4.21.3 Commercial Risks ............................................................................................................ 220
4.21.4 Legal Risks to Infrastructure Development...................................................................... 221
4.22 OPPORTUNITIES ........................................................................................................................... 222
4.22.1 Additional Ore Reserves .................................................................................................. 222
4.22.2 Sulphide Ore Processing Only Option ............................................................................. 222
4.22.3 Vat Leach Operation ........................................................................................................ 223
4.22.4 Sulphide Circuit ................................................................................................................ 223
4.22.5 Plant Design .................................................................................................................... 225
4.22.6 Cost and Implementation ................................................................................................. 226
4.23 POST DFS ACTIVITIES.................................................................................................................. 226
4.23.1 Exploration Drilling ........................................................................................................... 226
4.23.2 Additional Mine Planning ................................................................................................. 229
4.23.3 Identification of Alternative Access Routes ..................................................................... 230
4.23.4 Project Schedule .............................................................................................................. 231
5. REFERENCES ...................................................................................................... 232
6. STATEMENT OF CAPABILITY ............................................................................. 233
7. STATEMENT OF INDEPENDENCE....................................................................... 234
8. LIMITATIONS AND CONSENT ............................................................................ 235
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List of Tables
Table 2.1 Global Classified Resources ................................................................................................... 12

Table 2.2 Global Classified Resources for Silver and Gold .................................................................... 12
Table 2.3 Mina Justa Probable Mineral Reserve (1), (2), (3) ................................................................. 15
Table 2.4 Annual Production Schedule: Mining and Processing ............................................................ 18
Table 2.5 Key Operating Cost Inputs ...................................................................................................... 20
Table 2.6 Equipment Fleet and Hourly Costs ......................................................................................... 20
Table 2.7 Mining: Capital, Sustaining and Replacement Costs (US$ M, July 2009) .............................. 22
Table 2.8 Predictive Metallurgy Summary .............................................................................................. 26
Table 2.9 Oxide Plant DFS Capital Cost Estimate, Summarised by Area (1Q09) ................................. 49
Table 2.10 Oxide Plant DFS Capital Cost Estimate: Escalated to IQ10 .................................................. 49
Table 2.11 Sulphide Concentrator PFS Capital Cost Estimate Summarised by Area (1Q09) ................. 50
Table 2.12 Sulphide Concentrator PFS Capital Cost Estimate Summarised by Area, Escalated to
1Q10 ....................................................................................................................................... 50
Table 2.13 Exchange Rates (1Q09) ......................................................................................................... 51
Table 2.14 Sustaining/Deferred Capital Summary (1Q09) ....................................................................... 52
Table 2.15 Sustaining/Deferred Capital Escalated to 1Q10 ..................................................................... 52
Table 2.16 Key Unit Costs Provided by Marcobre (1Q09) ....................................................................... 53
Table 2.17 Summary of Project Operating Costs (US$/t ROM processed) Model 090821 (1Q09
basis) ...................................................................................................................................... 54
Table 2.18 Summary of Project Operating Costs, Escalated to 1Q10 (US$/t ROM processed) .............. 54
Table 2.19 Summary of Project Closure Costs (US$, 1Q09 Basis) ......................................................... 55
Table 2.20 Summary of Project Closure Costs, Escalated to January 2010 ............................................ 55
Table 2.21 Summary of Forecast Prices and Terms, Q1 2009 US$ terms, 2012 to 2023 Average ........ 58
Table 2.22 Transportation, Marketing and Realisation Costs (1Q09) ...................................................... 59
Table 4.1 Exploration History of the Mina Justa Prospect ...................................................................... 88
Table 4.2 Drilling Conducted on the Mina Justa Prospect ...................................................................... 91
Table 4.3 Details of Block Model Density Assignment by Deposit ......................................................... 97
Table 4.4 Top-cuts Applied: Cut by Domain ........................................................................................... 99
Table 4.5 Variogram Parameters: October 2008 Resource Update..................................................... 103
Table 4.6 Search Volume Parameters .................................................................................................. 104
Table 4.7 Model Validation: Global Mean Grade Comparisons by Domain ......................................... 108
Table 4.8 Mina Justa Prospect Global Classified Resource for Total Cu ............................................. 114
Table 4.9 Global Classified Resource for Ag and Au ........................................................................... 114
Table 4.10 Mina Justa Prospect Global Classified Resource: Sequential Copper Data ........................ 115
Table 4.11 Pit Slope Design Criteria ....................................................................................................... 120
Table 4.12 Probabilistic Analysis: Peak Ground Acceleration in Rock ................................................... 122
Table 4.13 Pit Inventory .......................................................................................................................... 125
Table 4.14 Mina Justa Probable Mineral Reserve (1), (2), (3) ............................................................... 127
Table 4.15 Annual Production Schedule: Mining and Processing .......................................................... 129
Table 4.16 Key Operating Cost Assumptions ......................................................................................... 132
Table 4.17 Equipment Fleet and Hourly Costs ....................................................................................... 132
Table 4.18 Mine Initial and Sustaining Capital Costs: Bare Costs ($M) ................................................. 134
Table 4.19 First Phase Bulk Flotation Testwork: Grade and Mass Pull ................................................. 141
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Table 4.20 Flash Flotation Concentrate Performance ............................................................................ 142

Table 4.21 Predictive Metallurgy Summary ............................................................................................ 144
Table 4.22 Copper Concentrate Specifications by Ore Type ................................................................. 145
Table 4.23 Summary Operations Manning Levels.................................................................................. 201
Table 4.24 Oxide Plant DFS Capital Cost Estimate (1Q09), Summarised by Area ............................... 204
Table 4.25 Oxide Plant DFS Capital Cost Estimate, Escalated to 1Q10 ............................................... 204
Table 4.26 Sulphide Concentrator PFS Capital Cost Estimate (1Q09), Summarised by Area .............. 205
Table 4.27 Sulphide Concentrator PFS Capital Cost Estimate, Escalated to 1Q10 .............................. 205
Table 4.28 Exchange Rates (1Q09) ....................................................................................................... 206
Table 4.29 Sustaining/Deferred Capital Summary (1Q09) ..................................................................... 208
Table 4.30 Total Sustaining/Deferred Capital, Escalated to 1Q10 ......................................................... 208
Table 4.31 Key Unit Costs Provided by Marcobre (1Q09) ..................................................................... 209
Table 4.32 Summary of Project Operating Costs (US$/t ROM Processed) Model 090821 ................... 212
Table 4.33 Summary of Operating Costs (US$/t ROM Process Model 090821, Escalated to IQ10) ..... 212
Table 4.34 Summary of Project Closure Costs....................................................................................... 213
Table 4.35 Summary of Project Closure Costs: Escalated to IQ10 ........................................................ 213
Table 4.36 Summary of Forecast Prices and Terms .............................................................................. 217
Table 4.37 Transportation, Marketing and Realisation Costs (1Q09) .................................................... 218
Table 4.38 DFS and Updated Pit Inventories ......................................................................................... 229
Table 4.39 Pit Optimisation Shell Comparisons ..................................................................................... 230
Table 4.40 Comparison of Distances of Affected Infrastructure Items (km) ........................................... 231
List of Figures
Figure 2.1 Marcona Copper Project Location Plan .................................................................................... 4

Figure 2.2 Ultimate Pit Designs................................................................................................................ 14
Figure 2.3 Waste Storage Areas and Stockpiles ..................................................................................... 15
Figure 2.4 Mining by Pit Stage (Mt) ......................................................................................................... 16
Figure 2.5 Ore Mining by Material Type (Mt) ........................................................................................... 17
Figure 2.6 Long Term Stockpile Inventories (Mt) ..................................................................................... 19
Figure 2.7 Operating Costs by Time (US$/t) ............................................................................................ 21
Figure 2.8 Mina Justa Oxide Circuit Flow Sheet ...................................................................................... 29
Figure 2.9 Plant Layout ............................................................................................................................ 30
Figure 2.10 Mina Justa Sulphide Circuit Flow Sheet ................................................................................. 33
Figure 2.11 Mina Justa Project Plan .......................................................................................................... 37
Figure 2.12 Tailings Storage Facility .......................................................................................................... 44
Figure 4.1 Location of Mina Justa Project ................................................................................................ 75
Figure 4.2 Mina Justa Lot AA-CB ............................................................................................................ 77
Figure 4.3 Mine Justa Prospect Geology Showing Location of Mina Justa (east) and Magnetite
Manto (west) Deposits ............................................................................................................ 85
Figure 4.4 Copper Prospects Identified Within the Marcona Copper Property Area ............................... 90
Figure 4.5 Mina Justa Prospect Drill Hole Location Plan (as at August 2008) ........................................ 92
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Figure 4.6 Example Variograms and Variogram Models for Oxide Domains in the Mina Justa
Prospect ................................................................................................................................ 101
Figure 4.7 Example Variograms and Variogram Models for Selected Transition and Sulphide
Domains in the Mina Justa Prospect .................................................................................... 102
Figure 4.8 W-E Section through Mina Justa Prospect, Coded by Resource Category ......................... 106
Figure 4.9 Comparison of Grade Trends between Block Model and Input Drill Hole Data ................... 109
Figure 4.10 Local Grid West-East Cross-Sections through the Mina Justa Prospect Resource
Model, Colour Coded According to Total Cu ........................................................................ 110
Figure 4.13 Geotechnical Plan: West Sector Plant .................................................................................. 116
Figure 4.14 Geotechnical Plan: East Sector Plant ................................................................................... 117
Figure 4.15 Final Pit and Dump Layout Plan ........................................................................................... 123
Figure 4.16 Ultimate Pit Designs.............................................................................................................. 125
Figure 4.17 Waste Storage Areas and Stockpiles ................................................................................... 126
Figure 4.18 Total Mining Tonnage by Pit Stage (Mt) ............................................................................... 128
Figure 4.19 Ore Mining Tonnage by Material Type (Mt) .......................................................................... 128
Figure 4.20 Vat and Float Ore Processing (Mt) ....................................................................................... 130
Figure 4.21 Long Term Stockpile Inventories (Mt) ................................................................................... 130
Figure 4.22 Operating Costs per Tonne by Time (US$/t) ........................................................................ 133
Figure 4.23 Mina Justa Oxide Circuit Flow Sheet .................................................................................... 149
Figure 4.24 Plant Layout .......................................................................................................................... 151
Figure 4.25 Vat Leaching Layout ............................................................................................................. 153
Figure 4.26 Mina Justa Sulphide Circuit Flow Sheet ............................................................................... 158
Figure 4.27 Concentrator Layout ............................................................................................................. 160
Figure 4.28 Mina Justa Project Plan ........................................................................................................ 166
Figure 4.29 Locations MPA-1 Lomas, MPA-2 Jahuay and Proposed Test-Production Wells ................. 171
Figure 4.30 Ripios and Mine Waste Dumps ............................................................................................ 178
Figure 4.31 Tailings Storage Facility ........................................................................................................ 182
Figure 4.32 Tailings Dam ......................................................................................................................... 183
Figure 4.33 Mina Justa Project: Oxide Project Implementation Schedule (DFS Version) ....................... 191
Figure 4.34 Mina Justa Project: Sulphide Project Implementation Schedule (DFS Version) .................. 192
Figure 4.35 Drill Hold Location Plan ± Recent Exploration Drilling .......................................................... 228
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1. INTRODUCTION AND PROJECT OVERVIEW
The Marcona Copper Property, located approximately 400 km southeast of Lima in the province of
Nazca, department of Ica, is owned by Marcobre S.A.C. (Marcobre), a private closed corporation with
limited liability existing under the laws of Peru. Marcobre was incorporated in Peru in 2004.
Chariot Resources Limited (Chariot) indirectly owns 70% of Marcobre, while Korea Resources
Corporation (Korea Resources) and LS-Nikko Copper Inc. (LS-Nikko) indirectly own 30%. Chariot,
Korea Resources, LS-Nikko, their respective shareholder entities, and Marcobre have entered into a
shareholders agreement with respect to the corporate governance of Marcobre and the ownership,
development and operation of the Marcona Copper Property.
China Sci-tech Holdings Limited (China Sci-tech) has recently concluded an exclusivity agreement with
Chariot to investigate the purchase of Chariot and acquire its 70% interest in the Marcona Copper
Property.
The Marcona Copper Property consists of a number of iron oxide-copper (silver-gold) deposits and
prospects, the most advanced of which is the Mina Justa prospect, which has been the subject of a
Definitive Feasibility Study (DFS), completed by GRD Minproc Limited ± now AMEC Minproc Limited
(AMEC Minproc), with assistance from other consultants, in July 2009. The DFS covers the whole
Project combining the mine, process plant, metals production facility and associated infrastructural
facilities proposed for the Project.
The mineralisation to be exploited by the Mina Justa Project is contained in two deposits, the Main or
Mina Justa deposit and the much smaller Magnetite Manto deposit, which are separated by 1 km of
barren ground.
The Mina Justa Project is designed to process 12 Mt/a of Oxide ore by crushing, vat leaching, solvent
extraction, and electrowinning to produce up to 52 000 t/a of cathode copper. The Project will be
expanded during operating Year 2 (quarter 7) to include a 5 Mt/a concentrator to treat copper sulphide
ore underlying the oxide ore in certain portions of the Mina Justa deposit. The Concentrator plant
design is developed to Prefeasibility Study (PFS) level.
Additional studies and other activities since completion of the DFS comprise:
x Continued drilling in the vicinity of the Mina Justa Project, with 125 additional holes and extensions
to existing holes added to the database.
x Mining studies ± assessment of potential increases in the pit inventory and project life.
x Preliminary studies into re-routing of certain infrastructure elements to avoid possible conflict with
expansion plans on a neighbouring mining property.
x Project implementation schedule revision: the start date for the Project has been deferred to
1 October, 2010.
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x Progress in the Environmental and Social Impact Assessment (ESIA) application, which was
submitted in November 2009, approved for PuEOLF GLVWULEXWLRQ E\ 3HUX¶V 0LQLVWU\ RI (QHUJ\ DQG
Mines. Public workshops were then conducted in the town of San Juan de Marcona on 10
December 2009 and a full public hearing in the community on 8 January 2010.
Through the intermediary of Chariot, AMEC Minproc has been commissioned by China Sci-tech
Holdings Limited to prepare a Technical Report comprising a technical review and summary of the DFS
and subsequent work completed on the Mina Justa Project (the Project), suitable for inclusion as
Appendix V to a Hong Kong listing document. This Technical Report covers the geology, exploration,
resource and reserve estimation, mining, processing, infrastructure, environmental and social aspects
of the Project, life of mine production plans, project implementation, capital and operating costs and
project risks and opportunities.
AMEC Minproc has been involved continuously with the Mina Justa Project since 2005, and has
completed a scoping study, option studies and the DFS. Consequently, it is well acquainted with the
Project, infrastructure requirements and environmental issues affecting the Project. AMEC Minproc
geologists, mining engineers, process plant and project implementation engineers have visited the site
several times over that period. In addition, a major Peruvian group has provided engineering services
and capital and operating cost estimates for power, water supply, accommodation, port and other
transport infrastructure.
The currency used in the Technical Report is United States dollars (US$) unless otherwise stated.
Resources and Reserves have been developed and are in accordance with the regulations and
guidelines of Canadian National Instrument 43-101 (NI43-101). AMEC Minproc considers that the
Resources and Reserves are also in accordance with the JORC Code, December 2004.1
AMEC Minproc /LPLWHG¶VDGGUHVVLV/HYHO6W*HRUJHV7HUUDFH3HUWK:HVWHUQ$XVWUDOLD

Australia.
AMEC Minproc is a subsidiary of AMEC Limited, an international supplier of consultancy, engineering

DQG SURMHFW PDQDJHPHQW VHUYLFHV WR WKH ZRUOG¶V QDWXUDO UHVRXUFHV QXFOHDU FOHDQ HQHUJ\ ZDWHU DQG
environmental sectors, with its head office in London, UK.
This Technical Report is provided to the Directors of China Sci-tech for the purpose of assisting them in
evaluating the Mina Justa Project. The Technical Report should not be used or relied upon by other
parties. Neither the whole nor any part of this Technical Report nor any reference thereto may be
included in, or with, or attached to any documents or used for any purpose without AMEC Minproc¶V
written consent as to the form and context in which it appears.
1
Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Committee of the
Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia
60254-00000-00-002-001
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2. EXECUTIVE SUMMARY
2.1 BACKGROUND
AMEC Minproc completed a DFS in July 2009, with the final DFS report being issued in August 2009,
regarding the development of the Mina Justa Project. Since that time, minor additional work has been
completed in revising the open pit optimisation and mine designs to match the latest operating costs,
and revising the project development schedule to reflect the latest development strategy. Chariot has
provided additional information regarding the progress in finalising the ESIA, and has released results
of further exploration drilling in the vicinity of the deposits.
Alternative routes for 220 kV power, fresh water and road access to site have been identified at a
preliminary level, in order to avoid potential conflict with an adjacent mine operator over the proposed
DFS routes. The new routes are considered viable and the changes are relatively minor, with limited
cost implications, but geotechnical, archeological and engineering studies have not been completed to
provide new cost estimates.
At China Sci-tech¶VUHTXHVWAMEC Minproc has compiled this Technical Report incorporating results of
the DFS and subsequent activities, in accordance with Rule 18.09 of the Hong Kong Stock Exchange
Listing Rules.
Section 2 provides a summary of the findings of the technical review; Section 3 is a review of technical
risk and an indication of mitigation activities that are or could be contemplated; details of all technical
areas of the Project are found in Section 4; Section 5 provides a list of key references, and Section 6
provides a summary of the qualification of the technical reviewers, Section 7 is a statement of
independence and Section 8 outlines limitations and consents accompanying the document.
2.2 PROJECT SETTING
2.2.1 Location
The Mina Justa Project is located approximately 400 km southeast of Lima within the Nazca Province,
Ica Department of the southern Peruvian coastal belt (Figure 2.1). The Project lies approximately
25 km north of the coastal town of San Juan de Marcona and 35 km south-southwest of the town of
Nazca.
2.2.2 Topography and Vegetation
The Project is located within the coastal plain area of Peru approximately 20 to 30 km from the Pacific
Ocean. The topography is relatively subdued, ranging in elevation from 630 to 880 metres above sea
level (masl), although the eastern flank of the Mina Justa deposit is marked by a north-northwest
trending, steep, fault-bounded scarp.
Due to the desert climate, vegetation on the property is almost non-existent. None of the property is
used for agricultural purposes.
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Figure 2.1
Marcona Copper Project Location Plan
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2.2.3 Climate
The climate is arid and windy. Annual rainfall averages approximately 27 mm and the annual mean
temperature is 19°C. Average monthly maximum temperatures range between 22°C and 28°C, and
minimum monthly average temperatures range between 15ºC and 26°C. Relative humidity is generally
65-85%. During the winter months (June to August), thick fogs are common.
2.2.4 Local Resources and Infrastructure
Limited infrastructure exists at the small town of San Juan de Marcona, which was developed to
support large-scale mining of the Marcona Iron ore deposits by Shougang Hierro Peru S.A.A.
(Shougang). The town has a population estimated at 11 500 of which nearly 1800 are employed by
Shougang. The other neighbouring towns of Nazca and Vista Alegre have a combined population of
approximately 20 000.
The region can provide the basic goods, services, medical care and some accommodation to assist in
project development, as well as meet some labour requirements for various stages of exploration and
development projects.
6DQ-XDQGH0DUFRQDDQG6KRXJDQJ¶VPLQLQJRSHUDWLRQVDUHFRQQHFWHGWRWKH1DWLRQDO3Rwer Grid. A
220 kV powerline passes within 10 km of the Mina Justa Project.
There is no surface water on the Project site; sub-surface water has been intersected at a depth of
450 m at the Mina Justa GHSRVLW :DWHU IRU 6KRXJDQJ¶V RSHUDWLRQV DQG WKH 6Dn Juan de Marcona
community is obtained from the Jahuay aquifer located 30 km southeast of the Mina Justa Project.
The nearest suitable ports exist at San Martin, 250 km by road to the north, and Matarani, 550 km to
the south.
Cellular phone coverage is available to a limited extent in the Project area, but the grid is expanding.
Communications between site and Lima currently are via satellite telephone.
2.3 LAND OWNERSHIP
2.3.1 Mining Concessions
Marcobre is currently the sole and registered titleholder of the TA1 mining concession, which covers the
Mina Justa Project as well as a group of 45 other mining concessions abutting the TA1 concession, for
a total landholding of 32 889 ha.
All concessions are in good standing and free of any liens and mortgages except for a first and
preferential mortgage over the TA1 concession amounting to US$27.6 M granted by Marcobre in favour
of the previous owners, Shougang and Rio Tinto Exploration (Rio Tinto) in order to guarantee payment
obligations in connection with the transfer of the TA1 concession.
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Based on the resources at Mina Justa and Magnetite Manto covered by the DFS, a contingent payment
totalling $3 M will be payable following a production decision. Upon making such payment, the
PRUWJDJHRQWKH7$PLQLQJFRQFHVVLRQDQGWKHSOHGJHRI0DUFREUH¶VVKDUHVZRXOGEHGLVFKDUJHG
2.3.2 Surface Rights
Surface rights are required for the processing facilities, open pits, waste dumps, and tailings and ripios
storage areas. In addition, other surface rights such as rights-of-way and easements for the access
road, power lines and water pipeline are required.
Marcobre has initiated a procedure to acquire these rights and estimates that the total cost of
acquiring the surface rights and easements will be approximately $3.1 M.
2.3.3 Construction Materials
Separate industrial minerals mining concessions are required to access materials on site for
construction purposes, although the project can also make use of waste rock from the Mina Justa and
Magnetite Manto pits where these are suitable. Studies have identified sites with materials suitable for
construction elsewhere on the TA1 concession. The relevant concessions will be applied for in due
course.
2.4 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT
The ESIA for the Mina Justa Project, which was submitted in November 2009, forms the principal
mechanism for identifying baseline conditions and evaluating the impact of the project. Under current
legislation, the Ministry of Energy and Mines (MINEM) is the responsible environmental authority for
approving the ESIA and authorising project development. The ESIA has been designed to satisfy the
requirements of Peruvian Legislation and to comply with internationally accepted guidelines for social
and environmental protection, including those followed by such organisations as the World Bank and
International Finance Corporation (IFC) and followed by commercial banks through the Equator
Principles.
2.4.1 Permitting
The MINEM central office in Lima is in charge of conducting the ESIA evaluation process and issuing
permits, although other agencies may be involved in the evaluation of the ESIA. The evaluation
process also includes making the ESIA availabe to affected local communities for review and comment,
publication of findings by the agencies, a period for the applicant to respond, and then a period of final
evaluation before approval and issuance of a concession to operate.
2.4.2 ESIA Studies
Baseline studies indicate that Mina Justa Project site conditions are typical of a desert, with no surface
water, saline and poor soils, and the area is judged to be generally unsuitable for the development of
any another activity outside mining. Surveys have recorded scanty presence of desert flora and fauna,
which are represented throughout the San Juan de Marcona district.
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No communities or population centres occur inside the zone of direct environmental influence of the
Project. Some archaeological vestiges have been recorded, and these will have to receive the
treatment that the legislation dictates in order to delimit or preserve them as required.
Anticipated environmental and socio-economic impacts from the proposed project were identified. The
main effects from the construction, operating and closure stages are related mainly to dust and water,
and corresponding mitigation measures will be readily implemented.
Given the presence to the north of the Project of the San Fernando Zone, MINEM is required to seek
the opinion of the National Institute of Natural Resources, prior to issung permits. The ESIA
FRQVXOWDQW¶V evaluation of the impacts of the Project concluded that there will be no direct or indirect
influence on the San Fernando Zone, and no complications are expected in obtaining the permissions
of that authority.
In addition, it is necessary to obtain agreement to the results of the archaeological evaluation from the
National Institute of Culture, which is authorised to issue the required Certificate of Nonexistence of
Archaeological Remains.
2.4.3 Community Relations
In order to optimise relations between the community and the Project, an integrated community
relations program has been implemented by Marcobre, including the establishment of an office in San
Juan de Marcona to establish ties with community leaders and enhance understanding of the social
conditions of the neighbouring populations, their concerns and hopes for development.
Information about the Project has been shared with the community at public meetings, and community
members have been involved in the baseline studies. The local population has been fully briefed
regarding the proposed operation, and have proven to be very supportive. Concerns exist regarding the
influx of immigrant labour during the construction and operations phases, and Marcobre intends to
provide significant skills training to allow the local population to participate.
2.4.4 Environmental Management
Marcobre has committed to instituting best practices for the environmental management of the Project.
The position of Environmental Manager, responsible for the control and environmental management of
operations will be established, and will report directly to the Operations Manager.
2.4.5 Mine Closure
Legislation requires that every operation must have an approved closure plan and financial guarantees
of ability to cover the estimated closure costs. The closure plan must be elaborated within a year
following the approval of the ESIA, and it must be approved by MINEM prior to receipt of permission to
operate.
A conceptual closure plan has been developed, with the objective of ensuring the physical and
chemical stability of the diverse components of the project after closure and returning the environment
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to a condition similar to that found before implementation of the Project. Principal closure activities
relate to the reduction in slopes of waste dumps, in order to assure physical stability, and covering
potential acid generating material with inert material.
In addition, the closure plan confirms the demolition of infrastructure and leveling of the involved areas.
Finally, and depending on the requirements of Government regulators and the local communities, it is
possible that ownership of some of the infrastructure, eg, the water pipeline and/or the electrical
transmission line, might be transferred to the community for its use post-closure.
2.5 GEOLOGY, MINERALISATION AND EXPLORATION
2.5.1 Geological Setting
The Marcona Copper Project is located in the Coastal Belt of Peru, a northwest trending linear belt
where the Nazca Plate subducts beneath the South American Plate, forming an active continental
margin.
The district geology comprises Precambrian basement unconformably overlain by Neoproterozoic and
Phanerozoic sedimentary rocks. Monzogranite, granodiorite and gabbro-diorite rocks of the San
Nicolas batholith (dated at approximately 425 Ma) intrude pre-Mesozoic rocks. The pre-Mesozoic rocks
are unconformably overlain by a series of volcano-sedimentary sequences ranging in age from late
Triassic to Holocene. The volcano-sedimentary rock sequences are intruded by porphyritic andesite
G\NHV VLOOV DQG SOXJV RI WKH 7XQJD $QGHVLWH DOVR WHUPHG ³RFRLWH´ DQG LQ WKH HDVWHUQ SDUWV RI WKH
district, by granitoid plutons of the circa 109 Ma Coastal Batholith. Tertiary age shallow water marine
sediments and Quaternary age marine terrace deposits unconformably overlie the volcano-plutonic arc
succession.
The Mina Justa Prospect comprises two deposits, the Mina Justa and Magnetite Manto deposits, which
are hosted by the Jurassic Upper Rio Grande Formation, dominated by andesitic lavas and
pyroclastics, intercalated with minor sandstone, siltstone and carbonate units. This
volcano-sedimentary package displays a prolonged deformation history that includes a southeast
verging overturned folding stage, followed by a shear faulting stage that generated curvilinear fault
systems. The youngest deformation stage is normal block faulting along northwest trending structures
that are closely associated with late stage emplacement of ocoite dykes.
Recent work suggests that the Mina Justa Prospect is significantly younger (approximately 104 Ma to
95 Ma) than, and geochemically distinct from, the neighbouring Marcona iron deposits (approximately
162 Ma to 156 Ma). The Mina Justa Prospect is now interpreted as a hydrothermal deposit formed by
the incursion of exotic and probably evaporite-sourced brines that were expelled from an adjacent
sedimentary basin. The recent findings support the classification of the Mina Justa Prospect as an Iron
Oxide Copper Gold (IOCG) deposit.
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2.5.2 Mineralisation and Alteration
The highest-grade copper sulphide mineralisation occurs with massive, brecciated, elongated
magnetite bodies, the location of which appears to be controlled primarily by a northeast striking and
southeast dipping system of faults (the Mina Justa fault system). The mineralised bodies have
subsequently been dislocated by northwest striking and northeast dipping faults, and by associated
ocoite dykes, the latter ranging from less than a few metres to 70 m in thickness (typically 15 m to 30 m
in thickness).
Seven stages of hydrothermal alteration have been recognised, with the main copper sulphide stage
being relatively late, replacing precursor magnetite mineralisation in stratabound and structurally
controlled ore bodies. Earlier alteration included prominent albite-actinolite and magnetite alteration
stages.
Weathering has produced supergene copper oxide mineralisation (predominantly atacamite and
chrysocolla), hosted mainly in rock fractures, to an average depth of about 180 m, although the depth
influenced by the degree of faulting.
The Mina Justa deposit extends over an area of approximately 2100 m north-south by approximately
1500 m east-west, and ranges in thickness from a few metres up to 150 m. The mineralisation is at or
FORVHWRWKHVXUIDFHLQWKHQRUWKHUQDQGZHVWHUQSDUWVRIWKHGHSRVLWWKH³1RUWKHUQ2[LGHV´³:HVWHUQ
([WHQVLRQV´ DQG ³&X´ ]RQHV), extending to depths approaching 550 m in the southeastern parts of
WKH GHSRVLW WKH ³6XOSKLGH ([WHQVLRQV´ ]RQH 7KH PLQHUDOLVHG ERGLHV DUH JHQHUDOO\ IODW-lying in the
upper parts of the deposit, while, at depth, the mineralisation follows the curvilinear faults, and
resembles a flat bowl-like structure with an overall shallow plunge of approximately 15° to the
southeast. The sulphide mineralisation at depth is zoned: a central core of bornite and chalcocite is
surrounded by predominantly chalcopyrite mineralisation. A narrow transition zone separates the
sulphide mineralisation from the overlying oxide mineralisation.
The Magnetite Manto deposit strikes approximately northeast-southwest, with a moderate dip of
approximately 60o to the northwest. The tabular body is some 700 m long by 350 m wide, ranging
between 25 m and 35 m in thickness. The Magnetite Manto deposit is characterised by copper oxide
mineralisation.
2.5.3 Exploration
Although surface mapping, geophysical and geochemical exploration have contributed, drilling has
been the dominant tool used in the exploration of the Mina Justa Prospect. Prior to 2005, Rio Tinto
completed a total of 102 drill holes (31 025 m) at the Mina Justa Prospect. From 2005 to 2008,
Marcobre drilled a further 227 844 m in 938 drill holes on the Mina Justa prospect, and 28 607 m in 137
drill holes on the Magnetite Manto deposit. Drill hole spacing is now between 25 m and 50 m apart on
both deposits. RC drilling has been the predominant method used.
Drill hole collars have been professionally surveyed, and down-hole surveys undertaken using
gyroscopic instruments.
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2.5.4 Logging, Sampling, Sample Preparation and Analysis
Drill core was logged for geotechnical and geological features prior to being marked for sampling. Core
sample intervals were generally 1 m for mineralised core and 2 m for non-mineralised core, although
major geological contacts have been honoured. Drill core sample recovery is generally better than
95%.
Density measurements were conducted on selected core intervals after logging and before sampling.
The conventional weight-in-water-weight-in-air technique was used.
RC chips were collected at regular intervals and logged. Samples were collected over 2 m intervals,
weighed and riffle split to approximately 10 kg sub-samples. All samples were dry: weighing indicated
an acceptable average recovery of over 85%.
RC samples were dried and crushed to 95% passing 10 mesh. The crushed samples were riffle split to
250 g, and pulverised to 95% passing 200 mesh. Sample pulps were submitted to the SGS laboratory
in Lima for analysis. Diamond core was sawn and half-core samples prepared in the same manner.
The SGS laboratory in Lima was used as the primary laboratory for all Marcobre drilling samples.
Samples were analysed for total Cu (CuT) and sequential leaching (CuSeq ± sulphuric acid extractable,
cyanide extractable and residual Cu2) with an AAS finish. Sulphide and transition zone samples were
also analysed for Ag and other elements by ICP-OES analysis, while Au analyses were carried out
using a 30 g fire assay with an AAS finish.
0DUFREUH¶VVLWHVHFXULW\LQFOXGHVDSULYDWHURDGHQWUDQFHJDWHDQGDURXQG-the-clock site-based security

guards. The SGS site-based preparation facility is securely locked. SGS takes custody of all samples
on site, once they have been appropriately bagged and labelled. Following sample preparation, sample
pulps are transported by road (in the care of SGS) to SGS Lima for analysis. The SGS laboratory in
Lima is completely surrounded by a security wall and all access is security controlled.
2.5.5 Data Verification
Marcobre established a quality assurance and quality control (QAQC) programme in 2005 to monitor
SGS assay quality. The QAQC programme established protocols for insertion of standard reference
materials, blank and duplicate samples at a rate of approximately 10%. In addition, 5% of the drill hole
samples were submitted to an external laboratory for repeat analysis.
Analytical results were continually monitored by independent consultants, who evaluated accuracy,
sample contamination, precision and bias on a routine basis.
Independent review of drilling, sampling, sample preparation and assaying has been undertaken
SHULRGLFDOO\IURPZKLFKLWKDVEHHQFRQFOXGHGWKDW0DUFREUH¶s drill hole data is of adequate quality to
support the generation of mineral resource and mineral reserve estimates to DFS standard. Similar
conclusions have previously been reached for Rio Tinto¶VGDWD
2
CuSS or Cu_SS, CuCN or Cu_CN and CuR or Cu_R, respectively
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2.6 MINERAL RESOURCE ESTIMATION
2.6.1 Introduction
Snowden Mining Industry Consultants (Snowden) has prepared an updated resource estimate for the
Mina Justa and Magnetite Manto deposits based on all drilling data available as of May 23, 2008
(October 2008 resource). This forms the basis for the Mina Justa DFS completed by AMEC Minproc.
2.6.2 Block Model Generation
A three dimensional (3-D) geological model of lithology, mineralisation, structure and ocoite dyke
LQWUXVLYH XQLWV ZDV GHYHORSHG E\ $WWLFXV DQG $VVRFLDWHV LQ /LPD LQ FRQMXQFWLRQ ZLWK 0DUFREUH¶V
Lima-based geologists. The mineralisation outlines roughly corresponded to 0.2% CuT, although
significant internal waste was incorporated in some areas, and isolated zones of >0.2% material were
excluded. Modelled solids and surfaces were verified and used, in conjunction with the validated drill
hole database, in the generation of the October 2008 mineral resource estimate.
2.6.3 Resource Modelling
Assay (CuT, CuSeq, Ag and Au), lithological and mineralogical desurveyed drill hole files were created
from the validated database. The drill hole data were then domain-coded according to mineralisation
domains, prior to being composited to 2 m. Grade capping (top-cuts) was applied to the assay data,
where required, to minimise the influence of extreme values in grade estimation. Variography was
conducted on the assay variables in the various domains to model mineralisation continuity for grade
estimation.
A sub-celled, and appropriately coded (deposit, lithological unit, weathering zone and mineralisation
domain) block model was generated using Datamine Studio 3 mining software. Average densities were
determined for different lithological units in the oxide, transition and sulphide zones for each deposit,
and applied to the relevant blocks as per the deposit, lithological and weathering codes.
CuT, Cu_SS, Cu_CN, Cu_R, Ag and Au grades were estimated into the block model using Ordinary
Kriging with an expanding search. Alphanumeric mineralogical data, were estimated into the block
model using the Nearest Neighbour technique.
Block model grade estimates were reviewed in detail following completion of the estimation process, to
ensure that the estimation process was valid. Sequential copper data were estimated into blocks using
variogram and search volume parameters defined for total copper to honour ratios between the
variables and the relationship CuT = Cu_SS + Cu_CN + Cu_R as far as possible. Following estimation,
the sequential copper data were normalised to the total copper data on a block-by-block basis in order
to retain the ratios between the three sequential copper components. Detailed validation checks were
conducted on the normalised sequential copper data to ensure that this process worked correctly. In
general, only minor adjustments were made to the individual sequential copper components during the
normalisation process.
The Indicated resource category portion of the resource model was validated by detailed comparison
between the block model and input (composite) data using visual and statistical methods. From this,
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Snowden determined that the October 2008 resource model was valid, with the block estimates
honouring the input drill hole data.
Resource model classification was completed by Snowden in accordance with CIM3 (2005) definitions
and guidelines, taking account of data quality, geological and grade continuity, spatial representivity of
density data, kriging efficiency and drill hole spacing. Total copper, sequential copper, silver and gold
data were judged to be of sufficient quality and sufficiently well spaced to support Indicated and Inferred
Mineral Resource classifications, but the mineralogical data is considered subjective and was not
classified.
2.6.4 Mineral Resources
The mineral resources at CuT cut-offs of 0.2%, 0.3% and 0.4% are summarised in Table 2.1. Detailed
reporting by domain and over a range of cut-off grades is included in Section 4.5.2.7.
The Mineral Resources are as reported by Snowden in October 2008, and reviewed by AMEC Minproc
as part of this technical report. No mining has occurred subsequently to deplete the resource.
Table 2.1
Global Classified Resources
Cut-off grade Million CuT Cu_SS Cu_CN Cu_R Contained Cu
(CuT%) Tonnes (%) (%) (%) (%) (Million lb)
Indicated
0.2 411.3 0.67 0.26 0.19 0.22 6070
0.3 336.8 0.76 0.29 0.23 0.25 5650
0.4 246.9 0.91 0.31 0.29 0.30 4960
Inferred
0.2 77.5 0.72 0.08 0.12 0.53 1240
0.3 64.6 0.82 0.08 0.14 0.60 1170
0.4 50.9 0.94 0.08 0.15 0.72 1060
Silver and gold grades are reported only for the transition and sulphide zones (Table 2.2).
Table 2.2
Global Classified Resources for Silver and Gold
Tonnage Ag Au Contained Ag Contained Au
(Mt) (g/t) ppb (oz) (oz)
Indicated Resource
161.8 8.75 55.95 45 530 000 291 000
Inferred Resource
58.3 5.03 79.22 9 430 000 148 500
3
Canadian Institute of Mining and Metallurgy
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It should be noted when considering the grade and tonnage estimates, that mineral resources that are
not mineral reserves do not have demonstrated economic viability.
2.7 MINING
2.7.1 Introduction
The deposits are located at relatively low altitude, in an arid area with moderate topographic relief.
Rock strengths are low to moderate. There is no groundwater and insignificant rainfall. Consequently,
open pit mining should be routine and relatively low cost. Some difficulties will arise from the presence
of barren dykes that are pervasive throughout the mineralisation. In order to minimise dilution and
mining losses, selective mining on 10 m benches (5 m mining flitches) is specified, using excavators in
backhoe configuration.
2.7.2 Pit Optimisation
Pit optimisation of the mining model (Indicated mineralisation only) was carried out using Whittle Four-X
software, based on a regularised model with 10 x 10 x 5 m blocks which was selected following a study
of the impact of regularisation at different block sizes. Optimisation input parameters were based on
then-current information, including overall slope input (41° to 44°) from Knight Piésold and a copper
price of $1.65/lb provided by Marcobre. Revenue was received from both Vat (Oxide) and Concentrator
(Sulphide) ore processing streams. The optimisation was constrained to prevent mining on the
adjacent Shougang property. A number of different scenarios and sensitivities were produced and
shells were selected to form the basis for the ultimate and staged pit designs.
2.7.3 Pit and Dump Design
Ultimate and staged pit designs were created from the selected optimisation shells, incorporating
access ramps.
Pit slope geotechnical investigations were carried out by Knight Piésold based on 15 geotechnical holes
plus geotechnical data gathered from logging of another 17 exploration holes. Pit slope stability is most
influenced by major structures and block faulting, with four major fault systems identified in the pit area.
A number of pit design sectors were established to group areas of the proposed pits with similar
geometric, geological and rock mass quality characteristics. Stability analysis results indicate that a
bench face angle of 65o to 70o is expected to be achievable for the Mina Justa pits. A 20 m high
double-benching configuration is recommended for pit development. Recommended inter-ramp slope
angles range from 45o to 50o depending on the design sector.
Access was generally by a single ramp of 30 m width at a maximum grade of 10%. Ramps were
narrowed to one-way at depth to minimise associated waste. There are four discrete pits, of which two
are developed in stages to defer waste stripping and improve ore presentation.
The ultimate pit designs are shown in Figure 2.2.
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Figure 2.2
Ultimate Pit Designs
The Project will generate approximately 402.5 Mt of waste rock, of which 383 Mt will be placed in the
Main waste dump, 14 Mt in the Magnetite Manto waste dump and the remaining 5.5 Mt, comprising non
potentially acid generating (PAG) material, will be used for construction of the tailings dam. Waste
storage areas and stockpiles are illustrated in Figure 2.3.
The Main waste dump is located northeast of the Main pit and it also serves as the containment
structure for ripios storage. The ripios dump, which has been designed to have a capacity of
approximately 110 Mt, will be surrounded by mine waste rock to maintain adequate physical stability of
the material.
A separate dump is provided for Magnetite Manto pit waste, some of which will be used for tailing dam
embankment construction. Some mine waste will be directed to enlarge the ROM pad to provide a
suitable configuration for dumping, storing and rehandling of crusher feed. Opportunistic backfill of
waste into the Northern Oxide pit may be feasible near the end of the mine life.
The small quantities of PAG waste rock will be dumped, then contained and covered with non-PAG
material in the Main waste dump.
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A large, long-term stockpile is allowed for excess, lower grade vat leach feed (LGO) that accumulates
during the early years of mining.
Figure 2.3
Waste Storage Areas and Stockpiles
2.7.4 Mineral Reserve
The Mina Justa Project Mineral Reserve is that portion of the Indicated Resource that is contained
within the ultimate pits and has recoverable metal values that allow economic treatment. The Mineral
Reserve, tabulated by process plant feed type, is identified in Table 2.3.
Table 2.3
Mina Justa Probable Mineral Reserve (1), (2), (3)
Classification Tonnes CuT CuSS Ag
(Mt) (%) (%) (ppm)
Vat Feed 114.6 0.56 0.46 -
Concentrator Feed 48.8 1.37 - 14.1
Total 163.4 0.80 - -
(1) Reported according to NI 43-101 reporting guidelines, QP is Ross Oliver, an employee of AMEC Minproc.
(2) No Measured resource so no Proven Mineral Reserve.
(3) Mineral Reserve cut-off for both vat and concentrator feed is based on a Net Smelter Return calculation and a
copper price of $1.65/lb.
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The Mineral Reserve was determined by AMEC Minproc as of June 2009, as part of the DFS. The
Mineral Reserve is based on the most recent resource model, which was developed by Snowden in
October 2008, and reviewed by AMEC Minproc as part of this technical report. No mining has occurred
subsequently to deplete the Mineral Reserve.
2.7.5 Mine and Process Schedules
Bench reporting of reserve information was performed for the pit stages and imported into a
purpose-built mine scheduling spreadsheet. A variety of mining rates and vat leach cathode production
profiles were investigated. A final mining rate of 60 Mt/a was adopted as a sustainable rate that will
bring forward the mining and treatment of higher grade concentrator feed, and also sustain a cathode
production rate of 52 000 t/a of copper.
Mine and process scheduling was carried out on a monthly basis for the pre-strip period (Yr-1) and first
year of production, quarterly for years 2 through 5 and annually thereafter. An annual production
schedule is provided in Table 2.4.
Figure 2.4 illustrates the mining production rate by pit stage over the mine life, while Figure 2.5 shows
the ore types mined.
Figure 2.4
Mining by Pit Stage (Mt)
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Figure 2.5
Ore Mining by Material Type (Mt)
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Table 2.4
Annual Production Schedule: Mining and Processing
Mining Total Yr-1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12
Vat Ore (kts) 114 602 4 640 14 791 20 568 8 977 8 866 14 836 12 811 8 158 10 059 8 762 2 134
APPENDIX V
Cu (%) 0.56% 0.44% 0.47% 0.54% 0.57% 0.57% 0.58% 0.54% 0.71% 0.60% 0.69% 0.47% 0.00%
CuSS (%) 0.46% 0.37% 0.40% 0.42% 0.44% 0.46% 0.47% 0.39% 0.58% 0.51% 0.62% 0.36% 0.00%
Float Ore (kts) 48 794 2 380 5 055 5 059 4 670 5 301 5 043 5 005 5 014 5 081 6 183
Cu (%) 1.37% 1.17% 1.43% 1.33% 2.79% 1.19% 1.04% 1.01% 1.07% 1.09% 1.53%
Au (g/t) 0.029 0.016 0.016 0.020 0.037 0.026 0.022 0.021 0.033 0.044 0.048
Ag (g/t) 14.1 8.8 12.2 11.8 32.0 12.9 10.7 11.7 10.8 9.6 18.2
Total Ore (kts) 163 396 4 640 14 791 22 948 14 032 13 925 19 506 18 112 13 201 15 064 13 776 7 216 6 183
Waste (kts) 402 363 27 942 44 972 37 251 46 446 46 550 40 724 42 330 47 157 45 038 14 442 7 544 1 968
Total Mining (kts) 565 759 32 582 59 763 60 199 60 478 60 475 60 231 60 442 60 358 60 102 28 219 14 760 8 151
Strip Ratio 2.46 6.02 3.04 1.62 3.31 3.34 2.09 2.34 3.57 2.99 1.05 1.05 0.32
Closing Stockpiles
HG Vat Feed (kts) 1 180 147 1 651 1 406 825 795 2 223
MG Vat Feed (kts) 1 940 4 101 4 950 2 383
LG Vat Feed (kts) 1 520 5 934 12 150 13 344 12 593 14 024 16 241 11 574 9 663 4 998
Float Ore (kts) 461 515 574 243 544 587 592 606 687 1 871
Total (kts) 4 640 10 183 19 212 16 241 13 167 15 673 16 785 12 986 11 050 7 827 687 1 871
Processing
Vat Ore (kts) 114 602 9 248 12 000 12 001 12 000 12 000 12 000 12 000 12 000 12 000 9 355
Cu (%) 0.56% 0.56% 0.61% 0.59% 0.53% 0.56% 0.61% 0.58% 0.56% 0.54% 0.48%
CuSS (%) 0.46% 0.47% 0.47% 0.47% 0.43% 0.47% 0.45% 0.46% 0.47% 0.47% 0.39%
— V-29 —
CuRec (%) 0.42% 0.43% 0.43% 0.43% 0.39% 0.43% 0.42% 0.43% 0.43% 0.43% 0.36%
Acid (kg/t) 40.66 40.15 40.32 40.39 41.10 40.49 40.67 40.91 40.39 40.48 41.89
Cu Recovery (%) 74.5% 78.1% 71.5% 72.2% 73.4% 76.2% 68.8% 75.2% 77.4% 79.7% 74.0%
Cu in Cathode (t) 481 596 40 100 51 999 51 513 46 867 51 601 50 157 52 010 51 997 52 056 33 295
Float Ore Feed (kts) 48 794 1 919 5 001 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 1 871
Cu (%) 1.37% 1.23% 1.43% 1.33% 2.57% 1.31% 1.04% 1.01% 1.07% 1.10% 1.73% 0.73%
Au (g/t) 0.029 0.016 0.016 0.020 0.035 0.028 0.022 0.021 0.033 0.044 0.055 0.018
Ag (g/t) 14.1 9.3 12.3 11.9 28.9 14.1 10.7 11.7 10.8 9.7 20.8 8.9
Cu Rec to Con (%) 93.0% 90.1% 91.9% 92.5% 95.3% 92.9% 91.8% 91.5% 92.6% 92.3% 95.0% 87.8%
Au Rec to Con (%) 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Ag Rec to Con (%) 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Concentrate (dry t) 1 643 741 56 279 164 301 144 397 291 496 176 948 126 276 125 066 150 083 151 018 224 479 33 399
Cu Con Grade (%) 37.8% 37.7% 40.1% 42.7% 42.1% 34.5% 38.0% 37.1% 33.0% 33.7% 36.7% 35.9%
Au Con Grade (g/t) 0.70 0.44 0.39 0.56 0.48 0.63 0.70 0.67 0.88 1.17 0.98 0.81
Ag Con Grade (g/t) 335 255 299 329 397 319 340 375 288 256 370 399
Cu in Con (t) 621 373 21 192 65 867 61 618 122 596 61 053 47 945 46 431 49 528 50 834 82 319 11 989
Au in Con (ozs) 36 978 792 2 082 2 608 4 516 3 565 2 850 2 679 4 261 5 700 7 057 867
Ag in Con (kozs) 17 725 461 1 579 1 528 3 718 1 817 1 381 1 508 1 391 1 244 2 669 429
Total Copper (t) 1 102 969 40 100 73 191 117 379 108 485 174 198 111 210 99 955 98 428 101 584 84 129 82 319 11 989
Note: Metal in concentrate is total contained metal.

TECHNICAL REPORT ON THE MINA JUSTA PROJECT
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Figure 2.6 shows the stockpile inventory over the life of mine (LOM). Large vat leach inventories are
accumulated in the early years in order to accelerate access to sustainable feed for the concentrator.
Figure 2.6
Long Term Stockpile Inventories (Mt)
2.7.6 Mine Fleet Assessment
A 20 m3 backhoe excavator was selected as the primary digging unit, in order to minimise dilution and
mining losses, and maximise the mined ore grade. A large front end loader (FEL) has been specified to
serve as a back-up loading unit and provide truck loading for rehandle of long-term vat feed stockpiles,
plus rehandle (by tramming) from short-term operational stockpiles located on the ROM pad.
A fleet of 220 t class haul trucks and support equipment have been selected. Crawler-mounted diesel
drills capable of single pass drilling have been selected for productivity and operational flexibility.
A computerised dispatch system has been allowed, to monitor equipment, provide production statistics
and provide the information to measure and improve fleet productivity.
Table 2.6 includes a summary of the major equipment selected.
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2.7.7 Mine Operating Cost
The mine equipment will be owned, operated and maintained by the Owner with support by specialist
contractors for down-the-hole explosive supply, diesel supply, storage and dispensing services and
vendor-provided preventative maintenance services for major equipment.
Since the conditions are dry, ANFO has been specified as the sole explosive. Following a review of
rock conditions, powder factors of 0.20 kg/t in waste and 0.24 kg/t in ore have been adopted.
Key operating cost drivers are summarised in Table 2.5.
Table 2.5
Key Operating Cost Inputs
Item Value Unit Comment
Diesel 0.636 $/litre includes storage & dispensing
AN explosive 540 $/t Dry, 100% ANFO used
3
Powder factor - ore 0.24 kg/m
3
Powder factor - waste 0.20 kg/m
Truck tyre life 5 000 hrs
The proposed major equipment fleet make-up is summarised in Table 2.6, together with key equipment
assumptions used to build up the operating cost estimate. Actual fleet configuration will be subject to a
further tendering and evaluation process to establish the most cost-effective mining solution.
Table 2.6
Equipment Fleet and Hourly Costs
Type Equipment Fleet Operating Operating Purchase Expected
Class Units Hours Costs Price Life
(h/yr) (US$/h) (US$ M) (h)
3
Excavator 20 m 3 6701 435 5.55 60 000
Dump truck 228 tonne 23 6701 219 3.65 65 000
3
FEL 20 m 1 5585 280 4.67 50 000
Track dozer 433 kW 4 5046 105 1.22 30 000
Wheel dozer 372 kW 1 4840 89 1.01 50 000
Grader 221 kW 3 5606 64 0.82 40 000
Water truck 45 kl 2 3723 91 1.11 60 000
Production drill 229 mm 4 4906 44 1.61 50 000
The average mine operating cost for the life of the mine is $1.14/t mined (1Q09 base). Unit costs are
seen to increase in later years as haul distances increase and the total tonnages mined decrease.
Figure 2.7 shows the major operating cost components and the changes over time. The mining costs
are inclusive of all material handling from stockpiles, and the transport and placement of ripios on the
ripios dump.
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Figure 2.7
Operating Costs by Time (US$/t)
2.7.8 Mine Capital Cost
The total mine capital cost (including replacement, rebuilds and sustaining capital) has been estimated
at $139 M as of July 2009, as summarised in Table 2.7. This cost excludes pre-production mining
costs, although these are also capitalised for accounting purposes.
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APPENDIX V
Table 2.7
Mining: Capital, Sustaining and Replacement Costs (US$ M, July 2009)
Mine Area Yr-1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Total
Loading 21.78 21.78
Hauling 65.70 14.59 0.45 0.45 3.65 0.45 85.28
Drill & Blast 6.45 6.45
Support 8.52 2.04 3.65 1.23 15.44
Other 7.42 0.60 0.03 0.63 0.09 0.81 0.20 0.21 0.04 10.02
Total 109.87 17.24 0.48 0.63 0.45 7.39 1.25 1.43 0.00 0.21 0.00 0.04 0.00 138.97
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2.8 METALLURGY AND PROCESSING
Extensive metallurgical testwork has been completed on Oxide ores as a basis for the vat leach circuit
design at a DFS level of detail. Metallurgical testwork for the Sulphide ore flotation plant is more
preliminary in nature, but suitable for a PFS design.
2.8.1 Vat Leach Circuit
2.8.1.1 Comminution Testwork
A comprehensive testwork programme was completed by Phillips Enterprises LLC (Phillips) in

Colorado, USA, and by Ammtec Limited (Ammtec) facility in Perth, Western Australia.
This work determined that there was little difference in crushing work index (CWi) results for different
lithologies, depths or geographic locations. A large range of values was recorded for different
specimens within each sample tested, greater competency occurring for those samples with minimal
inherent fractures. As the material is crushed finer (and the rock fractures are removed), the
competency of the ore is expected to increase. This trend has been used in the selection of CWi
values for the design criteria; a Bond CWi of 10 kWh/t has been selected for the primary, secondary
and tertiary crushing stages, increasing to 16 kWh/t for the quaternary stage.
UCS testwork was undertaken by Advanced Terra Testing Inc (under the direction of Phillips). The
overall dataset showed an average UCS value of 48.2 MPa, and a maximum UCS value of 130.2 MPa.
The results of Bond abrasion index tests conducted by Phillips showed an average abrasion index at
Mina Justa ranging from 0.13 in sediments to 0.22 for andesite and 0.24 for amygdaloidal andesite.
Limited crushing data was obtained for the Magnetite Manto deposit, which showed a large variation in
results (between 0.08 to 0.32) for the different lithologies tested. On average, the Mina Justa deposits
are expected to be moderately abrasive with an abrasion index value of 0.19.
Modelling of potential crushing circuits to achieve the required particle size of P80 8 mm determined the
most cost-effective design to be a quaternary crushing circuit, with the secondary stage in open circuit,
and the tertiary and quaternary stages in closed circuit.
2.8.1.2 Leach Testwork
Testwork on the Oxide material has consisted of bottle roll leaching, column tests and an integrated
pilot program run continuously in locked cycle. Pilot testing was followed by an on-going program of
variability testing on material from various areas of the proposed open pits.
Bottle roll tests demonstrated that the Oxide ore is inherently leachable, recovery being dependent on
crush size and pH. Both andesite and sedimentary material achieved 100% extraction of the acid
soluble copper (CuSS) at fine crush sizes (1 and 3 mm top size) and high acid levels (pH <1.5).
A column testing program followed, focussed initially on identifying the design parameters for a heap
leach operation. However, the results were discouraging; high recoveries could be achieved (>90%),
but long leach cycles (3 to 5 months) and high acid levels were needed.
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The problem was shown to be one of relative kinetics. The initial copper leach rate was fast, with about
half the total recovery occurring in the first 10 days, after which the leach rate slowed dramatically,
typically taking another 3 or 4 months for the recovery to double. The rate of acid consumption
behaved quite differently, rising linearly with time over the entire leach cycle. Thus after 10 days,
recovery was reasonably good and acid consumption was still very low. However, after another 3 to
4 months of leaching, copper extraction doubled, but GAC increased by a factor of 14 or 15 times.
The results of a series of tests led to the conclusion that vat leaching with its high flow rate, short cycle
time and good wash efficiency might be the most effective process route for the Oxide material. A vat
testwork program was developed, starting with a series of batch trials, the results of which suggested
that operating on a 6 day leach cycle with material crushed to between 6.0 mm and 9.5 mm would
provide an optimum vat process. Subsequent testwork demonstrated that there was little difference in
leach results between 6 mm and 8 mm, but 9.5 mm proved to be too coarse.
Batch vat tests were followed by testing of an integrated vat pilot plant operating continuously in locked
cycle. The results indicated that while copper extraction is influenced to some degree by the various
deposit parameters, the key relationship is between recovery and head grade. Regression analysis
showed that the grade-recovery relationship has the following form:
Recovery of CuT (%) = (86.5 + 9.3 x CuSS) x (CuSS/CuT)
Maximum copper recovery is capped at 95% of CuT, to prevent the projection of 100% extraction from
high grade ore.
The other important numerical expression is the relationship between head grade and acid
consumption. Regression analysis demonstrated that GAC was related to head grade, but that the
relationship was negative (GAC declined as the grade increased), due to the increased acid credit from
higher grade material. Numerically, the relationship can be expressed as:
GAC (kg/t) = 50.07e(-0.47 x CuSS)
Other design parameters determined in conjunction with the pilot plant tests included:
x Total suspended solids (TSS) in the vat overflow.
x Clarification tests on the pregnant leach solution (PLS) to provide the design basis for the PLS
clarifier.
x Viscosity of the leach solution averaged 1.5 cP, but increased gradually during the tests and ended
at 1.8 cP.
x Final moisture in the leach residues ranged from 9.0% to 16.4%, with an average of 11%.
x Void space in the ore bed, which decreased from 42% to 37.5% during the 6 day leach cycle.
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2.8.1.3 Solvent Extraction Testwork
Solvent extraction (SX) testwork and modelling was conducted by Cognis Corporation (Cognis) in Chile
and Peru, with additional testing at the Cognis laboratory in Chile. Solutions were derived from pilot
plant test runs.
Modelling of the SX process demonstrated that the optimum circuit required to achieve the mass
transfer of copper involved 2 extraction stages, 1 stripping stage and 1 washing stage (ie, 2E+1S+1W).
Cognis conducted further modelling using the selected 2E+1S+1W circuit at a copper tenor of 8 g/L and
revised pH of 1.9 to determine the preferred reagent (LIX84-l).
Solution analyses showed high chloride levels of up to 6 g/L, which have been taken into account in
subsequent design work.
An extraction of 94% of the soluble copper in the PLS stream is expected to be recovered through the
2E+1S+1W circuit, based on a PLS stream containing 8 g/L copper at a pH of 1.9. An extractant
concentration of 25% v/v is required for effective extraction of the soluble copper. Stripping of the
copper from the extractant is carried out using an electrolyte solution containing 35 g/L copper and
180 g/L sulphuric acid. These electrolyte parameters are relatively standard for copper SX systems in
plants world-wide.
Full ICP scans of the PLS solution show several impurities, primarily iron, manganese, silicon (colloidal
silica) and chlorides. Mitigation measures to manage these contaminants include a wash mixer/settler
and coalescer tank to remove aqueous entrainment carrying iron, manganese and chloride. Equipment
for treating the organic stream with activated clay to mitigate the effects of colloidal silica has been
included in the crud treatment area of the SX plant.
2.8.2 Sulphide Ore Processing
Several testwork campaigns were completed during the PFS evaluation of the Mina Justa sulphide
deposit. Three ore types were recognised, namely Primary (chalcopyrite), Secondary (bornite-
chalcocite) and Transition or Mixed (oxides and sulphides) ores. Sample collection and testwork was
directed by Transmin Metallurgical Consultants (Transmin) based in Lima.
Comminution testwork was carried out by SGS Lakefield Research in Chile, Laboratorio Plenge in Peru
and by JKTech in Australia. Findings are based on a limited number of samples tested.
It was concluded that:

x The ores are generally moderately abrasive, hard to very hard, with poor to moderate grindability.
x Results are quite variable. Considerable additional testwork is required to characterise a broad
range of materials from the most relevant parts of the orebody and provide definitive comminution
design criteria.
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2.8.2.2 Flotation Testwork
Three phases of testwork were completed to investigate the optimum flow sheet, concentrate regrind
size and reagent regime for the float plant. The results showed that concentrates of saleable grade can
be produced from all three ore types, although recoveries and grades vary by ore type as shown in
Table 2.8.
Rougher concentrates require regrinding and cleaning to produce acceptable grades, although optimum
grind size and cleaner requirements vary for the three ore types.
Flash flotation test results indicate that flash flotation could be feasible, but regrinding and cleaner
flotation would be required at least for Primary ore, which forms the bulk of the sulphide deposit.
A reagent scheme consisting of promoter A-3477 (isobutyl dithiophosphate) with collector Z-11 (sodium
isopropyl xanthate) was evaluated at different dosage rates. For Primary ore, the addition of sulphidiser
did not result in significant grade improvement, but final recovery was negatively affected. Secondary
ore concentrate grade and recovery showed some improvement when sulphidiser was added.
Regrind and cleaner tests were conducted on Primary and Secondary sulphide rougher flotation
concentrates. The results indicate that >25% copper concentrate can be produced without cyanide
addition.
Copper recovery and concentrate grade versus copper grade were plotted for locked cycle tests to
estimate basic correlations for a metallurgical model. However, insufficient data was available to
establish variable relationships, and the majority of the correlations were constant values (Table 2.8).
Table 2.8
Predictive Metallurgy Summary
Recovery Concentrate Grade
Mineralisation Type Metal
(%) (% Cu)
Transitional (Oxide plus sulphide) Copper (Cu) 85 32
Copper (Cu) min of (5.3892Ln(CuT)+90.956)
Secondary (Bornite-Chalcocite) or 96 45
Primary (Chalcopyrite) Copper (Cu) 94 23.5
Precious metals Gold (Au) 80 -
Silver (Ag) 80 -
Precious metals recoveries of 80% are based on the average metal recovery observed from the trials.
Preliminary investigation of the chemical composition of the concentrates suggests that contaminant
elements will not incur treatment penalties.
2.8.2.3 Magnetite Testwork
Preliminary magnetic separation tests were performed to evaluate the feasibility of producing a saleable
magnetite concentrate from rougher/scavenger flotation tailings. It was concluded a 63% iron
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magnetite concentrate can be generated by wet magnetic separation, provided intermediate processing
(regrinding, slimes removal and finishing magnetic separation) is undertaken.
2.8.2.4 Geochemical Characterisation of the Tailings
Knight Piésold performed geochemical characterisation testing to assess the acid generation and
neutralisation potential as well as the leachability and supernatant quality associated with samples of
flotation tailings from metallurgical pilot plant. The results, which were used to formulate the tailings
disposal strategy, were found to be dependant on the dominant sulphide mineralisation of the ore.
The test results showed that the cleaner scavenger tailings (CST), rougher scavenger tailings (RST)
and thus a combined CST and RST tailings produced from bornite-chalcocite ore are likely to be non-
acid generating. However, CST and combined tailings from the chalcopyrite ore are likely to be acid
generating while the RST is likely to be non-acid generating.
Leachability and supernatant quality tests on the same samples indicated that many of trace elements
were below detection limits or were not defined as potential problems under the relevant water quality
guidelines. Aluminium and iron were found to be higher than the regulatory limits in at least one of the
RST supernatant samples from the chalcopyrite and bornite-chalcocite samples. The CST supernatant
from the chalcopyrite ore was found to have slightly elevated nickel and manganese, while there was
slightly elevated antimony from the bornite-chalcocite ore.
2.9 PLANT ENGINEERING
2.9.1 Geotechnical Investigations
2.9.1.1 Site Conditions
Site geotechnical investigations were undertaken to determine foundation conditions, sources of borrow
material, the groundwater situation and other site stability issues.
Bedrock consists of andesitic volcanics and epiclastic sediments, intruded by porphyritic andesite. The
basement is covered by Quaternary aeolian deposits typically 0.5 to 4 m thick over the majority of the
site, with alluvial materials to depths of as much as 65 m in broad valley bottoms, such as in the tailings
storage facility (TSF) area.
Beneath the aeolian sand there is a thin layer of poor quality and heavily weathered rock. Bedrock is
fair to good quality rock (RMR value between 45 and 55), except for the upper few metres which display
lower RMR values of approximately 29.
In the TSF area, the aeolian sands are underlain by dense alluvial sand and gravel deposits with a
basal conglomeratic sandstone layer, overlying basement rocks.
The plant site area is founded on fair to good quality bedrock (average RMR of 51). The thin overlying
aeolian sands and any poor quality rock will be removed to reach the foundation level.
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2.9.1.2 Borrow Materials
Suitable common fill and fine-grained construction materials have been located and tested on the
property.
Non-PAG waste rock from the Magnetite Manto Pit is suitable for construction of the tailings dam.
Waste rock in the upper part of the Main Pit may also be suitable for this purpose, but testwork is
required to confirm this source.
2.9.1.3 Groundwater
Results obtained from a vibrating wire piezometer in the Main pit area indicate that the phreatic level
(depth to ground water) is 470 m deep (312 masl), or approximately 90 m below the base of the
deepest pit, which, consequently, will be developed under dry conditions.
2.9.1.4 Site Stability and Seismic Design Criteria
The slopes, hills and low mountains in the area display stable conditions, and there is no risk of flash
floods, landslides or other mass displacement phenomena.
A seismic hazard study was completed, showing that the area is subject to high intensity seismic events
capable of causing serious damage. Deterministic analysis identified the maximum event as a
magnitude Mw 8.0 earthquake, producing a mean plus one standard deviation peak ground
acceleration (PGA) at the site of 0.48 g. PGAs at the site were determined for selected return period
events, and appropriate seismic coefficient values were determined and applied in designs for each
mine facility according to the risk, flexibility and life of the corresponding structure.
2.9.2 Oxide Plant
The overall processing flow sheet for the Oxide ore is depicted in Figure 2.8, with the plant layout as
Figure 2.9. The plant has a design throughput of 12 mt/a, and, in summary, comprises:
x Crushing and Screening: A four stage crushing circuit consisting of:
Primary Crushing and Stockpiling: run-of-mine (ROM) ore is delivered by direct tipping from
mine haul trucks, supplemented as necessary by ore fed by FEL from the Oxide stockpile.
Primary crushing by a 54" x 75" gyratory crusher feeding to a coarse ore stockpile with a live
capcity of 12 hours.
Secondary, Tertiary, and Quaternary Crushing: a secondary 750 kW cone crusher operating
in open circuit is followed by screening. Two by 750 kW cone crushers operating in closed
circuit are utilised for the tertiary crushing stage. The quaternary crushing stage comprises
three 750 kW cone crushers operating in closed circuit. Metal detectors and/or electro-
magnets are included to detect and/or remove tramp metal. The detectors are tuned to allow
for the high magnetite content of some of the ore.
Dust Control: Dust is controlled by a combination of dust suppression and dust collection
systems, including wetting sprays, ducted dust collection systems and high-efficiency wet
scrubbers with extraction hoods at all major dust generating locations.
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Figure 2.8
APPENDIX V
Mina Justa Oxide Circuit Flow Sheet
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Marcona Project – Mina Justa Definitive Feasibility Study
Figure 2.9
Plant Layout
APPENDIX V
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Rev 5 – Issued to Client – 19 Apr 2010
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x Vat Leaching: ore crushed to 100% passing 8 mm is delivered to the fine ore bin, which has a
surge capacity of 1 hour. After the crushed ore is drawn from the fine ore bin, it is sprayed with
dilute sulphuric acid, and transported by conveyor to the vat leaching area, where it is loaded into
vats for leaching, by means of a tripping conveyor. The vat is flooded with a dilute sulphuric acid
solution introduced through the base of the vat, under a filtration bed, and which overflows from the
top of the vat into a launder from which the solution is piped to the next vat or to a storage pond.
The vats are reinforced concrete shells, each measuring 30 m wide, 40.5 m in length and 7.6 m
high, and capable of holding 12 800 t of ore for a 6 day leaching cycle. At any one time, 16 vats
participate in the leaching process, with an additional two vats provided to allow for loading,
unloading, filling, draining and maintenance.
At the end of the 6 day leach cycle, the vat is drained and the moist waste solids (ripios) are
removed by a clamshell grab, placed into a hopper and discharged onto a conveyor system for
transfer to the ripios dump.
Solution management is counter-current. Solution advances progressively to fresher ore in order
to maximise the copper content of the leach solution before treatment in the SX/EW plant. The
final leach solution is clarified in a pin-bed clarifier and stored in a covered holding pond for
pumping to the SX circuit.
Dilute acid solution (raffinate) returning from the SX plant is used for final leaching of ore before it
is removed from a vat and sent to the ripios dump. The residual moisture in the ripios
(approximately 11% by weight) is essentially raffinate and provides a bleed for impurities.
The PLS and raffinate ponds are 6 m deep, sized to contain 24 500 m3 and 16 400 m3 of solution,
respectively, and are double-lined with HDPE. The dimensions include an allowance to contain
precipitation from a 100 year, 24 hour rainfall event. The raffinate pond also serves as an
emergency reservoir should a vat be drained by accident or intentionally in an emergency.
The ripios is transported to the ripios area via three discharge conveyors, the last of which loads a
truck loading bin. Haul trucks are used for final disposal in the adjacent ripios dump.
x Solvent Extraction: The SX mixer/settler units are configured for 2 stages of extraction, 1 stage of
wash and 1 stage of stripping. Here, PLS is contacted with an organic phase to extract copper
from the aqueous phase. Loaded organic reports to the wash stage to remove any entrained
impurities, such as iron, manganese and chloride.
Copper-rich electrolyte flows by gravity to the strong electrolyte tank. Any particulate solids and
entrained organic are removed using CoMatrix dual media filters.
Crud is split by centrifuge into aqueous, organic and solids phases. The aqueous phase is
returned to the SX circuit, whilst cleaned organic phase is either returned to the SX circuit or
treated further with activated clay. Contaminated solids are collected for separate disposal.
The fire protection system is based of foam suppression to the SX bunds, SX settlers and tanks
containing organic, and a fire detection system for the bund and inside of each of the vessels
described above.
x Electrowinning: EW utilises 122 electrolytic cells (26 polishing cells and 96 commercial cells)
operating at a nominal current density of 320 A/m2. Copper is recovered as cathode over a six day
period. Polishing cells receive strong electrolyte and act as organic entrainment protection for the
commercial cells. Each cell contains 69 cathodes (stainless steel blanks) and 70 anodes.
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Copper is removed from the cathodes by an automated cathode stripping machine. Approximately
3 t of copper sheets are accumulated before the bundles are sampled, strapped and transferred by
forklift to a dedicated storage area prior to dispatch.
The copper electrowinning cells are housed in a fully enclosed building. Primary acid mist
suppression is by a layer of polyolefin prills, while a forced cross-flow ventilation system provides
secondary mist suppression.
x Reagents involved in the leaching process are:
Sulphuric Acid: delivered by road tankers to two storage tanks (total 14 day supply). The
tanks are sited within a HDPE-lined earth bund capable of containing 110% of the entire
storage capacity.
Flocculant: delivered by road in 25 kg bags and prepared with fresh water in a batching plant.
Extractant (LIX984 or Acorga M5640): delivered in 1 m3 intermediate bulk containers (IBCs),
stored in a covered shed.
Diluent (Shelsol 2046 or equivalent): delivered by road tanker and off-loaded into a diluent
storage tank, with storage capacity for 45 days production.
Guar: received in 25 kg bags, with storage on-site equivalent to 28 days of usage.
Cobalt sulphate: received in 25 kg bags, with storage on-site equivalent to 28 days of usage.
x Services include:
Raw Water: supplied from the Jahuay borefield, 30 km to the southeast. Water is pumped to
the raw water pond sited in the plant area for redistribution as process water, fire water, dust
control, camp, mine water trucks and other purposes.
Fire Water: the raw water pond and pumps are configured to ensure a minimum amount of
fire water (4 hours) is always available in the pond. The fire water pump set comprises an
electrically powered main centrifugal pump, a diesel powered pump, and an electrically
powered jockey pump.
Raw Water: treated through a chlorination plant to produce potable quality water for safety
showers, drinking water, and ablution facilities. Potable water is transferred to the 80 m3
potable water storage tank.
Plant and Instrument Air: plant compressed air at 750 kPag is stored in the plant air receiver
and reticulated to the plant air utility stations. A separate portable air compressor is provided
for the crusher plant areas.
A stream of plant air is filtered and dried to generate instrument quality air.
2.9.3 Sulphide Ore Plant
The overall processing flow sheet for the Sulphide ore is depicted in Figure 2.10. Design is to a PFS
level. The plant is designed to treat 5 Mt/a, and comprises the following areas:
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Figure 2.10
APPENDIX V
Mina Justa Sulphide Circuit Flow Sheet
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x Comminution: a separate comminution circuit, designed to produce a product size of P80 150 µm,
comprising:
Primary Crushing of ROM ore tipped directly by mine haul truck, or fed from the adjacent
sulphide ore stockpile by FEL. A 54" x 75" primary gyratory crusher feeds to a coarse ore
stockpile with 12 hours of surge capacity. Wetting sprays and ducted dust collection systems
with high-efficiency wet scrubbers are included at all major dust generating locations.
Primary Grinding and Pebble Crushing: an open circuit semi-autogenous (SAG) mill with a
pebble crushing circuit. The SAG mill has a diameter of 9.15 m, with an effective grinding
length of 5.3 m, powered by twin variable speed 4000 kW hyper-synchronous wound rotor
motors. Oversize pebbles are transferred to a 600 kW cone crusher, and crushed pebbles are
returned to the SAG mill.
Secondary Grinding and Classification: this consists of a ball mill in closed circuit with a
cyclone cluster, and targets a product size of 80% passing 150 µm. The ball mill has a 6.57 m
diameter, an effective grinding length of 10.75 m, and is powered by twin 4200 kW motors.
x Flotation: the flotation circuit comprises bulk flotation, concentrate regrind, cleaner flotation and
on-stream analysis. Cyclone overflow from the grinding circuit, at a pulp density of 35% solids and
pH of 9 reports to the rougher/scavenger circuit. The rougher flotation stage consists of two 70 m3
tank cells, and the scavenger flotation stage consists of four 70 m3 tank cells. Total installed
residence time for this section is 20 minutes.
Rougher/scavenger concentrates are pumped to the regrind circuit, while scavenger flotation
tailings are transferred to the tailings disposal circuit. A single 3.8 m diameter ball mill operates in
closed circuit with hydrocyclones to achieve a P 80 in regrind cyclone overflow of approximately
49 µm. The regrind mill is powered by a 1300 kW motor and uses 40 mm balls as grinding media.
Cleaner Flotation is achieved using collector and frother and by increasing the pulp pH to 11. It is
carried out in four 38m3 cells with a total nominal residence time of 10 minutes. Cleaner
concentrate is transferred to the recleaner circuit, consisting of three 16 m3 u-shaped flotation cells
with a total nominal residence time of 10 minutes. Recleaner concentrate is pumped to the
concentrate handling area.
Cleaner flotation tailings flow to cleaner scavenger flotation in three 38 m3 u-shaped flotation cells
with a total nominal residence time of 10 minutes. The cleaner scavenger flotation tailings are
transferred to the tailings disposal circuit.
Various in-stream samplers collect samples and direct the streams to a multiple stream XRF
analyser, while in-stream particle size determination is carried out on rougher feed and regrind
overflow samples.
x Concentrate Handling: recleaner concentrate is screened and thickened in a 15 m diameter high-
rate thickener to produce a product at 65% solids, which is transferred to a filter feed tank
(12 hours capacity) ahead of dewatering by a pressure filter. Concentrate is dumped onto a
storage slab below the filter, while the filtrate is returned to the concentrate thickener. Concentrate
is then transferred to a storage shed with an FEL, and subsequently loaded onto trucks for
transport to port.
x Tailings Thickening and Disposal: two tailings streams are produced by the concentrator, namely
the cleaner scavenger tailings (CST) stream which has potential for acid generation, and the
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rougher scavenger (RST) tailings stream which has low acid generation potential. The two
streams are disposed of separately. RST are thickened in a 28 m diameter high-rate unit.
Thickened RST (60% solids) is pumped to the RST section of the TSF. CST are pumped to a
11 m diameter thickener, and underflow, at 60% solids, is pumped to the CST section of the TSF.
x Reagents comprise:
Collector (Sodium Isopropyl Xanthate): delivered in 1 t bulka bags. A 2 t monorail hoist lifts
the bags into a bag splitter chute above a 6 m3 agitated collector mixing tank. A 20% solution
is prepared with raw water and pumped to the collector header tank for distribution.
Promoter (Aerofloat 3477): delivered in 210 L drums, with storage being provided for
75 drums. The promoter is transferred from the drums to a 1 m3 promoter storage tank, from
where it is dosed into the flotation circuit.
Frother (Dow 250): Dow 250 is received in 210 L drums and storage is provided for 75 drums.
The frother is transferred to a 1 m3 frother storage tank, from where it is dosed in the flotation
circuit with dedicated metering pumps.
pH Modifier (Lime): hydrated lime (85% Ca(OH)2) is delivered as a bulk solid and stored in a
60 t hopper. Lime solution is prepared with raw water and transferred to a 20 m3 agitated lime
storage tank prior to distribution to the plant through a ring main.
Flocculant: transported to site in 25 kg bags. Storage is provided for 400 bags. Flocculant is
mixed in an automated system and delivered to the respective thickeners using dedicated
variable-speed metering pumps. Flocculant solution is diluted prior to dosage.
Sodium Sulphide (Na2S): delivered in 1 t bulka bags, with storage allowance in a secured
area on-site for 15 t. A 2 t monorail hoist lifts the bulka bags into a bag splitter chute above a
6 m3 agitated mixing tank. Na2S is made up to a 15% solution concentration with raw water,
transferred to a 10 m3 storage tank sited in a concrete containment area capable of storing the
entire contents of the tank, and metered to the rougher flotation feed box.
x Services:
Raw Water: raw water requirements are pumped from the Oxide plant raw water pond.
Fire Water: supplied from the Oxide fire water system.
Potable Water: potable water is provided from the Oxide Plant potable water system.
Process Water: the process water pond has a capacity of 4500 m3.
Plant and Instrument Air: the concentrator has a dedicated plant and instrument air system
similar to that at the Oxide plant. Two independent flotation air blower systems are utilised for
bulk flotation and cleaner flotation air supply.
2.10 INFRASTRUCTURE
Infrastructure requirements for the Mina Justa Project include an access road, power and water
supplies, and camp accommodation, for which the bulk of the engineering and costing was undertaken
by GMI, a subsidiary of Grana y Mmontero, a major Peruvian engineering and construction group. On-
site infrastructure engineering such as internal roads, buildings and electrical distribution was
undertaken by AMEC Minproc. A plan showing major infrastructure is included as Figure 2.11.
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2.10.1 Roads
A 14.8 km gravel two-lane access road linking National Route PE-30 to the plant site and
accommodation camp has been surveyed and designed.
A network of internal roads provides access from the main gate to the offices, stores, process plants,
mine, waste and ripios dumps, stockpiles and the TSF. Roads in and around the processing plant are
sealed with bitumen, and the remainder are gravel.
2.10.2 Buildings
The following buildings are additional to the main processing plant structures:
x Common facilities: administration building, main security building, first aid and fire station, gate
and sentry box, workshop and offices, warehouse and offices, laboratory, change rooms, plant
dining room, site toilets, sewage treatment plants, Mina Justa main substation, camp, water
borefield pump stations, water transfer pump station No. 1, water transfer pump station No. 2.
x Oxide processing plant: Oxide reagents store, Oxide control room, Oxide primary crushing
substation, secondary screening substation, crushing and creening substation, tertiary screening
substation, quaternary screening substation, Oxide process substation, SX substation, EW
substation, rectiformer A substation, rectiformer B substation, Oxide services substation.
x Sulphide processing plant: Sulphide administration building, Sulphide control room, Sulphide
reagents store, concentrate store, grinding substation, flotation substation, HV substation,
thickening and concentrate substation, Sulphide primary crushing substation, pebble crushing
substation, administration and services substation.
x Mine facilities: mine offices, heavy vehicle workshop and lube store, mine warehouse, mine
change rooms, mine dining room, vehicle washdown, vehicle refuelling, diesel storage facility, tyre
bay and battery store, explosives and detonator store, ammonium nitrate storage, core shed, mine
office substation, mine workshop substation.
x Fuel facilities: a vendor will supply storage and distribution facilities as required under the fuel
supply contract.
x Communications: a radio link to the town of Marcona to provide telephone and broadband data
communications to site. A single mode fibre optic cable connects the operations centre to all
offices, substations, laboratory and gatehouse. This supports the plant information network,
computer networking, redundant process control system network (PCS), communication system,
fire alarm system and CCTV signals. A multi-channel radio system, suitable for maintenance and
security/emergency communications, provides coverage for the mine, plant and tailings dam areas.
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Figure 2.11
Mina Justa Project Plan
APPENDIX V
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2.10.3 Construction and Accommodation Camp
The fully-equipped accommodation camp, located 4.4 km away from the plant site, will serve both the
construction and operations phases of the project. The maximum capacity of the camp is 990 people
during the construction phase and 270 people during the operation phase.
2.10.4 Waste Treatment
2.10.4.1 Solid and Hazardous Waste
Solid waste facilities are designed to process and store organic waste and industrial non-dangerous
waste. Dangerous industrial wastes will be stored in a temporary area and transported off-site for
subsequent final disposal using accredited groups.
Hazardous wastes include waste with dangerous metallic elements, reactant residues explosive and
flammable materials. Specific procedures will be established for waste collection, temporary disposal
on site and final transportation off-site for treatment and final disposal. A separately fenced temporary
storage facility will be constructed next to the solid waste landfill site.
2.10.4.2 Sewage
Sewage treatment plants will be sited at the camp, plant areas and mine.
2.10.5 Project Water Supply
2.10.5.1 Water Balance
A site-wide water balance has been developed by Knight Piesold to estimate the amount of make-up
water required to sustain operations, as follows:
x Leaching operations: outside source make-up water for the vat leaching operation is estimated to
be 141 m3/hr. The majority of this is required to offset the residual water retained in the ripios.
x Sulphide plant operations: principal water losses are associated with tailings disposal. The
associated make-up water requirements are estimated to be 403 m3/hr. It has been deemed
impractical to reclaim water from this pond.
x Other areas: approximately 45 m3KURI³RWKHU´PDNH-up is estimated for the operation of the camp
and for water for dust suppression on the roads.
x Total operational requirements: the total make-up requirement for the project is estimated at
approximately 186 m3/hr from Year 1 through Q7 in Year 2 (Oxides only), increasing to 589 m3/hr
for Years 2 to 7 (Oxides + Sulphides), but then decreasing to 420 m3/hr for Years 10 through 12
(Sulphides only).
x Closure and Reclamation Water Balance: climatological data analysis shows that there is
significant net evaporation at the site, which indicates that there will be no net accumulation of
precipitation on the site, with the exception of short duration storm events. The TSF will have the
capacity to temporarily store the run-off produced from a PMP event on the undiverted catchment,
and this water will then be evaporated so that no release is required.
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2.10.5.2 District Water Resources
Field investigations and studies by MWH Peru S.A. (MWH, formerly GWI) and Vector determined that
the Jahuay aquifer, 31 km east-southeast of the site, is capable of supplying Project demand. The
aquifer displays high hydraulic conductivity and storativity values, based on pump testing. A safe long-
term yield of 34 L/s per well has been estimated.
The water is fresh, pH-neutral with slightly elevated levels of iron (0.3 to 0.6 mg/L). Corrosion potential
is anticipated to be minimal over the proposed life of the project.
The aquifer is fed almost exclusively by rainwater and snow-melt from the mountains to the east. The
best estimate of annual water surplus for the basin is about 73 L/s. The aquifer is currently utilised by
6KRXJDQJ¶VLURQRSHUDWLRQVDQG0DUFRQDWRZQDQGWRWDODQQXDOZLWKGUDZDOVPD\H[FHHGWKHDYHUDJH
annual water surplus for the basin, ie, there may be some draw-down of water resources from the
aquifer. However, following closure of the Mina Justa operation, water levels will gradually recover to
pre-operation levels.
The Lomas aquifer, 50 km southeast of the Project represents a viable back-up water supply source,
should this be required, although pump tests indicated a long-term safe yield of 5 L/s, water quality is
slightly poorer and there is potential to affect neighbouring wells in the area.
2.10.5.3 Well Field Design
The design basis considers an average well yield of 25 L/s. Two stages of well installation are
proposed: Stage 1 (Year -1) ± 3 wells and Stage 2 (Year 2) ± 5 wells; providing 1 back-up well in
Stage 1 and 2 back-up wells in Stage 2.
Well sites have been proposed, but may not be optimal; additional surficial resistivity surveys are
recommended to investigate potential water resources on the east side of the Jahuay valley, which
would reduce the need for pipeline crossings of the valley, and provide additional information for
characterising the aquifer.
2.10.5.4 Water Supply System
A pipeline has been designed with an intermediate pump station required to manage the 300 m
difference in elevation, and the 31 km pumping distance.
The water supply system includes the following elements:

x Borefield/water collection and transfer system: a total of 8 wells will be installed to supplement the
1 existing well. Pump intakes are located at 20 m below the dynamic level (120 to 170 m below
surface). The pumps are turbine type with submersible motors/drives. Water is transferred from
the wells via a single pipeline to a 300 m3 collection tank.
x Pump station No. 1: pump station No. 1 includes the collection tank, and pumps which are located
in a custom-designed, ventiled building. Pumps are of vertical turbine, can type, with 295 m3/h
capacity and 326 m TDH.
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Two pumps will be installed in the station initially, one operating and the other on stand-by. As
project requirements increase, a third pump will be installed.
x Transfer pump station No. 2: transfer pump station No. 2 includes a transfer tank with a capacity of
300 m3, and utilises identical pumps, housed in a building of similar construction.
x Transfer pipeline: there are 2 pipeline sections, 1 of 18.1 km and the other 13 km. For the first
section between pump stations, the pipeline will be steel, 14" diameter for 16 km, reduFLQJWR´
HDPE for the final 2.1 km. The second section from the Pump Station No. WRVLWHZLOOEHRI´
UHGXFLQJ WR ´ VWHHO IRU km, followed by 2 NP RI ´ +'3( 6WHHO SLSHV ZLOO KDYH FRQFUHWH
sleepers installed every 6 m and anchor blocks where direction changes. HDPE pipes will be
restrained with earth anchors. Pipes will be protected with venting/vacuum breaker valves.
x Fire protection system: BC type carbon dioxide fire extinguishers will be installed in each pump
station. The detection system signals will be transferred to local detection and alarm control panels
communicating with the central control room.
x Fresh water storage and distribution system at site: water will be discharged in the pond located at
the plant site, from where it will be distributed to internal facilities.
x Power supply and distribution ± borefield/water collection system: electrical power supply to the
well pumps will be by means of a 22.9 kV overhead line from the project site. A secondary line will
be installed to each well using a 315 kVA transformer of 22.9/0.48 kV.
x Power supply and distribution ± water transfer system: the 22.9 kV transmission line will supply the
pump stations via a 1500 kVA transformer which will feed the 4.16 kV motor control centre that
supplies the pumps. Auxiliary supplies such as the control system, lighting and small power, etc.
will be supplied via an auxiliary transformer.
x Control and Instrumentation System: instrumentation is provided throughout the system to provide
adequate information for remote control/operation of the water collection and transfer system.
2.10.6 Power Supply and Distribution
2.10.6.1 Power Supply
The plant site is located approximately 15 km from the existing Marcona 220 kV substation, which is
connected into the regional 220 kV network. A dedicated 14.7 km 220 kV overhead power line
VXSSRUWHGE\VWHHOWRZHUVZLOOFRQQHFWWRWKH3URMHFW¶V+9VZLWFK\DUG$ kV power line supported
on wooden poles will run from site 31 km to the Jahuay borefield. An outdoor switchyard will
accommodate a 220/22.9 kV transformer to supply the plant and associated HV switchgear feeding a
22.9 kV switchboard located indoors at the main plant substation.
Power is distributed from the 22.9 kV main substation switchboard to major plant loads via an overhead
line to the boundary of the process plants, within which power cables are used. Plant load centres have
varying secondary voltages supplied by step-down power transformers adjacent to the each of the load
centres.
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2.10.6.2 On-site Distribution
x Oxide plant electrical load: the total connected load for the oxide plant and mine infrastructure is
36 394 kW. The application of relevant utilisation factors, power factor correction and harmonic
filtering equipment gives a predicted maximum demand of 33 441 kVA.
x Sulphide plant electrical load: the sulphide plant total connected load is 29 061 kW. The
application of relevant utilisation factors power factor correction and harmonic filtering equipment
produces a predicted maximum demand of 24 211 kVA.
x Other electrical loads: in addition to process plant loads, other loads are the camp (824 kVA),
lighting for internal access road (190 kVA), wells substation (695 kVA) and transfer pumping station
(842 kVA).
x Power reticulation: total of 19 substations services the combined process plant facilities. The
Oxide plant HV switchboards are located within the oxide crushing and screening area HV
substation and the oxide process area HV substation. The sulphide plant HV switchboard is
located within the sulphide plant HV substation and handles the sulphide primary crusher as well.
x Emergency generation: emergency power is provided by individual small generators for the
following:
Oxide plant: total 2321 kW consisting of 2027 kW fixed loads (building loads, plant lighting and
small power) and 294 kW process loads.
Sulphide plant: total 922 kW consisting of 690 kW fixed loads (building loads, plant lighting
and small power) and 232 kW process loads.
2.10.6.3 Control Systems
The Oxide plant is provided with a process control system (PCS) with a moderate level of control
complexity. It is designed to be operated primarily from the central control room (CCR) located
adjacent to the EW building. Local field operator stations provide control room type information, and
allow interaction from the field operators on a secured basis.
A CCR is provided for the Sulphide plant and is located near the grinding building.
2.11 WASTE DISPOSAL
2.11.1 Mine and Ripios Waste Dumps
Designs have been prepared for the two mine waste rock dumps (the Main Mina Justa and Magnetite
Manto waste dumps), the ripios dump and the low grade stockpile, taking account of the physical and
geochemical stability of the structures and closure requirements.
The estimated amount of waste rock to be generated by the Project is approximately 402.5 Mt, of which
383 Mt will be placed in the Main waste dump, 14 Mt in the Magnetite Manto waste dump and the
remaining 5.5 Mt (non-PAG material) will be used for construction of the tailings dam. The ripios dump
has been designed with a capacity of approximately 114 Mt, and the low grade stockpile with a capacity
of 20 Mt.
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Geotechnical and geochemical investigations were conducted by Knight Piésold to characterise the
foundations, rock waste and ripios materials, from which it was concluded:
x Geological units underlying the waste dumps and stockpile areas are expected to provide
adequate foundations. However, aeolian material located beneath the final outer toe of the mine
waste dump will be removed to improve the stability of the final outer slope.
x The water table lies some 400 to 500 m below the ground surface. Seepage analysis performed
for the main waste rock dump and ripios dump indicate that the potential for any seepage reaching
groundwater is minimal.
The design of the mine waste dump includes for the placement of the ripios material within its limits.
The ripios material will be placed in the Northern sector of the dump, buttressed by mine waste. The
configuration of the dump and butressing embankment takes account of the results of stability analysis
by Knight Piesold. The analyses indicated that a security zone of approximately 25 m should be
established beyond each advancing lift of ripios as some minor (superficial) unravelling or sloughing of
the ripios may be expected during placement. In addition, a security or buffer zone will be established
beyond the final downstream toe of the dump since some minor and localised ravelling may occur.
In order to monitor slope movements on the Main mine waste dump, marker points will be installed
during and after operations. Underdrain systems will be installed at the base of the ripios dump to
monitor any potential seepage from the ripios area. A liner system will be placed below the underdrain
system to limit vertical seepage potential, and potential flow will be conducted to a water monitoring
station.
The PAG mine waste rock (estimated at approximately 15 Mt) will be placed in a designated area within
the southern portion of the main waste dump and will be encapsulated by non-PAG material. At
closure, the upper surface of the PAG waste rock in the dump will be covered with a 1 m layer of non-
PAG material to limit the potential for acid dust generation and dermal contact
2.11.2 Magnetite Manto Waste Dump and Low Grade Stockpile Design
The Magnetite Manto waste dump and the low grade stockpile will each be constructed in three layers.
Again, Knight Piésold undertook stability analysis of the design slopes, the results indicating that
industry accepted static and dynamic (earthquake) factors of safety (FoS) will be achieved.
2.11.3 Tailings Storage Facility
The TSF has been designed to a DFS level with a capacity for 49 Mt (dry tonnes) of tailings, consisting
of 7.5 Mt of CST and 41.5 Mt of RST, that will be deposited seperately and managed in adjacent
portions of the facility over a period of 10 years. The two tailings delivery systems have been designed
to a pre-feasibility level.
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The TSF is located in a north-south trending depression just to the southwest of the planned mill site. It
will cover a surface area of approximately 372 ha at full build-out, and this arrangement is shown on
Figure 2.12. The location of the TSF was selected based on an alternatives analysis study of seven
options for which environmental, economic and technical aspects were considered.
The design of the TSF was developed by Knight Piésold based on:
x Site geotechnical, hydrogeological, hydrological and climate data
x Geotechnical and geochemical data for the tailings
x Geotechnical and geochemical data for the mine waste that will be used in the dam
x The mining and mill processing
x Production schedule.
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Figure 2.12
Tailings Storage Facility
APPENDIX V
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The tailings dam will be constructed out of non-PAG mine waste rock from the Magnetite Manto open
pit and possibly the Main open pit pending further characterisation studies on the Main pit materials. At
full build-out, the dam will have a length of 1.8 km and a height of 27 m. The dam will be constructed in
three stages using the downstream construction method. A geosynthetic liner will be included on the
upstream face of the dam and will be extended to underly the southern portion of the TSF basin where
the CST tailings will be stored.
The dam was assessed for its consequence classification according to the Canadian Dam Association
'DP 6DIHW\ *XLGHOLQHV DQG ZDV IRXQG WR KDYH D ³/RZ´ classification. This ranking is due to the
absence of a population at risk and the remote nature of any surface or groundwater resources that
could be affected.
The CST tailings will be deposited into the southern portion of the TSF through frequently rotated
spigots located along the upstream crest of the dam while the RST will be discharged into the northern
side of the TSF from a few off-take points above the northeast side. The CST will be stored above a
liner while the RST will not. A separation dike will be constructed between the CST and the RST areas
in the TSF. The overall tailings management plan will involve keeping a shallow supernatant water
pond over as much of the CST deposit as possible in order to keep it saturated and reduce its potential
for oxidation and acid generation. However, it is expected that the pond will not cover the whole CST
deposit at all times and thus the management plan will also involve frequently blanketing the surface of
the CST with a fresh layer of CST. This will keep the areas that are not submerged also in a saturated
condition to the greatest extent possible. The CST deposition spigots will be closely spaced along the
entire crest length of the dam to facilitate this. The liner under the CST will assist in keeping the deposit
saturated by keeping any seepage losses to a minimum.
The RST deposited from above the northeast side of the TSF will form a drained and consolidated
mass that will confine the CST into the southern side of the TSF. The surface of the RST deposit will
slope to the south and west and will confine the small supernatant pond in this area to cover a
significant portion of the CST. The RST will be non acid generating and will be largely above the pond
and exposed to air to increase its drying, consolidation and densification. The liner under the CST will
not be extended under the RST so that bottom drainage from the RST can occur thus further increasing
its consolidation.
Leachate generation and seepage is expected to be low or negligible due to the strong evaporation
potential at the site, which will desiccate the RST and produce a regime of low and possibly negative
pore pressures in the deposit with little to no propensity for causing seepage. Any small amounts of
seepage from the base of the RST are likely to be intermittent and either retained in the geological units
well above the groundwater (at >400 m depth), or have their trace elements attenuated to levels that
will be unlikely to negatively impact the groundwater. A preliminary seepage model showed that the
potential seepage will reach a depth of 140 m during a period of 15 years considering an unlined facility
and a constant supernatant pond.
The closure plan for the TSF has been developed to a concept level only at this time. The plan calls for
covering the final CST surface with a layer of non-PAG material in order to limit the potential for
oxidation and acid generation.
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2.12 FUEL SUPPLY
Fuel supply will be contracted under a long-term supply contract, and will cover transport to site,
storage and facilities management, in-pit refuelling vehicles, and 24 hour per day dispensing service.
2.13 PORT AND ROAD TRANSPORT
Port and road transport facilities are key infrastructure components for the project, allowing movement
of significant tonnages of products (copper cathode and copper concentrate) and reagents (particularly
sulphuric acid).
A multi-port strategy is proposed for the Project, as recommended in the report from Sandwell (2009),
as follows:
x San Martin, 250 km by road to the north of Mina Justa, is selected for cathode and acid shipments
for the first 5 years. The existing port IDFLOLWLHVDUHVXIILFLHQWIRU0DUFREUH¶VUHTXLUHPHQWV, with the
exception of the tank farm for liquid bulk storage that will be expanded.
x Matarani, 550 km by road to the south is used for shipment of concentrate for 1 year. Matarani
already handles significant qualtities of copper concentrates and cathodes from other operations.
The existing port infrastructure and shipping facilities are adequate for handling concentrates from
Mina Justa.
x San Juan de Marcona, 30 km to the south, is preferred for cathode, acid and concentrate supply
and shipments for the latter part of the Project, due to its proximity. The government is proposing
to develop San Juan de Marcona port through a private tender process, with start-up now projected
for 2014. Marcobre has assumed that the start of operation of the bulk mineral handling facilities
will be delayed to 2015, at which time concentrates from Mina Justa will be shipped out of this port.
Marcobre has further assumed that cathodes and acid will also be handled by the new port in
2017.
The Mina Justa Project is located approximately 400 km south of Lima, and is easily accessible by the
Panamerica Sur and local hard-top roads to within 5 km of the project. Road distances from the project
to the towns of San Juan de Marcona and Nazca are 30 km and 50 km, respectively.
A number of employees will be transported between Lima and site by aircraft. Minor airfields exist at
Nazca and on the edge of San Juan de Marcona, but neither airfield has lighting and no commercial
flights are available.
2.14 PROJECT IMPLEMENTATION
The Mina Justa Project will be implemented in two stages, the Oxide phase and the Sulphide phase,
which will commence while the Oxide plant is still under construction.
A timeframe of 29 months is projected for completion of the Oxide plant, with an additional 3 months to
complete the commissioning and commence cathode production. It is assumed that all necessary
permitting and environmental approvals are obtained within the timeframe indicated.
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Similarly, a 29 month timeframe is projected for the sulphide plant implementation, plus 3 months for
commissioning.
The key drivers of the schedules are the very long delivery lead times for some critical equipment (eg,
crushers and mills), the large quantity of concrete works required for the vat leaching area, and the time
required to construct camp accommodation.
The Project will be implemented with a general strategy of multiple horizontal discipline-oriented
contract packages, with the inter-discipline construction interfaces managed by an EPCM Contractor,
whose primary areas of responsibility relate to construction and commissioning of the process plants
and infrastructure.
0DUFREUH¶V WHDP ZLOO PDQDJH WKH EPCM Contractor, and manage or execute several other activities
needed to complete the Project, including those related to financing, permits and approvals, mining,
waste disposal, and contracts for power supply, port usage, transport of cathodes, copper concentrate,
acid, other reagents and consumables, etc.
A Project HSEC Management Plan will be developed prior to project execution, and will identify the
HSEC requirements, allocate duties and responsibilities, and detail the processes and procedures that
are used to manage HSEC during the implementation of the project. Public meetings, consultations,
systems, procedures and management plans will be used to align the key stakeholders, namely the
Marcobre Project Team, the Marcobre Operating Team, the EPCM Contractor, contractors, vendors,
the workforce and the community in order to achieve the HSEC objectives.
2.15 CAPITAL COSTS
2.15.1 Cost Update from 1Q09 to 1Q10
Capital and operating costs estimated for the DFS have a base date of 15 February 2009, shown as
1Q09 in this report.
China Sci-tech requested an update of both capital and operating costs to 31 January 2010 as part of
this Technical Report. An accurate update would require immensely time-consuming revalidation of
every quotation received from vendors and contractors, and well as an update of the foreign currency
rates of exchange. Due to time constraints, AMEC Minproc has adopted a simplified approach using
information from the US Bureau of Economic Analysis website, as explained in more detail in
Section 4.17.1.
This approach equates to a percentage increase over the period of 0.23% which AMEC Minproc has
used to adjust both capital and operating cost estimates from 1Q09 to 1Q10. No adjustments have
been made to foreign currency exchange rates.
Amounts shown in key tables in this report have not been changed from the original DFS report, but
additional tables have been included below each of these key tables showing the original cost at 1Q09,
the adjustment percentage, adjustment amount and the final updated cost to 1Q10. Apart from these
tables, all other costs in the report have a base date of 1Q09 costs unless otherwise stated.
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2.15.2 Initial Project Capital
AMEC Minproc developed or supervised the capital cost estimates for the mining equipment, mine
development, process plant, and associated in-plant and ex-plant infrastructure. Additional information
and costs were supplied by Knight Piésold IRU WKH 76) ZKLOH 0DUFREUH GHYHORSHG WKH 2ZQHU¶V &RVW
estimates.
The estimated total capital costs are summarised in Table 2.9 (Oxide Plant and Mine ± Base Date
1Q09), Table 2.10 (Oxide Plant and Mine ± Escalated to 1Q10), Table 2.11(Sulphide Plant ± Base Date
1Q09) and Table 2.12 (Sulphide Plant ± Escalated to 1Q10). Details of mine capital costs are included
in Section 2.7.8.
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Table 2.9
Oxide Plant DFS Capital Cost Estimate, Summarised by Area (1Q09)
Area Area Description Bare Cost Accuracy Provision Total Cost
No. ($) (%) ($) ($)
001 General Plant 11 055 834 11.4% 1 261 807 12 317 641
010 Crushing and Screening 1 097 296 10.0% 109 731 1 207 027
011 Primary Crushing 12 011 627 8.9% 1 063 609 13 075 236
012 Primary Stockpile and Reclaim 5 399 360 9.3% 501 547 5 900 907
013 Secondary Screening/Crushing and Tertiary Crushing 20 287 527 6.1% 1 228 564 21 516 091
014 Tertiary Screening and Quaternary Crushing 22 968 439 6.0% 1 387 639 24 356 078
015 Quaternary Screening 10 418 274 7.3% 758 199 11 176 473
020 Vat Leaching 67 288 240 9.3% 6 248 419 73 536 659
030 Solvent Extraction 18 772 003 11.2% 2 094 912 20 866 915
040 Electrowinning 29 898 230 7.6% 2 262 348 32 160 578
050 Reagents ± Oxide 2 391 151 10.3% 246 951 2 638 102
060 Services ± Oxide 3 469 873 11.4% 395 997 3 865 870
070 Infrastructure ± Oxide 21 533 336 9.7% 2 097 806 23 631 142
079 Mobilisation and Demobilisation 2 949 703 10.7% 315 812 3 265 515
080 Temporary Facilities 4 354 608 10.0% 435 461 4 790 069
081 Commissioning ± Oxide 2 020 961 10.0% 202 096 2 223 057
082 Vendor Representatives 1 058 439 10.0% 105 844 1 164 283
083 First Fills and Spares 11 512 650 10.0% 1 151 265 12 663 915
084 Loose Tools and Equipment 1 221 938 10.0% 122 193 1 344 131
095 Power Supply 11 545 443 10.0% 1 154 545 12 699 988
096 Plant Access Road 7 134 713 13.6% 968 895 8 103 608
097 Construction Camp and Village 17 008 679 10.0% 1 700 868 18 709 547
098 Water Supply 16 576 532 13.7% 2 270 740 18 847 272
200 Mining 123 150 502 0.2% 224 776 123 375 278
Direct Costs ± Subtotals 425 125 358 6.7% 28 310 024 453 435 382
EPCM 51 080 140 10.0% 5 108 014 56 188 154
Indirect Costs ± Subtotals 476 205 498 7.0% 33 418 038 509 623 536
2ZQHU¶V&RVWV 37 242 013 0.0% 0 37 242 013
Totals 513 447 511 6.5% 33 418 038 546 865 549
Table 2.10
Oxide Plant DFS Capital Cost Estimate: Escalated to IQ10
Description Total Cost Escalation Total Cost
1Q09 (%) ($) 1Q10
($) ($)
Total Escalated Oxide DFS Capital Cost Estimate 546 865 549 0.23% 1 257 791 548 123 340
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Table 2.11
Sulphide Concentrator PFS Capital Cost Estimate Summarised by Area (1Q09)
No. ($) (%) ($) ($)
001 General Plant 4 651 645 18.5% 860 088 5 511 733
098 Water Supply 3 598 297 12.8% 460 312 4 058 609
110 Sulphide Primary Crushing 15 066 043 14.3% 2 157 212 17 223 255
120 Sulphide Grinding 36 804 910 9.6% 3 545 430 40 350 340
130 Sulphide Flotation 17 230 211 15.2% 2 615 714 19 845 925
140 Sulphide Concentrate Thickening and Filtration 7 579 799 13.8% 1 045 210 8 625 009
160 Sulphide Tailings Thickening and Disposal 15 102 265 18.2% 2 753 420 17 855 685
170 Sulphide Reagents 2 444 480 16.9% 414 113 2 858 593
180 Sulphide Services 7 592 634 16.7% 1 265 847 8 858 481
191 Commissioning 485 763 14.3% 69 596 555 359
192 Vendor Representatives 535 528 15.0% 80 329 615 857
193 First Fills and Spares 3 681 004 19.9% 732 099 4 413 103
EPCM 22 129 233 0.0% 0 22 129 233
2ZQHU¶V&RVWV 10 529 709 0.0% 0 10 529 709
Totals 151 693 661 11.0% 16 613 409 168 307 070
Table 2.12
Sulphide Concentrator PFS Capital Cost Estimate Summarised by Area, Escalated to 1Q10
1Q09 (%) ($) 1Q10
($) ($)
Total escalated Sulphide concentrator capital cost estimate 168 307 070 0.23% 387 106 168 694 176
The unescalated capital cost estimate for the Oxide plant as shown in Table 2.9 has a level of accuracy
of ±10%, while the unescalated estimate for the Sulphide plant in Table 2.11 has a level of accuracy of
±20%. Costs originally in currencies other than US$ have been converted to US$ at the exchange
rates shown in Table 2.13.
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Table 2.13
Exchange Rates (1Q09)
Currency Unit Units per US$
AUD Australia Dollars 1.54
CLP Chile Pesos 595
EUR Euro 0.785
JPY Japan Yen 91.7
PEN Peru Nuevos Soles 3.26
USD United States Dollars 1
ZAR South Africa Rand 10.1
CAD Canadian Dollar 1.24
Note: Base date 16 February 2009
Generally, for earthworks, concrete, structural steelwork and platework fabrication and installation,
supply rates and unit man-hours are based on information provided by GMI, a major local contractor
and checked against other Peruvian contractors by AMEC Minproc. Quantities were determined from
material take-offs based on preliminary designs and layout drawings.
Budget equipment prices (including electrical equipment) were obtained for major equipment items, the
remainder being derived from AMEC Minproc¶VGDWDEDVH
In-plant piping is derived from the actual costs of similar plants designed or completed by
AMEC Minproc, adjusted to Peruvian costs and productivity. The basis of the piping estimate is
installed piping to number of pumps per area, for equivalent type areas.
A budget quotation was received from a local contractor for buildings. Building area costs were
compared and verified against similar buildings on current projects.
Transport of concrete-related bulk materials is included in the all-in concrete rate. Transport rates for
steelwork and platework bulk materials were derived from rates received from installation contractors.
Transport for all equipment items is based on information received for steelwork and platework
transport. Where this method of calculating freight costs was inappropriate, an allowance varying from
5% to 12% was applied, based on historical information, depending on original source of equipment,
volume, weight, etc.
Sunk costs are not included in the capital cost estimate.
$W0DUFREUH¶VGLUHFWLRQQRSURMHFWFRQWLQJHQF\RUHVFDODWLRQZDVLQFOXGHG for the original estimate.
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2.15.3 Sustaining Capital
Sustaining capital includes deferred capital such as a tailings dam lift, and sustaining capital such as
the replacement of mining equipment, other heavy mobile equipment, computer hardware, light
vehicles, etc.
Summaries of the sustaining capital requirements are presented in Table 2.14 (base date 1Q09) and
Table 2.15 (escalated to 1Q10).
Table 2.14
Sustaining/Deferred Capital Summary (1Q09)
Total Cost
Plant Description
($)
Deferred Capital
Sulphide Recleaner concentrate pump 2 28 600
Sulphide Tailings Storage Facility ± Phase 2 3 220 000
Sulphide Pressure Filter Upgrade 510 000
Sub-Total Deferred Capital 8 398 600
Sustaining Capital
Oxide/Sulphide Replacement of computers 1 411 000
Oxide/Sulphide Mining Sustaining Capital 15 185 638
Oxide/Sulphide Vehicles Sustaining Capital 7 859 997
Sub-Total Sustaining Capital 24 456 635
Total 32 855 235
Table 2.15
Sustaining/Deferred Capital Escalated to 1Q10
IQ09($) (%) ($) IQ10
($)
Total escalated sustaining/deferred capital 32 855 235 0.23% 75 567 32 930 802
2.16 OPERATING COSTS
Project operating costs are summarised in Table 2.17and Table 2.18(unescalated 1Q09 and escalated
1Q10 respectively), and closure costs in Table 2.19 and Table 2.20 (unescalated and escalated).
Operating costs are in US$. Foreign currency conversion rates are as shown in Table 2.13. The
unescalated operating cost estimate has an accuracy of ±10% (except for the Sulphide plant which is to
±20%).
IGV tax is not included as it is expected to be fully recovered by Marcobre with a 3 month lag.
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No allowance has been made in the operating cost estimate for financing charges, contingency,
escalation or exchange rate variations, depreciation and accounting effects, sustaining capital (which is
included in capital expenditures), and exploration on other prospects.
Key unit operating cost inputs provided by Marcobre are summarised in Table 2.16.
Table 2.16
Key Unit Costs Provided by Marcobre (1Q09)
Item Unit Cost
Diesel (delivered to site, including site storage and dispensing) US$/L 0.636
Electricity (including transmission) US$/MWh 55.00
Sulphuric acid (delivered to site)
Via San Martin US$/t 90.40
Via San Juan US$/t 62.50
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Table 2.17
APPENDIX V
Summary of Project Operating Costs (US$/t ROM processed) Model 090821 (1Q09 basis)
Area Period
Yr -1 2012 2013 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023
Mining 0 9.88 5.47 3.72 3.60 3.68 3.84 3.74 3.74 2.98 1.85 2.24 2.07
Oxide Plant 0 5.76 5.68 5.68 5.69 5.69 4.50 4.49 4.52 4.52 4.46 4.57 -
Sulphide Plant 0 - - 4.90 4.82 5.20 5.12 5.06 4.81 5.24 4.80 5.16 4.92
General and Administration 0 2.14 1.30 1.08 1.04 1.05 1.05 1.05 1.05 1.04 1.03 1.88 2.95
Corporate Office (Lima) 0 0.25 0.15 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.22 0.38
Transport/ Marketing 0 0.23 0.23 3.42 3.08 4.74 4.88 2.65 2.60 2.66 2.61 7.18 11.92
Total 0 18.27 12.84 18.91 18.34 20.46 19.49 17.10 16.83 16.54 14.85 21.24 22.25
Table 2.18
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Summary of Project Operating Costs, Escalated to 1Q10 (US$/t ROM processed)
Description Period
Yr -1 2012 2013 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total cost IQ09 0 18.27 12.84 18.91 18.34 20.46 19.49 17.10 16.83 16.54 14.85 21.24 22.25
Total escalated cost IQ10 0 18.30 12.86 18.95 18.38 20.52 19.54 17.14 16.87 16.59 14.89 21.30 22.29

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APPENDIX V
Table 2.19
Summary of Project Closure Costs (US$, 1Q09 Basis)
Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Progressive 688 468 323 212 155 209 1 656 698 851 302 - - -
1)
Closure
2)
Final Closure - - - - 3 008 260 5 556 186 3 217 554 144 125
Total 688 468 323 212 155 209 1 656 698 3 859 563 5 556 186 3 217 554 144 125
1)
Progressive closure costs include costs related to pits mined out before cessation of production and closure of the oxide treatment facilities (including the ripios dump) which cease
operation prior to the concentrator.
2)
Final closure costs include sulphide processing facilities, waste dumps, tailings pond, concentrator facilities, camp and infrastructure.
— V-66 —
Table 2.20
Summary of Project Closure Costs, Escalated to January 2010
Description Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Total Cost IQ09 688 468 323 212 155 209 1 656 698 3 859 563 5 556 186 3 217 554 144 125
Total escalated 690 051 323 955 155 566 1 660 508 3 868 440 5 568 965 3 224 954 144 456
cost IQ10

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Mining Cost
Mine operating costs represent Owner mining costs, and include appropriate allowances for technical
labour and materials to control the mining operation.
Mining equipment maintenance and repair costs are assumed to be carried out under a maintenance
and repair contract with the mining equipment vendor, while blasting is assumed to be carried out by
the explosives supplier under contract to Marcobre.
The average mine operating cost for life of the mine is $1.14/t mined (February 2009 basis). Costs in
the earlier years are lower, but increase in later years as haul distances increase and the total tonnage
mined decreases. Further details are supplied in Section 4.7.7.
Oxide and Sulphide Plant

Plant operating costs have been developed under the categories of Labour, Power, Maintenance
materials, Reagents, Consumables and Miscellaneous items.
Reagents and consumables have been priced by suppliers on the basis of delivery to site where
possible, or shipped via the port of Callao (Lima). Additional road transport costs from Callao to site are
based on a transportation cost assessment undertaken by Marcobre and Sandwell.
Costs associated with shipping, sales and off-site treatment are reported separately (Section 2.17.4).
General and Administration (G&A)

The G&A costs cover labour and miscellaneous items required to support and manage site operations.
The Labour cost include administration, community relations, environmental, safety, security,
accounting, logistics, laboratory and centralised maintenance personnel. Miscellaneous items include
administration costs, insurance, personnel transport and accommodation, site services, administration
vehicles, road maintenance, consultants and health, safety and environmental management related
costs.
G&A costs encompass both site administration and Lima corporate office costs, but exclude costs
DWWULEXWDEOHWRH[SORUDWLRQRQ0DUFREUH¶VRWKHUSURVSHFWV
Environmental Costs
The cost of environmental monitoring includes costs associated with monitoring atmospheric conditions,
air and water quality, noise, biological conditions, inspection and audit costs by governmental
authorities, related to health, safety and environment, and other costs including dust control program,
management of efluents and management of domestic and industrial solid wastes.
Closure costs were estimated by Vector, following review of Knight Piésold¶VGHVLJQV
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2.17 MARKETING AND PRODUCT PRICING
2.17.1 Copper Cathode Sales
Under the Shareholders Agreement, current plans commit 100% of the first 10 \HDUV¶ SURGXFWLRQ RI
copper cathodes to LS-Nikko Copper (70%) and Norddeutsche Affinerie AG (NA ± 30%). Formal sales
contracts have yet to be negotiated, but there are understandings covering such items as marketing
fees and cathode premiums.
2.17.2 Copper Concentrates Sales
Pursuant to the Shareholders Agreement, Marcobre will sell 90% of its copper concentrate production
to LS-Nikko for 10 years from the commencement of copper concentrate production. The sales
contract has not been finalised, but the Shareholders Agreement specifies the principal terms relating to
price basis, payable metal, treatment and refining charges, copper price participation, refining charges
and payment terms
The 10% balance of the copper concentrates is insufficient to support a long-term sales contract.
Marcobre intends to sell the uncommitted production on a spot basis, most likely to smelters in the Far
East to take advantage of freight savings from combining shipments with the volume going to
LS-Nikko. For the purposes of the DFS, it was assumed that the 10% balance of production is sold to
LS-Nikko on the same terms as the market portion of the long-term contract.
2.17.3 Market Review (Copper and Sulphuric Acid)
Brook Hunt and Associates Limited (Brook Hunt) provided a market review of a range of issues which
included forecasts of copper price, concentrate treatment and refining charges, copper cathode
premium, penalty elements and standard penalty rates, freight rates, and sulphuric acid price.
Table 2.21 summarises the key forecasts from the Brook Hunt report, and compares the forecasts with
the assumptions used in the DFS financial analysis.
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Table 2.21
Summary of Forecast Prices and Terms, Q1 2009 US$ terms, 2012 to 2023 Average
1)
Brook Hunt Cases DFS
Low Base High Case
Price
/0(*UDGH³$´&RSSHUOE 1.82 1.93 2.12 2.00
Cathode premium, $/tonne
South Korea 63.82 69.17 77.50 69.55
Germany 82.08 89.17 100.42 89.55
Reagents
Sulphuric Acid, $/t, CIF Main Peruvian Ports 33.33 44.17 57.50 45.00
Ocean Freight Rates
Cathodes: South Korea, $/t 53.83 57.08 61.50 56.91
Cathodes: Germany, $/t 59.58 64.00 67.58 63.64
Concentrates: South Korea, $/t 41.83 45.17 61.00 45.50
Market Treatment and Refining Charges, Copper Concentrates
Treatment Charge US$/t 79.17 86.25 87.50 87.00
Refining Charge c/lb 0.07917 0.08625 0.0875 0.087
Price Participation Base commencing 2015 1.50 1.60 1.75 1.60
Precious Metal Refining Charges
Au (US$/payable oz) 5.00 5.00 5.00 5.00
Ag (US$/payable oz) 0.35 0.35 0.35 0.35
1)
Brook Hunt cases copyright Brook Hunt and Associates Limited
The Brook Hunt forecasts are cyclical. For the DFS base case cash flow projections, Marcobre elected
to use the simple average of the Brook Hunt base case projections over the relevant period.
2.17.4 Off-site Operating Costs (Transport, Marketing and Realisation)
The off-site operating costs include product trucking, port storage and handling, ship loading, ocean
freight, marketing fee (copper cathodes), concentrate treatment and refining charges, and marine cargo
insurance.
Cost estimates were developed by Marcobre based on Brook Hunt and other inputs, and are shown in
Table 2.22. The costs in this table have a base date of 1Q09.
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Table 2.22
Transportation, Marketing and Realisation Costs (1Q09)
Category Units $
Copper Cathodes
Truck to port, San Martin/San Juan US$/t 19.59/5.48
Port handling and storage charges, Martin/San Juan US$/t 18.20/14.50
Ocean freight: South Korea US$/t 56.91
Ocean freight: Northern Europe US$/t 63.64
Marine cargo insurance % of CIF value 0.15125%
Marketing fee US$/t 13.00
Copper Concentrates
Truck to port, Matarani/San Juan US$/wmt 35.72/5.48
Port handling and storage charges, Matarani/ San Juan US$/wmt 10.50/22.00
Ocean freight US$/wmt 45.50
Market Portion (60% of LS-Nikko and 100% of other)
Copper concentrate treatment charge US$/dmt 87.00
Copper refining charge US¢/payable lb Cu 8.7
Price-Sharing Portion (40% of LS-Nikko)
Note 1
Combined treatment and refining charge % of Copper Price 24.5%
Gold refining charge US$/payable oz Au 5.00
Silver refining charge US$/payable oz Ag 0.35
Note 1: 24% for first 5 years, 25% for second five years, floor of 19 cents per payable pound.
2.18 RISK AND OPPORTUNITY
2.18.1 Hazard Identification
A formal hazard identification and risk assessment study was conducted by AMEC Minproc to identify
issues affecting the safety and health of people working in the oxide plant, while Indec S.A, conducted
its own review and produced a separate Hazard Identification report for the vat leach section.
Seven extreme risk areas were identified, and mitigating strategies developed, including redesign
where required.
2.18.2 Technical Risks
BatteryLimits Pty Ltd conducted a technical risk assessment for the Project. Thirty-four risks were
identified, although the technical risk profile contains a relatively low number of top priority risks.
The key issue identified is that the Sulphide project, which is a major contributor to project economics,
has been studied only at a PFS level of detail. This risk is expected to be mitigated by further studies.
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2.18.3 Commercial Risks
As with any project, there are commercial risks related to reliance on key operating cost inputs. For
Mina Justa, prices for acid, diesel and electricity represent 21%, 13% and 12% of site costs
respectively, and unexpected increases in price of these consumables constitute a significant risk to the
economics of the project. Acid prices and diesel prices have varied over a large range in the past few
years, and there is an unknown degree of risk relating to the Brook Hunt costs used in the operating
costs.
Security of supply is important for sulphuric acid, a vital input to the Oxide process with no practical
substitute. Marcobre intends to enter into long term supply contracts to ensure delivery, although prices
would not be fixed.
Land transportation and port costs for cathodes, concentrates and acid form a significant part of project
operating costs, particularly in the early years when the more distant ports of San Martin and Matarani
are used. Should the development of the nearby proposed port of San Juan de Marcona be delayed for
several years, the cost to the project of trucking acid and concentrates over far greater distances will
run to several million dollars per annum, with a modest impact on total operating costs and Project
NPV.
2.18.4 Legal Risks to Infrastructure Development
Water Supply
Marcobre¶V intension is to PHHWWKH3URMHFW¶VZDWHUUHTXLUHPHQWVE\REWDLQLQJDZDWHUOLFHQVHRYHUWKH
Upper Jahuay aquifer. Options exist in the event that this is not possible, but there would be significant
additional capital and operating cost implications.
2.18.5 Opportunities
2.18.5.1 Additional Ore Reserves
During and subsequent to the DFS several scenarios were identified with potential to increase the
pit size and contained ore reserve, and extend the project life. The viability and economic benefit
of these scenarios is subject to future conditions and operating parameters.
2.18.5.2 Sulphide Ore Processing Only Option
A Sulphide-Only option would have relatively high pre-production stripping costs, although this would be
offset by the capital cost reduction through not building the Oxide facilities. It could be considered as a
response to sustained high acid costs, such as were seen in 2007.
A Sulphide-Only mine plan was developed, along with mining capital and operating costs. Capital costs
for process and infrastructure were factored from the DFS capital costs. Process and G&A operating
costs for the Sulphide-Only case were already available.
The preliminary economic analysis of the Sulphide-Only case indicates that this alternative is feasible.
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2.18.5.3 Vat Leach Operation
Assay Accountability
Check analyses at the end of the Phase 2 pilot tests indicated that estimated metallurgical recoveries
could be biased low by about 0.5% for average grade ore and as much as 1% for high grade ore.
pH Control
There is evidence to suggest that acid levels for many of the pilot plant tests were too low which may
have retarded extraction to some degree. Once the commercial plant is in operation, it may be possible
to increase recovery through better control of the acid level in the final stage of leaching, provided that
the cost of the additional acid does not exceed the value of the addition copper recovery.
Crusher Circuit Design

Potential exists to optimise the crushers, as CWi testwork data was not available for the DFS design.
The crusher specifications were based on correlations of CWi from Drop Weight Index (DWi) data,
which indicated the ore as competent. The primary crusher selected is on the upper limit in terms of
power, and the design can be revisited when test data is available.
2.18.5.4 Sulphide Circuit
A number of risks and opportunities exist in the sulphide circuit as a result of the limited testwork
completed to-date. Assumptions may or may not be conservative, and potential exists for relatively
significant variations in capital and operating costs when DFS-level testwork is undertaken. Major
uncertainties exist in the following areas:
Magnetite recovery circuit
Grinding circuit design
Flash flotation circuit
Bulk flotation optimisation
Cleaner flotation circuit optimisation
Regrind circuit optimisation
2.18.5.5 Tailings Storage Facility
Additional tailings characterisation studies are required to investigate whether combined RST and CST
disposal will result in non-acid generating tailings, thereby resulting in capital, operating and closure
cost savings.
2.18.5.6 Plant Design
Ripios Disposal System

Substitution of a modular conveying system could provide an operating and capital cost saving. A cost
comparison and detailed technical evaluation is required to confirm this opportunity.
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Dual Media Electrolyte Filters

Comatrix filters can offer a significant cost saving over dual media filters due to higher specific flowrates
and hence smaller vessels. The opportunity to save on capital cost by the use of Comatrix filters
should be investigated.
EW Building Ventilation System

A proprietary ventilation system has been selected as it included a performance guarantee. There is an
opportunity to reduce capital cost and complexity of the system using a non-proprietary system.
However careful checking is required to ensure that the system is sufficient to ensure exposure levels
are not exceeded.
2.18.6 Cost and Implementation
x Changed market conditions: market conditions are highly uncertain and could impact negatively or
positively on costs.
x Secondhand plant and cancelled orders: there may be an opportunity to source secondhand plant
and cancelled orders, thereby reducing capital costs.
x Oxide and Sulphide plant overlap: increased overlap between the Oxide and Sulphide construction
programs could result in greater synergies between the two projects and therefore cost savings
such as more efficient utilisation of the accommodation camp.
2.19 POST-DFS ACTIVITIES
2.19.1 Exploration Drilling
Results of exploration drilling since the October 2008 resource model indicate extensions to the known
mineralisation, with potential for incremental DGGLWLRQWRWKHSURMHFW¶VUHVRXUFHVDQGUHVHUYHV
2.19.2 Additional Mine Planning
Subsequent to the DFS AMEC Minproc performed the following mine planning tasks:
x 3LWGHVLJQDQGVFKHGXOLQJEDVHGRQ')6SLWRSWLPLVDWLRQ³5XQ´WRFRQILUPWKHSRWHQWLDOLQFUHDVH
in pit inventory and recoverable metal.
x Pit optimisations to simulate the potential impact on pit inventory if mining was allowed to proceed
across the TA1 6KRXJDQJERXQGDU\³5XQD´ and, sequentially, to then simulate the cumulative
impact if Inferred mineralisation was treated as potential ore ³5XQE´
2.19.3 Alternative Infrastructure Access Routes
Subsequent to the DFS, Shougang has submitted an EIA that indicates conflict between its mine
expansion plans and the DFS access routes selected for:
x 220 kV powerline
x 22.9 kV powerline
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x Fresh water pipeline

x Access road.
GMI has identified alternative access routes for each of these items and it has been determined that
they are of low impact environmentally and socio-culturally. Distances for the alternatives have
increased in most cases, but not dramatically. No engineering has been undertaken for these
alternatives; minor additional capital cost is anticipated assuming that the shortest alternatives are
adopted.
2.19.4 Revised Project Schedule
The DFS assumed that the ESIA application would be filed for approval by July 1, 2009. Given that the
actual date of filing was November 6, 2009, there is an impact on the overall project schedule and
timing to obtain the main consents to construct and operate the facilities of the Mina Justa Project.
Estudio Osterling, Macobre¶s legal counsel, has reassessed the project permitting schedule and
advised on the following changes to key project dates:
x ESIA approval End of July 2010 (end of March 2010 in the DFS)
x Oxide plant construction start 1 February 2011 (1 April 2010 in the DFS)
x Oxide plant construction complete 6 February 2013 (6 April 2012 in the DFS)
x Oxide plant commissioning complete 29 April 2013 (29 June 2012 in the DFS).
The sulphide plant schedule will consequently be delayed in accordance with this new oxide plant
schedule.
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3. PROJECT RISK SUMMARY
3.1 INTRODUCTION
In comparison with many industrial and commercial enterprises, mining is a relatively high-risk
business. Every ore deposit is unique, and the nature of the deposit, the occurrence and grade of ore,
and its behaviour during mining and processing is not entirely predictable. Estimation of the tonnes,
grade and overall metal content of the deposit are not precise calculations, but are based on
interpretation and extrapolation of samples from drilling, which, even with closely drilled deposits
represent a small fraction of the total deposit. Similarly, comprehensive metallurgical testwork will
reduce processing risk, but questions of sample representativity and scale-up remain.
Estimations of capital and operating cost are rarely more accurate than ±10% for DFS work, and for the
Sulphide plant at PFS-level are considered to be ±25%.
However, greater risk is typically associated with non-technical issues such as variations in metal prices
and exchange rates, or with social risk, sovereign risk and acts of god, none of which have been
evaluated by AMEC Minproc.
Risk has been assessed considering both likelihood of occurrence and consequence of occurrence, ie,
the impact on project economics. Ultimately, risk is assigned qualitatively on a scale as follows: low,
low/medium, medium, medium/high, high. No high risk issues are identified for the Mina Justa Project;
the highest risks recognised relate to resources, processing of Oxide ore, capital cost estimation and
SURMHFWLPSOHPHQWDWLRQHDFKRIZKLFKLVGHILQHGDV³0HGLXP5LVN´
3.2 PROJECT RISK
Risk Area Comments

Resources AMEC Minproc considers the geological database to be acceptable,
Medium Risk although the use of RC drilling as the predominant tool in resource
drilling results in more limited geological, ,density and geotechnical
information than would be the case for diamond drilling. Survey data
is considered adequate although questions remain concerning down-
hole surveys from a number of early drill holes.
Sampling and assaying methods conform to industry standards and
are supported by QAQC data.
The mineralisation is structurally controlled, but the exact nature and
location of individual structures is not clearly defined or predictable,
at the current drill hole spacing, particularly at Mina Justa.
Consequently, the mineralisation model incorporates a significant
proportion of sub-cut-off drill intervals.
Resource modelling has been completed independently by
Snowden, based on interpreted mineralisation boundaries supplied
by Marcobre. Grade modelling follows conventional practice,
including statistical and geostatistical analysis, top-cutting, and
ordinary kriging for different copper species, silver and gold.
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Statistical and visual validation of the resource model have been

undertaken. Indicated and Inferred resources have been classified
according to NI43-101 and JORC guidelines; no Measured
Resources were recognised by Snowden, even in closely drilled
areas, due to limitations in the density data.
Mineralogical information was added to the block model to assist in
mine planning and scheduling, but confidence in this part of the
model is not high.
AMEC Minproc considers that the quality of the resource model
meets the requirements of NI43-101 and the JORC code, at the
Indicated and Inferred classifications applied. It does not
believe that uncertainty in density information will have a
material effect on the total resource. AMEC Minproc agrees that
the greater part of the risk lies in incomplete understanding of
the structures controlling mineralisation, Definition of different
mineralogical zones is relatively poor, with some consequences
for mine planning.
Open Pit Mining AMEC Minproc considers that open pit mining of the Mina Justa and
Low Risk Magnetite Manto deposits should be straightforward in a physical
sense, ie, for drilling/blasting and load/haul. The site is relatively flat,
unvegetated and very dry, and groundwater lies below the base of
the pit.
Pit designs are based on adequate geotechnical studies, although
care will be required in shaping final walls, and some changes may
be required based on experience from early mining. Localised wall
failure is expected, however. Dumps have been designed with
geotechnical input. Seismic stability has been taken into account in
pit and dump design.
No dilution or mining loss is considered in Resource to Reserve
conversion, since the resource model is considered to be fully
diluted. Ore reserves have been derived solely from Indicated
resources lying within open pits that have been optimised and for
which designs have been completed. Adequate consideration has
been given to processing, infrastructure, environmental, cost and
other issues to allow the definition of ore reserves under NI43-101
and JORC.
The mining targets are considered achievable using the proposed
equipment fleet.
Mining risk is seen in relation to maintaining ROM head grade, with
potential for additional dilution from barren ocoite dykes and due to
interfingering of ore and waste along uncertain boundaries.
In addition, careful grade control is required in-pit to ensure delivery
of higher grade Oxide and Sulphide ores to the ROM pad, while
identifying and stockpiling lower grade for later processing. A further
complicating factor is the need to consider GAC for Oxide ores in
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determining higher and lower grade ore and waste.

AMEC Minproc considers there to be low/ risk associated with
mining, although it may provedifficult delivering anticipated
grades and tonnages to the process plant without major
stockpile re-handling. Additional equipment may be required if
problems materialise.
Processing and plant design A large body of testwork has been undertaken in developing the
- Oxides Oxide process flow sheet, but it must be recognised that a wide
Medium Risk range of leaching responses (primarily recovery and GAC) were
obtained, and that these are not readily predictable within the
geological and resource models. Further optimisation is expected
once operations commence, but, until then, risk in achieving
recoveries while containing acid consumption is recognised.
Quaternary crushing is required to achieve the necessary 8 mm
crush size. This results in a relatively complex and expensive circuit.
Vat leaching is used occasionally on a commercial scale elsewhere
in South America, and appears applicable to the Mina Justa and
Magnetite Manto ores. Vat design and proposed operation have
taken on-board lessons from other projects. The approach is
significantly more expensive and less flexible than traditional heap
leaching, but is a necessary response to the specific metallurgy of
the ore.
Ripios disposal will take place within the main waste dump.
Plant design has been completed to a level sufficient to define
equipment requirements, and to support capital and operating cost
estimates to a DFS level.
AMEC Minproc considers that there is a medium level of risk in
achieving the target copper recoveries and GAC figures, and
that there are limitations to the flexibility that can be built into
the vat system to adapt to unexpected outcomes.
Processing and plant design Preliminary testwork has been completed to demonstrate that
± Sulphides saleable copper concentrates can be produced from the three types
Medium Risk of sulphide ore at Mina Justa. The proposed flow sheet is
conventional, but cannot be considered optimised; there is potential
for both upside and downside in terms of final plant requirements
once DFS-level testwork has been completed.
Depending on the similarity in optimum process conditions finally
determined for each ore type, and the degree of separation that can
be maintained between ore types during mining, recoveries projected
in this PFS may be compromised to some degree.
Preliminary testwork has shown that a potentially saleable magnetite
concentrate can be produced from the flotation tailings, but this
option has not been included in the financial analysis.
Two types of tailings will be produced. CST are potentially acid
generating, whereas the RST (85% by volume) are not. A tailings
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storage site has been identified and a facility has been designed to
DFS standard, including geotechnical and tailings quality studies.
The structure is very simple and low risk, particularly given the lack
of surface and groundwater, and the absence of any inhabitants in
the area.
AMEC Minproc considers sulphide processing to involve
low/medium risk at this stage as reflected in the PFS level of
work undertaken to-date. It accepts that this is a conventional
process, and that saleable concentrates can be produced, but
uncertainties relate to the final process flow sheet (including
primary grinding and regrinding requirements) and the
achievable recoveries. It may be difficult to operate under
conditions suitable for all three ore types, and there are limits to
how much segregation of ore is possible without recourse to
extensive stockpiling.
Both upside and downside exist in the sulphide process area.
Infrastructure While some additional work may be require to bolster the regional
Low/Medium Risk grid to ensure adequate HT power supplies, a 220 KV sub-station
exists within 15 km. Even if adjustments are required to the new
power line route to site, there appears to be little risk in this area.
Adequate water supplies have been demonstrated 30 km from site
and the pipeline route is relatively flat. Water rights still have to be
REWDLQHG EXW 0DUFREUH¶V DGYLFH LV WKDW WKLV VKRXOG EH D
straightforward procedure. Again, any necessary changes to the
access route are unlikely to have significant implications.
Good road infrastructure passes very close to site. However, road
accidents are frequent in Peru, and the contractor fleet transporting
acid, cathode and concentrates will require careful management.
There should be no material impact on the project should a new
access road route be required to avoid Shougang¶VFRQFHVVLRQV
Adequate port facilities exist at San Martin and Matarani port,
250 km and 500 km from the site. These will be used for several
years until a new port is constructed 25 km from site at San Juan de
Marcona. The possibility of an acid terminal being constructed by
Petral at nearby Saint Nicholas would also have positive benefits.
AMEC Minproc considers infrastructure aspects of the project
to be relatively low risk, subject to confirmation of grid power
supply upgrades and obtaining water rights. A slightly higher
level of risk relates to whether and when the Marcona port will
be constructed, since the benefits have been realised in the
DFS in the middle and later years. Significant additional
transport costs would be incurred in later years, if the Marcona
Port is deferred.
Tenement/title AMEC Minproc is not qualified to comment about title to the property,
Low Risk but information provided by other parties indicates that Marcobre
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owns 100% of the relevant mining concession and should be in a

position to acquire the necessary surface rights for mine, plant site
and necessary rights of way.
These efforts need to be expanded to include new access routes
avoiding Shougang property.
Social Information from Marcobre indicates that serious attention has been
Low Risk given to communications concerning the project over the past
4 years, and that the local communities are positive about the
SURMHFW¶VGHYHORSPHQW,QWKLVFRQWH[WLWLVLPSRUWDQWWRQRWHWKDWQR
people live within several kilometres of the project, and no grazing
areas, water or other resources will be affected.
The feedback from Marcobre about the outcomes from the recent
public workshop and community consultations confirms this
statement.
Environmental Information within the DFS supplied by Marcobre¶V HQYLURQPHQWDO
Low Risk consultants indicates that the ESIA work has been completed without
unearthing any issues that would limit development of the project.
The ESIA has been submitted, and feedback from public workshop
and community consultations reportedly has raised no serious
issues.
AMEC Minproc considers that conditions at the site and the
processes involved are such that environmental approval and
environmental compliance should be low risk areas.
Project implementation Serious consideration has been given to project implementation, and
Medium Risk a strategy and schedule developed as part of the DFS. The 29-
month schedule is considered to be aggressive, and provides limited
time for obtaining approvals and permits, project financing and
construction. Indeed, a 10 month delay to commencement of the
schedule is now predicted, due to slower than expected progress
with the ESIA and approval for initial permits.
Once underway, the schedule relies heavily on early award of the
EPCM contract, early ordering of critical path items, as well as
maximum pre-assembly off-site. It also assumes that Marcobre can
quickly assemble an experienced, high quality management team for
the construction phase, and undertake work in several other areas in
a timely manner.
The need to undertake new geotechnical, environmental and
archaeological investigations along new access routes for power,
water and roads could further delay site activities.
AMEC Minproc considers that the proposed schedule could be
difficult to achieve, particularly as the resource industry
recovers and pressure is applied to manpower resources,
equipment waiting times, etc. There is a moderate risk that
project implementation will be extended by 6 to 12 months,
particularly in the project permitting approval and financing
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areas.
Production levels While AMEC Minproc considers that mine production and
Low/Medium Risk process throughput levels are achievable, there are risks
associated with cathode and concentrate production
expectations. These relate both to head grade (resource risk
and dilution) and to process recovery levels, both of which have
been assigned low/medium risk.
Capital costs Capital costs for mining projects have been subject to significant
Medium Risk over-runs in recent years, due partly to pressure on manpower and
rising costs of equipment, materials and labour.
The estimating methodology employed for the mine, Oxide plant and
infrastructure has been rigorous and appropriate although an
accuracy of ±10% is difficult to achieve with feasibility level designs.
The accuracy provision is designed to cover expected under-design.
No project contingency has been applied by Marcobre to account for
unanticipated events such as delays to construction due to political
or social unrest, industrial disputation, an unexpected escalation of
costs or significant adjustments in exchange rates.
The estimating methology applied to the Sulphide plant at PFS level
is considered appropriate for ±20% accuracy.
The methodology used to update capital costs from 1Q09 to 1Q10 is
very simplistic and foreign currency rates of exchange have not been
applied as part of this update. All quotations should be re-validated
and foreign currency exchange rates updated to meet the target
estimate accuracy range of +/-10%.
AMEC Minproc considers that the capital cost estimate is a
medium risk area for the sulphide phase since this is only to a
PFS level.
More importantly, capital cost over-runs have been
experienced for most mining projects over the last several
years for a variety of reasons, including unforeseen events
such as increases in prices for steel and diesel. The absence of
a contingency in the total capital cost estimate leaves the
project exposed to a significant cost over-run.
Operating costs As for capital costs, the methodology adopted and resulting accuracy
Low/Medium Risk of operating cost estimates are appropriate for the Oxide and
Sulphide operations at their stated levels of accuracy. Nevertheless,
most operations have experienced unanticipated upward pressure
on operating costs in the past 10 years, and this is inevitably an area
of risk.
Costs are in 1Q09 dollars, and Marcobre should monitor that costs
for key inputs, particularly power (5.5 c/kWh), acid ($90.40/t
delivered, through San Martin) and fuel ($0.636/L)4 remain
4
Marcobre has advised that an updated price for diesel is $0.819/L as of 1Q10, based on the current exchange rate
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appropriate. Equally, costs for other process reagents, crushing and

grinding media should be confirmed.
Off-site costs such as TC/RC and shipping are on an international
basis and, while governed to some extent by the Shareholders
Agreement, can be expected to vary appreciably over time. The
Brook Hunt review of potential future costs (including also acid costs)
is a sound basis for the DFS financial evaluation, but remains a
projection, with attendant uncertainty.
Additional risk exists in tems of acid usage. GAC varied appreciably
between test samples, and could not be predicted with any certainty
in relation to lithology, mineralogy, alteration, depth or location. Thus
expectaions of average GAC may not be realised during production.
The methodology used to update operating costs from 1Q09 to 1Q10
is very simplistic and foreign currency rates of exchange have not
been applied as part of this update. All quotations should be re-
validated and foreign currency exchange rates updated to meet the
target estimate accuracy range of +/-10%.
AMEC Minproc considers operating cost projections to be a
Low/Medium risk area, but with a reasonable prospect for a 10%
increase.
Price Escalation AMEC Minproc notes that PPI price escalation as applied to the
Low/Medium Risk 1Q09 estimates to get to 1Q10, is very low, and the approach as
adopted is not considered to be particularly accurate. Neither is
it considered possible to make accurate predictions of
escalation rates over the period of Project implementation.
Exchange rate changes could have a greater impact on capital
and operating costs, but again accurate prediction is not
possible into the future.
3.3 RISK MITIGATION FACTORS
A number of factors are expected to reduce some of the risks identified in Section 3.2, principally:
x Resource and Mining:
In-fill drilling is likely to be undertaken in some areas to increase confidence in resources,
particularly any Inferred resources in and immediately adjacent to the open pits.
Exploration drilling: Success has been reported from recent drilling in and around the
deposits, intersecting additional mineralisation, some of which can most likely be incorporated
into planned open pits without much change to the design.
Density measurements: Snowden expressed concern about the limitations of the density
database and recommended additional measurements be made. Some additional diamond
holes are likely to be required to provide more samples.
Conditional simulation (CS): Snowden recommended a CS study as a means to quantify the
likely range of ROM grades over time. AMEC Minproc agrees that there would be benefits
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from a CS approach, and that it may also prove appropriate for grade control definition of ore
and waste.
Detailed drilling: RC drilling of several benches at close spacing is recommended ahead of
mining in order to better define the distribution of the mineralisation and examine the potential
to reduce dilution and increase head grade.
Grade control drilling: during operations sampling of blast holes will assist in ore definition,
reducing dilution by waste blocks.
x Oxide processing:
GAC: further testwork is required to relate GAC to geological or grade characteristics, so that
GAC can be predicted from the resource model. In addition, a rapid test for GAC should be
developed, in order to differentiate ore from waste on the basis of acid consumption as well as
copper grade.
Ripios disposal: to further optimise costs, investigation into alternative methods of ripios
disposal, such as by enclosed conveyor system, should be continued.
x Sulphide processing:
Additional testwork to DFS level: more detailed comminution testwork is required to provide
greater certainty in crusher and mill design. Additional flotation testwork is required to
optimise the flow sheet, flotation conditions and reagent addition.
Tailings disposal: the current design calls for separate disposal of PAG CST and RST.
However, it is possible that a combined CST/RST stream would be non-PAG, thereby allowing
a much simpler tailings transfer and disposal system, and eliminate the need for a synthetic
liner.
Magnetite concentrate: further testwork and design is required to determine the viability of
separating magnetite concentrates from Sulphide plant tails. This should be combined with
approaches to potential buyers to confirm interest in the product.
x Infrastructure:
San Juan de Marcona port: there will be significant operating cost savings involved with the
use of the proposed San Juan de Marcona port. Marcobre has been monitoring progress with
this project and also the proposal by Petral to develop a facility to import acid at a nearby
location. Efforts to promote these options should continue as a way to reducing operating
costs.
Water rights: it is important that Marcobre obtains rights to required water resources at
Jahuay, as these are absolutely fundamental to the Project.
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x Capital cost:
Uncertainty in the capital cost estimate relates partly to the passage of time. Updated quotes
are required for key mine, Oxide plant and infrastructure equipment, for major material (eg,
concrete and steel), and for relevant installation labour costs, in order to bring the previous
(1Q09) estimate to current date with ±10% accuracy.
x Operating cost:
As with capital costs, it is recommended that operating costs should be confirmed for key
inputs, particularly power, fuel, acid, other process reagents, crushing and grinding media, in
order to return accuracy to ±10% for the Oxide plant.
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4. PROJECT DETAILS
4.1 PROJECT LOCATION, CLIMATE AND REGIONAL INFRASTRUCTURE
4.1.1 Location
The Mina Justa Project is located approximately 400 km southeast of Lima within the Nazca Province,
Ica Department of the southern Peruvian coastal belt. The Project lies approximately 25 km north of
the coastal town of San Juan de Marcona; the town of Nazca, on the Pan Americana Sur highway, is
located approximately 35 km to the north-northeast Figure 4.1). Driving time from Lima to site is
approximately 7 hours.
The nearest airfields are at Nazca and at San Juan de Marcona. Neither are serviced by scheduled
flights, but both are suitable for chartered aircraft. Flying time from Lima to San Juan de Marcona is
approximately 1 hour.
4.1.2 Topography and Vegetation
The Project is located within the coastal plain area of Peru approximately 20 to 30 km from the Pacific
Ocean. The topography in the immediate vicinity of the Mina Justa project is relatively subdued,
ranging in elevation from 630 to 880 masl. The eastern flank of the Mina Justa deposit is marked by a
north-northwest trending, steep fault-bounded scarp.
Due to the desert climate, vegetation on the property is almost non-existent with less than 1% cover
and limited to a few scattered clumps of Clavelinas that depend on moisture from the thick fogs. None
of the property is used for agricultural purposes.
4.1.3 Climate
The Project area has an arid climate with strong prevailing southerly winds during the day, alternating
with northerly winds at night. Annual rainfall ranges between 0 mm and 80 mm, averaging
approximately 27 mm. The annual mean temperature is approximately 19°C average. Monthly
maximum temperature averages range between 22°C and 28°C and minimum monthly average
temperatures range between 15ºC and 26°C. Relative humidity generally is between 65% and 85%.
During the winter months (June to August), thick fogs are common.
4.1.4 Local Resources and Infrastructure
Some infrastructure exists at the small town of San Juan de Marcona, which was developed to support
on-going large-scale mining of the Marcona iron ore deposits by Shougang Hierro Peru S.A.A.
(Shougang) over the past 50 years. The town San Juan de Marcona has a population estimated at
11 500 with nearly 1800 employed by the mine. The towns of Nazca and Vista Alegre have a combined
population of approximately 20 000.
The region can provide the basic goods, services, medical care and some accommodation to assist in
project development, as well as meet some labour requirements for various stages of exploration and
development projects.
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San Juan de Marcona and the Marcona mine operations are connected to the National Power Grid. A
high tension line passes within 10 km of the Mina Justa Prospect.
There is no surface water on the Project site; sub-surface water has been intersected at a depth of
450 m at the Mina Justa deposit. Water for the San Juan de Marcona community is obtained from the
Jahuay aquifer located 30 km southeast of the Mina Justa Prospect. A second underground water
source is located approximately 20 km further to the southeast at the Lomas aquifer. Water rights will
have to be acquired and developed by Marcobre.
The nearest suitable ports are at San Martin, 250 km by road to the north, and Matarani, 550 km to the
south. A deep-water port facility for shipping the Shougang iron concentrates has been constructed at
Puerto San Nicholas, 20 km southwest of the Mina Justa Prospect, but it is appears unlikely that
suitable access to this facility can be negotiated with Shougang.
Cellular phone coverage is available to a limited extent in the Project area, but the grid is expanding.
Communications between site and Lima currently are via satellite telephone.
4.2 LAND OWNERSHIP
4.2.1 Mining Concessions
Pursuant to Peruvian law, title to a mining concession granted by the Peruvian state is required to carry
out exploration and exploitation activities within the area covered by the mining concession.
Marcobre has acquired all material mining concessions related to the Mina Justa Project and the wider
0DUFRQD &RSSHU 3URSHUW\ 0DUFREUH¶V WLWOH WR VXFK PLQLQJ FRQFHVVLRQV KDV EHHQ UHJLVWHUHG ZLWK WKH
Mining Public Registry and is fully enforceable before the Peruvian State and third parties.
The Mina Justa and Magnetite Manto deposits are located on the Target Area 1 (TA1) mining
concession, which covers approximately 3969 ha. Marcobre owns a group of 45 other mining
concessions covering approximately 28 920 KD MRLQWO\ UHIHUUHG WR KHUHLQ DV WKH ³0DUFREUH
&RQFHVVLRQV´DEXWWLQJWKHTA1 concession (Figure 4.1).
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Figure 4.1
Location of Mina Justa Project
4.2.1.1 The TA1 Mining Concession
Shougang and Rio Tinto Mining and Exploration Limited Sucursal del Peru (Rio Tinto) were parties to
DQ RSWLRQ DJUHHPHQW UHODWLQJ WR 6KRXJDQJ¶V &36 1R 1 mining coQFHVVLRQ WKH ³2SWLRQ $JUHHPHQW´
dated December 14, 2000. By resolution No. 1731-2004-INACC/J, dated May 7, 2004, the competent
Peruvian governmental agency approved the legal division of the CPS No. 1 mining concession, and
granted title to the newly created TA1 mining concession. The area granted for TA1 was 3969.31 ha.
Pursuant to an amendment to the Option Agreement dated August 5, 2004 and formalised by public
deed dated January 3, 2005, Rio Tinto and Shougang each consented to the other selling its respective
interest in the Marcona Copper Property to Marcobre, including Shougang consenting to Rio Tinto
assigning to Marcobre its rights and obligations under the Option Agreement.
Considering the above, by means of a transfer agreement dated August 6, 2004 and formalised by
public deed dated January 3, 2005 granted before public notary of Lima, Marcobre acquired (i)
Rio Tinto¶VLQWHUHVWXQGHUWKH2SWLRQ$JUHHPHQWWRJHWKHUZLWKWKHUHOHYDQWVWXGLHVDQGLQIRUPDWLRQZLWK
respect of TA1 area, (ii) ShouganJ¶VWLWOHWR7$
As a consequence of the execution of the agreements mentioned above, Marcobre is currently the sole
and registered titleholder of the TA1 mining concession. Likewise, this concession is in good standing
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and free of any liens and mortgages except for a first and preferential mortgage amounting to
US$ 27 600 000.00 granted by Marcobre in favour of Shougang and Rio Tinto in order to guarantee
payment obligations described above in connection with the transfer of the TA1 concession.
4.2.1.2 The Marcobre Concessions
At the same time as the transaction described in the previous section, Marcobre and Rio Tinto entered
into a Claims Transfer Agreement, under which Marcobre acquired 45 contiguous claims covering
approximately 28 930 ha bordering the TA1 mining concession on its northern and eastern margins.
These claims were subsequently converted to mining concessions, as a result of which Marcobre is the
sole and registered titleholder of the 45 concessions jointly referred to herein as the Marcobre
Concessions. All of the Marcobre Concessions are in good standing and free of any liens and
mortgages as of the date hereof.
Based on the resources at Mina Justa and Magnetite Manto covered by the DFS, a contingent payment
totalling $10 M will be payable following a production decision. Upon making such payment, the
PRUWJDJHRQWKH7$PLQLQJFRQFHVVLRQDQGWKHSOHGJHRI0DUFREUH¶VVKDUHVZRXOGEHGLVFKDUJHG
4.2.2 Surface Rights
4.2.2.1 Mine Site Surface Rights
Pursuant to Peruvian law, a mining concession does not grant its holder ownership of the overlying
surface area. In order for a mining concessionaire to develop a mine, it must either acquire ownership
of the required surface rights or obtain authorisation from the owners. Surface rights are required for
the processing facilities, the open pits, waste dumps, and tailings and ripios storage. Additional surface
rights, such as rights-of-way and easements for the access road, power lines and water pipeline are
also required.
In order to secure the surface lands required for the development of the Mina Justa Project, Marcobre
has initiated a direct acquisition procedure before the National Superintendence of Goods (SBN), which
is the National Authority in charge of the administration and management of the lands (among other
assets) that belong to the Peruvian State. On October 7, 2008, the SBN informed Marcobre about the
viability of the acquisition procedure regarding lot AA-CB (which covers most of the TA1 mining
concession), and ordered an on-site inspection and the valuation of this lot. After the valuation and
determination of its commercial value, Marcobre will be entitled to acquire the lot. On the basis of the
current DFS design, Marcobre considers that approximately 70% of lot AA-CB will ultimately be
required for the Mina Justa Project and has designed the project in such way that all surface facilities,
including waste and ripios dumps, remain within its border.
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Figure 4.2
Mina Justa Lot AA-CB
APPENDIX V
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Other rights, such as rights-of-way and easements would be required for Marcobre to facilitate and
achieve the development of the Mina Justa Project, as explained in the following subsections.
4.2.2.2 220 kV Power Line Right-of-Way
An electricity transmission concession granted by the Ministry of Energy and Mines (MEM) is required
in order to construct a transmission line if the line requires the imposition of easements or affects the
property of the State. Electricity transmission concessions allow the use of State property and grant the
right to obtain the imposition of easements on property owned by third parties in order to build and
operate generating stations and ancillary works, substations and transmission lines. It should be noted
that the easements granted over State property are totally free, but in cases where the easement is
granted over private property, the owner must be compensated.
In order to obtain the transmission concession and easements, procedures must be followed before the
National Institute of Culture (INC) and the MEM evidencing fulfilment of the obligations related to the
SURWHFWLRQRIWKH1DWLRQ¶VFXOWXUDOKHULWDJHDQGHQYLURQPHQWDOSURWHFWLRQ
The proposed 220 kV powerline crosses 13.7 km of Shougang mining concession lands. Although
requesting the imposition of the easements with the previous consent of Shougang is the fastest and
easiest way to acquire the surface rights needed for the installation of the transmission power lines, if
Marcobre cannot reach an agreement with Shougang, Marcobre has other legal alternatives to obtain
the easements.
4.2.2.3 22.9 kV Power Line Right-of-Way to Borefield
The proposed alignment of the 22.9 kV powerline requires 30.3 km of easement, 8.8 km being over the
Shougang mining concession lands5.
Matters concerning this procedure are the same as those referred to in the above subsection.
However, the 22.9 kV power line passes through lands owned by the Peruvian State that are
theoretically reserved for the development of the Pampas Verdes Project. Should the Pampas Verdes
Project oppose the imposition of the easement, Marcobre has two possibilities, either obtain its
permission and/or to challenge the alleged rights of the Pampas Verdes Project over such lands. This
is due to the fact that such entity has not complied with the requirements needed in order to acquire the
lands during the term established by the SBN.
4.2.2.4 Water Pipeline Right-of-Way
The building of pipelines and the right to impose the corresponding easements that may be required
also must be authorised by the pertinent authority, Autoridad Nacional del Agua (ANA). The proposed
alignment of the water pipeline requires 32.7 km of easement, 7 km of which crosses the Shougang
mining concessions.
5
For discussions concerning changes to the power line, water pipeline/powerline and road access right of way see
Section 4.23.3.
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As for the 220 kV Power Line right-of-way, Marcobre intends to first negotiate with Shougang to obtain
consent to the imposition of the easements access into mining concession, but will use other legal
alternatives if agreement is not forthcoming.
Regarding the lands reserved to the Pampas Verdes Project, theoretically it could be possible that the
entity opposes the imposition of the easements. In that scenario, Marcobre has a strong argument to
challenge the Pampas Verdes Project alleged rights.
4.2.2.5 Well Field Surface Rights
The well field consists of several well locations covering a distance of approximately 7 km.
According to article 21 of Resolution No. 470-2008-INRENA/IRH, in order to obtain the license to drill,
dig or perform any work to locate underground water, Marcobre must provide proof to the ANA of its
right over the surface land. However, in principle it is not necessary to obtain superficial rights over the
area in order to initiate the administrative procedure.
The surface rights at the well field are owned by the State, and theoretically reserved for the
development of the Pampas Verdes Project. In order to obtain superficial rights over the area,
Marcobre intends to request the imposition of a compulsory easement, on the basis that the Pampas
Verdes Project is in breach of its conditions for development.
Although the imposition of an easement is the fastest and easiest way in order to acquire the surface
right needed for the installation of the well field, Marcobre has other alternatives in order to acquire the
right over the required lands.
4.2.2.6 Site Access Road Right-of-Way
The proposed access road requires an easement of 5.5 km, all of which lies within Shougang mining
concession lands6. The access road will be private, and therefore no permits or licenses are required
for its construction. However, standards set by the Ministry of Transportation and Communications
(MTC) related to the construction and connection with public roads will be met. Easements will be
negotiated with owners of the affected lands except where it is possible to impose legal easements
thereon.
4.2.2.7 Total Costs
Marcobre considers that the total cost of acquiring the surface rights and easements referred to above
will be $3.1 M.
6
For discussions concerning changes to the power line, water pipeline/powerline and road access right of way see
Section 4.23.3
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4.2.3 Construction Materials
While Marcobre is the titleholder of the TA1 concession and is in the process of acquiring surface
rights, these rights will not give Marcobre the ability to freely use materials on site for construction
purposes.
Marcobre can, however, freely use waste rock extracted from the Mina Justa and Magnetite Manto pits
for construction materials. In the event that such waste rock is not suitable for construction materials,
Marcobre has identified quarry sites with materials that have been tested and found suitable for
construction elsewhere on the TA1 concession. Marcobre can freely utilise such materials provided
that it first carves a separate industrial minerals mining concession out of the TA1 concession. The
procedure required to do this is simple and inexpensive.
4.3 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT (ESIA)
The ESIA for the Mina Justa Project forms the principal mechanism for identifying baseline conditions
and evaluating the impact of the project. The ESIA has been designed to satisfy the requirements of
Peruvian Legislation and to comply with internationally accepted guidelines for social and
environmental protection followed by such organisations as the World Bank and International Finance
Corporation, and followed by commercial banks through the Equator Principles.
The ESIA has been completed and approved for public distribution by MINEM in November 2009. A
local community workshop was held in December 2009, and public hearings in the community took
place on 8 January 2010.
4.3.1 Legal Framework
The legal and institutional framework in Peru is represented by a number of authorities that have the
jurisdiction to permit and regulate implementation of mining projects. Primary among these is the
Ministry of Energy and Mines (MINEM). The legal framework applicable to the Mina Justa Project is
outlined by a number of environmental protection laws and documents. Key among these is Peruvian
General Environmental Law (Law 28611).
The Peruvian environmental legislation is in the process of being updated, primarily through the
creation of the Ministery of Environment, which, in the future, will be the entity responsible for
monitoring, controlling and promoting the care of the environment in the country.
The intention is that in the future all the controls, permissions and authorisations are centralised in this
Ministry, but the process of developing and adapting the legislation and other organisms of the State for
this purpose is still underway.
It is clear that under current legislation, MINEM is the responsible environmental authority for approving
the ESIA and authorising project development. However, the ESIA has fulfilled all requirements that
the new authority is likely to request.
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4.3.2 Permitting
The ESIA is submitted to regional and central offices of MINEM. The central office in Lima is in charge
of conducting the evaluation process and, eventually, issuing permits. Depending on the location of the
project and its characteristics, other agencies may be involved in the evaluation of the ESIA. The
evaluation process also includes making the ESIA availabe to affected local communities for review and
comment, publication of findings by the agencies, a period for the applicant to respond, and then a
period of final evaluation before approval and issuance of a concession to operate.
Given the presence to the north of the project of the San Fernando Zone, MINEM will seek the opinion
of the National Institute of Natural Resources, prior to issung permits. The evaluation of the impacts
from construction, operation and closure of the Project concludes that there is no direct or indirect
influence on the San Fernando Zone, and no complications are expected in obtaining the permissions
of that authority.
In addition, it is necessary to obtain agreement to the results of the archaeological evaluation from the
National Institute of Culture, which is authorised to issue the required Certificate of Nonexistence of
Archaeological Remains.
4.3.3 ESIA Scope
The key objectives of the ESIA were:

x Determine baseline environmental conditions in the Project area, ie, establish the physical,
biological and socio-cultural conditions before the establishment of the project.
x Identify environmental and socio-economic resources that could potentially be affected by the
project.
x Predict positive and negative effects resulting from the Project, and determine to what degree the
negative effects can be mitigated.
x Quantify and evaluate the significance of the effects wherever possible.
x Outline requirements for monitoring of the resources that could be affected by the Project.
x Provide a conceptual closure plan for the mine site and associated facilities.
x Complete a cost-benefit analysis of the Project.
4.3.4 Baseline Studies
A detailed description of environmental and social aspects of the project area was developed; the
studies began in 2006 and were completed in 2008. All of the baseline studies were developed by local
professionals.
The baseline study has not been restricted to the Mina Justa Project area, but covers the district of San
Juan de Marcona.
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The environmental and socio-economic impacts were identified by measuring the characteristics of the
area, and comparing them with results anticipated following project implementation. In some cases
(particularly in air and water studies), models were developed to evaluate the magnitude and extent of
potential effects.
The results of the studies indicate that Mina Justa Project site conditions are typical of a desert, with no
surface water, saline and poor soils, generally unsuitable for the development of any another activity
outside mining.
Surveys have recorded scanty presence of flora and fauna typical of the desert environment, which are
represented elsewhere throughout the San Juan de Marcona district.
No communities or population centres occur inside the zone of direct environmental influence of the
Project.
Some archaeological vestiges have been recorded, and these will have to receive the treatment that
the legislation dictates in order to delimit or preserve them as required.
4.3.5 Community Relations and Public Consultation
In order to optimise relations between the community and the project, an integrated community
relations program has been developed by Marcobre with the following objectives:
x Establishment of ties with community leaders to enhance understanding of the social conditions of
the neighbouring populations, their concerns and hopes for development.
x Disclosure and consultation regarding the technical and economic aspects of the project.
x Identification and establishment of mechanisms to support local development processes
throughout and after operations.
x Strengthening of the institutions through development of consensual programs based on mutual
respect and transparency.
From the beginning of the environmental studies, Marcobre has implemented a policy of involvement
with representative sectors of the community as part of the ESIA process.
Peruvian legislation recommends a minimum of three public consultation meetings during the
elaboration of the ESIA. The initial meeting is designed to introduce the communities to the ESIA
process, help them understand their rights and responsibilities, and to describe the baseline studies
that form a part of the permitting process. Information about the general characteristics of the project
(scale, lifecycle, etc.), the complexity of the mining activity, and the relations that will be established
with the local community are shared in each of these meetings. The local population is involved in the
baseline studies, with community members participating in the field teams specializing in fauna, flora,
water and soil surveys.
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Marcobre has successfully conducted workshops during the last 3 years of studies, which has allowed it
to communicate the development of the feasibility study, and to receive contributions and suggestions
from the community.
The Office of Community Relations located in San Juan de Marcona has permanent contact with the
community and has joined in the life of the population, continuously informing the community about the
project and providing feed-back to Marcobre.
4.3.6 Identification and Evaluation of Effects
The environmental and socio-economic impacts were identified and compared with the anticipated
impacts of the implementation of the project. The main effects and corresponding mitigation measures
for the construction and operating stages are related mainly to water and land usage for the mine site.
Some of the impacts identified are:

x Changes in the current use of the soils.
x Changes in the topography and soil due to the presence of tailings and ripios, open pit and waste
rock facilities.
x Generation of dust during the construction and operation phases.
x Generation of noise in the construction and operation areas.
x Minor loss of vegetation coverage.
x Migration of some fauna species due to the presence of the operation.
x An increase in immigrants during the construction phases; a reduction is expected during mine
operation and closure.
4.3.7 Environmental Management
Marcobre has committed to instituting best practices for the environmental management of the Project.
The implementation process will begin once the authorities have granted permission to proceed with
the project. This will provide a global mechanism to ensure that appropriate environmental
management is maintained during the life of the mine.
Environmental management is conceived for three principal stages of the project: construction,
operation and closing.
The principal components of the Plan of Environmental Management are:

x Monitoring program
x Program of management of domestic and industrial residues
x Program of management of domestic and industrial effluents
x Policy regarding the behaviour of Marcobre and contractor personnel
x Contingency plans.
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Marcobre will establish the position of Environmental Manager, responsible for the control and
environmental management of operations. This area will report directly to the Operations Manager, and
will be in charge of supervising and controlling all the environmental programs related to the Project.
4.3.8 Mine Closure
Closure legislation (Peruvian Law 28090) requires that every operation must have an approved closure
plan and financial guarantees of ability to cover the estimated closure costs. The closure plan must be
elaborated within a year following the approval of the ESIA, but it must be approved by MINEM prior to
receipt of permission to operate.
The ESIA has developed the conceptual closure plan for the operation, with the objective of ensuring
the physical and chemical stability of the diverse components of the project after closure and returning
the environment to a condition similar to that found before implementation of the Project.
The principal closure activities relate to the reduction in slopes of waste dumps, in order to assure
physical stability, and covering potential acid generating material with inert material.
In addition, the closure plan confirms the demolition of infrastructure and leveling of the involved areas.
Finally, and depending on the requirements of Government regulators and the local communities, it is
possible that ownership of some of the infrastructure, eg, the water pipeline and/or the electrical
transmission line, might be transferred to the community for its use post-closure.
4.3.9 Socio-economic Conditions
Details of the socio-economic conditions, as well as the projected benefits of the Mina Justa Project and
Marcobre´s community relations efforts, are detailed in the ESIA report.
The Mina Justa Project is located in the Department of Ica an important agricultural region, where
grapes, cotton, asparagus, olives and other produce is cultivated and the place where the biggest
deposits of iron on the Pacific coast have been formed. Ica has experienced approximately 1.8%
population growth between 1993 and 2005; however, a portion of the population still lacks access to
basic services. Ica also has significant poverty rates, with about 29% of the population classified as
below the poverty line (INEI 2007). More than half the population earn their living through agriculture
and fishing. Mining is also a significant contributor to the economy.
Most of the affected local people live in the town of San Juan de Marcona, which has a population of
aproximately 11 600 habitants and is located approximately 24 km from the Mina Justa Project.
The Mina Justa Project will contribute to the local community through jobs, local purchases of goods
and services, and through taxes.
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4.4 GEOLOGY, EXPLORATION AND DATA QUALITY
The Mina Justa Prospect, which includes the Mina Justa deposit and the Magnetite Manto deposit
(Figure 4.3), is thHIRFXVRI0DUFREUH¶V)HDVLELOLW\6WXG\DQGFRYHUVDQDUHDRIDSSUR[LPDWHO\ ha.
Figure 4.3
Mine Justa Prospect Geology Showing Location of Mina Justa (east) and Magnetite Manto (west) Deposits
Note: Conceptual pit outlines included for reference.
4.4.1 Geology
4.4.1.1 Geological Setting
The Mina Justa Prospect is located in the Coastal Belt of Peru. This northwest trending linear belt
represents the westernmost part of the Central Andean Cordillera where the Nazca Plate is subducting
beneath the South American Plate, forming an active continental margin along the Peru-Chile Trench.
The geology of the district consists of a Precambrian high grade metamorphic basement (the Arequipa
Massif), unconformably overlain by Neoproterozoic and Phanerozoic sedimentary rocks. Palaeozoic
sediments (the Ordovician Marcona Formation) host the majority of the economic magnetite orebodies
at the Marcona iron mine. Monzogranite, granodiorite and gabbro-diorite rocks of the post-kinematic
San Nicolas batholith (dated at approximately 425 Ma) intrude the pre-Mesozoic rocks.
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The pre-Mesozoic rocks are unconformably overlain by a series of volcano-sedimentary and volcano-
plutonic arc sequences that range in age from late Triassic to Holocene. The volcano-sedimentary rock
sequences are intruded by porphyritic andesite dykes, sills and plugs of the Tunga Andesite (also
WHUPHG ³2FRLWH´ DQG LQ WKH HDVWHUQ SDUWV RI WKH GLVWULFW E\ JUDQLWRLG SOXWRQV RI WKH FLUFD Ma
Coastal Batholith. Tertiary-age shallow water marine sediments and Quaternary-age marine terrace
deposits unconformably overlie the volcano-plutonic arc succession.
The Mina Justa and Magnetite Manto copper deposits are hosted by the Jurassic Upper Rio Grande
Formation, which is dominated by andesitic lavas and andesitic pyroclastics, intercalated with minor
sandstone, siltstone and carbonate units. This volcano-sedimentary package displays a prolonged
deformation history that includes a southeast verging overturned folding stage followed by a shear
faulting stage that generated curvilinear fault systems. The youngest deformation stage is normal block
faulting along northwest trending structures that are closely associated with the late-stage ocoite
intrusives.
4.4.2 Deposit Type
Until recently it was believed that the Marcona iron mine and the Mina Justa copper deposits were
associated, both being part of a large iron-rich hydrothermal system formed in an extensional
environment along a subduction-related continental margin. Recent work (Chen, 2008) has indicated
that the Mina Justa Prospect is significantly younger than (approximately 104 Ma to 95 Ma), and
geochemically distinct from, the Marcona iron deposit (approximately 162 Ma to 156 Ma). The
Mina Justa Prospect is now interpreted as a hydrothermal deposit that was formed by the incursion of
exotic and probably evaporite-sourced brines expelled from an adjacent sedimentary basin. The recent
findings support the classification of the Mina Justa Prospect as an Iron Oxide Copper Gold (IOCG)
deposit, and suggest the Marcona iron deposits are a distinctly different style of deposit.
The Mina Justa and Magnetite Manto deposits share many mineralogical and textural characteristics
with other major exo-contact Andean Cu-rich IOCG deposits, eg, Raúl-Condestable (Peru), and
Mantoverde and La Candelaria (Chile).
4.4.3 Mineralisation
Massive to brecciated, elongate magnetite (-pyrite) bodies host the highest-grade copper sulphide
mineralisation at Mina Justa. The location of these bodies appears to be controlled primarily by a
northeast striking and southeast dipping system of faults (the Mina Justa fault system). The
mineralised bodies have, however, been dislocated by northwest striking and northeast dipping faults
(Huaca faults) and associated ocoite dykes, the latter ranging from less than a few metres to 70 m in
thickness (typically 15 m to 30 m in thickness).
Seven stages of hydrothermal alteration and hypogene mineralisation are recognised at the Mina Justa
prospect, providing evidence of protracted hydrothermal evolution linked to the deformational history of
the Marcona-Mina Justa District. A sequence of four distinct hydrothermal alteration stages including
albite-actinolite alteration, potassium-iron metasomatism, calcium metasomatism and an early
haematite alteration stage was followed by intense iron metasomatism that formed the magnetite
bodies in the Mina Justa deposit at circa 104 Ma to 101 Ma. The subsequent main copper sulphide
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mineralisation stage of chalcopyrite, chalcocite and bornite (at approximately 95 Ma to 99 Ma)

frequently replaced the precursor magnetite mineralisation in stratabound and structurally controlled ore
body geometries. The Mina Justa hydrothermal alteration sequence concluded with late-stage specular
haematite deposition.
Weathering, modified by post-mineralisation faulting, produced supergene copper oxide mineralisation

(predominantly atacamite and chrysocolla), hosted mainly in rock fractures, to an average depth of
about 180 m.
The mineralised bodies of the Mina Justa deposit extend over an area of approximately 2100 m
north-south by approximately 1500 m east-west, and range in thickness from a few metres up to
150 m. The mineralisation lies at or close to the surface in northern and western parts of the deposit
WKH ³1RUWKHUQ 2[LGHV´ ³:HVWHUQ ([WHQVLRQV´ DQG ³&X´ ]RQHV H[WHQGLQJ WR GHSWKV DSSURDFKLQJ
550 PLQWKHVRXWKHDVWHUQSDUWRIWKHGHSRVLWWKH³6XOSKLGH([WHQVLRQV´]RQH7KHPLQHUDOLVHGERGLHV
are generally flat-lying in the upper parts of the deposit (ie, in the oxide zone), but at depth the
mineralisation follows the curvilinear faults, and resembles a flat bowl-like structure with an overall
shallow plunge of approximately 15° to the southeast. Sulphide mineralisation at depth displays a
central core of bornite and chalcocite surrounded by predominantly chalcopyrite mineralisation. A
narrow transition zone separates the sulphide mineralisation from the overlying oxide mineralisation.
Sulphide mineralised bodies appear to increase in thickness from west to east, and with increasing
depth.
The Magnetite Manto mineralised body strikes approximately northeast-southwest, with a moderate dip
of approximately 60° to the northwest. The tabular body is approximately 700 m long by approximately
350 m wide, ranging between 25 m and 35 m in thickness. The Magnetite Manto deposit is
characterised by copper oxide mineralisation.
4.4.4 Exploration History
A summary of the exploration history of the Marcona Copper Property, with emphasis on the Mina Justa
Prospect, is presented in Table 4.1.
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Table 4.1
Exploration History of the Mina Justa Prospect
Period Event
Late 1800s to mid-1980s Episodic small-scale artisanal mining for copper oxides in the Marcona district.
1950-1972 Regional airborne magnetic survey and follow-up geological mapping, geochemical
sampling and drilling conducted by Marcona Mining Company (subsidiary of Utah Mining
Corporation), operators of Marcona Iron Mine.
1975-1980s Small-scale mining of Marcona Iron Mine and (possibly) parts of the Mina Justa Prospect
by Propiedad Minas Justa S.A., following nationalisation of the Marcona Iron Mine.
1992-2000 Surface mapping, rock chip sampling, trenching, electromagnetic surveys and preliminary
resource estimation exploration work conducted by Jindi (a subsidiary of Shougang Hierro
Peru S.A.; SHP) throughout the Marcona Iron Mina mining concession, including the area
of the Mina Justa Prospect.
1993-2003 Exploration conducted by Rio Tinto: regional airborne magnetic and radiometric surveys,
property acquisition, limited initial exploration drilling of Clavelinas Prospect (1995), joint
venture agreement with SHP (2000), geological mapping, geochemistry, geophysics,
exploration drilling, limited metallurgical testing, resource estimation and economic
studies on Mina Justa Prospect. Rio Tinto conducted limited drill testing of other targets,
including Achupallas, Miramar, Clavelinas and La Apreciada Prospects. The Mina Justa
Prospect failed to meet Rio Tinto¶VPLQLPXPVL]HUHTXLUHPHQWDQG6KRXJDQJDQG
Rio Tinto put the property up for sale.
Aug to Dec, 2004 Chariot acquires Marcona Copper Project, in a joint venture agreement with
Korea Resources and LG-Nikko, from Rio Tinto and SHP. Peruvian-registered Marcobre
S.A.C. incorporated. Owned 70% by Chariot, 15% LS-Nikko and 15% by
Korea Resources.
March 2005 Marcobre commenced first phase drilling programme on the Marcona Copper Property.
Initial results reported in April 2005.
2005-present ExSORUDWLRQE\0DUFREUHWKHSULPDU\IRFXVRI0DUFREUH¶VH[SORUDWLRQSURJUDPPHZDV
(and is) exploration and resource definition drilling on the Mina Justa Prospect. A
regional exploration programme of geological mapping, surface sampling, geophysical
surveys (ground magnetic and IP surveys) and trenching was initiated on the Achupallas,
Miramar, Clavelinas and La Apreciada deposits, which occur on lands surrounding the
Mina Justa Prospect, within the Marcona Copper Property. Limited drill testing of targets
in Achupallas (2005) and Clavelinas (2008).
4.4.5 Adjacent Properties
7KH ZHVWHUQ SRUWLRQRI 0DUFREUH¶V7$ SURSHUW\ ERXQGDU\ LV FRLQFLGHQW ZLWK WKH HDVWHUQ ERXQGDU\ RI
the Marcona iron mine. It is the largest known magnetite deposit in South America, estimated at
approximately 1400 Mt of iron ore grading 54.1% Fe and 0.11% Cu dispersed in at least 8 major and 47
minor orebodies (AMEC, 2004). Current production is believed to be 8 Mt/a, with intentions for an
expansion to 18 Mt/a over the next 13 years.
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Recent research indicates that the Marcona iron deposit and Mina Justa Prospect are not coeval,
despite their proximity, but instead their parageneses represent separate mineralising events occurring
approximately 60 Ma apart under widely different conditions (Chen, 2008).
Although not situated adjacent to the Mina Justa deposit, the district is host to another giant magnetite
deposit, the Pampa de Pongo. This deposit is located approximately 30 km to the southeast of the
Mina Justa Prospect and contains an inferred resource of 863 Mt at 41.3% Fe, 0.1% Cu and 0.07 g/t Au
at a 15% Fe cut-off grade (Cardero Resource Corporation News Release NR08-27, 29 October, 2008),
hosted in Jurassic andesites and intercalated sedimentary strata.
The Marcona Copper Property completely surrounds the Milagros property owned by Minera del Norte
S.A. (Figure 4.4). This property is characterised by a magnetic anomaly in the vicinity of historic
workings with weak copper and molybdenum anomalies hosted in andesite. Unoxidised primary
magnetite in the matrix of the volcanic rocks is thought to be the cause of the magnetic anomaly in this
area. Marcobre is unaware of any additional work conducted on the Milagros property.
Four copper prospects have been identified elsewhere within the Marcona Copper Property, including:
x Achupallas Prospect, located about 6 km to the north of Mina Justa
x Miramar Prospect, 18 km to the northwest of Mina Justa
x Clavelinas Prospect, located about 5 km east of Mina Justa
x La Apreciada Prospect, some 15 km to the east of Mina Justa.
Limited exploration has been conducted on these prospects to-date, and they have not been
considered further in the DFS.
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Figure 4.4
Copper Prospects Identified Within the Marcona Copper Property Area
4.4.6 Drilling
Drilling has been the dominant tool used by Marcobre in the exploration of the Mina Justa Prospect.
Marcobre drilled a total of 256 451.18 m in 1075 drill holes on the Mina Justa Prospect from 2005 to
2008. The majority of the drilling was conducted on the Mina Justa deposit with 227 843.98 m in
938 drill holes, while a total of 28 607.20 m in 137 drill holes was drilled on the Magnetite Manto
deposit.
A summary of the drilling conducted on the Marcona Copper Property, with emphasis on the Mina Justa
Prospect, is presented in Table 4.2. Drill hole locations are presented in Figure 4.5.
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Table 4.2
Drilling Conducted on the Mina Justa Prospect
Period Company Details
Pre-2005 Rio Tinto Rio Tinto drilled a total of 41 142.65 m in 298 holes on the Marcona Copper Property. A
total of 31 024.85 m in 102 drill holes was completed on the Mina Justa Prospect using a
combination of diamond core (total of 7448.85 m) and RC (total of 23 576.00 m) drilling
techniques. In addition, 159 short RC reconnaissance drill holes totalling 1982 m were
drilled in the prospect.
2005 Marcobre Marcobre drilled a total of 50 401.60 m in 141 drill holes on the Mina Justa Prospect in 2005.
Drilling was predominantly RC (122 holes), with just 2 diamond core drill holes. Diamond
core tails were completed in 17 RC drill holes.
2006 Marcobre Marcobre drilled a total of 66 473.50 m in 300 drill holes in 2006. Drilling was predominantly
RC (274 holes), plus13 diamond core drill holes (including 9 metallurgical drill holes).
Diamond core tails were completed in 13 RC drill holes (including 4 metallurgical holes).
2007 Marcobre A total of 75 233.98 m was completed in 357 drill holes on the Mina Justa Prospect in 2007.
Drilling was predominantly RC (261 holes totalling 57 354.00 m), with 96 diamond core holes
totalling 17 879.98 m.
2008 Marcobre A total of 37 935.80 m in 145 drill holes was drilled and compiled into the mineral resource
database as of 8 August 2008. Drilling was predominantly RC (127 holes totalling
33 460.00 m), with 18 diamond core drill holes totalling 4475.80 m.
A total of 63 600.80 m in 277 drill holes was drilled for the full year. This comprised 225 RC
holes (total of 52 386.00 m), 51 diamond core holes (total of 10 764.80 m) and one
combined RC and diamond core drill hole (450.00 m). In addition, 5 RC holes drilled in 2007
were extended by 4 RC tails totalling 516.00 m and a single diamond core tail of 225.30 m.
Notes: RC = reverse circulation.
Numerous drilling contractors were used, including Bradley (Lima), Geotec (Lima), HYS Drilling (Lima),
MCA (Lima), and Sonda Sur (Lima). Several drilling rigs were used, including Longyear LF 70, Marca
CBC model CS-1000, Marca CBC model CS-3000, Schramm T-660 Rotadrill, Foremost W750
Prospector and CSR-3000.
A combination of reverse circulation (RC; 5.25 inch diameter) and diamond core drilling (HQ diameter
core reducing to NQ diameter with depth, where necessary) was used. Drill hole inclinations and
directions were selected and adjusted to intersect the mineralisation perpendicular to the interpreted
trend of the mineralisation. Appropriately labelled concrete drill hole collar monuments with capped
PVC piping permanently mark the location of each drill hole collar.
Drill hole collars were surveyed using a Leica Total Station Model PCR 305 digital theodolite with
millimetre-scale accuracy and a range of up to 3.5 km. Gyroscopic down hole surveys were completed
using an SRG borehole gyroscope with a ±0.1° accuracy manufactured by Goodrich Corporation of the
USA on the drill holes by independent surveying contractors (Proyectistas Tecnicos y Servicios S.A. of
Lima, and Comprobe S.R.L. of Chile). Continuous down-hole survey readings were collected, with time
average readings made every 10 m down-hole. Additional check readings were made every 50 m on
WKHSUREH¶VUHWXUQXSWKHGULll hole.
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Drilling in the Mina Justa deposit covers an area of approximately 7.5 km2, with drill holes spaced
between 25 m and 50 m apart (generally 35 m to 40 m) and drilled to a maximum depth of 630 m.
Drilling in the Magnetite Manto copper deposit covers an area of approximately 0.23 km2, with drill holes
spaced between 25 m and 50 m apart (generally 25 m to 30 m) and drilled to depths of approximately
410 m.
Figure 4.5
Mina Justa Prospect Drill Hole Location Plan (as at August 2008)
4.4.7 Sampling Method and Approach
A total of 127 868 drill samples were collected in and around the Mina Justa Prospect. Consistent
sampling methods were maintained by Marcobre over the exploration period.
Drill Core
Drill hole core was logged for geotechnical and geological features prior to being marked and sawn for
sampling. Core sample intervals were generally 1 m for mineralised core and 2 m for non-mineralised
core, but significant geological boundaries were honoured. Drill hole core sample recovery was
generally better than 95% (with more than 90% of the recovery data displaying a recovery of better than
90%). Density measurements were conducted on selected core intervals after logging and before
sampling. The standard weight-in-water-weight-in-air technique was used.
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RC Drill Cuttings
RC chips were collected at regular 2 m intervals, geologically logged and riffle split to achieve 12.5%
splits of approximately 10 kg. Marcobre recorded sample weights at the rig to quantify RC sample
recovery; results indicated a recovery of better than 85%, which is considered to be adequate.
Reject and reference samples were stored in camp. Prepared coarse and fine blanks, oxide and
sulphide standards as well as field, crush and pulp duplicates were inserted into the sample stream.
4.4.8 Sample Preparation, Analysis and Security
For all Marcobre drilling, sample preparation was carried out at an on-site preparation facility operated
by SGS del Peru SAC (SGS) laboratory personnel. The RC samples were dried and crushed to 95%
passing 10 mesh. The crushed samples were riffle split to produce 250 g samples, which were
pulverised to 95% passing 200 mesh. Sample pulps were submitted to the SGS laboratory in Lima for
analysis in complete drill hole batches. Coarse sample rejects were bagged and stored on site.
Following analysis, the pulp sample was returned to Marcobre for storage on site.
Half-core samples were prepared following the same sample preparation protocol as the RC samples
through to the pulp sample stage on site.
The SGS laboratory in Lima was the primary laboratory to which all drilling samples collected from
0DUFREUH¶VGULOOLQJSURJUDPPHVZHUHVXEPLWWHG7KH6*6/DERUDWRULHV4XDOLW\$VVXUDQFH6\VWHPKDV
ISO 9002 accreditation and participates on a regular basis in round-robin testing with analytical
laboratories in Canada, Sweden, and the USA, amongst others.
All sample pulps received were entered into the laboratory management system and uniquely bar-
coded for Quality Assessment and Quality Control (QAQC) and tracking purposes. All preparation and
analytical data recorded for the samples was done electronically. Marcobre submitted a total of
142 750 samples (including QAQC samples) during the 2005 to 2008 drilling campaigns at the
Mina Justa prospect.
All of the samples were analysed for total Cu (CuT) and sequential leaching (sulphuric acid extractable,
cyanide extractable and residual Cu7) with an AAS finish, resulting in four Cu assay values per sample.
In addition, sulphide and transition zone samples were analysed for Ag using ICP-OES analysis with an
aqua regia digest as part of a multi-element package (Al, As, Ba, Be, Bi, Ca, Cd, Co, Cr, Fe, Ga, Hg, K,
La, Mg, Mn, Mo, Na, Nb, Ni, P, Pb, S, Sb, Sc, Se, Sn, Sr, Te, Ti, Tl, U, V, W, Y, Zn and Zr). Au
analyses were carried out using a 30 g fire assay with AAS finish.
The assay data was loaded into the database and verified against the original laboratory certificates
that are kept on file in the Marcobre DDWD5RRP0DUFREUH¶V-RKQ'.DSXVWD3*HR9LFH-President
([SORUDWLRQ DQG *HRORJLFDO 6HUYLFHV LV WKH 4XDOLILHG 3HUVRQ UHVSRQVLEOH IRU 0DUFREUH¶V H[SORUDWLRQ
drilling, sampling and data quality.
7
Cu_SS, Cu_CN and Cu_R, respectively
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0DUFREUH¶VVLWHVHFXULW\LQFOXGHVDSULYDWHURDGHQWUDQce gate and around-the-clock site-based security

guards. The SGS site-based laboratory is securely locked. SGS takes custody of all samples on site,
once they have been appropriately bagged and labelled. Following sample preparation, sample pulps
are transported by road (in the care of SGS) to SGS Lima for analysis. The SGS laboratory in Lima is
completely surrounded by a security wall and all access is security controlled.
The quality of the sampling, sample preparation, security and analytical procedures is considered to be
adequate to support the generation of mineral resource and mineral reserve estimates to JORC
standards.
Details of the pre-2005 Rio Tinto sample preparation, analyses and security were presented in AMEC
(2004), and the procedures were considered to meet industry standards.
4.4.9 Data Verification
Marcobre established a QAQC programme in 2005 to verify and monitor total copper, sequential
copper, Au, and Ag assay results provided by SGS. The QAQC programme established protocols for
insertion of Quality Control (QC) samples, evaluation criteria, and secondary laboratory check analyses.
The QC samples inserted into the sample batches submitted to SGS included standard reference
materials (SRMs), blank materials, and duplicate samples (core or RC drill cuttings, coarse reject
material and pulps). The rate of QC sample insertion was approximately 10% throughout the drill
programme. In addition, 5% of the drill hole samples were randomly selected and submitted to
secondary (external) laboratories, and the results evaluated.
Analytical results were monitored by independent consultants, who evaluated accuracy, sample
contamination, precision and bias on a routine basis.
Based on observations made during several laboratory and site visits between September 2005 and
-XQH DQG IURP LQGHSHQGHQW DVVHVVPHQW RI 0DUFREUH¶V GDWD 6QRZGHQ 0LQLQJ ,QGXVWU\
&RQVXOWDQWV 6QRZGHQ FRQFOXGHG WKDW 0DUFREUH¶V GULOO KROH VXUYH\ GHQVLW\ DQG DVVD\ GDWD LV RI
adequate quality to support the generation of mineral resource and mineral reserve estimates to CIM
standards.
Details of data verification conducted on the pre-2005 Rio Tinto data are presented in AMEC (2004),
and the data was deemed to be adequate.
AMEC Minproc has visited site and reviewed drilling, sampling and sample preparation activities. The
data acquisition procedures are considered to be in accordance with current industry practice, and,
while AMEC Minproc has not conducted a audit of the database or independently analysed QAQC data,
LWKDVUHYLHZHG6QRZGHQ¶VUHSRUWVDQGFRQVLGHUVWKDWWKHGDWDKDVEHHQULJRURXVO\DVVHVVHGSULRUWR
use in resource modelling.
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4.5 MINERAL RESOURCE ESTIMATE
4.5.1 Introduction
Marcobre commissioned Snowden to complete several resource estimates between 2006 and 2008,
including the October 2008 resource estimate used as the basis for the DFS.
The October 2008 resource estimate was generated using a comprehensive database that includes
drilling data from the pre-2005 Rio Tinto exploration programme and the Marcobre drilling programmes
up to a cut-off date of 23 May 2008. Previous Mina Justa resource estimates have been reported in
NI43-101 Technical Reports by Snowden in October 2005, February 2007 and June 2008, and by
AMEC in November 2004.
Mineral resources were prepared by Dr. Warwick S. Board, P.Geo., formerly Senior Consultant with
Snowden, and independent of Marcobre.
4.5.2 Database and Block Model
4.5.2.1 Database
Marcobre supplied the database comprising survey, assay, density, geological, mineralogical and
structural data, together with QAQC data (standard, blank and duplicate assays). Snowden conducted
a series of validation tests and made recommendations to Marcobre to fix several minor errors and
inconsistencies, following which the database was adopted for the October 2008 resource model.
The database included:

x 1070 drill hole collar records.
x 133 170 assays (excluding QAQC results). Results include CuT, Cu_CN, Cu_SS, Cu_R, Ag, Au,
and H2SO4_Kg/t, although there was insufficient information available for H2SO4 to generate a
meaningful estimate for this variable.
x 3768 density measurements.
The database was uploaded into Datamine Studio 3 mining software for resource modelling. Basic
validation checks were undertaken, less than detection values converted to half the detection limit, and
zero values set as missing data.
The data was desurveyed, and a final resource database produced, excluding 17 holes without surveys
and those drilled for metallurgical purposes. The final database contained 132 165 records.
4.5.2.2 Wireframes and Domain Coding
Marcobre supplied the following wireframes to constrain the resource model:

x 0.2% Cu grade shells for Mina Justa and Magnetite Manto
x Wireframes for the ocoite dykes at Mina Justa and Magnetite Manto
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x Wireframes for the various lithological units at Mina Justa and Magnetite Manto
x Topography, base-of-oxide and top-of-sulphide surfaces
x A bornite-chalcocite solid for Mina Justa.
Drill hole data was coded by these wireframes and the coding verified by visual comparison with the
wireframe solids.
4.5.2.3 Mineralogy Data
Mineralogical data (57 545 records) were imported as alphanumeric codes, validated and desurveyed.
4.5.2.4 Lithology and Density Data
Lithological data were imported for wireframe validation. Some Rio Tinto lithological logging was
included, but, for the most part, relogging of Rio Tinto drill holes was undertaken by Marcobre, and
given priority. This data, too, was desurveyed, and compared to the lithological wireframes provided by
Marcobre, which were found to be reasonable. However, Snowden noted the presence of a number of
ocoite intersections which were not captured by the dyke wireframes, particularly near the Cu40 area.
Density data were imported and desurveyed. This file was coded according to the base-of-oxide and
top-of-sulphide surfaces, the portion between the two being classified as Transition mineralisation. The
sulphide portion was further sub-divided into Bn-Cc or Cpy types. Semi-massive to massive magnetite
zones were separately identified by the lithology code.
Snowden considered that there was insufficient density data to allow interpolation into the resource
model. Consequently, average values were calculated for each combination of lithology and
weathering (Table 4.3). The density data was particularly inadequate for the Bn-Cc domain; this data
was combined with that from the Cpy domain and the overall average applied to the entire sulphide
domain.
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Table 4.3
Details of Block Model Density Assignment by Deposit
Density
Details Deposit 3
(t/m )
Air Both 0.00
Mina Justa 2.81
Default oxide
Magnetite Manto 2.82
Default transition Mina Justa 3.08
Default sulphide Mina Justa 3.12
Oxidised dyke Both 2.81
Transition dyke Both 2.88
Fresh dyke Both 2.90
Oxidised magnetite manto lithology
Mina Justa 3.41
Magnetite manto lithology in transition zone Mina Justa 3.70
Magnetite manto lithology in sulphide zone Mina Justa 3.53
Oxidised andesite
Mina Justa 2.73
Andesite in transition zone Mina Justa 3.04
Andesite in sulphide zone Mina Justa 3.12
Oxidised crystal tuff
Mina Justa 2.81
Crystal tuff in transition zone Mina Justa 3.04
Crystal tuff in sulphide zone Mina Justa 3.12
Oxidised arkose
Mina Justa 2.80
Arkose in transition zone Mina Justa 3.04
Arkose in sulphide zone Mina Justa 3.12
Oxidised volcanosedimentary rocks Mina Justa 2.81
Volcanosedimentary rocks in transition zone Mina Justa 3.08
Volcanosedimentary rocks in sulphide zone Mina Justa 3.12
4.5.2.5 Block Model Generation
Prototype
The block size was set at 25x25x5 m, with sub-celling to 5x5x1 m to honour wireframe boundaries. The
block size was selected to take account of drill hole spacing and the scale of mining being considered.
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Model Compilation
The block model was generated by sequential addition involving three steps, namely:
x Mineralisation (Grade shell model): the copper grade shell models were interpreted based on a
0.2% Cu cut-off from cross-VHFWLRQV ZLWK DVVLVWDQFH IURP 0DUFREUH¶V JHRORJLVWV ,QGLYLGXDO GULOO
hole intercepts were snapped to the wireframe during generation, to honour the sample data.
Barren, post-mineralisation (ocoite) dykes were ignored during the interpretation, but were
superimposed subsequently in Datamine.
x Lithological Model: Lithological data recorded during core logging were electronically stored as
LithoType and LithoSubType fields. Atticus and Associates, a Lima-based geological consultancy,
used these fields in the generation of lithological models for the Mina Justa Prospect.
Separate lithological models were generated for the volcanic, sedimentary, intrusive (dyke) and
metasomatic (magnetite manto) lithological units. Spatial continuity of the volcanic and
sedimentary units was interpreted and modelled using north-south sections spaced at 50 m
intervals. Modelling of the ocoite dyke and magnetite manto units was conducted directly in three
dimensions rather than on a sectional basis, due to their complex geometries. All surfaces and
solids were generated using the Leapfrog modelling software and were then exported in Datamine
Studio wireframe format for validation and subsequent use in resource modelling.
x Mineralogical Model: The mineralogical model created by Atticus and Associates was divided into
Oxide, Transition, Sulphide, and Bornite-Chalcocite domains. The Oxide domain was defined by a
minimum CuSS/CuT ratio of 60%. Mineralogical information from drill logs was used to
supplement the interpretation when sparse sequential copper data was encountered. A maximum
CuSS/CuT ratio of 30% defined the Sulphide domain. The Transition zone was defined as the
zone between the Oxide and Sulphide domains.
Definition of the Bornite-Chalcocite domain used a CuCN/CuT ratio of 50%, although
experimentation with a 90% CuCN/CuT ratio showed little variation in the defined volume.
For the purposes of resource estimation, the Transition zone three-dimensional solid was not used
by Snowden. Instead, the Transition domain was defined in Datamine Studio software by using
overlapping relationships, where the block moGHO ZDV JLYHQ D GHIDXOW ³WUDQVLWLRQ ]RQH´ FRGH
(CODE=152), and other domains were superimposed on top of it.
4.5.2.6 Grade Modelling
Sample Composites
A composite length of 2 m was selected following analysis of sample data. The domain-coded raw drill
hole data were composited to 2 m, retaining all residual composites regardless of length, with
compositing controlled by domain. The resulting drill hole file was validated by comparison against the
input domain-coded drill hole file, as well as by ³metal content´ (ie, comparing the sum of length x grade
pre- and post-compositing).
Top-cuts
Statistical analysis indicated the presence of extreme outlier values in the raw and composited data for
the variables of interest. Snowden undertook grade capping analysis on the composited,
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domain-coded drill hole data for each of the variables of interest, and top-cuts were applied to the
domain-coded and composite data.
Top-cuts for the sequential copper data were set at the same percentile as those determined from the
total copper data, to preserve relationships between these variables.
Details of the top-cuts applied to CuT in each domain are presented in Table 4.4. Validation of the
top-cut application was focussed on total copper as this is the economically most important constituent
of the deposit. Top-cuts applied to the total copper data were validated globally against the input uncut
domain-coded composited drill hole data, as well as in terms of ³metal´ loss. Top-cuts were also
determined for Ag and Au data.
Table 4.4
Top-cuts Applied: Cut by Domain
Domain Variable Top-cut No data No. top-cut Top-cut Mean Mean
(uncut) Percentile (Uncut) (Top-cut)
10 Cu 7.0% 18 701 39 99.79% 0.485% 0.478%
151 Cu No TC 1258 0 - 0.742% -
152 Cu 7.00% 771 2 99.74% 0.755% 0.747%
153 Cu 2.25% 556 9 98.38% 0.338% 0.300%
201 Cu 9.4% 2988 8 99.73% 0.755% 0.751%
202 Cu 8.4% 3333 7 99.79% 0.745% 0.742%
211 Cu 22.3% 1913 4 99.79% 2.073% 2.064%
212 Cu 2.29% 405 4 99.01% 0.523% 0.516%
100 Cu 6.4% 2018 10 99.48% 0.620% 0.616%
Note: Limited Ag and Au data in Oxide and Magnetite Manto domains due to relative absence of silver and gold in these
domains, and so top-cut analysis not undertaken for this data.
The top-cuts applied do not significantly reduce the mean grade, either globally or on a domain basis
except for domain 153, in which a 12% loss of metal occurred, due probably to the small number of
samples involved and the presence of a mixed population. OtherwiVHWKHGHFUHDVHLQµPHWDO¶FRQWHQWLV
within acceptable limits for all other domains.
Variography
Variographic analysis was conducted on the total copper and sequential copper data for the Oxide and
Magnetite Manto domains, and on the copper, silver and gold data for the Transition, Cpy sulphide and
Bn-Cc sulphide domains.
Horizontal, across-strike and dip-plane continuity directions were defined based on variogram fans,
JHRORJLFDO FRQVWUDLQWV DQG GLVFXVVLRQV ZLWK 0DUFREUH¶V JHRORJLVW ([SHULPHQWDO YDULRJUDPV ZHUH
generated for the three principle directions of the modelled continuity ellipsoid, using normal scores
transformed data, with all modelled variances back-transformed prior to estimation. Variogram models
generated in normal scores space were checked against untransformed and log-transformed
experimental variograms, and results indicated that the selected model parameters were robust.
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Variogram directions and model parameters for total copper were superimposed on variograms of
sequential copper data for each domain and found to be a close approximation of the continuity of this
data. Thus the total copper data variogram parameters were applied for all the sequential copper data
in the estimation process in order to maintain the relationship between the different copper components
during grade interpolation.
Results of the continuity analyses and variogram model parameters for total copper are presented in
Table 4.5. Example experimental variograms and variogram models are presented for total copper
data along the major, semi-major and minor directions for selected domains in Figure 4.6 and Figure
4.7.
Search Volume Parameters

An expanding search strategy was used, based on the results of the variography. Ranges for the first
search pass were defined on the basis of the variogram and were generally set within the variogram
range. Details of the search volume parameters are presented in Table 4.6.
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Figure 4.6
APPENDIX V
Example Variograms and Variogram Models for Oxide Domains in the Mina Justa Prospect
— V-112 —
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Figure 4.7
APPENDIX V
Example Variograms and Variogram Models for Selected Transition and Sulphide Domains in the Mina Justa Prospect
— V-113 —
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APPENDIX V
Table 4.5
Variogram Parameters: October 2008 Resource Update
Range1 Range2 Range3
Direction Datamine
(m) (m) (m)
Domain ZXZ Angles Nugget Sill1 Sill2 Sill3
Semi Major
Major (D1) Minor (D3) (Y=D1) D1 D2 D3 D1 D2 D3 D1 D2 D3
(D2)
Total copper (Cu)*
10 -ĺ -ĺ -ĺ {-90, 165, 40} 0.28 0.49 30 10 8 0.13 75 50 50 0.10 160 100 100
151 -ĺ ĺ -ĺ {-80, 170, 0} 0.09 0.45 50 70 10 0.32 230 195 12.5 0.14 415 195 12.5
152 -ĺ ĺ -ĺ {-75, 150, 0} 0.08 0.64 130 75 9 0.28 175 150 17 - - - -
153 -ĺ -ĺ -ĺ {-65, 170, 25} 0.06 0.62 60 60 5 0.32 135 100 10 - - - -
201 -ĺ ĺ -ĺ {-45, 160, 0} 0.10 0.50 30 95 7 0.40 220 155 32 - - - -
202 -ĺ ĺ -ĺ {-40, 135, 0} 0.07 0.34 65 55 35 0.59 115 175 35 - - - -
— V-114 —
211 -ĺ ĺ -ĺ {-65, 160, 0} 0.12 0.24 70 60 5 0.23 70 115 15 0.41 150 280 50
212 -ĺ ĺ -ĺ {-65, 160, 0} 0.12 0.24 70 60 5 0.23 70 115 15 0.41 150 280 50
100 -ĺ -ĺ ĺ {-30, 55, 75} 0.05 0.64 50 35 25 0.31 125 55 25 - - - -
Note: a direction of -11° to 141° means a plunge of 11 degrees towards an azimuth of 141 degrees, Mina Justa Prospect local grid system; backtransformed nugget and sill values shown.

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APPENDIX V
Table 4.6
Search Volume Parameters
Datamine First Search Pass (SVOL1) Second Search Pass (SVOL2) Third Search Pass (SVOL3)
Domain ZXZ Angles
D1, D2, D3 Samples Factor Samples Factor** Samples
(Y=D1)
Total copper (Cu)*
10 {-90, 165, 40} 160, 100, 50 min. 12, max. 30, mpd. 5 1.5 x SVOL1 min. 10, max. 30, mpd. 5 5 x SVOL1 min. 6, max. 15, mpd. 5
— V-115 —
Notes:
*Search volume parameters for total copper used for sequential copper components Cu_SS, Cu_CN and Cu_R for the relevant domains; mpd=maximum number of samples per drill hole;
**SVOL3 set large to ensure all blocks in 0.2% Cu grade shells informed with grade; orientation data reference Mina Justa Prospect local coordinate system.

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Grade Estimation
Total copper, sequential copper, silver and gold grades were estimated into the relevant domain-coded
blocks in the input block model using ordinary kriging. The domain-coded, composited and top-cut drill
hole file was used as the input drill hole data file for grade estimation. Mineralogical data were
estimated into the input model using the nearest neighbour technique.
Block model grade estimates were reviewed in detail by Snowden to ensure that the estimation process
had worked. Sequential copper data were estimated into blocks using the variogram and search
volume parameters defined for total copper, to honour ratios between the variables and the relationship
CuT=CuSS+CuCN+CuR as far as possible. Following block grade estimation, the sequential copper
data were normalised to the total copper data on a block-by-block basis, given that there is confidence
in the quality of the total copper data. This normalisation process was conducted to ensure that the
ratios between the three sequential copper components were retained. Detailed validation checks were
conducted on the normalised sequential copper data by Snowden to check that this process worked
correctly. In general, the pre-normalisation sum of the sequential copper data matched the total copper
grade fairly closely and only minor adjustments were made to the individual sequential copper
components during the normalisation process.
Model Confidence Classification

Resource model classification took account of data quality, geological continuity, confidence in the
geological model and current level of domaining, grade continuity (from the variography), kriging
efficiency and drill hole spacing. Based on review of all of these factors, Snowden is of the opinion that
the total copper, sequential copper, silver and gold models are of sufficient quality to support Indicated
and Inferred classifications as per CIM (2005) definitions for the Mina Justa and Magnetite Manto
deposits.
Example views of the October 2008 mineral resource model colour-coded according to resource
category are presented in Figure 4.8. The relatively low proportion of Indicated material in the deep
sulphide domains and in the Magnetite Manto domain are due to excessive extrapolations of the grade
shell interpretation into areas that are not well supported by the current drilling.
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Figure 4.8
W-E Section through Mina Justa Prospect, Coded by Resource Category
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$OWKRXJKLQ6QRZGHQ¶VRSLQLRQWKHGDWDLVRIVXIILFLHQWTXDOLW\DQGDWDSSURSULDWHGULOOKROHVSDFLQJWR
support a Measured classification in parts of the deposit (eg, the Cu40 area, the Northern Oxides and
part of the Cpy Sulphide domain), there are insufficient geologically and spatially representative density
data to raise confidence in the applied density model to the required level at this stage. This is
particularly important in a prospect such as Mina Justa in which density varies significantly in plan and
with depth as a function of lithology, weathering, alteration, and mineralisation.
The mineralogical data is subjective and cannot be classified according to the CIM (2005) resource
classification definitions.
Model Validation
Block model validation was conducted by Snowden on the Indicated material as follows:
x Detailed review of the compilation of the input block model to ensure that all blocks were correctly
coded.
x Visual inspection of drill hole and block model grade data for each of the variables of interest,
colour coded according to grade, to ensure that input data trends are honoured in the resource
model.
x Global comparison of model and input drill hole grades for total copper, acid-soluble copper, silver
and gold (in relevant domains) to assess global unbiasedness (Table 4.7).
x Comparison of grade trends between the declustered, domain-coded, composited and top-cut input
drill hole data and the block model on easting, northing and elevation slices to assess areal bias.
Snowden conducted this validation step on the total copper, acid-soluble copper, silver and gold
variables on a by-domain basis, and noted that the block model data honoured trends in the input
drill hole data for each variable of interest. A selection of these plots is presented in Figure 4.9.
x Grade-tonnage reporting checks. Grade-tonnage reports were generated in independent software
packages to ensure no errors were made during reporting.
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Table 4.7
Model Validation: Global Mean Grade Comparisons by Domain
Variable Domain Mean Grade
Input data* Block Model
Cu 10 0.45% 0.46%
151 0.70% 0.73%
152 0.87% 0.83%
153 0.33% 0.32%
201 0.69% 0.73%
202 0.70% 0.68%
211 1.90% 1.93%
212 0.52% 0.53%
100 0.58% 0.58%
Cu_SS 10 0.36% 0.37%
*Note: Input drill hole data are declustered, domain-coded, composited and top-cut. All data from that part of the
resource classified as Indicated. Declustering conducted using nearest neighbour interpolation into block model for
relevant variables and domains.
Based on the results of block model validation, Snowden considers the resource model to be valid, with
the block estimates honouring the input drill hole data. Example local grid west-east cross-sections
through the validated block model, filtered such that CODE>0.1, colour coded according to total copper
are presented in Figure 4.10, Figure 4.11 and Figure 4.12.
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Figure 4.9
Comparison of Grade Trends between Block Model and Input Drill Hole Data
APPENDIX V
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Figure 4.10
Local Grid West-East Cross-Sections through the Mina Justa Prospect Resource Model, Colour Coded According to Total Cu
APPENDIX V
a b
— V-121 —
c d
e f
Notes: Cross-sections are filtered such that CODE>0.1. Sections along a) 9100 mN, b) 9200 mN, C) 9300 nN, d) 9400 mN, e) 9500 mN; topography (brown), base of oxides (ochre), and top-of-sulphide (red) surfaces are shown for reference. Yellow: Oxide, Mina Justa Deposit
(CODE=10); Dark blue: Oxide, Magnetite Manto Deposit (CODE=100); Light blue: Transition, Mina Justa (CODE=151); Dark green: Transition, Mina Justa (CODE=152); Light green: Transition, Mina Justa (CODE=153); Orange: CPY sulphide, Mina Justa (CODE=201); Light
orange: CPY sulphide, Mina Justa (CODE=202); Pink: Bn-Cc sulphide, Mina Justa (CODE=211); Magenta: Bn-Cc sulphide, Mina Justa (CODE=212).

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Figure 4.11
APPENDIX V
a b
— V-122 —
c d
e f
Notes: Cross-sections are filtered such that CODE>0.1; sections along a) 9700 mN, b) 9800 mN, c) 9850 mN, d) 9900 mN, e) 9950 mN, and f) 10000 mN; topography (brown), base-of-oxide (ochre) and top-of-sulphide (red) surfaces are shown for reference. Yellow: Oxide,
Mina Justa Deposit (CODE=10); Dark blue: Oxide, Magnetite Manto Deposit (CODE=100); Light blue: Transition, Mina Justa (CODE=151); Dark green: Transition, Mina Justa (CODE=152); Light green: Transition, Mina Justa (CODE=153); Orange: CPY sulphide, Mina Justa
(CODE=201); Light orange: CPY sulphide, Mina Justa (CODE=202); Pink: Bn-Cc sulphide, Mina Justa (CODE=211); Magenta: Bn-Cc sulphide, Mina Justa (CODE=212).

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Figure 4.12
APPENDIX V
a b
— V-123 —
c d
e f
Notes: Sections are filtered such that CODE>0.1. Sections along a) 10 050 mN, b) 10 100 mN, c) 10 150 mN, d) 10 200 mN, e) 10 300 mN, and f) 10 400 mN; topography (brown), base-of-oxide (ochre) and top-of-sulphide (red) surfaces are shown for reference. Yellow: Oxide,
Mina Justa Deposit (CODE=10); Dark blue: Oxide, Magnetite Manto Deposit (CODE=100); Light blue: Transition, Mina Justa (CODE=151); Dark green: Transition, Mina Justa (CODE=152); Light green: Transition, Mina Justa (CODE=153); Orange: CPY sulphide, Mina Justa
(CODE=201); Light orange: CPY sulphide, Mina Justa (CODE=202); Pink: Bn-Cc sulphide, Mina Justa (CODE=211); Magenta: Bn-Cc sulphide, Mina Justa (CODE=212).

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4.5.2.7 Mineral Resource Reporting
CIM Definitions
x Mineral resources that are not mineral reserves do not have demonstrated economic viability. The
mineral resources presented in this section are inclusive of any ore reserves that are defined in
other parts of this report.
x A Measured mineral resource (CIM, 2005) is that part of a mineral resource for which quantity,
grade or quality, densities, shape, and physical characteristics are so well established that they can
be estimated with confidence sufficient to allow the appropriate application of technical and
economic parameters, to support production planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable exploration, sampling and testing
information gathered through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes that are spaced closely enough to confirm both geological and grade
continuity. This classification requires a high level of confidence in, and understanding of, the
geology and controls of the mineral deposit.
x An Indicated mineral resource (CIM, 2005) is that part of a mineral resource for which quantity,
grade or quality, densities, shape, and physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of the deposit. The estimate is
based on detailed and reliable exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced
closely enough for geological and grade continuity to be reasonably assumed. An Indicated
mineral resource estimate is of sufficient quality to support a preliminary feasibility study.
x An Inferred mineral resource (CIM, 2005) is that part of a mineral resource for which quantity and
grade or quality can be estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade continuity. The estimate is based on
limited information and sampling gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes. Confidence in an Inferred mineral resource
estimate is insufficient to allow the meaningful application of technical and economic parameters or
to enable an evaluation of economic viability worthy of public disclosure. Inferred mineral resources
must be excluded from estimates forming the basis of feasibility or other economic studies.
Resource Reporting
The Mineral Resources are as reported by Snowden in October 2008, and reviewed by AMEC Minproc
as part of this technical report. No mining has occurred to deplete the resource.
The October 2008 global classified resource for the Mina Justa Prospect is presented for total Cu in
Table 4.8 and for Ag and Au in Table 4.9.
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Table 4.8
Mina Justa Prospect Global Classified Resource for Total Cu
Cut-off grade Million CuT Contained Cu
(CuT %) Tonnes (%) (Million lb)
Indicated
0.2 411.3 0.67 6 070
0.3 336.8 0.76 5 650
0.4 246.9 0.91 4 960
Inferred
0.2 77.5 0.72 1 240
0.3 64.6 0.82 1 170
0.4 50.9 0.94 1 060
Data may not tally exactly due to rounding. CuT=total Cu%.
Table 4.9
Global Classified Resource for Ag and Au
Cut-off grade Million Ag Au Contained Ag Contained Au
(CuT %) Tonnes (g/t) (ppb) (kOz) (Oz)
Indicated
0.2 189.3 7.77 51.48 47 290 313 300
0.3 161.8 8.75 55.95 45 530 291 000
0.4 135.4 9.93 61.61 43 230 268 200
Inferred
0.2 68.8 4.50 71.13 9960 157 400
0.3 58.3 5.03 79.22 9430 148 500
0.4 48.1 5.63 89.89 8700 138 900
Silver and gold data reported only for the transition and sulphide domains. CuT=total Cu%. Data may not tally exactly
due to rounding.
The global classified resource detailing total and sequential copper data as of October 2008 is
presented in Table 4.10.
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Table 4.10
Mina Justa Prospect Global Classified Resource: Sequential Copper Data
Cut-off grade Million CuT Cu_SS Cu_CN Cu_R Contained Cu
(CuT %) Tonnes (%) (%) (%) (%) (million lb)
Indicated
0.2 411.3 0.67 0.26 0.19 0.22 6070
0.3 336.8 0.76 0.29 0.23 0.25 5650
0.4 246.9 0.91 0.31 0.29 0.30 4960
Inferred
0.2 77.5 0.72 0.08 0.12 0.53 1240
0.3 64.6 0.82 0.08 0.14 0.60 1170
0.4 50.9 0.94 0.08 0.15 0.72 1060
Data may not tally exactly due to rounding
4.6 GEOTECHNICAL STUDIES
4.6.1 Introduction
Knight Piésold, an independent consulting group specialising in geotechnical studies, and waste
characterisation and waste storage matters, carried out geotechnical investigations at the DFS level for
pit slope design, tailings storage, waste rock dumps, ripios dumps, stockpiles and process plant
structures. The field work was conducted between October 2006 and November 2007, during which
time representative samples were collected for laboratory tests and in-situ tests were completed.
Sources of potential borrow materials were also identified and classified.
The geotechnical program and geological and structural mapping results are presented in Figure 4.13
and Figure 4.14.
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Figure 4.13
Geotechnical Plan: West Sector Plant
APPENDIX V
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Figure 4.14
Geotechnical Plan: East Sector Plant
APPENDIX V
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The geotechnical investigation program consisted of the following:

x Ten oriented core drill holes in the main (Mina Justa) pit area, with depths ranging between 260
and 750 m.
x Five oriented core drill holes in the Magnetite Manto pit area, with depths ranging between 101 and
173 m.
x Eight drill holes distributed over the areas where the main project facilities are located, with depths
ranging between 30 and 120 m.
x Geomechanical mapping and lithological description of material from 40 drill holes.
x Geological-geomechanical surface outcrop mapping and detailed line mapping (7 traverses).
x Field testing: Standard Penetration Testing, permeability tests in soil and rock, Point Load Testing
and in-situ density of soils.
x Rock laboratory testing: Index properties, triaxial tests, Unconfined Compressive Strength (UCS)
and direct shear.
x Tests of representative rock samples to characterise the foundation materials and locate borrow
materials.
x Installation of two open pipe piezometers and a vibrating wire piezometer.
4.6.2 Open Pit Geotechnical Design Parameters
The final Main or Mina Justa pit area will measure 2.2 km by 1.3 km with a maximum depth of 430 m,
while the final Magnetite Manto pit will be 0.55 km by 0.31 km by 155 m deep.
From the geotechnical database, a simplified geotechnical model has been defined for pit slope design,
comprising three major geotechnical domains:
x Domain I: Overburden, 1.0 to 6.1 m thick, including Quaternary aeolian and alluvial deposits, that
have no effective influence on pit slope design.
x Domain II: Tunga andesite (ocoite) ranging from fresh to slightly weathered, but locally highly
weathered in fault zones. UCS value is high on average (77 MPa).
x Domain III: Volcanic-sedimentary rocks of the Rio Grande formation, weathering as in Domain II
and with similar UCS values.
The rock mass quality characterisation, using the Rock Mass Rating (RMR) classification system,
VKRZV WKDW FRUUHVSRQG WR ³SRRU´ URFN WR ³IDLU´ DQG WR ³JRRG´ /LWWOH GLIIHUHQFH ZDs
observed between ocoite and volcano-sedimentary host rocks in this regard.
The most important structural characteristics observed in the project area are block faulting and
fracturing related to major structures. These structures are of critical importance as they directly
influence the quality of the rock mass and, thus, affect the development and operation of the open pits.
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In the main pit area, the result of the analysis of major structures indicates that the structural
arrangement is represented by four main fault systems:
x System 1: The dominant system has a NW-SE direction and dips varying between 35º and 70º
NE. This system is related to regional faults such as the Tunga and Treinta Libras faults.
x System 2: Has an ENE-WSW direction with dips varying between 44º (Zorrito fault) and 66º to the
southeast.
x System 3: Has a NE-SW direction with dips varying between 45º and 75º to the northwest.
x System 4: Has a NW-SE direction, with dips varying between 60º and 80º to the southwest.
Analysis of small scale structures shows the presence of 3 main systems and 2 random systems, as
follows:
x Main systems:
N22°W trending, dipping 56°NE
N23°E trending, dipping 54°SE
N83°W trending, dipping 54°SW.
x Random systems:
N18°W trending, dipping 40°SW
N49°E trending, dipping 58°NW.
Based on the geotechnical model and the proposed pit shell, a total of 13 pit design sectors were
defined for the Main pit and three for the Magnetite Manto pit. However, a review of the data shows
that quality of the rock mass and the structural features show little variation among the design sectors.
Two types of stability analysis of pit slopes were carried out for each design sector, namely kinematic
stability analysis controlled by rock mass structures, and overall slope stability analysis controlled by
rock mass strength. The pit slope geometries for each design sector have been determined based on
minimum acceptable criteria for each of these design methods.
The minimum factor of safety (FoS) criteria adopted for stability analyses are in accordance with the
Peruvian regulations and are 1.3 under static conditions and >1.0 (post-earthquake) taking account of
peak ground acceleration for 100 year return events. Based on a seismic study, a peak ground
acceleration of 0.20 g is predicted for a return period of 100 years; a value of 0.12 has been assumed
as the horizontal seismic coefficient, based on standard practice.
Stability analysis results indicate that a bench face angle of 65° to 70° is expected to be achievable for
the pits. A 20 m high double-benching configuration is recommended for pit development.
Recommended inter-ramp slope angles range from 45° to 50°, as shown in Table 4.11.
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Table 4.11
Pit Slope Design Criteria
Pit Design Sector Bench Slope Bench Height Bench Width Inter-ramp
Angle (m) (m) Slope Angle
I 65 20 11 45
II 70 20 10 49
Northern Oxide
III 70 20 10 49
IV 65 20 11 45
V 65 20 11 45
VI 65 20 9 48
Main VII 70 20 10 49
VIII 70 20 10 49
XII 65 20 11 45
XVI 65 20 11 45
XVII 65 20 9.5 47
Cu40
XVIII 65 20 9.5 47
XIX 65 20 11 45
XIII 70 20 9.5 50
Magnetite Manto XIV 65 20 9 48
XV 65 20 9 48
Slope stability is sensitive to blasting disturbance. Consequently, low damage controlled blasting is
recommended for the development of final pit walls.
The recommended slope configurations do not eliminate all potentially unstable blocks in the pit wall. A
certain percentage (less than 35%) of bench scale planar/wedge daylighting is acceptable and can be
managed during pit mining operations. Regular bench scaling and ravelling clean-up should be
implemented to control the potential rockfall hazard and a geotechnical instrumentation system is
recommended to monitor pit wall performance during operations.
4.6.3 Site Geotechnical Investigations: Tailings Storage and Process Facility Areas
Bedrock consists primarily of crystal tuff, epiclastic sandstone and lithic volcanoclastic rocks of andesitic
composition, together with fine-grained andesite. This sequence is intruded by sub-volcanic porphyritic
andesite.
The basement is covered by Quaternary aeolian deposits over the majority of the site, with alluvial
materials in valley bottoms, such as in the TSF area. Site investigations indicate that the cover material
is loose to medium dense aeolian sand, between 0.5 m and 4 m thick.
Beneath the aeolian sand there is a thin layer of poor quality and heavily weathered rock with a lower
RMR value of approximately 29. Below this layer there is fair to good quality rock (RMR value between
45 and 55) extending to depths greater than 700 m below surface.
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In the TSF area, the aeolian sands are underlain by dense alluvial sand and gravel deposits with
thicknesses of as much as 65 m observed in the investigation drill holes. Underlying this is a
conglomeratic sandstone in the order of 15 m thick, overlying basement rocks.
The plant site area is founded on fair to good quality bedrock (average RMR of 51). The thin overlying
aeolian sands and any poor quality rock will be removed to reach the foundation level.
4.6.4 Borrow Materials
Source areas for suitable borrow materials to be used during the construction have been located. An
approximate volume of 1 295 000 m3 of common fill material is estimated to be contained in two
quarries adjacent to the plant site.
Approximately 933 000 m3 of fine grained construction materials have been identified in the two
quarries and the Chauchilla fine material quarry. While more distant from the construction area, the
Chaucilla quarry is expected to provide a source of suitable clay-fraction material for blending to
achieve required plasticity, permeability and particle size.
Non-PAG waste rock from the Magnetite Manto Pit has been confirmed to be suitable for construction
of the tailings dam. However, Marcobre intends to conduct studies to confirm that waste rock available
early from the Main Pit will also be suitable for construction of the tailings dam, since production from
Magnetite Manto pit is not scheduled to start in time for construction of the starter dam.
4.6.5 Groundwater
Results obtained from a vibrating wire piezometer in the Main pit area indicate that the phreatic level
(depth to ground water) is 470 m deep (312 masl). The water level is approximately 90 m below the
base of the final pit, consequently, the pit will be developed under dry conditions.
4.6.6 Site Stability
The slopes, hills and low mountains in the area display stable conditions, and there is no risk of flash
floods, landslides or other mass displacement phenomena.
4.6.7 Seismic Risk Analysis
The site is prone to seismic activity that is largely associated with the subduction of the Nazca plate
beneath the Continental plate just off the west coast of Peru. Based on a seismic hazard study, the
area is subject to high intensity seismic events capable of causing serious damage.
Both deterministic and probabilistic analyses were carried out. The deterministic analysis defined the
potential source zones, types and properties of earthquakes that could be experienced at the site,
based on its seismic setting, and included defining the potential Maximum Credible Earthquakes
(MCEs) that the site could experience. The probabilistic analysis produced a statistical relationship
between peak ground acceleration (PGA) and return period for earthquakes that the site could be
expected to experience based on the recorded seismic history.
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The deterministic analysis identified the maximum event as a magnitude Mw 8.0 upper intraplate
subduction earthquake, producing a mean plus one standard deviation PGA at the site of 0.48 g.
The probabilistic analysis gave PGAs at the site, in the free field, for selected return period events, as
shown in Table 4.12.
Table 4.12
Probabilistic Analysis: Peak Ground Acceleration in Rock
1
Average Return Period PGA
Site Comments
(Years) (g)
50 0.15
100 0.20
475 0.36 10% prob. of exceedance in 50 years.
Mina Justa 1000 0.44
2475 0.58 2% prob. of exceedance in 50 years.
5000 0.70
10000 0.84
(1)
PGAs associated with 63% probability of exceedance minus the representative of the case where the design life in
years equals the return period.
Appropriate seismic coefficient values were determined for each mine facility according to the risk,
flexibility, and life of the corresponding structure.
4.7 MINING
4.7.1 Introduction
The Mina Justa and Magnetite Manto deposits are located at low altitude in an arid area of moderate
topography. Rock strengths are low to moderate. There is no groundwater and insignificant rainfall.
These factors suggest that open pit mining should be routine and low cost. Negative aspects include
the relatively low grade of the Oxide mineralisation and the presence of barren dykes that are pervasive
throughout the mineralisation. In order to minimise dilution and mining losses, selective mining on 10 m
benches (5 m mining flitches) is specified using excavators configured as backhoes.
The bulk of mining is focussed in the Mina Justa deposit which includes Oxide (vat leach feed) and
deeper Sulphide (concentrator feed) mineralisation. Oxide ore is also mined from the Magnetite Manto
pit. Oxide ore is hauled to the vat feed crusher and the long term Oxide stockpiles. Sulphide ore is
hauled to a separate concentrator crusher. The majority of waste is hauled to the main waste dump,
with other destinations including the Magnetite Manto waste dump, the concentrator tailings dam
embankment, the ROM stockpile area and the ripios disposal containment structure.
Figure 4.15 displays the general mining site plan including final pits, waste dumps, stockpiles, ripios
dump and tailings dam.
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Figure 4.15
Final Pit and Dump Layout Plan
APPENDIX V
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Mine planning activities performed during the course of the study included:
x Pit optimisation
x Pit and dump designs
x Mineral reserve estimation
x Mine and process scheduling
x Mine fleet assessment
x Mine operating and capital cost estimation.
4.7.2 Pit Optimisation
The resource model prepared by Snowden was based on 25 m x 25 m x 5 m parent block size with
smaller sub-cells. Several regularised mining models were prepared to investigate the impact of block
size on dilution and mining losses relative to the in-situ resource model, and a block size of 10 m x
10 m x 5 m was selected as the basis for mine planning.
Pit optimisation of the mining model (Indicated mineralisation only) was carried out using Whittle Four-X
software. Optimisation input parameters were based on information available at the start of the study,
including overall slope input (41° to 44°) from Knight Piésold and a copper price of $1.65/lb. Revenue
was received from both Vat and Concentrator ore streams. The optimisation was constrained to prevent
mining on the adjacent Shougang property. A number of different analysis scenarios and sensitivities
were produced and shells were selected to form the basis for the ultimate and staged pit designs.
4.7.3 Pit and Dump Design
Ultimate and staged pit designs were created from the selected optimisation shells incorporating access
ramps. Access was generally by a single ramp of 30 m width at a maximum design grade of 10%.
Ramps were narrowed to one-way at depth in the pits to minimise associated waste. There are 4
discrete pits, of which 2 are developed in stages to defer waste stripping and improve ore presentation.
Pit slope geotechnical investigations were carried out by Knight Piésold. Pit design sectors were
established to group areas of the proposed pits with similar geometric, geological and rock mass quality
characteristics. Stability analysis results indicate that a bench face angle of 65° to 70° is expected to be
achievable. A 20 m high double benching configuration is recommended for pit development.
Recommended inter-ramp slope angles range from 45° to 50° depending on the design sector.
Pit inventories are summarised in Table 4.13, and ultimate pit designs are illustrated in Figure 4.16.
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Table 4.13
Pit Inventory
Unit Main Pit Northern Copper 40 Magnetite Total
Oxide Manto
Vat Ore Mt 90.4 17.0 2.6 4.6 114.6
Concentrator Ore Mt 48.0 - 0.8 - 48.8
Waste Tonnes Mt 329.5 43.5 10.9 18.5 402.4
Total Material Mt 467.9 60.5 14.3 23.1 565.8
Strip Ratio t:t 2.38 2.56 3.23 3.96 2.46
Figure 4.16
Ultimate Pit Designs
It is estimated that the Project will generate approximately 402.5 Mt of waste rock, of which 383 Mt will
be placed in the Main waste dump, 14 Mt in the Magnetite Manto waste dump and the remaining 5.5 Mt
(non-PAG material) will be used for construction of the tailings dam.
The main waste dump is located northeast of the main pit and also serves as the containment structure
for ripios storage. The ripios will be surrounded by mine waste rock to maintain adequate physical
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stability of the material. The ripios dump has a capacity of approximately 114 Mt and will contain the
waste product from the vat leaching process.
A separate dump is provided for Magnetite Manto pit waste, some of which may be used for tailing dam
embankment construction. Some mine waste will be directed to enlarge the ROM pad to provide a
suitable configuration for dumping, storage and rehandle of crusher feed. Some opportunistic backfill of
waste into the Northern oxide pit may be feasible near the end of the mine life.
Current estimates are that 15 Mt of mine waste will be classified as PAG. This material will be placed
within designated areas within the main waste dump, but in areas well removed from the ripios and final
outer faces. It will be surrounded by non-PAG waste and at closure it will be covered by non-PAG
waste.
A large long term stockpile is also allowed for excess, lower grade vat feed that accumulates during the
early years of mining.
Waste storage areas and stockpiles are illustrated in Figure 4.17.
Figure 4.17
Waste Storage Areas and Stockpiles
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4.7.4 Mineral (Ore) Reserve
The Mina Justa Mineral Reserve is that portion of the Indicated Resource that is contained within the
ultimate pits and has recoverable metal values that allow economic treatment (Table 4.14). The
Mineral Reserve is classified as Probable Mineral Reserve.
The Mineral Reserve was determined by AMEC Minproc as of June 2009, as part of the DFS. The
Mineral Reserve is based on the most recent resource model, which was developed by Snowden in
October 2008, and reviewed by AMEC Minproc as part of this technical report. No mining has occurred
subsequently to deplete the Mineral Reserve.
Table 4.14
Mina Justa Probable Mineral Reserve (1), (2), (3)
Tonnes CuT CuSS Ag
Classification
(Mt) (%) (%) (ppm)
Vat Feed 114.6 0.56 0.46 -
Concentrator Feed 48.8 1.37 - 14.1
Total 163.4 0.80 - -
(1) Reported according to NI 43-101 reporting guidelines, QP is Ross Oliver, an employee of AMEC Minproc.
(2) No Measured resource so no Proved Mineral Reserve.
(3) Mineral Reserve cut-off is based on an NSR (Net Smelter Return) calculation and a copper price of $1.65/lb.
4.7.5 Mine and Process Schedules
Bench reporting of reserve information was performed for the pit stages and imported into a purpose-
built mine scheduling spreadsheet. A range of mining rates and vat leach cathode production profiles
was investigated. A final mining rate of 60 Mt/a was adopted as a sustainable rate that could bring
forward the mining and treatment of higher grade concentrator feed and also sustain a cathode
production rate of 52 000 t/a of copper.
Mine and process scheduling was carried out on a monthly basis for the pre-strip (Yr-1) and first year of
production, quarterly for Year 2 through Year 5 and annually thereafter. The quarterly resolution was
necessary to ensure ore availability for the deferred concentrator start.
Figure 4.18 illustrates the mining production rate by pit stage over the mine life. The majority of mining
is associated with developing and sustaining the presentation of the deeper sulphides from the
Mina Justa Main Pit stages. Figure 4.19 shows the material types mined.
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Figure 4.18
Total Mining Tonnage by Pit Stage (Mt)
Figure 4.19
Ore Mining Tonnage by Material Type (Mt)
Table 4.15 shows the annual mining and processing production schedule.
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Table 4.15
Annual Production Schedule: Mining and Processing
Mining Total Yr-1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12
Vat Ore (kts) 114 602 4 640 14 791 20 568 8 977 8 866 14 836 12 811 8 158 10 059 8 762 2 134
APPENDIX V
Cu (%) 0.56% 0.44% 0.47% 0.54% 0.57% 0.57% 0.58% 0.54% 0.71% 0.60% 0.69% 0.47% 0.00%
CuSS (%) 0.46% 0.37% 0.40% 0.42% 0.44% 0.46% 0.47% 0.39% 0.58% 0.51% 0.62% 0.36% 0.00%
Float Ore (kts) 48 794 2 380 5 055 5 059 4 670 5 301 5 043 5 005 5 014 5 081 6 183
Cu (%) 1.37% 1.17% 1.43% 1.33% 2.79% 1.19% 1.04% 1.01% 1.07% 1.09% 1.53%
Au (g/t) 0.029 0.016 0.016 0.020 0.037 0.026 0.022 0.021 0.033 0.044 0.048
Ag (g/t) 14.1 8.8 12.2 11.8 32.0 12.9 10.7 11.7 10.8 9.6 18.2
Total Ore (kts) 163 396 4 640 14 791 22 948 14 032 13 925 19 506 18 112 13 201 15 064 13 776 7 216 6 183
Waste (kts) 402 363 27 942 44 972 37 251 46 446 46 550 40 724 42 330 47 157 45 038 14 442 7 544 1 968
Total Mining (kts) 565 759 32 582 59 763 60 199 60 478 60 475 60 231 60 442 60 358 60 102 28 219 14 760 8 151
Strip Ratio 2.46 6.02 3.04 1.62 3.31 3.34 2.09 2.34 3.57 2.99 1.05 1.05 0.32
Closing Stockpiles
HG Vat Feed (kts) 1 180 147 1 651 1 406 825 795 2 223
MG Vat Feed (kts) 1 940 4 101 4 950 2 383
LG Vat Feed (kts) 1 520 5 934 12 150 13 344 12 593 14 024 16 241 11 574 9 663 4 998
Float Ore (kts) 461 515 574 243 544 587 592 606 687 1 871
Total (kts) 4 640 10 183 19 212 16 241 13 167 15 673 16 785 12 986 11 050 7 827 687 1 871
Processing
Vat Ore (kts) 114 602 9 248 12 000 12 001 12 000 12 000 12 000 12 000 12 000 12 000 9 355
Cu (%) 0.56% 0.56% 0.61% 0.59% 0.53% 0.56% 0.61% 0.58% 0.56% 0.54% 0.48%
CuSS (%) 0.46% 0.47% 0.47% 0.47% 0.43% 0.47% 0.45% 0.46% 0.47% 0.47% 0.39%
— V-140 —
CuRec (%) 0.42% 0.43% 0.43% 0.43% 0.39% 0.43% 0.42% 0.43% 0.43% 0.43% 0.36%
Acid (kg/t) 40.66 40.15 40.32 40.39 41.10 40.49 40.67 40.91 40.39 40.48 41.89
Cu Recovery (%) 74.5% 78.1% 71.5% 72.2% 73.4% 76.2% 68.8% 75.2% 77.4% 79.7% 74.0%
Cu in Cathode (t) 481 596 40 100 51 999 51 513 46 867 51 601 50 157 52 010 51 997 52 056 33 295
Float Ore Feed (kts) 48 794 1 919 5 001 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 1 871
Cu (%) 1.37% 1.23% 1.43% 1.33% 2.57% 1.31% 1.04% 1.01% 1.07% 1.10% 1.73% 0.73%
Au (g/t) 0.029 0.016 0.016 0.020 0.035 0.028 0.022 0.021 0.033 0.044 0.055 0.018
Ag (g/t) 14.1 9.3 12.3 11.9 28.9 14.1 10.7 11.7 10.8 9.7 20.8 8.9
Cu rec to Con (%) 93.0% 90.1% 91.9% 92.5% 95.3% 92.9% 91.8% 91.5% 92.6% 92.3% 95.0% 87.8%
Au Rec to Con (%) 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Ag Rec to Con (%) 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Concentrate (dry t) 1 643 741 56 279 164 301 144 397 291 496 176 948 126 276 125 066 150 083 151 018 224 479 33 399
Cu Con Grade (%) 37.8% 37.7% 40.1% 42.7% 42.1% 34.5% 38.0% 37.1% 33.0% 33.7% 36.7% 35.9%
Au Con Grade (g/t) 0.70 0.44 0.39 0.56 0.48 0.63 0.70 0.67 0.88 1.17 0.98 0.81
Ag Con Grade (g/t) 335 255 299 329 397 319 340 375 288 256 370 399
Cu in Con (t) 621 373 21 192 65 867 61 618 122 596 61 053 47 945 46 431 49 528 50 834 82 319 11 989
Au in Con (ozs) 36 978 792 2 082 2 608 4 516 3 565 2 850 2 679 4 261 5 700 7 057 867
Ag in Con (kozs) 17 725 461 1 579 1 528 3 718 1 817 1 381 1 508 1 391 1 244 2 669 429
Total Copper (t) 1 102 969 40 100 73 191 117 379 108 485 174 198 111 210 99 955 98 428 101 584 84 129 82 319 11 989

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Annual Vat and Concentrator ore processing feed rates are shown in Figure 4.20 and long term ore
stockpile inventories are illustrated in Figure 4.21.
Figure 4.20
Vat and Float Ore Processing (Mt)
Figure 4.21
Long Term Stockpile Inventories (Mt)
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4.7.6 Mine Fleet Assessment
In order to minimise dilution and mining losses, and maximise the mined ore grade, a selective
approach to mining is required, mandating the use of the most selective, large scale, digging unit, the
backhoe excavator. Relative to a FEL or face shovel, the backhoe configuration allows tight control of
digging boundaries both in plan and elevation.
The selected bench height is 10 m to allow 2 nominal 5 m flitches to be mined by the backhoe. After
considering blast heave, the actual flitch height dug by the backhoe will average about 6 m. Backhoes
in the 20 m3 class can operate productively with this bench height. The selected excavator has a
production rate that is a good match for the peak throughput rates of the Vat circuit primary crusher.
A large FEL has been specified to serve the following functions:

x Provide production loading back-up in the pit when a primary excavator is unavailable
x Provide truck loading for rehandle of long term vat feed stockpiles
x Rehandle (by tramming) from short term operational stockpiles located on the ROM pad.
In order to keep operating costs low, 228 t class haul trucks and support equipment have been
selected. Crawler-mounted diesel drills capable of single pass drilling have been selected for
productivity and operational flexibility.
Fleet sizing for loading, hauling and drilling was based on unit productivity estimates from vendor and
benchmark data, plus detailed analysis of haulage profiles to estimate haul truck productivity.
A computerised dispatch system is required in order to monitor equipment, provide production statistics
and provide the information to measure and improve fleet productivity.
4.7.7 Mine Operating Cost
The mine equipment will be owned and operated by the Owner team with support in some key areas by
specialist contractors. Peru has many long term mines and trained operational and maintenance
personnel with experience in the class of mining equipment specified for the project.
Specialist support will include:

x Down-the-hole explosive supply
x Vendor preventative maintenance services for major equipment, inclusive of labour, site support
and consignment stock
x Diesel supply, storage and dispensing services.
Explosive supply will be by a local vendor providing a down-the-hole service. Since the conditions are
dry, ANFO has been specified as the sole explosive. After assessment of rock properties, powder
factors of 0.20 kg/t in waste and 0.24 kg/t in ore have been adopted.
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Key operating cost drivers are summarised in Table 4.16.
Table 4.16
Key Operating Cost Assumptions
Item Value Unit Comment
1
Diesel 0.636 $/litre includes storage & dispensing
1
AN explosive 540 $/t Dry, 100% ANFO used
3
Powder factor - ore 0.24 kg/m
3
Powder factor - waste 0.20 kg/m
Truck tyre life 5 000 hrs
1
costs supplied 1Q, 2009
The proposed major equipment fleet make-up is summarised in Table 4.17, together with key
equipment assumptions used to build up the operating cost estimate. While specific equipment models
have been used to build up the estimate, actual fleet configuration would be subject to a further
tendering and evaluation process to establish the most cost-effective mining solution. Costs were
supplied by vendors between February and July 2009.
Table 4.17
Equipment Fleet and Hourly Costs
Type Equipment Fleet Operating Operating Purchase Expected
Class Units Hours Costs Price Life
h/yr US$/h (US$ M) (h)
3
Excavator 20 m 3 6 701 $435 $5.55 60 000
Dump Truck 228 t 23 6 701 $219 $3.65 65 000
3
FEL 20 m 1 5 585 $280 $4.67 50 000
Track Dozer 433 kW 4 5 046 $105 $1.22 30 000
Wheel Dozer 372 kW 1 4 840 $89 $1.01 50 000
Grader 221 kW 3 5 606 $64 $0.82 40 000
Water Truck 45 kl 2 3 723 $91 $1.11 60 000
Production Drill 229 mm 4 4 906 $44 $1.61 50 000
Figure 4.22 illustrates the mining operating unit cost with time, showing the major operating cost
components. Mining costs are inclusive of all material handling from stockpiles, and the transport and
placement of ripios on the dump.
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Figure 4.22
Operating Costs per Tonne by Time (US$/t)
The average mine operating cost for life of the mine is $1.14/t mined as of IQ09. Costs in the earlier
years are lower, but increase in later years as haul distances increase and the total tonnage mined
decreases.
4.7.8 Mine Capital Cost
The total mine capital cost (including replacement, rebuilds and sustaining capital) has been estimated
at $138 M as detailed in Table 4.18. This cost does not include capitalisation of mining costs in the
construction period. Costs were supplied in the period February-July 2009; no escalation has been
applied.
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APPENDIX V
Table 4.18
Mine Initial and Sustaining Capital Costs: Bare Costs ($M)
Mining Capital
Mine Area Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Total
-1 1 2 3 4 5 6 7 8 9 10 11
Loading 21.78 21.78
Hauling 65.68 10.95 76.63
Drill and Blast 6.45 6.45
Support 8.53 2.04 10.57
Other 7.20 0.52 7.72
Total Mine Capital 109.64 13.51 - - - - - - - - - - 123.15
Mining Sustaining Capital
Mine Area Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Total
— V-145 —
-1 1 2 3 4 5 6 7 8 9 10 11
Loading -
Hauling 3.64 0.45 0.45 3.64 0.45 8.63
Drill and Blast -
Support 3.65 1.23 4.88
Other 0.09 0.03 0.45 0.09 0.62 0.20 0.15 0.04 1.66
Total Sustaining 0.00 3.73 0.48 0.45 0.45 7.38 1.07 1.43 - 0.15 - 0.04 15.17
Capital
Total Mine Capital 109.64 17.24 0.48 0.45 0.45 7.38 1.07 1.43 - 0.15 - 0.04 138.32
Note: costs received between February and July 2009, and have not been escalated

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4.8 METALLURGY
Metallurgical testwork has been completed on representative subsamples of the Mina Justa and
Magnetite Manto ore to determine the processing requirements.
4.8.1 Oxide Ore
Testwork was initially conducted by Metso Minerals on four samples of Mina Justa Oxide ore. These
test results generated a Macon crushability result of 28%, indicating that the oxide ore is competent and
difficult to crush.
A comprehensive testwork program was completed on 21 samples representing the main Oxide ore
types at varing depths and locations within the deposits. The crushing testwork program was
conducted at Phillips Enterprises LLC (Phillips) in Colorado, USA, and at the Ammtec Limited (Ammtec)
facility in Perth, Western Australia. The Ammtec testwork and results were selected for detailed
analysis and generation of the Bond crushing work index (CWi) design values, while the Phillips
testwork results were used to further investigate trends generated from the Ammtec results.
No significant differences were noted in the CWi results for different depths or geographic locations.
The Ammtec results tended to show similar results between the andesite and sedimentary lithologies,
although amygdaloidal andesite material appeared to be marginally more competent. By contrast, the
Phillips testwork indicated that the sedimentary material may be slightly more difficult to crush.
The CWi results obtained show a large range of results between specimens within each sample tested.
Greater competency occurred for these samples with minimal inherent fractures. As the material is
crushed finer (and the rock fractures are removed), the competency of the ore is expected to increase.
This trend has been used in the selection of CWi values for the design criteria; a Bond CWi of 10 kWh/t
has been selected for the primary, secondary and tertiary crushing stages, increasing to 16 kWh/t for
the quaternary stage.
UCS testwork was undertaken by Advanced Terra Testing Inc (under the direction of Phillips). The
overall dataset showed an average UCS value of 48.2 MPa, and a maximum UCS value of 130.2 MPa.
The results of Bond abrasion index tests conducted by Phillips showed that the sedimentary material is
less abrasive, with an average abrasion index of 0.13. Andesite has an abrasion index of 0.22,
increasing to 0.24 for amygdaloidal andesite. Limited crushing data was obtained for the Magnetite
Manto deposit, which showed a large variation in results (0.08 to 0.32) for the different lithology types
tested. On average, the Mina Justa deposits are expected to be moderately abrasive with an abrasion
index value of 0.19.
Based on the parameters generated during the comminution testwork program, modelling of potential
crushing circuits was undertaken. Several flow sheet options were modelled including 3 and 4 stages
of crushing, open and closed circuit secondary crushing, crushed ore stockpile options and various
equipment configurations. The optimal circuit design from the modelling was determined to be a
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quaternary crushing circuit, with the secondary stage in open circuit, and the tertiary and quaternary
stages in closed circuit.
4.8.1.2 Leach Testwork
Testwork on the Oxide material commenced with bottle roll leaching, moved to individual column tests,
and finally evolved into an integrated pilot program run continuously in locked cycle. Pilot testing was
followed by an on-going program of variability testing on material from various areas of the proposed
Mina Justa and Magnetite Manto open pits.
%RWWOHUROOWHVWLQJFRPPHQFHGSULRUWR0DUFREUH¶VDFTXLVLWLRQRIWKHSURMHFW,QWKH0DUFREUHWHVWVWKH
principal variables were crush size (1 mm to 25 mm), acid level (pH 1.2 to 2.5) and lithology (andesite
or sedimentary). Both the Rio Tinto and Marcobre results demonstrated that the Mina Justa Oxide ore
is inherently leachable, although recovery generally decline as the crush size or pH increase. Both
andesite and sedimentary material achieved 100% extraction of the acid soluble copper (CuSS) at fine
crush sizes (1 mm and 3 mm top size) and high acid levels (pH <1.5). Recovery from the andesite was
found to be more sensitive to both crush size and pH than the sedimentary rock. Acid consumption by
the andesite was also more sensitive to these variables than it was for the sedimentary material.
Ancillary bottle roll tests suggested that a high chloride level would minimise acid consumption, but
retard copper extraction.
A column testing program followed, based on the results of the bottle roll tests. Initially, the main focus
was on identifying the design parameters for some type of heap leach operation. Testing started with
12 trials on the same andesite composite used in bottle roll tests. Variables included crush size, acid
cure dosage, irrigation rate, acid concentration in the leach solution, and test duration. However, the
results were somewhat discouraging; high recoveries could be achieved (>90%), but long leach cycles
(3 to 5 months) and high acid levels were needed. The resulting gangue acid consumption (GAC)
approached 100 kg/t, with specific consumptions of 11 kg to 20 kg acid/kg Cu. The runs with the lowest
specific acid consumption (7 kg acid/kg Cu) only achieved recoveries of about 70%, with GAC levels
just below 50 kg/t.
Results were no better for columns charged with sedimentary material. In general, recoveries were
lower, while the GAC levels were higher. The problem proved to be one of relative kinetics. The initial
copper leach rate was fast, with about half the total recovery occurring in the first 10 days. After that the
leach rate slowed dramatically, typically taking another 3 or 4 months for the recovery to double. The
rate of acid consumption behaved quite differently, rising linearly with time over the entire leach cycle.
Thus after 10 days, recovery was reasonably good and acid consumption was still very low. However,
after another 3 to 4 months of leaching, Cu extraction doubled, but GAC increased by a factor of 14 or
15 times.
One set of tests showed that increasing the irrigation rate improved copper recovery but did not
increase acid consumption. This observation and the kinetic factors led to a key series of experiments,
in which flows were increased in stages from 10 to 40 L/h.m2. At the same time, the acid concentration
in the leach solution was decreased proportionately so that after 55 days of leaching, each test received
the same total quantity of acid. The results were quite dramatic. Recovery increased as the flow rate
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increased. At the same time the total acid consumption, GAC and specific acid consumption all
declined progressively as the flow increased and the acid concentration decreased.
These results led to the conclusion that vat leaching with its high flow rate, short cycle time and good
wash efficiency might be the most effective process route for the Mina Justa Oxide material. Therefore,
a vat testwork program was developed, starting with a series of batch trials, which generally confirmed:
x That the pH needed to be below 1.5 to get effective leaching.
x Recovery generally increased as the crush size decreased. Although most head samples showed
significant upgrading in the finer fractions, the residue assays showed no such effect. Thus, the
fines leached better than the coarser material.
x The GAC values in kg/t tended to increase with finer crushing, but the specific acid consumption
(kg acid/kg Cu) actually declined in many cases.
These results suggested that operating on a 6 day leach cycle with material crushed to between
6.0 mm and 9.5 mm would provide an optimum vat process.
In order to determine the range of leach behaviour that might occur in operations, 40 composites were
tested under identical (but non-optimised) conditions. Recovery based on total copper (CuT) analyses
averaged 58%, with a range of 13% to 84%. When samples containing less than 0.3% Cu (the
expected cut-off grade) were deleted from the database, the average recovery increased to 62.5% of
CuT (equivalent to 75% of the acid soluble copper). The average GAC level was 44 kg/t, but ranged
from 19 kg/t to 139 kg/t.
Positive results in the batch vat tests led to testing in an integrated vat pilot plant operating continuously
in locked cycle. Phase 1 tests utilised four composites; low-grade and mid-grade samples from the
Mina Justa deposit and mid-grade and high-grade samples from Magnetite Manto. During this phase,
some problems with acid control and copper stripping from the pregnant leach solution were
experienced. In spite of these, the Phase 1 results showed that crushing to 6 mm or 8 mm gave the
same recovery and the same residue assays. However, 9.5 mm crush size was shown to be too
coarse, leading to a drop in recovery. The results also showed that acid cure dosages of 10 kg/t to
20 kg/t had minimal effects on the leach performance. Over this range both extraction and GAC values
were actually highest at the lowest cure dosage.
At the end of Phase 1 testing, samples of the final leach solutions from each ore type were sent to the
solvent extraction reagent vendors for compatibility studies. The results were positive, with no copper
transfer or phase disengagement problems noted.
After resolving operational problems (acid control and copper stripping), a second pilot plant campaign
(Phase 2) was conducted. All Phase 2 testing was done using the optimal process conditions
established in the Phase 1 tests. The 37 Phase 2 samples were selected to provide a variability
program that was intended to demonstrate the effects of changes in head grade, mineralogy, lithology,
geographic location, depth in the deposit and blends based on the then-current mine plan.
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The results indicated that while copper extraction is undoubtedly influenced by the various deposit
parameters, the key relationship is between recovery and head grade. Regression analysis showed
that the grade-recovery relationship has the following form:
Recovery of CuT (%) = (86.5 + 9.3 x CuSS) x (CuSS/CuT)
Maximum copper recovery is capped at 95% of CuT, to prevent the projection of 100% extraction from
high grade ore.
The other important numerical expression required for such activities as mine planning and financial
analysis is the relationship between head grade and acid consumption. Here, regression analysis
showed that total acid consumption was independent of the head grade, indicating that total acid
consumption is primarily dependent on gangue characteristics. Regression analysis demonstrated that
GAC was related to head grade, but that the relationship was negative (GAC declined as the grade
increased). This was caused by the increased acid credit from higher grade material. Initially, a simple
linear correlation was established for the relationship. However, further evaluation showed that an
exponential expression fits the data better and has a higher correlation coefficient. Both are strictly
empirical fits of the data. Numerically, the exponential relationship is expressed as follows:
GAC (kg/t) = 50.07e(-0.47 x CuSS)
Other design parameters determined in conjunction with the Phase 2 tests included:
x Total suspended solids (TSS) in the vat overflow
x Clarification tests on the PLS to provide the design basis for the PLS clarifier
x Viscosity of the leach solution averaged 1.5 cP, but increased gradually during the tests and ended
at 1.8 cP
x Final moisture in the leach residues ranged from 9.0% to 16.4%, with an average of 11%
x Void space in the ore bed, which decreased from 42% to 37.5% during the 6 day leach cycle.
Once pilot testing was complete and the results evaluated, a follow-up variability testwork program was
initiated. This involved testing of more than 200 samples from various locations in both Mina Justa and
Magnetite Manto. One of the objectives was to characterise material so that the results could be used
in the block modelling work. Another was to develop a procedure that would provide a fast, simple test
that could be used on blast hole material to estimate its leach behavior. A large-scale bottle roll
procedure was adopted for the tests. Unfortunately, when applied to the 200 samples, the results did
not replicate those obtained in the pilot tests. Both the recoveries and acid consumption in the
variability tests were higher than expected. In fact, recoveries for the transition ore (<80% acid soluble)
actually exceeded the acid soluble content of the samples. Additional testwork has been undertaken to
resolve the differences and improve the variability test procedure. However, it appears that further work
may be necessary to develop a viable procedure to support grade control and ore material type
classification.
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4.8.1.3 Solvent Extraction Testwork
SX testwork and modelling was conducted by Cognis Corporation in Chile, with additional modelling by
Cytec Limited in Peru based on analysis of the PLS solutions. Data was derived primarily from
operation of the Phase 2 vat leaching pilot plant. A number of circuit configurations were considered
during the testwork and modelling phases to determine the optimum SX circuit for the project.
Samples were sent to the Cognis laboratory in Chile for batch scale solvent extraction testing. These
samples were used to generate McCabe Thiele isotherms for reagents LIX973N and LIX612N-LV at
concentrations of between 20% v/v and 28% v/v.
Modelling of the solvent extraction process by Cognis demonstrated that the required mass transfer of
copper could be achieved from a number of circuit configurations, including series parallel, optimum
series parallel, series and dual SX trains in a series configuration. From a review of the possible
configurations and assessment of the capital and operating cost implications, the 2E+1S+1W (ie,
2 extraction stages, 1 stripping stage, and 1 washing stage) was selected as the preferred circuit
configuration.
Cognis conducted further modelling using the selected 2E+1S+1W circuit at a copper tenor of 8 g/L and
revised pH of 1.9. These simulations were run using both LIX973N and LIX84-l as each offers
performance benefits at the increased pH of 1.9. The modelling was conducted at several extractant
concentrations and organic to aqueous ratios. The modelling showed that the LIX84-l reagent was
superior to the LIX973N.
Samples were also sent to Cytec in Peru where they were analysed at independent laboratories. The
analyses showed high chloride levels of up to 6 g/L which have been taken into account in subsequent
design work. Cytec conducted a comparison of two potential circuit configurations, namely 2E+2S and
2E+1S. The simulations also included the impact of varying pH levels and extractant concentrations.
The results obtained confirmed that acceptable copper recoveries can be achieved by both circuits.
The 2E+2S circuit would require a lower extractant concentration to achieve the same recovery as the
2E+1S circuit, however, an additional stage of mixer/settlers would be required. Ultimately, once
relative capital and operating cost were taken into account, a 2E+1S+1W circuit configuration was
selected.
An extraction of 94% of the soluble copper in the PLS stream is expected to be recovered through the
2E+1S+1W circuit, based on a PLS stream containing 8 g/L copper at a pH of 1.9. An extractant
concentration of 25% v/v is required for effective extraction of the soluble copper. Stripping of the
copper from the extractant is carried out using an electrolyte solution containing 35 g/L copper and
180 g/L sulphuric acid. These electrolyte parameters are relatively standard for copper SX systems in
plants world-wide.
Full ICP scans of the PLS solution from the Phase 2 vat leaching testwork program show several
impurities which need to be considered in the design of the SX circuit. These impurities include iron,
manganese, silicon (colloidal silica) and chlorides. Mitigation measures include a wash mixer/settler
and coalescer tank to remove aqueous entrainment carrying iron, manganese and chloride. Equipment
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for treating the organic stream with activated clay to mitigate the effects of colloidal silica has been
included in the crud treatment area of the SX plant.
4.8.2 Sulphide Ore
Several testwork campaigns were completed during the PFS evaluation of the Mina Justa Sulphide
deposit. The sample collection and testwork was directed by Transmin Metallurgical Consultants in
Lima (Transmin).
Comminution testwork was conducted on selected sample intervals to represent Transitional (Mixed),
Primary (Cpy), and Secondary (Bn-Cc) ore types. The initial testwork campaign was conducted at SGS
Lakefield Research in Chile during 2006, and was limited to Bond abrasion, rod mill, and ball mill work
index tests. The testwork results obtained indicated that all three samples tested were of moderate
grindability and abrasiveness.
The second comminution testwork campaign was conducted in 2008 at SGS Lakefield Research in
Chile, and by JKTech in Australia. With the exception of a more elevated primary sulphide abrasion
index, the results for the Transitional, Secondary and Primary Sulphide ores tested were similar to
those tested in Campaign 1, except that a Mixed sulphide ore sample returned relatively low rod mill
and ball mill indices.
The SMC test results showed a similar trend to that found with the Rod and Ball work indices. The
highest competency ore type was Transitional ore, which was classified as very hard, while the
Secondary sulphide sample displayed moderate to hard competency. The Primary and Mixed samples
tested have an average to soft classification.
A third testwork campaign was conducted in late 2008. The testwork, performed by Laboratorio Plenge
in Peru, included ball mill work index and SMC tests, with the results of the SMC tests evaluated by
JKTech in Australia. The Primary and Secondary sulphide ore samples were designated as very hard
to hard, except for Primary ore from the Cu40 zone which was classified as having average
competency. A weighted average Axb competency value of 32.0 was chosen for design. This
corresponds to an ore of high competency. The Axb results from the SMC tests ranged from a low
competency of 63.1 to a very high competency of 27.0. The BWi results returned by the Primary and
Secondary ores were higher than reported in Campaign 1, while results obtained for the Cu40 zone
samples indicated significant variability, ranging from moderate to low grindability. The design BWI
value was calculated as 22.1 kWh/t. This corresponds to an ore of hard grindability. Individual sample
BWI results ranged from 11.3 kWh/t to 26.7 kWh/t which is a very broad spectrum.
A targeted sample selection and comminution testing program is required to better define the sulphide
comminution properties for DFS purposes. This requires updated geometallurgical analysis of ore
types and mine concepts to ensure the samples selected are relevant to the early years of sulphide ore
treatment in particular.
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4.8.2.2 Flotation Testwork
Phase 1 Testwork
A diamond drill program in 2005 provided drill core for flotation testwork. Samples were identified as
Transitional, Secondary and Primary sulphide ore types.
During this testwork campaign, the impact of primary grind on recovery, flotation kinetics and
concentrate grades was assessed for the three main ore types. The trends showed that copper
recovery increased with the extent of grind. For the Transitional material, the highest bulk flotation
recovery of 92% was achieved at a grind size of P80 75 µm. The Secondary sulphide ore produced a
bulk flotation recovery of 98% at a grind of P80 75 µm, with recovery decreasing for the coarser grinds.
The P80 106 µm grind grade-recovery relationship was the most favourable, but was not significantly
better than 150 µm. For the Primary sulphide material the highest bulk flotation recovery of 98% was
achieved at a grind size of P80 75 µm, with recovery decreasing for grinds coarser than P80 106 µm. The
copper distribution by particle size in the flotation tailings indicated that some copper remained locked
with gangue in the coarser size fractions, with improved liberation observed at the finer grinds.
Bulk flotation tests showed that the copper minerals are readily recovered by flotation, but generally low
concentrate grades and high mass pulls were evident (Table 4.19).
Table 4.19
First Phase Bulk Flotation Testwork: Grade and Mass Pull
Ore Type Concentrate Grade Mass Pull
(Cu%) (%)
Transition 4.5 18
Secondary 11.5 30
Primary 3.8 26
A series of regrind tests were conducted on the Primary and Secondary rougher flotation concentrates
to determine the optimum regrind size. These tests showed an increase in copper concentrate grade
with increased degree of regrind. For the Secondary ore, regrinding rougher concentrate to P80 52 µm
resulted in the fastest recovery rates and highest terminal recovery rates, but with the lowest copper
grades. The P80 43 µm regrind and P80 37 µm regrind tests performed at pH11 produced similar
results. For the Primary ore, the most favourable concentrate grade, mass pull and recovery resulted
from a P80 43 µm concentrate regrind combined with a slurry pH of 12. A concentrate regrind of P 80
16 µm for the Transitional, P80 18 µm for the Secondary and P80 16 µm for the Primary sulphide
material was selected by Transmin for the locked cycle tests.
Cleaner flotation response to sodium cyanide addition was evaluated during this phase. The tests
showed a positive response to sodium cyanide, with improved concentrate grades and recoveries
noted. However, the tests were completed at high additions of sodium cyanide, and tests at lower
levels were not evaluated. Other depressants were also evaluated during this testwork, but no
significant benefits were noted from these alternatives.
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Locked cycle tests were performed on the Transitional, Primary, and Secondary ore composites to
determine the expected flotation performance and concentrate parameters. These tests were
conducted at a significantly finer regrind size (P80 16 µm to 18 µm) than the initial regrind tests. The
Transitional and Primary composites required two stages of cleaning to produce marketable
concentrate, a single stage was sufficient for the Secondary ore composite. Concentrates containing
25% copper or more were produced in all the locked cycle tests after two stages of cleaning. From
these tests, a circuit consisting of two cleaning stages, followed by a cleaner scavenger stage was
recommended to produce marketable flotation concentrate.
Phase 2 Testwork
Additional composite samples were assembled for a second phase of flotation testwork using drill cores
not previously used for testwork, in order to test the variability of the different ore types. Testwork
conducted during this second campaign was aimed at further exploring flash flotation, rougher flotation,
and cleaner flotation performance.
x Flash Flotation
Flash flotation tests were conducted with 67% solids slurry after grinding to a particle size P80 of
300 µm, with results as shown in Table 4.20. These indicate that flash flotation could be feasible,
but regrinding and cleaner flotation would be required at least for Primary ore, which forms the bulk
of the sulphide deposit.
Table 4.20
Flash Flotation Concentrate Performance
Ore Type Copper Recovery Copper Grade
(%) (%)
Secondary 79 30
Primary 88 11
x Bulk Flotation
Bulk flotation tests were performed to optimise the reagent scheme. A reagent scheme consisting
of promoter A-3477 (isobutyl dithiophosphate) with collector Z-11 (sodium isopropyl xanthate) was
evaluated at different dosage rates and also combined with sodium sulphide addition. A standard
primary grind of P80 150 µm was selected for all tests, with stage dosing of Aerofloat 3477
promoter prior to milling and 10 g/t xanthate collector before flotation. The addition of sulphidiser
did not result in significant grade improvement, but final recovery was negatively affected.
Promoter at an addition rate of 25 g/t produced a lower mass pull, higher copper grade and faster
recovery rates than the other levels tested.
Bulk flotation tests were conducted on the Secondary sulphide ore to optimise the slurry pH and to
review the impact of sodium sulphide addition. The tests showed an increase in recovery as the
pH was increased from 8.6 to 11. A slurry pH of 10 produced an acceptable recovery with the
lowest mass pull and highest copper grade. Sulphidiser addition resulted in some grade and
recovery improvements.
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Cleaner tests were conducted using rougher concentrates generated with promoter (A3477) and
collector (Z-11), with regrinding to P80 37 µm. The Primary ore type generated a 15% copper
concentrate after 4 minutes of flotation, whereas the Secondary ore type produced a 44% copper
concentrate.
Phase 3 Testwork
A third testwork campaign aimed at optimising regrind and cleaner flotation performance was
completed in early 2009. A series of tests were conducted on the Primary and Secondary sulphide
rougher flotation concentrates to determine the optimum circuit parameters. The composite samples
evaluated in this phase of testwork were similar to the second phase samples, although Primary ore
samples from the Cu40 zone were also included.
Regrind and cleaner tests excluding sodium cyanide dosing were conducted on Primary and Secondary
sulphide rougher flotation concentrates. The Primary ore results indicate that 25% copper concentrate
can be produced at particle size distribution P80 of 37 µm and 43 µm, without cyanide addition. Higher
copper concentrate grades were produced from Secondary ore samples at P80 of 49 µm and 57 µm,
again without cyanide addition. For both ore types, recoveries and concentrate grades improved
compared to earlier testwork.
Transmin selected P80 37 µm and P80 49 µm for the Primary and Secondary ore, respectively, as the
basis for the additional variability and locked cycle tests.
Variability batch flotation tests with three cleaning stages and locked cycle tests were performed on
similar composites. In general, lower bulk flotation mass pulls were observed in this campaign, when
compared to the first two testwork campaigns. A revised reagent scheme was utilised, with reduced
collector (Z11) and promoter (A3477) dosages. Concentrates containing 25% copper or more were
produced from the Transitional and Secondary ore samples in the locked cycle tests, after two stages of
cleaning. Both recovery and concentrate grade improved for the Secondary ore. The Primary ore tests
did not consistently produce 25% copper concentrate after two stages of cleaning, but sodium cyanide
was not added during the cleaning stages as had been the case during the first two campaigns. The
Primary ore concentrate grade was therefore lower than previously reported.
Higher overall recoveries were evident for the Primary samples, while the Transitional ore tests
returned lower recoveries.
Copper recovery and concentrate grade versus copper grade were plotted for locked cycle tests from
the second and third campaign to estimate basic correlations for a metallurgical model. However,
insufficient data was available to establish relationships, so the majority of the correlations were
constant values.
Precious metals recoveries of 80% are based on the average metal recovery observed from the trials.
The flotation parameters adopted for the PFS are shown in Table 4.21.
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Table 4.21
Predictive Metallurgy Summary
Recovery Concentrate Grade
Mineralisation Type Metal
(%) (% Cu)
Transitional (Oxide plus sulphide) Copper 85 32
Copper min of (5.3892Ln(CuT)+90.956)
Secondary (Bornite-Chalcocite) or 96 45
Primary (Chalcopyrite) Copper 94 23.5
Precious metals Gold 80 -
Silver 80 -
The metallurgical testwork was completed to PFS level and some fundamental assumptions of
metallurgical response of some ore types have been made for plant design, optimisation and metal
production.
The copper concentrate specifications summarised in Table 4.22 were prepared as follows:
x The concentrate grades are obtained from the projections detailed in Table 4.21
x The precious metals head grades and recoveries shown in Table 4.21 were used to calculate the
metals grades in each concentrate type
x The remaining elements were estimated based on locked cycle test concentrate analyses.
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Table 4.22
Copper Concentrate Specifications by Ore Type
Secondary
Primary (Chalcopyrite) Transition
(Bornite/Chalcocite)
Element Units
Operating Operating Operating
Range Range Range
Range Range Range
Cu % 19.1 - 33.2 23.5 39.6 - 50.0 45 30 - 50.9 32
Bi g/t 5 - 731 21 - 1 260 25 - 55
Fe % 31.1 - 38 12.1 - 20 11.4 - 14.5
Mo % 0.002 - 0.01 0.002 - 0.01 0.001 - 0.01
Pb % 0.02 - 0.84 0.01 - 0.03 0.01 - 0.03
S % 32.8 - 43.9 13.5 - 18.3 14.4 - 16.2
Si %
Insoluble % 1.2 - 4 9 - 17.1 10.9 - 16.2
Zn % 0.01 - 2.88 0.01 - 0.05 0.03 - 0.04
Ag g/t 62.7 - 199.5 151.8 333 - 705.3 422.0 320 - 592 326.2
Al % <0.01 - 0.15 0.19 - 0.65 0.36 - 0.55
As g/t 38.5 - 466 <5 - 145 31 - 148
Au g/t 0.3 - 3 1.00 0.5 - 0.6 0.54 0.4 - 2.2 0.49
Ba g/t 1 - 128 3 - 64 22 - 36
Be g/t <1 - 79 <1 - 56 <3 - 41
Ca % 0.05 - 0.28 0.36 - 0.98 0.49 - 1.2
Cd g/t <2 - 163 <2 <2
Cl g/t 100 - 190 100 - 190 100 - 190
Co g/t <1 000 - 3 009 <1 - 261 145
Cr g/t 4 - 353 22 - 120 31 - 195
F % <0.001 <0.001 <0.001
Hg g/t 5.4 0.8 6.7
K % <0.01 - 0.04 <0.01 - 0.05 0.04
La
Mg % 0.05 - 0.17 0.3 - 0.89 0.54 - 0.69
Mn % <0.01 - 0.05 0.03 - 0.11 0.04 - 0.14
Na % 0.01 - 0.04 0.01 - 0.06 0.01 - 0.05
Ni g/t <2 - 2 430 <2 - 193 19 - 169
P g/t 125 - 2 327 474 - 4 248 230 - 537
Sb % <0.0005 <0.0005 - 0.023 <0.0005 - 0.003
Se
Sn g/t <5 <5 <5
Te
U g/t <50 <50 <50
Y g/t <1 - 19 <1 - 7 3-8
The results indicate good concentrate quality with no analysed elements at penalty levels.
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4.8.2.3 Magnetite Testwork
The Mina Justa rougher/scavenger flotation tailings contain recoverable quantities of magnetite.
Magnetic separation laboratory test campaigns were performed to evaluate the feasibility of producing a
saleable magnetite concentrate.
The first testwork campaign was conducted at Laboratorio Plenge in Peru using the flotation tailings
from the initial flotation testwork campaign. Single pass and triple pass cleaner separation tests were
performed after bulk magnetic recovery. The iron grades in the magnetite concentrates were generally
below market specification for all three ore types. The levels of copper, sulphur, silica and alumina
obtained in the concentrates suggested that intermediate processing of the first-pass magnetic
concentrate is required to liberate locked magnetite and separate gangue.
The second round of magnetite testwork was performed at CIMM Chile using flotation tailings from the
second flotation testwork campaign. The testwork included both dry and wet magnetic separation on
five samples. Wet magnetic separation tests produced higher magnetite grades in the final
concentrates than the dry tests, but were still below typical market specifications. Rougher and first-
pass cleaning steps produced substantial grade improvements, but minimal grade improvements were
obtained from further cleaning stages. Metal recovery to the rougher concentrate improved with
increasing degree of regrind.
The third testwork campaign was aimed at confirming the conceptual magnetite recovery circuit derived
from preliminary testwork. The testwork, which was conducted by Transmin on five samples at the
Pontificia Universidad Catolica del Peru, further investigated the effect of regrinding, with the results
showing an increase in magnetite concentrate iron grade as the extent of regrinding increased.
The magnetite testwork completed during the campaigns confirmed that a high grade (63% iron)
magnetite concentrate can be generated from the Mina Justa flotation tailings with high magnetite
grades, provided intermediate processing (regrinding, slimes removal and finishing magnetic
separation) is undertaken.
4.8.2.4 Geochemical Characterisation of the Tailings
Knight Piésold performed geochemical characterisation testing to assess the acid generation and
neutralisation potential as well as the leachability and supernatant quality associated with samples of
flotation tailings from metallurgical pilot plant studies conducted by Transmin. The results, which were
used to formulate the tailings disposal strategy, were found to be dependant on the dominant sulphide
mineralisation of the ore, ie, bornite-chalcocite and chalcopyrite ores.
The test results showed that the cleaner scavenger tailings (CST), rougher scavenger tailings (RST)
and thus combined CST and RST tailings produced from bornite-chalcocite ore are likely to be non-acid
generating. However, the results also showed that CST and combined tailings from the chalcopyrite
ore are likely to be acid generating while the RST is likely to be non-acid generating.
Leachability and supernatant quality tests on the same samples indicated that many of trace elements
were below detection limits, or were not defined as potential COC by the relevant water quality
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guidelines. Manganese, molybdenum and nickel were found to be higher than the regulatory limits in at
least one of the RST supernatant samples from the chalcopyrite and bornite-chalcocite samples. The
CST supernatant from the chalcopyrite ore was found to have slightly elevated nickel, while supernatant
from bornite-chalcocite sample was found to have slightly elevated antimony.
The scenario for managing tailings in the TSF is to separately dispose of the CST and RST in dedicated
areas in a manner that the CST will be kept saturated to reduce its potential for oxidation and thus acid
generation. The CST will also be contained in a fully-lined portion of the TSF for seepage control,
which will also assist in keeping it saturated. The RST will be deposited in an adjacent but unlined area
of the TSF, for which air drying will be promoted to consolidate the deposits.
Leachate generation and seepage is expected to be low or negligible due to the strong evaporation
potential at the site, which will desiccate the RST and produce a regime of low and possibly negative
pore pressures in the deposit with little to no propensity for causing seepage. However, if any small
amounts of seepage do emerge from the base of the RST they are likely to be intermittent and will
either be retained in the geological units well above the groundwater (at a depth of over 400 m), or have
the trace elements attenuated to levels that will be highly unlikely to negatively impact the groundwater.
A preliminary seepage model showed that the potential seepage will reach a depth of 140 m after a
period of 15 years assuming an unlined facility and a constant supernatant pond.
In the next stage of design, detailed seepage analysis will be undertaken taking account of the mine
schedule and TSF configuration during different periods of the mine life.
4.9 PROCESS PLANT DESIGN
The processing plant for the Mina Justa Project is conceived as being built in two stages. The first
stage consists of the plant to treat Oxide ore to produce copper cathodes, and the second stage
consists of a plant to treat Sulphide ore to produce copper concentrates. Much of the infrastructure for
the two processing plants is common, which will reduce overall costs compared to comparable separate
facilities.
4.9.1 Oxide Ore Plant
The Mina Justa Project utilises sulphuric acid leaching of the Oxide ore to extract copper. The leached
copper is purified and upgraded by SX to provide a rich electrolyte to the EW plant, producing copper
cathodes. The feed to the leaching process is prepared by crushing and screening to achieve an 8 mm
product size.
The overall processing flow sheet for the Oxide ore is depicted in Figure 4.23 and the plant layout in
Figure 4.24.
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4.9.1.1 Crushing and Screening
The crushing circuit is designed to reduce 12 Mt/a (1712 t/h at an overall 80% availability) of oxide ore
to minus 8 mm prior to leaching. This is accomplished using a four stage crushing circuit consisting of:
x Primary Crushing and Stockpiling: ROM ore is delivered by 220 t mine haul trucks tipping directly
into the ROM bin. Ore that cannot be fed directly to the primary crusher (eg, due to maintenance
downtime) will be dumped on the adjacent ROM oxide ore stockpile, and later fed to the crusher by
FEL.
The primary crusher is a 54" x 75" gyratory crusher, treating an average of 2283 t/h, sufficient to
crush 12 Mt/a at 60% availability. A coarse ore stockpile with a live capcity of 12 hours provides
surge capacity between the primary and secondary crushing stages to account for mine trucking
cycles and maintenance requirements.
x Secondary, Tertiary, and Quaternary Crushing: The coarse ore reports to a 12' x 27' scalping
screen prior to secondary crushing by means of a 750 kW cone crusher operating in open circuit.
Tertiary screening is conducted by two 12' x 27' double deck screens. To reduce the height of the
tertiary screening facility, the tertiary screens have been lowered and 9 m long transfer conveyors
have been installed under the screens to allow removal of the undersize material. Two 750 kW
cone crushers operating in closed circuit are utilised for the tertiary crushing stage.
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Figure 4.23
APPENDIX V
Mina Justa Oxide Circuit Flow Sheet
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Quaternary screening is conducted by four 14' x 27' double deck screens. The quaternary screens
have been lowered and 11 m long transfer conveyors have been installed to allow removal of the
undersize material.
The quaternary crushing stage utilises three 750 kW cone crushers operating in closed circuit.
Metal detectors and/or electro-magnets are included ahead of the secondary, tertiary, and
quaternary crushers to detect and/or remove tramp metal. The detectors are tuned to allow for the
high magnetite content of some of the ore.
To minimise capital cost, most of the facilities are fully exposed to the weather. An open type of
building is selected with easy access provided for mobile cranes for maintenance of equipment.
x Dust Control: Dust will be controlled by a combination of dust suppression and dust collection
systems. The primary crusher will be a major source of dust, particularly the ROM bin during truck
dumping. The truck tip point is enclosed on three sides. Wetting sprays have been included to wet
the ore while on the truck and a set of sprays has been included in the ROM bin to wet the ore
stream as it is dumped, to suppress dust.
Ducted dust collection systems and high-efficiency wet scrubbers are included with extraction
hoods at all major dust generating locations throughout the crushing circuit, including transfer
points, crusher discharges, vibrating screens and feeders.
4.9.1.2 Vat Leaching
x Acid Curing: Ore crushed to 100% passing 8 mm is delivered to the fine ore bin, which has a
surge capacity of 1 hour. Due to the dry and windy site conditions, a bin has been provided as
opposed to an open stockpile to minimise generation of dust.
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Figure 4.24
Plant Layout
APPENDIX V
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The crushed ore requires a short period of curing with acid to optimise leaching recovery.
Therefore, after the crushed ore is drawn from the fine ore bin, it is sprayed with dilute sulphuric
acid as it passes from one discharge conveyor to another.
x Vat Leaching (Figure 4.25): The acidified ore is transported by conveyor to the vat leaching area,
where it is loaded into vats for leaching.
The vats are essentially reinforced concrete shells, each measuring 30 m wide, 40.5 m in length
and 7.6 m high, and capable of holding 12 800 t of ore for a 6 day leaching cycle. At any one time,
16 vats participate in the leaching process. However, 18 vats have been designed to allow for
loading, unloading, filling, draining and maintenance. The vats are designed to be acid resistant
and are constructed to ensure that the leach solution is not lost due to leaks or seismic events.
Acidified ore is loaded into a vat by means of a tripping conveyor until the vat is full, leaving
300 mm of freeboard in the vat. The vat is then flooded with a dilute sulphuric acid solution which
is introduced through the base of the vat, under a filtration bed, and which overflows from the top of
the vat into a launder from which the solution is piped to the next vat or to a storage pond.
Leaching occurs over a 6 day period, at the end of which most of the acid-soluble copper has been
leached into solution. Over the life of the mine the average recovery of total copper is projected to
be 74.5%. At the end of the leaching cycle, the remaining solution is drained from the vat and the
moist waste solids are removed by a clamshell grab, placed into a hopper and discharged onto a
conveyor system for transfer to the ripios dump.
Solution management is designed as a counter-current system. Solution advances progressively
to fresher ore in order to maximise the copper content of the leach solution before treatment in the
solvent extraction and electrowinning plant. The highest tenor copper solution (PLS), which
overflows from the vat containing the freshest ore, is clarified then stored in a covered holding pond
before being pumped to the SX circuit.
The dilute acid solution (raffinate) returning from the SX plant, contains only 0.48 g/L Cu
(compared to 8 g/L for the PLS) and is used for final leaching of ore before it is removed from a vat
and sent to the ripios dump. The residual moisture in the ripios (approximately 11% by weight) is
essentially raffinate and provides a bleed for impurities, so that another bleed stream is not
required.
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Figure 4.25
Vat Leaching Layout
APPENDIX V
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x Clarification: Pinned bed clarifiers have been specified because of their proven performance in
removal of fines from copper leach solutions. Due to the acidic nature of the PLS solution,
materials of construction include SAF2205 stainless steel for the clarifier feed tank and fibre
reinforced plastic (FRP) and SAF2205 internals for the clarifiers.
The clarified PLS solution gravitates to the PLS Pond with the clarifier underflow solids being
pumped to the vats.
x Solution Ponds: The PLS pond is 6 m deep and has been sized to contain 24 500 m3 of solution.
This pond is covered to reduce evaporation and prevent pick-up of wind-blown solids. The
raffinate pond is also 6 m deep and has been sized to contain 16 400 m3 of solution. The raffinate
pond is not covered and it will also serve as an emergency reservoir in case one of the vats is
drained by accident or intentionally in an emergency.
Both ponds are lined with a double layer of HDPE membrane in order to avoid loss of solution and
prevent contamination of the environment. The dimensions also include an allowance to contain
precipitation from a 100 year, 24 hour rainfall event.
x Ripios: The ripios remaining after the leaching stage are removed from each vat by an unloading
crane with a 22 m3 clamshell grab. The clamshell discharges the material into a hopper that feeds
the ripios receiving conveyor. This material is transported to the ripios area via three discharge
conveyors. The last ripios conveyor loads a truck loading bin, which in turn loads haul trucks for
final ripios removal and disposal in the adjacent ripios dump, the design of which is described in
more detail in Section 4.13.1.
4.9.1.3 Solvent Extraction
The SX process involves the selective extraction of copper from the relatively dilute PLS to produce a
high purity, high tenor copper sulphate solution suitable for the EW process:
x Configuration: The SX mixer/settler units are configured for 2 stages of extraction, 1 stage of wash
and 1 stage of stripping. Solution is pumped from the PLS pond to the extraction circuit where it is
contacted with the organic phase to extract copper from the aqueous phase. Loaded organic exits
the extraction circuit and reports to the wash stage to remove any entrained impurities, such as
iron, manganese and chloride.
Spent electrolyte from the EW process enters the strip circuit at the primary mix tank and is mixed
with the loaded organic stream prior to passing through the strip settler for disengagement of the
aqueous and organic phases. Copper-rich electrolyte flows by gravity to the strong electrolyte
tank. Strong electrolyte contains minor amounts of particulate solids and entrained organic, which
are removed prior to electrowinning using CoMatrix dual media filters.
A reverse flow design is selected for the mixer/settler layout to minimise plant footprint and pipe run
length. Primary and secondary single mix tanks are utilised for each stage. The settlers are
constructed with concrete walls lined with fibre-reinforced plastic (FRP). The settler roofs are
constructed from a steel cladding with access ports for maintenance.
The solvent extraction area includes a series of floor drains which drain to a set of sumps/firetraps.
This arrangement will eliminate pooling of corrosive or combustible fluids in the bund.
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x Crud Handling: Crud from various areas within the SX plant is pumped through the crud centrifuge
that splits the crud into its three constituent phases, aqueous, organic and solids. The aqueous
phase is returned to the SX circuit whilst cleaned organic phase is either returned to the SX circuit
or treated further with activated clay. Contaminated solids are collected for separate disposal.
x Fire Protection: Fire protection philosophy is one of automatic detection and initiation of
suppression measures. SX fires in recent years have demonstrated that any fire must be
suppressed in the very early stages to prevent destruction of the plant and surrounding
infrastructure. For this reason, the fire protection system for Mina Justa comprises the following:
Foam suppression to the SX bunds, SX settlers and tanks containing organic
A fire detection system for the bund and inside of each of the vessels described above.
4.9.1.4 Electrowinning
The EW circuit utilises permanent cathode technology to produce LME Grade A cathode copper.
Electrowinning is conducted using a total of 122 cells at a nominal current density of 320 A/m2. Copper
plating is continuous over a period of 6 days before the cathodes are removed and processed for
dispatch:
x EW Cells: The copper-rich electrolyte (strong electroliyte), passes to the EW circuit where copper
is recovered by electrowinning in the form of copper cathodes. Electrolyte that has been depleted
of copper during electrowinning is recycled to the strip stage in solvent extraction.
Polishing cells receive strong electrolyte and act as organic entrainment protection for the
commercial cells. Electrolyte overflowing the polishing cells flows to the electrolyte circulation tank
and mixes with the spent electrolyte from the commercial cells to result in a stream of circulating
electrolyte.
The electrowinning cells are of monolithic polymer concrete construction comprising vinyl ester
resin mixed with aggregate. Electrolyte is circulated throughout the cell via a PVC manifold
mounted at the bottom of each cell. Holes drilled into the PVC manifold allow electrolyte to pass
between the electrodes in the cell. A total of 122 EW cells are installed, comprising 26 polishing
cells and 96 commercial cells. Each cell contains 69 cathodes (stainless steel blanks) and 70
anodes. Cathode quality is expected to be the same between the polishing and commercial cells.
The polishing cells are generally viewed as insurance against contaminating the entire tankhouse if
organic breakthrough occurs in the filters.
x Cathode Stripping: Copper plating onto the stainless steel blanks is continuous over a period of
approximately 6 days before the cathodes are removed for harvesting of the copper. Copper is
removed from the cathodes by an automated cathode stripping machine.
Approximately 3 t of copper sheets are accumulated before the bundles are sampled, strapped,
and transferred by forklift to a dedicated storage area prior to dispatch.
x Ventilation System: The EW cells are housed in a fully enclosed building to provide protection from
dust and climatic conditions, and provide an acceptable working environment for the crane and
stripping machine operators.
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Primary acid mist suppression is by a layer of polyolefin prills, which float on the cell surface and
disperse the bubbles of acid mist as they reach the solution line of the cell. A forced cross-flow
ventilation system provides secondary mist suppression by removing acid mist from the building.
4.9.1.5 Reagents
x Sulphuric Acid: Sulphuric acid (98%) is delivered by road tankers to the sulphuric acid unloading
area. Four unloading stations have been provided to transfer the sulphuric acid into the two
storage tanks. Each tank contains a live volume of 3187 m3, sufficient to store a 7 day supply on
site.
The tanks are sited within a HDPE-lined earth bund capable of containing 110% of the entire
contents of sulphuric acid stored on site.
x Flocculant: A non-ionic flocculant is dosed to the clarifier feed well. Flocculant is delivered to site
by road on pallets containing 25 kg bags and prepared with fresh water in a batching plant near the
clarifier.
x Extractant: Extractant (LIX984 or Acorga M5640) at a concentration of 25% by volume, is used in
the SX process to extract copper from the pregnant leach solution.
Extractant is delivered to site in 1 m3 intermediate bulk containers (IBCs), off-loaded by forklift, and
stored in a covered shed. The containers are moved to the SX area as required. Extractant is
added (by gravity) to the SX circuit on a demand basis.
x Diluent: High flash-point diluent (Shelsol 2046 or equivalent) is delivered to site by road tanker and
off-loaded into the diluent storage tank, which has a storage capacity equivalent to 45 days.
Diluent is transferred to the SX circuit and the crud treatment area on a demand basis, using a
single positive displacement pump.
x Guar: Guar is a high molecular weight organic polymer that acts as a smoothing agent for the
deposition of copper during the EW process, therefore enhancing the appearance of the final
copper product.
Guar for this system is received as powder in 25 kg bags, with storage on-site equivalent to
28 days of usage. The Guar is mixed in an automated system and the solution is pumped to the
EW circuit.
x Cobalt Sulphate: Cobalt sulphate is added to the EW circuit to maintain a cobalt concentration of
180 ppm and enhance the stability of the lead anode coating.
The cobalt sulphate reagent is received in 25 kg bags, with storage on-site equivalent to 28 days of
usage. The reagent is mixed in a small mixing tank and dosed to the EW circuit as required.
4.9.1.6 Services
x Raw Water: This is supplied from a borefield in the Jahuay aquifer, 31 km to the southeast. A
network of bores fitted with screens and submersible pumps will feed into a holding tank at the
aquifer. From there the water is pumped to site, an intermediate pumping station being required to
overcome the difference in elevation.
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A 6 m deep raw water pond with 16 000 m3 capacity is sited in the plant area to receive water from
the borefield for redistribution around the site for process water, fire water, dust control, camp,
mine water trucks and other purposes.
x Fire Water: The raw water pond also serves as the source of fire water, with the pond and pumps
configured to ensure a minimum amount of fire water is always available in the pond. The raw
water pump suctions are located above the fire water pump suctions, so the required four hours of
water is available.
The fire water pump set comprises an electrically powered main centrifugal pump, a diesel
powered pump, and an electrically powered jockey pump. The fire water system pressure is
maintained using the jockey pump, thereby preventing premature starting of the main fire water
pump.
x Potable Water: Raw water is treated through the water treatment plant to produce potable quality
water to be used for safety shower, drinking water and ablution facilities. The water treatment plant
uses chlorination to destroy any harmful bacteria present. The resultant potable quality water is
transferred to the 80 m3 potable water storage tank.
x Plant and Instrument Air: Plant air at 750 kPag is provided from the two main plant air
compressors and stored in the plant air receiver where it is reticulated to the plant air utility stations
(excluding the crusher buildings). A separate portable air compressor is provided for use in the
crusher plant areas.
A stream of plant air is diverted through a pair of air filters and fed to a duty/standby desiccant air
drier to remove moisture from the plant air to generate instrument quality air. Instrument air is
reticulated to points of demand.
4.9.2 Sulphide Ore Plant
The overall processing flow sheet for the Mina Justa sulphide ore is depicted in Figure 4.26 and the
concentrator facilities layout is depicted in Figure 4.27. Design is to a PFS level, with further
metallurgical testwork required to support DFS-level engineering.
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Figure 4.26
APPENDIX V
Mina Justa Sulphide Circuit Flow Sheet
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4.9.2.1 Comminution
The separate comminution circuit is designed to treat 5 Mt/a of sulphide ore to produce a product size
of 80% passing 150 µm. It comprises:
x Primary Crushing: ROM sulphide ore is delivered to the crushing area by 220 t mine haul truck,
and tipped directly into the ROM bin. Ore that cannot be fed directly to the primary crusher, for
example due to crusher maintenance, will be unloaded to the adjacent ROM sulphide ore stockpile,
and later fed to the crusher by a wheel loader.
A 54" x 75" primary gyratory crusher treats an average of 951 t/h, producing 5 Mt/a (availability
60%). A coarse ore stockpile provides 12 hours of surge capacity between the crushing and
milling stages.
x Dust Control: Wetting sprays have been included to wet the ore while on the truck, and a set of
sprays has been included in the ROM bin to wet the ore stream as it is dumped, to suppress dust.
Ducted dust collection systems with high-efficiency wet scrubbers are included with extraction
hoods at all major dust generating locations throughout the crushing circuit.
x Primary Grinding and Pebble Crushing: The primary grinding circuit consists of an open circuit
SAG mill with a pebble crushing circuit. The SAG mill feed conveyor transports crushed material
reclaimed from the crushed ore stockpile to a SAG mill.
The SAG mill has a diameter of 9.15 m, with an effective grinding length of 5.3 m. The SAG mill
has been designed on the basis of a nominal 12% ball load. The motors are sized to take a
maximum ball load of 15% at a 30% charge level and approximately 72% of critical speed. It is
powered by twin 4000 kW hyper-synchronous wound rotor motors. The drive motors are variable
speed with the adjustment achieved using slip energy recovery (SER) drives. The SAG mill is
equipped with a dedicated lubrication system for mill motors, gearboxes, pinion bearings and mill
bearings.
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Figure 4.27
Concentrator Layout
APPENDIX V
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Oversize pebbles from the SAG mill are transferred to the pebble crushing circuit which includes a
600 kW cone crusher. The crushed pebbles are returned to the SAG mill via the SAG mill feed
conveyor.
x Secondary Grinding and Classification: This consists of a ball mill in closed circuit with a cyclone
cluster, and targets a product size of 80% passing 150 µm.
The ball mill has a 6.57 m diameter and effective grinding length of 10.75 m. It is powered by twin
4200 kW motors. The ball mill has a jacking cradle system and inching drive for maintenance
purposes. The ball mill is equipped with a dedicated lubrication system for mill motors, gearboxes,
pinion bearings and mill bearings.
4.9.2.2 Flotation
The flotation circuit comprises bulk flotation, concentrate regrind, cleaner flotation and on-stream
analysis. The bulk flotation circuit produces a concentrate. Selective recovery of the copper minerals
occurs in the cleaner circuit, where a concentrate of final product quality is produced.
x Bulk Flotation: Cyclone overflow from the secondary grinding circuit, at a pulp density of 35%
solids and pH of 9 reports to the rougher/scavenger circuit. The rougher flotation stage consists of
two 70 m3 tank cells, and the scavenger flotation stage consists of four 70 m3 tank cells. The total
installed residence time for the rougher-scavenger flotation circuit is 20 minutes.
Rougher/scavenger flotation concentrates are pumped to the regrind circuit for further grinding.
Provision exists to transfer the rougher concentrate to alternative locations, such as cleaner feed.
The scavenger flotation tailings are transferred to the tailings disposal circuit.
x Concentrate Regrind: Rougher and scavenger concentrates report to the regrind circuit for fine
grinding. A single 3.8 m diameter ball mill operates in closed circuit with hydrocyclones. The
regrind mill is powered by a 1300 kW motor and uses 40 mm balls as grinding media to achieve a
P80 in the regrind cyclone overflow of approximately 49 µm.
x Cleaner Flotation: Selective flotation is achieved through the addition of collector and frother and
by increasing the pulp pH to 11. Cleaner flotation is carried out in four 38m3 cells with a total
nominal residence time of 10 minutes.
Cleaner concentrate is transferred to the recleaner circuit, consisting of three 16 m3 u-shaped
flotation cells with a total nominal residence time of 10 minutes. The recleaner concentrate is
pumped to the concentrate handling area.
The cleaner flotation tailings flow to cleaner scavenger flotation which consists of three 38 m3
u-shaped flotation cells with a total nominal residence time of 10 minutes. The cleaner scavenger
flotation tailings are transferred to the tailings disposal circuit.
x Sampling and Analysis: Eight sample streams are collected for on-line control of the flotation
circuit. Various in-stream samplers collect samples and direct the streams to a multiple stream
XRF analyser. The analysis is undertaken using an XRF analyser. The rejects from the sampling
system are pumped to their respective return point in the process.
Rougher feed and regrind overflow samples pass through a particle size analyser for particle size
determination.
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4.9.2.3 Concentrate Handling
The recleaner concentrate is screened to remove debris from the slurry. Thickening of the
concentrates is carried out using a 15 m diameter high-rate thickener to produce a product at 65%
solids.
The thickened stream is transferred to the filter feed tank which has 12 hours of storage capacity. The
concentrate solids are dewatered by a pressure filter. The filter discharges moist concentrate directly
onto a storage slab below the filter, while the filtrate is returned to the concentrate thickener.
Concentrate is transferred from the stockpile into a storage shed with an FEL, which is also used to
load road trucks for shipment.
4.9.2.4 Tailings Thickening and Disposal
Two tailings streams are produced by the concentrator, namely the cleaner scavenger tailings (CST)
stream which has potential for acid generation, and the rougher scavenger (RST) tailings stream which
has low acid generation potential. The two streams are disposed of separately.
x The RST are pumped to the tailings thickener which is a 28 m diameter high-rate unit. Thickener
overflow discharges to the process water pond, while thickener underflow, at 60% solids, is
pumped to the RST section of the TSF.
x The CST are pumped to a 11 m diameter thickener. Overflow discharges to the process water
pond and underflow, at 60% solids, is pumped to the CST section of the TSF.
4.9.2.5 Reagents
x Collector (Sodium Isopropyl Xanthate - SIPX): Used in the flotation process to promote recovery of
mineral particles by creating hydrophobic surfaces for air bubble attachment. SIPX is delivered to
site in 1 t bulka bags, with storage being provided for 20 bags. A 2 t monorail hoist lifts the bags
into a bag splitter chute above a 6 m3 agitated collector mixing tank. A 20% solution is prepared
with raw water and pumped to the collector header tank for distribution.
x Promoter (Aerofloat 3477): Contains dithiophosphates, which are selective for copper recovery
and are generally used in conjunction with xanthate collectors. A3477 is delivered as a liquid to
site in 210 L drums, with storage being provided for 75 drums. The promoter is transferred from
the drums by a drum pump to a 1 m3 promoter storage tank, from where it is dosed into the
flotation circuit.
x Frother (Dow 250): Frother stabilises air bubbles that reach the surface of the agitated slurry in the
flotation process. Dow 250 is received as liquid in 210 L drums and storage is provided for
75 drums. The frother is transferred from the drums using a drum pump to a 1 m3 frother storage
tank, from where it is dosed in the flotation circuit with dedicated metering pumps.
x pH Modifier (Lime): Lime is used is to regulate the pulp pH, suppressing the flotation of iron
sulphides and improving copper sulphide mineral flotation. Hydrated lime (85% Ca(OH)2) is
delivered to site as a bulk solid and stored in a 60 t hopper. Lime solution is prepared with raw
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water and transferred to a 20 m3 agitated lime storage tank prior to distribution to the plant through
a ring main.
x Flocculant: This is added to the concentrate and tailings thickeners to aid settling of solids by
agglomerating fine particles in the slurry. Flocculant is transported to site as a solid in 25 kg bags.
Storage is provided on-site for 400 bags. Dry flocculant powder is transferred to the storage
vessel when required, mixed in an automated system and made up to a concentration of 0.3% w/w.
Flocculant solution is delivered to the respective thickeners using dedicated variable-speed
metering pumps. Flocculant solution is diluted to 0.03% w/w prior to dosage.
x Sodium Sulphide: Sodium sulphide (Na2S) is used in the flotation circuit as a sulphidising agent to
improve the flotation of partially oxidised minerals. It is delivered to site in 1 t bulka bags, with
storage allowance in a secured area on-site for 15 t. A 2 t monorail hoist lifts the bulka bags into a
bag splitter chute above a 6 m3 agitated mixing tank. Sodium sulphide is made up to a 15%
solution concentration with raw water. The solution is transferred to a 10 m3 storage tank which is
sited in a concrete containment area capable of storing the entire contents of the tank in case of an
emergency. The solution is metered to the rougher flotation feed box.
4.9.2.6 Services
x Raw Water: Raw water requirements are provided from the Oxide plant raw water pond. A set of
raw water pumps will be installed at the pond to supply the Sulphide plant.
x Fire Water: This is supplied from the Oxide fire water system.
x Potable Water: potable water is provided from the Oxide Plant potable water system.
x Process Water: The process water pond has a capacity of 4500 m3. Provision exists to transfer
raw water into the process water pond to maintain the level at a predetermined value. Process
water is distributed to the process plant areas as required.
x Plant and Instrument Air: The concentrator has a dedicated plant and instrument air system similar
to that at the Oxide plant. Two independent flotation air blower systems are utilised for bulk
flotation and cleaner flotation air supply.
4.10 GENERAL INFRASTRUCTURE
In addition to the mine and process plant, the Mina Justa Project includes significant infrastructure,
principally in the areas of power, transport and water supply. Key components of these are situated
off-site, with links to the Project area as depicted in Figure 4.28.
Additional site infrastructure includes buildings for accommodation and offices, workshops, stores and
explosive magazines. Facilities for waste disposal, security and fire protection have also been
considered.
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4.10.1 Access Roads
A 14.8 km access road8 has been surveyed and designed, linking National Route PE-30 (connecting
the Municipality of San Juan de Marcona to the Panamericana Highway) to the plant site and
accommodation camp. The access road has been designed with two lanes and a total width of 8.40 m.
The road surface is unsealed gravel. Signage will be provided to control traffic movements, particularly
where heavy vehicles are operating.
4.10.2 Internal Roads
A network of internal roads provides access from the main gate to the offices, various stores, process
plant buildings, the mine, waste and ripios dumps, stockpiles and the TSF. Some of the roads will carry
heavy traffic delivering fuel and acid, and exporting product. The roads in and around the processing
plant are sealed with bitumen.
4.10.3 Buildings
The following buildings are additional to the main processing plant structures:
x Common Facilities: administration building, main security building, first aid and fire station, gate
and sentry box, workshop and offices, warehouse and offices, laboratory, change rooms, plant
dining room, site toilets, sewage treatment plants, Mina Justa main substation, camp, water
borefield pump stations, water transfer pump station No. 1, water transfer pump station No. 2.
x Oxide Processing Plant: Oxide reagents store, Oxide control room, Oxide primary crushing
substation, secondary screening substation, Crushing and screening substation, tertiary screening
substation, quaternary screening substation, Oxide process substation, SX substation, EW
substation, Rectiformer A substation, Rectiformer B substation, Oxide services substation.
x Sulphide Processing Plant: Sulphide administration building, Sulphide control room, Sulphide
reagents store, concentrate store, grinding substation, flotation substation, HV substation
substation, thickening and concentrate substation, Sulphide primary crushing substation, pebble
crushing substation, administration and services substation.
x Mine Facilities: mine offices, heavy vehicle workshop and lube store, mine warehouse, mine
change rooms, mine dining room, vehicle washdown, vehicle refuelling, diesel storage facility, tyre
bay and battery store, explosives and detonator store, ammonium nitrate storage, core shed, mine
office substation, mine workshop substation.
x Diesel Facilities: A heavy vehicle diesel refuelling area is included in the mining area and will be
supplied under contract. The area is expected to comprise a fuel supply truck unloading package,
three 1500 m3 storage tanks, a loading pump and heavy vehicle refuelling diesel loading arm. The
storage tanks are to be located in a concrete bunded compound with an apron for tanker
unloading. The heavy vehicle refuelling bay is to be on a separate concrete slab.
A light vehicle diesel refuelling area is expected to comprise a fuel supply truck unloading package,
a storage tank and two light vehicle refuelling bowsers.
8
Following completion of the DFS, alternative access routes have been identified to avoid conflict with Shougang ±
Section 4.23.3
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4.10.4 Communications
A radio link to the town of Marcona will provide telephone and broadband data communications to site.
The site communications network backbone comprises a single mode fibre optic cable connecting the
operations centre to all offices, substations, laboratory and gatehouse. This backbone supports the
plant information network for computer networking, redundant Process Control System network (PCS),
communication system, fire alarm system and the CCTV signals.
A radio system incorporating multiple channels provides coverage for the entire process plant and
tailings dam areas. The radio system is suitable for maintenance and security/emergency
communications.
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Figure 4.28
Mina Justa Project Plan
APPENDIX V
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4.10.5 Construction and Accommodation Camp
Project facilities include an accommodation camp, located approximately 4.4 km away from the plant
site, which will serve both the construction and operations phases of the project. The maximum
capacity of the camp will be 990 people during the construction phase and 270 people during the
operation phase.
The camp will be equipped with accommodation, kitchen and eating areas, medical, security,
communications and recreation facilities. A gate-house is provided where the access road enters the
property.
Temporary buildings will be modular or prefabricated, which will allow easy disassembly, reuse or
resale at the end of the construction phase. Permanent buildings will be constructed with metal
structures, covered with thermoacoustic, metallic panels and/or simple metallic panels over concrete
slab for the laundry, storage and warehouse buildings; and/or buildings based on reinforced masonry
(concrete blocks) walls with metallic roofs and covering for the rest of the buildings.
4.10.6 Waste Treatment
4.10.6.1 Solid Waste Treatment
The solid waste facilities are designed to process and store organic waste and industrial non-dangerous
waste. Dangerous industrial wastes will be stored in a temporary area and transported off-site for
subsequent final disposal using accredited groups.
4.10.6.2 Hazardous Waste Treatment
Hazardous wastes on the project will include waste with dangerous metallic elements, reactant
residues, explosives and flammable materials.
For each case, specific procedures will be established for waste collection, temporary disposal on site,
safe transportation to storage areas and final transportation to registered locations for treatment and
final disposal. Marcobre will construct a facility next to the solid waste landfill site, in an area of
approximately 12 000 m2, completely enclosed by its own perimeter fence.
4.10.6.3 Sewage
A number of sewage treatment plants will be sited at several locations, including:

x At the camp, offices and storage areas, which are near each other, sewage will be directed to a
biological-type treatment plant with the capacity to serve 500 to 600 people (approximately
58 m3/day).
This system comprises primary treatment, which consists of local phosphates precipitation, oil
traps, re-collection and extraction of coarse residual material, etc.; and secondary treatment, which
consists of a first stage of anaerobic reactions and a second stage of an activated sludge process.
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x For the process plant areas, a similar but smaller system will be provided, with a capacity of
13 m3/day. Oil traps and phosphate precipitation are replaced by a metallic cation precipitation
reactor.
x Two collection tanks will be provided at the mine. The sewage will be collected and transported by
truck for treatment at the camp sewage treatment system.
4.11 WATER SUPPLY SYSTEM
The project water balance was studied, and site water supply and water management requirements
were determined by Knight Piésold.
4.11.1 Project Water Balance
A site-wide water balance has been developed to quantify the amount of make-up water that is required
to sustain operations, taking account of water that will be lost in the tailings from the Sulphide
concentrator operation and to the ripios in the vat leaching operation.
The water balance used a computer model that estimated for each month of the life of the mine and into
the post-closure period the amounts of water in the various components of the system. The
calculations were made from or calculated inflows and outflows. Two major inputs are monthly
precipitation and evaporation, which were obtained from a climate study for the project also by Knight
Piésold. Another principal input is the flowchart and logic for water management in the system, which
included the planned operation of the TSF for separate CST and RST management. Additional
information was supplied by GRD Minproc and Marcobre with regards to the loading, leaching and
unloading of the vat leach cells, and mine waste production for placement in the dumps.
Due to the very dry climatological conditions at the site, the water balance is significantly in deficit,
requiring the addition of make-up water from an outside source to sustain operations.
The amounts of make-up water for the vat leaching and sulphide process plant operations are
described in the following sections.
4.11.1.1 Leaching Operations
For the vat leach system, input information to the water balance included ore moisture contents at feed,
during leach and after draindown to a residual level in the ripios. In general, 710 m3/hr of water will be
required for processing, and the overall average outside source make-up water requirement to sustain
the vat leaching operation is predicted to be approximately 140 m3/hr.
4.11.1.2 Sulphide Plant Operations
The majority of the water loss for the concentrator is as discharge of tailings to the TSF. The results of
the water balance indicate that make-up requirements are approximately 175 m3/hr.
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The design and operation of the TSF is such that there is limited potential to reclaim water from the
TSF, since CST are required to be submerged as far as possible to avoid oxidation. Moreover, the
normal operating depth of water in the pond is 300 mm and it would be difficult to recover clean water.
4.11.1.3 Other Areas
Apart from the process operations, approximately 45 m3KURI³RWKHU´PDNH-up will be required for the
operation of the camp and for dust suppression on the roads.
4.11.1.4 Total Operational Requirements
The total outside source make up requirement is predicted to be approximately 186 m3/hr from Year 1
through Q7 in Year 2 for the vat leaching operation. From Years 2 through 10 the requirement is
predicted to increase to 589 m3/hr (Oxides + Sulphides), but then decrease during Years 10 through 12
to 420 m3/hr (Sulphides).
4.11.1.5 Start-up Water Requirements
The start-up water requirement for the vat leach facility is predicted to be 77 500 m3 with an additional
45 m3/hfor mining and other uses.
The volume of start-up water required for the sulphide mill is predicted to be 10 000 m3, with the
additional 45 m3KIRUWKH³RWKHU´VRXUFHVFor the start-up of TSF, it is estimated that a continuous flow
of 319 m3/h for the roughers and 56 m3/h for the cleaners will be required for start-up operation.
4.11.1.6 Closure and Reclamation Water Management
Climatological data shows that there is significant net evaporation at the site, which indicates that with
the exception of short duration storm events there will be no net accumulation of precipitation. The TSF
will have the capacity to temporarily store the run-off produced from a PMP event on the undiverted
catchment, and this water will then be evaporated, so that no release is required. Consequently, there
will be no need to provide and maintain a spillway or diversion channels with the TSF.
4.11.2 Hydrological Testwork and Studies
Field investigations and studies were undertaken by MWH Peru S.A. (MWH, formerly GWI) and Vector
into the potential of the Jahuay and Lomas aquifers (Figure 4.29) to supply project make-up water
requirements. Work included:
x Climatic water balance
x Test well drilling and installation in the Upper Jahuay aquifer, about 31 km northeast of the project
site, and in the Lomas aquifer, about 50 km southeast of the project site
x Numerical modelling and other analysis.
This work determined that the Jahuay aquifer is capable of meeting the project demand over the life of
the project, with a safe long-term yield of 34 L/s estimated from pump-testing. The average hydraulic
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conductivity values for the aquifer are high, estimated in the range of 1 to 2 x 104 m/s and the storativity
value estimated for the pumping test was 0.00115 (0.12%).
The water is fresh, pH-neutral with slightly elevated levels of iron (0.3 to 0.6 mg/L) and potentially
corrosive to mild steel over the long term, largely due to the low total dissolved solids (TDS) content.
However, corrosion potential is anticipated to be minimal over the proposed life of the project.
The aquifer is fed almost exclusively by water surplus generated within the Jahuay/Carbonara basin at
elevations between approximately 3300 and 4200 masl. Average annual water surplus for the basin is
estimated in the range of 40 to 140 L/s with a best estimate of about 73 L/s. Most of this water surplus
LVEHOLHYHGWREHFRPSRVHGRI³WUDQVPLVVLRQORVVHV´ie, infiltration through the sandy bed of the stream)
in the valley above the proposed well field location, with additional water as ground water flow from the
upper basin and, during peak storm events, some run-off within the valley south of the proposed well
field. Additional water is expected to recharge the aquifer from bedrock in the valley walls.
Numerical modelling indicates that withdrawals in the order of those required for the operation are
sustainable, due in part to the high storage capacity of the sand and gravel aquifer. It is possible that
total annual withdrawals from the aquifer by the Project, Marcona town and SKRXJDQJ¶VRSHUDWLRQVPD\
exceed the average annual water surplus for the basin, but, following closure of the Mina Justa
operation, water levels will gradually recover to pre-operation levels. Based on simulations, pumping of
the Mina Justa well field should not adversely affect the Shougang/Marcona field, located 9.6 km south
of the southernmost Marcobre well, even if Shougang/Marcona were to double its current well usage in
the near future.
The Upper Jahuay aquifer is preferred to that at Lomas in view of the following factors:
x Shorter pipeline length (estimated 31 km versus 48 km for Lomas)
x Higher permeability and potentially higher well yields and fewer wells required as a result
x Lower potential for well interference with other users
x Better water quality.
The Lomas aquifer represents a viable back-up water supply source, should this be required, although
pump tests indicated a long-term safe yield of only 5 L/s. Water quality was found to be suitable for the
use intended, although other wells in the area have encountered slightly brackish water. There is some
potential to affect neighbouring wells in the area, should significant water withdrawal occur.
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Figure 4.29
Locations MPA-1 Lomas, MPA-2 Jahuay and Proposed Test-Production Wells
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4.11.2.1 Well Field Design
Two stages of the well installation are proposed: Stage 1 (Year -1) ± 3 wells; Stage 2 (Year 2) ±
5 wells. The design basis considers an average well yield of 25 L/s, and provides for 1 back-up well in
Stage 1 and 2 back-up wells in Stage 2.
Although well sites have been proposed, execution of additional surficial resistivity surveys on the east
bank of the Jahuay valley is recommended prior to drilling to investigate the potential water resources
on this side of the valley, thereby reducing the need for pipeline crossings of the valley, and to provide
additional information for characterising the aquifer.
MWH recommends a test production drilling approach to the well field installation program, where
drilling from the outset is at a diameter that permits installation of a final production well. Wells drilled
using this approach should be installed with an air-rotary rig which can advance well casing, or with a
cable-tool rig. All wells are developed to a sand-free condition and test pumping undertaken to
evaluate optimum well yield, pump setting, potential for well interference and water quality.
4.11.3 Water Supply System
The pipeline is designed with two pumping sections. An intermediate pump station is required, because
of the 300 m difference in elevation between the starting pumping station and the reception pond at the
mine site, the 31 km long pipeline9, flow requirements, and the resultant dynamic heads.
The water supply system includes the following elements:

x Borefield/water collection system, water wells and pumps located in the Jahuay aquifer
x Water transfer system, two pump stations and transfer pipelines, from the reception tank in the
Jahuay aquifer to the storage pond at the mine site
x Electrical distribution system, 22.9 kV power distribution line to the borefield and distribution to
each pump station
x Controls and instrumentation at each pump station and borefield location tied back via optical fibre.
4.11.3.1 Borefield/Water Collection and Transfer System
Wells
A total of 8 wells will be installed to supplement the 1 existing well. The wells will be activated
progressively as the water requirement for the mine increases. For the first 2 years, 3 wells will be in
use and 1 on stand-by to satisfy the demand of 186 m3/h. This will be increased to 7 operating wells
with 2 wells on stand-by to meet the maximum requirement of 561 m3/h, while, for the last 2 years,
5 wells will be operating, with 2 wells on stand-by.
9
Subsequent to the DFS, alternative access routes are being considered (Section 4.23.3)
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Well Pumps
The dynamic levels of the water wells are estimated to lie between approximately 100 m to 150 m
below ground surface, and pump intakes are located at 20 m below the dynamic level.
Pumps shall be of turbine type with submersible motors/drives. Due to their location, environmental
characteristics and operating conditions, the following pumps have been selected:
x One pump with estimated 90 m3/h, 224 m Total Dynamic Head (TDH), 150 HP
x Four pumps with estimated 90 m3/h, 191 m TDH, 125 HP
x One pump with estimated 90 m3/h, 143 m TDH, 100 HP
x Three pumps with estimated 90 m3/h, 121 m TDH, 75 HP.
Well Field Piping and Collection Tank

Carbon steel will be used for the pipelines from the wells to the collection tank and for the transfer
pipelines from the pump stations to the storage pond on-site.
Water will be transferred from the wells via a single pipeline to a collection tank of 300 m3 capacity.
Pump Station No. 1

Pump Station No. 1 includes the collection tank and pumps. The pumps are located in a masonry room
with a Precor type roof supported by light metal trusses. Axial wall fan type air extractors have been
considered to help ventilation, especially in summer season. The roof metal structure includes the
maintenance openings with covers above each pump's axis to allow installation and removal of the
pumps using a mobile crane from outside of the building.
Pumps shall be of vertical turbine, can type, where the pump bowls are in a vessel, with 295 m3/h
capacity and 326 m TDH. Motor power is estimated in 300 HP per pump.
During the initial phase of operation 2 pumps will be installed in the station, 1 operating and other
stand-by. As project requirements increase, a third pump will be installed resulting in 1 pump used as a
stand-by and 2 others as operating pumps. Associated infrastructure for the pump station second
phase expansion, as such as blanked pipeline spurs, pump plinths, adequate space allowed in
substation and control system, etc., will be included as part of the Phase 1 works.
Transfer Pump Station No. 2

Transfer Pump Station No. 2 includes a transfer tank with a capacity of 300 m3, and utilises identical
pumps, housed in a building of similar construction.
Two pumps will be installed during the first phase of operation, 1 operating and 1 stand-by, while, for
the second phase, a third pump will be installed to provide 1 stand-by and 2 operating pumps.
Associated infrastructure for the pump station second phase expansion, such as blanked pipeline
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spurs, pump plinths, adequate space allowed in substation and control system, etc., will be included as
part of the Phase 1 works.
Transfer Pipeline
As pumping is in 2 stages, there are 2 pipeline sections, one of 18.1 km and the other 13 km.
Steel will be used close to the pumping stations, but, as pressure decreases along the pipeline,
sections further away from the pumping station will be of HDPE construction to minimise the costs.
Steel pipes shall have concrete sleepers installed every 6 m and anchor blocks whenever its direction
changes. HDPE pipes will be restrained with earth anchors. Pipes shall be protected with
venting/vacuum breaker valves.
For the first section between pump stations, the pipeline will be steel, 14" diameter for 16 km, reducing
WR´+'3(IRUWKHILQDO km. The second section from the Pump Station No. WRVLWHZLOOEHRI´
UHGXFLQJWR´VWHHOIRU km, followed by 2 NPRI´+'3(
During the detailed design phase, a transient analysis of various operational scenarios including the
instantaneous loss of all pumping systems will be undertaken. From the results of this transient
analysis, a full scope of required valves and pressure relief systems can be determined.
Fire Protection System

BC type carbon dioxide fire extinguishers will be installed in each pump station. The detection system
signals will be transferred to local detection and alarm control panels communicating with the central
control room.
Fresh Water Storage and Distribution System at Mina Justa

The water will be discharged in the pond located at the plant site, from where it will be distributed to
internal facilities.
4.11.3.2 Water Supply - Electrical System
Power Supply and Distribution ± Borefield/Water Collection System

Electrical power supply to the well pumps will be by means of a 22.9 kV overhead line from the Project
site. From this transmission line, a secondary line will be installed to each well using a 315 kVA
transformer of 22.9/0.48 kV. Each motor control centre that feeds each borefield pump motor control is
supplied from the overhead line on load isolator that supplies a pad-mounted transformer.
Power Supply and Distribution ± Water Transfer System

The overhead 22.9 kV transmission line will supply each pump station via a 1500 kVA transformer
which will feed the 4.16 kV motor control centre that supplies the pumps. The substations that feed
each pumping station will be conventional unitary substations, the same as those feeding the MV MCC,
which will be located in the electrical room. The considered starters are DOL.
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Auxiliary supplies such as the control system, lighting and small power, etc., will be supplied via an
auxiliary transformer.
Control and Instrumentation System

Instrumentation is provided at each borefield/water collection and transfer station to control the pumping
system and provide adequate information for remote control/operation of the water collection and
transfer system. This includes typical instrumentation such as:
x Flowmeters, pressure transmitter on pipeline
x Low flow switches on pump headers
x Alarms to warn remote operators when pumps have tripped out
x Optic fibre communication system relaying information from each borefield/water collection pump
substation and transfer station to the central control room.
4.12 POWER SUPPLY SYSTEM
4.12.1 Power Supply and Distribution
The plant site is located approximately 15 km from the existing Marcona 220 kV substation, which is
connected into the regional 220 kV network. Marcobre will enter into a long-term power supply
agreement with a generator that will deliver power to the distribution grid operated by Red de Energía
del Peru (REP).
To satisfy the power demand requirements for Mina Justa it is necessary to upgrade the National
Network System to Marcona. This is currently in progress by ProInversion (a Government entity).
A dedicated 14.7 km 220 kV overhead power line10 supported by steel towers will connect to the grid at
5(3¶V 0DUFRQDVXEVWDWLRQ kV bus. The 220 kV RYHUKHDG SRZHUOLQH WHUPLQDWHVDW WKH3URMHFW¶V
HV switchyard on the 220 kV bus.
A 22.9 kV power line will run between site and the Jahuay borefield, 31 km to the southeast, via an
intermediate pump station. The line is supported by wooden poles.
4.12.1.1 HV Switchyard
An outdoor switchyard is proposed to accommodate the incoming 220 kV overhead lines and a
220/22.9 kV transformer to supply the plant and associated HV switchgear feeding a 22.9 kV
switchboard located indoors at the main plant substation.
10
Subsequent to the DFS, alternative access routes are being considered (Section 4.23.3)
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4.12.1.2 22.9 kV Main Switchboard
The 22.9 kV main switchboard is provided with a single incomer bay. The 22.9 kV main switchboard is
provided with gas-insulated switchgear bays for distribution of 22.9 kV to plant load centres, power
factor correction and HV motors.
4.12.1.3 Distribution
Power is distributed from the 22.9 kV main substation switchboard to major plant loads via an overhead
line to the boundary of the process plants. Within the process plants, power cables are used. Plant
load centres have varying secondary voltages supplied by step-down power transformers adjacent to
the each of the load centres.
4.12.2 Site Power Supply
4.12.2.1 Oxide Plant Electrical Load
The total connected load for the Oxide plant and mine infrastructure is 36 394 kW. The application of
relevant utilisation factors results in a total running load of 30 124 kW for the oxide process plant and
mine infrastructure only. The inclusion of power factor correction and harmonic filtering equipment (with
a total reactive power of 6 MVAr) allows for the correction of the power load to approximately 0.9
lagging and a predicted maximum demand of 33 441 kVA.
4.12.2.2 Sulphide Plant Electrical Load
The Sulphide plant total connected load is 29 061 kW. The application of relevant utilisation factors
results in a total running load of 22 861 kW for the sulphide process plant, tailings and associated
process plant infrastructure only. The inclusion of power factor correction and harmonic filtering
equipment (with a total reactive power of 6 MVAr) allows for the correction of the power load to
approximately 0.94 lagging and a predicted maximum demand of 24 211 kVA.
4.12.2.3 Other Electrical Loads
In addition to process plant loads, other loads are the camp (824 kVA), lighting for internal access road
(190 kVA), wells substation (695 kVA) and transfer pumping station (842 kVA). These loads are fed
from the plant site via 22.9 kV overhead power line.
4.12.2.4 Power Reticulation
There are 12 substations servicing the Oxide crushing, screening and process plant facilities, and an
additional seven substations for the Sulphide plant.
4.12.2.5 HV Switchboards
The Oxide plant HV switchboards are located within the Oxide crushing and screening area HV
substation and the Oxide process area HV substation.
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For the Sulphide plant, power is distributed from the 22.9 kV main substation switchboard to major plant
loads via an overhead line to the boundary of the Sulphide plant. The Sulphide plant HV switchboard is
located within the Sulphide plant HV substation. It handles the Sulphide primary crusher as well.
4.12.2.6 Emergency Generation
Emergency power is required to maintain the plant process in a safe state, allowing safety systems to
function seamlessly and prevent long delays in restarting the plant after the restoration of power to the
site. Catastrophic failure of the power system is not considered.
The emergency power is provided to a number of drives that typically require back-up emergency
power for short-term power outages (4 hours or less). Individual small generators for this purpose are
located at or near the required substation.
The following emergency power requirement has been identified:

x Oxide plant: Total 2321 kW consisting of 2027 kW fixed loads (building loads, plant lighting and
x Sulphide plant: Total 922 kW consisting of 690 kW fixed loads (building loads, plant lighting and
4.12.3 Control Systems
The plant is provided with a process control system (PCS) with a moderate level of control complexity.
The plant is designed to be operated primarily from the central control room (CCR) located adjacent to
the EW building. The CCR contains four operating stations and an engineering workstation. Local field
operator stations provide complete control room type information to the operators, but allow interaction
from the field operators on a secured basis.
A CCR is provided for the Sulphide plant and is located near the grinding building.
4.13 WASTE DISPOSAL
4.13.1 Mine and Ripios Waste Dumps
A design has been prepared for the two mine waste rock dumps (the Main and Magnetite Manto waste
dumps), the ripios dump and the low grade stockpile, taking account of the physical and geochemical
stability of the structures and the appropriate land use following closure.
The estimated amount of waste rock to be generated by the Project is approximately 402.5 Mt, of which
383 Mt will be placed in the Main mine waste dump, 14 Mt in the Magnetite Manto waste dump and the
remaining 5.5 Mt (non-PAG material) will be used for construction of the tailings dam.
The ripios dump has been designed with a capacity of approximately 114 Mt, and the low grade
stockpile has a capacity of 20 Mt.
The location of the structures is shown in Figure 4.30.
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Figure 4.30
Ripios and Mine Waste Dumps
APPENDIX V
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In order to generate information for the design of these structures, a site investigation program was
conducted by Knight Piésold between June 2006 and December 2007. The investigation included
characterisation of the foundations, waste rock material and ripios material.
The foundation of the waste rock dumps and low grade stockpile comprises three main geological units:
Quaternary material (aeolian sands), overlying highly weathered and fractured bedrock (Tunga
Andesites and volcano-sedimentary material of the Rio Grande Formation), which, in turn, overlies
fresh, fractured bedrock with medium to high strength. All three geological units are adequate for
foundations. However, the aeolian material located at the final outer toe of the Main mine waste rock
dump will be removed to improve stability.
The water level encountered during the site investigation is at approximate elevation 312 masl, or some
400 m below the base of the Main waste rock dump and 500 m below the Magnetite Manto waste rock
dump and low grade stockpile.
The strength parameters for the waste rock were estimated using correlations based on the expected
particles sizes, angularity, and the stress conditions in the dumps. The strength parameters for the
ripios material were determined from standard laboratory testing; ripios material comprises silty sands
and fine gravels with a maximum size of 8 mm.
4.13.1.1 Ripios and Main Mine Waste Dump Design
Ripios will be placed at the north end of the Main waste rock dump and will be confined behind a large
buttressing embankment of mine waste rock. The buttressing embankment will have a crest elevation
of 820 masl. The ripios material will be placed slightly above this to a final elevation of 832 masl.
The intermediate slopes (bench slopes) on the mine waste dump have been designed to 1.4H:1V. The
overall outer slope in the North sector, which forms the downstream slope of the buttressing
embankment, will be 1.7H:1V. It will have an intermediate bench 40 m wide at elevation 750 masl. The
intermediate bench width has been established considering a minimum width for haul truck operation.
The upstream slope of the mine waste buttressing embankment in the North sector in contact with the
ripios material will be 1.4H:1V with no intermediate berms. The overall outer slope in the South sector
of the waste dump will be 2.15H:1V and will reach a maximum elevation of 780 masl. The Southern
sector will be buttressed by a stabilisation ramp and berm along the toe in order to improve the long
term stability.
The ripios and waste rock will be placed by trucks into their designated areas. The ripios will be
drained to a moisture content in the order of 11%, and will be transported from the vats by conveyors to
a transfer point and then onto the trucks. The ripios will be placed in relatively thin lifts to promote air
drying before the next lift is applied. This will reduce the moisture content below 11% and thus reduce
the propensity for the ripios to generate seepage.
The results of stability analyses for the Main waste rock dump gave static FoS values during
development and in the long term (after full build-out) in excess of 1.3 and 1.5, respectively. Dynamic
or earthquake stability analyses were carried out using a psuedo-static approach since the waste rock
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forming the slopes and confining the ripios will be non-liquefiable. The pseudo-static analyses gave
FoS values over 1.0 during both the operation and post-closure periods considering a 475 year event
(0.36 g). These results are compliant with industry accepted values. Stability analyses for the ripios
GXPSGXULQJSODFHPHQWLQGLFDWHGWKDWDVHFXULW\RU³QRJR´]RQHRIDSSUR[LPDWHO\ m to 25 m in front
of the advancing ripios lift will be necessary since some minor (superficial) sloughing of this advancing
slope can be expected.
Seepage analyses of the Main waste dump were undertaken and the results indicate that very little
infiltration can be expected during rainfall events. In particular, the saturation degree of the mine waste
was shown to increase only 5% in the top 5 m to 10 m from a PMP storm event. No variation on the
degree of saturation in the upper mine waste was calculated for lesser precipitation events.
Consequently, the potential to generate seepage through the dumps is limited, and the potential for
seepage to impact the groundwater table at a depth of 400 m to 500 m is very low.
In order to monitor slope movements on the Mine waste dump, marker points will be installed during
and after operations. Underdrain systems will be installed at the base of the ripios dump to monitor any
potential seepage from the ripios area. Potential flow will be conducted to a water monitoring station.
The amount of PAG mine waste rock is estimated at approximately 15 Mt. This material will be placed
in a designated area within the southern portion of the main waste dump and will be encapsulated by
non-PAG material. The PAG waste will be separated from the ripios to the north and will be kept
removed from the final outer slopes of the waste dump. At closure, the upper surface of the PAG waste
rock in the dump will be covered with a 1 m layer of non-PAG material to remove the potential for acid
dust generation and dermal contact.
4.13.1.2 Magnetite Manto Waste Rock Dump and Low Grade Stockpile Design
The Magnetite Manto waste rock dump covers 34 ha, and will be constructed in 3 layers. Disposition
will be by downstream discharge in 3 layers, 11.5 m, 10 m and 14 m thick. The final elevation will be
834 masl. Berms width will be 20 m.
The low grade stockpile will extend over 41 ha, and will also be constructed in 3 layers. Material
disposal will be by downstream discharge in 3 layers, 30 m, 20 m and 10 m thick, and the final elevation
will be 871.5 masl. Berm width will be 30 m at elevation 841.5 masl, and 40 m at elevation 861.5 masl.
For both structures the bench slopes and the overall outer slopes will be 1.4H:1V and 2.5H:1V,
respectively. Stability analyses were carried out on these slopes and gave FoS values at the end of full
build-out greater than 1.5. Psuedo-static analyses gave FoS values greater than 1 during both the
operation and post-closure periods considering a 475 year event (0.36 g). These results are compliant
with industry accepted values.
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4.13.2 Tailings Storage Facility (TSF)
4.13.2.1 Location and General Information
The TSF has been designed to a DFS level with a capacity for 49 Mt (dry) of tailings - consisting of
7.5 Mt (dry) of CST and 41.5 Mt (dry) of RST - that will be deposited seperately and managed in
adjacent portions of the facility over a period of 10 years. The two tailings delivery systems have been
designed to a PFS level.
The TSF will be located in a north-south trending depression just to the southwest of the planned mill
site and west of the Main and Magnetite Manto open pits. It will cover a surface area of approximately
372 ha at full build-out (Figure 4.31).
The location of the TSF was selected based on an alternatives analysis study of seven options for
which environmental, economic and technical aspects were considered together with the property
boundaries.
The design of the TSF was developed by Knight Piésold based on:
x Site geotechnical, hydrogeological, hydrological and climate data
x Geotechnical and geochemical data for the tailings
x Geotechnical and geochemical data for the mine waste that will be used in dam construction
x The mining and mill processing schedule.
As part of TSF design, a preliminary study was conducted to evaluate the costs and benefits of
including a tailings dewatering system in the design. The results indicated that thickened tailings
should be incorporated in the design to increase the amount of water recovered. The current DFS
design contemplates thickening both the CST and RST streams to 60 % solids content by weight prior
to delivery to the TSF.
4.13.2.2 Tailings Dam Design
The tailings dam will be constructed out of non-PAG mine waste rock from the Magnetite Manto open
pit and possibly the Main open pit (pending further characterisation studies on the Main pit materials).
Mine haul trucks will be used to transport the construction materials which will be placed into the dam in
thin, horizontal lifts and compaced by routing the mine trucks evenly over the lifts. Final surface
compaction will be by vibratory smooth drum rollers.
At full build-out, the dam will have a length of 1.8 km and a height of 27 m. It will be constructed in
three stages using the downstream construction method and has been designed to maintain its physical
stability during construction, operation and post-closure. A geosynthetic liner will be included on the
upstream face of the dam, and will be extended to underly the southern portion of the TSF basin where
the CST tailings will be stored. Figure 4.32 gives details of the dam.
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Figure 4.31
APPENDIX V
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Figure 4.32
Tailings Dam
APPENDIX V
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The dam was assessed for its consequence classification according to the Canadian Dam Association
&'$'DP6DIHW\*XLGHOLQHVDQGZDVIRXQGWRKDYHD³/RZ´FODVVLILFDWLRQ7KLVUDQNLQJLVGXHWRthe
absence of a population at risk and the remote nature of any surface or groundwater resources that
could be affected.
4.13.2.3 Tailings Deposition
The CST tailings will be deposited into the southern portion of the TSF through frequently rotated
spigots located along the upstream crest of the dam, while the RST will be discharged into the northern
side of the TSF from a few off-take points above the northeast side. The CST will be stored above a
liner while the RST will not. A separation dike will be constructed between the CST and the RST
areas. The overall tailings management plan will involve keeping a shallow supernatant water pond
over as much of the CST deposit as possible in order to keep it saturated and reduce its potential for
oxidation and acid generation. However, it is expected that the pond will not cover the whole CST
deposit at all times and thus the management plan will also involve frequently blanketing the surface of
the CST with a fresh layer of CST. This will keep the areas that are not submerged also in a saturated
condition to the greatest extent possible. The CST deposition spigots will be closely spaced along the
entire crest length of the dam to facilitate this. The liner under the CST will assist in keeping the deposit
saturated by keeping any seepage losses to a very low level.
The RST deposited on the northeast side of the TSF will form a drained and consolidated mass that will
confine the CST into the southern side of the TSF. The surface of the RST deposit will slope to the
south and west and will confine the small supernatant pond in this area to cover a significant portion of
the CST. The RST will be non-acid generating and will be largely above the pond and exposed to air to
increase its drying, consolidation and densification. The liner under the CST will not be extended under
the RST, so that bottom drainage from the RST can occur thus further increasing its consolidation.
Under normal operating conditions the volume of the supernatant pond in the TSF will vary between
about 79 800 and 116 200 m3 in the RST portion of the TSF and 20 300 to 243 100 m3 for the CST
side. The results also indicate that under an extreme precipitation event condition (Probable Maximum
Precipitation or PMP), the maximum pond size is predicted to increase to between 166 200 and
220 200 m3 in the RST side and 34 529 to 278 885 m3 in the CST side over the life of the operation.
These pond sizes are very small and translate into maximum depths of water over the tailings of less
than 1 m and normal depths of less than approximately 300 mm. Water is not planned to be reclaimed
from the TSF owing to the very shallow depths of the supernatant pond, from which the recovery of
clean water would be difficult.
In addition to providing capacity to store the operation and storm water volume, 1 m of freeboard has
been provided at each stage of development of the TSF.
Leachate generation and seepage from the TSF is expected to be low. The liner under the CST portion
will act as a barrier to seepage, while the strong evaporation potential at the site will desiccate the RST
and produce a deposit that will have low and possibly negative pore pressures with little to no
propensity for causing seepage. Any small amounts of seepage that do emerge from the base of the
TSF are likely to be retained in the geological units well above the groundwater, which is at a depth of
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over 400 m, or have their trace elements attenuated to levels that will be unlikely to negatively impact
the groundwater. A preliminary seepage model showed that the potential seepage will reach a depth of
140 m during a period of 15 years considering an unlined facility and a constant supernatant pond.
4.13.2.4 Tailings Delivery System
The tailings delivery systems have been designed to a PFS level and include a separate tailings
delivery pipeline for the RST and CST tailings. The current design, which is based on preliminary
rheology and hydraulics assessments, contemplates that the CST will be pumped and the RST will be
transported by gravity to the TSF. These plans will require confirmation or revision in more detailed
engineering studies.
The CST tailings will correspond to approximately 15% of the total total production or 0.75 Mt (dry) per
year while the RST will correspond to the remaining approximately 85% of the tailings production or
4.2 Mt (dry) per year. Both streams will be thickened at the plant to 60% solids content (by weight).
The CST will be delivered to the TSF via a 125 mm diameter steel pipe to the crest of the tailings dam,
from where the slurry will be discharged from frequently rotated and closely spaced spigots on the
upstream crest of the dam. The normal design flow rate for the CST system is 81 m³/h.
The RST will be delivered to the TSF via a 350 mm diameter HDPE pipe installed beside an access
and service road running parallel to the east side of the TSF. The RST tailings will be deposited from a
few single discharge points above the northeast side of the TSF. The deposition strategy for the RST
will be to establish and maintain a sloping beach to the south and west to keep the CST confined
against the dam and to keep the small supernatant pond largely over the CST. The normal design flow
rates for the RST system is 540 m³/h.
4.13.2.5 TSF Construction
To reduce initial capital costs, the TSF is planned to be built in three stages, involving raising the tailing
dam and progressively installing the CST liner system. The construction stages are:
x Stage 1: Construction of the tailings dam to elevation 765 masl. Placement of the geosynthetic
liner on the upstream slope of the dam and in the basin under the portion corresponding to CST
deposition for this stage. Installation of the CST and RST delivery systems.
x Stage 2: Raise the tailings dam to elevation 772 masl. Placement of the geosynthetic liner on the
upstream slope of the dam, and in the border of the basin under the portion corresponding to CST
deposition for this stage.
x Stage 3: Raise the tailings dam to its ultimate crest elevation of 781 masl. Placement of the
geosynthetic liner on the upstream slope of the dam and in the border of the basin under the area
of CST deposition for this stage. Install the second stage of the RST transport system in the north
side of the facility.
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4.13.2.6 TSF Closure Plan
The closure plan for the TSF has been developed to a concept level only at this time. The plan calls for
covering the final CST surface with an appropriate non-PAG layer in order to limit the potential for
oxidation and acid generation over the long term.
The TSF will have the capacity to temporarily store the run-off produced from a PMP event on the
undiverted catchment, and this water will then be evaporated so that no release is required.
Consequently, there will be no need to provide and maintain a spillway or diversion channels with the
TSF.
4.14 DIESEL FUEL SUPPLY
Fuel supply will be contracted with a vendor that will deliver to a fuel supply facility at site. The service
will cover:
x Transport to site
x Storage and facilities management
x Two in-pit fuel supply trucks for refuelling heavy vehicles
x Personnel to provide 24 hour 7 day per week dispensing service
The price used in the DFS is based on official refinery gate price for diesel, plus transportation to site,
storage and dispensing on a long-term contract basis, for which Marcobre obtained two quotes.
4.15 PORT AND TRANSPORT
4.15.1 Port Facilities
4.15.1.1 Overview
A multi-port strategy is proposed for the Project, as recommended in the report from Sandwell (2009),
as follows:
x San Martin, 250 km by road to the north of Mina Justa, is selected for cathode and acid shipments
for the first 5 years.
x Matarani, 550 km by road to the south is used for shipment of concentrate for 1 year.
x San Juan de Marcona, 30 km to the south, is selected for cathode, acid and concentrate supply
and shipments for the reminder of the Project.
4.15.1.2 San Martin (Terminal Portuario General San Martin)
This port is located approximately 250 km by road to the north of Mina Justa, road access being along
the single lane carriageway Panamerican Highway. Terminal Portuario General San Martin (TPGSM)
suffered damage from an earthquake in August 2007 as the port was being prepared for privatisation.
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TPGSM handled 997 740 t of cargo in 2007, down from the peak of 1 142 707 t it handled in 2006, due
to damage suffered in an earthquake. The predominant cargo is bulk solids which accounted for 78%
of the cargo in 2006.
The port has a 700 m long wharf divided into 4 berths. Overall berth utilisation in 2006 was
approximately 20%, corresponding to 292 berth-days per year total.
If the privatisation scheme goes ahead as envisaged, the 2 northernmost berths will be combined into a
large 350 m long berth for container ships. This will decrease the number of berths available for other
cargo to 2 or 3 (if the container berth is shared with other cargo) and increase pro-rata the berth
utilsation.
2YHUDOOWKHVSDFHDYDLODEOHDW73*60ZRXOGPHHW0DUFREUH¶VUHTXLUHPHQWVIRUFDUJRKDQGOLQJHYHQ
during the peak production years, the exception being the tank farm for liquid bulk storage that would
have to be expanded.
According to the Tender Basis document for TPGSM, the winning tenderer had to make an investment
in the order of US$80.4 M. This estimate is no longer valid considering the extensive damage to the
port caused by the earthquake of August 2007. It is not definite yet, but it seems that the government
plans are to transfer the insurance money collected and the responsibility for executing the necessary
repairs to the selected tenderer.
4.15.1.3 Matarani
The port of Matarani will be used for the shipment of concentrates for 1 year, in order to accommodate
a delay in the start-up of the port of San Juan de Marcona. The port is located approximately 450 km
by road to the south of Mina Justa, road access being along the single lane carriageway Panamerican
Highway.
Matarani port is operated by Terminal Internacional del Sur (TISUR), and handles bulk copper
concentrate and copper cathodes from various mines. Other cargo handled at the terminal includes
soya and soya meal, liquid bulks and containers.
Copper concentrate is received by rail or truck. Trucks are end-dumped into a hopper at an unloading
rate of 240 t/h.
Two storage buildings are available at the terminal. Stacking in both buildings is made by a travelling
stacker mounted against one side of the building. Reclaiming of the product is done by FEL and a fixed
hopper system. A pipe conveyor connects the storage buildings to the ship loading system.
The pipe conveyor feeds a travelling ship loader equipped with a tripper and a boom with a telescopic
chute. All the conveyors are enclosed to reduce dust emissions. The conveyor and ship loader
capacity is 1500 t/h. Pier length is 582 m and the port is capable of handling ships with a LOA up to
210 m and beam up to 35 m.
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TISUR has 160 ha of land area available for new developments; expansion plans include the option of
two new berths inside the existing harbor and, in a later phase, the construction of additional berths
outside the harbor through additional landfill.
The existing port infrastructure and shipping facilities is adequate to handle concentrates from
Mina Justa and it is likely that no additional investment is required. The project could share the existing
truck receiving hopper and 50 000 t capacity shed with other customers and negotiate storage and
handling charge with TISUR.
4.15.1.4 San Juan de Marcona
A Supreme Decree was issued by the government of Peru in December 2008, stating that the port will
be privatised. Tenders for the port concession are expected imminently.
The national port authority of Peru (APN) has completed preliminary studies for the development of a
SRUW DW 6DQ -XDQ GH 0DUFRQD 7KH $31¶V SODQ LV WR GHYHORS WKH 3RUW LQ XS WR VL[ SKDVHV WKH LQLWLDO
phase will focussed on the handling and shipment of iron ore, copper and possibly other bulk minerals.
Subsequent phases would see the development of facilities to handle containers, liquid bulks and other
materials.
The port was expected to handle up to 10 Mt/a of minerals starting in 2013 (and rising to 22 Mt/a by
2032), the majority of these shipments being iron ore.
The government proposed schedule for the start-up of San Juan de Marcona port has been delayed by
1 year, following which San Juan de Marcona port is selected for cathode, acid and concentrates
supply and shipments.
A contingency plan has been developed in case these assumptions do not materialise. If San Juan de
Marcona is not ready by 2015, then concentrates can continue to be shipped from the port of Matarani
until there is a facility in San Juan de Marcona. If there are no cathode handling and/or acid handling
facilities ready in San Juan de Marcona by 2017, then these can continue to be handled from San
Martin until facilities are available at San Juan de Marcona.
4.15.1.5 Port Selection for Mina Justa Project
Marcobre has assumed that the start of operation of the bulk mineral handling facilities at the new port
of San Juan de Marcona will be delayed for 1 year and will start in 2015, at which time concentrates
from Mina Justa will be shipped out of this port. Marcobre has further assumed that, starting in 2016,
cathodes and acid will also be handled by the new port of San Juan de Marcona in accordance with the
proposed phased development of this facility.
A contingency plan has been developed in case these assumptions do not materialise. If San Juan de
Marcona is not ready by 2015, then concentrates can continue to be shipped from the port of Matarani
until there is a facility in San Juan de Marcona. If there are no cathode handling and/or acid handling
facilities ready in San Juan de Marcona in 2016, then these can continue to be handled from San
Martin until facilities become available.
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4.15.2 Transport
4.15.2.1 Land
The Mina Justa Project is located approximately 400 km south of Lima, and is easily accessible by a
good network of highways. The highway south of Lima, the Panamerican Highway, is initially 4 or 6
lanes wide, reducing to two-way, single lane traffic after 115 km.
At highway marker 488, a spur road leads to the town of San Juan de Marcona. A distance of 10 km
along this highway there is an exit to the Mina Justa exploration camp, which lies another 3 km from the
exit. Thus, total travel distance to the project site from Lima is 501 km, a journey taking approximately
6 to 7 hours.
Road distances to other urban centres from the project site are:
x Nazca: 50 km
x San Juan de Marcona: 30 km.
4.15.2.2 Air
It is expected that some project employees will be transported between Lima and site by aircraft. Two
airports exist close to the project, as follows:
x The city of Nazca has a small airport that is used by light aircraft. The runway is approximately
1 km in length. Flying distance from Lima to Nazca is approximately 350 km.
x On the edge of San Juan de Marcona there is a small airport owned and operated by the Peruvian
Navy for training purposes. It has a runway of approximately 2 km, but only half is in good
condition. Flying distance from Lima is approximately 400 km.
Neither airfield has lighting for night flights and flying is restricted to between approximately 7 am and
4 pm. Neither airport is serviced by commercial carriers at this time.
4.16 PROJECT IMPLEMENTATION PLAN
The Mina Justa Project will be implemented in two stages. The first stage involves construction of the
facilities required to mine and process Oxide ore, and the second stage, which will commence while the
Oxide plant is still under construction, involves construction of a concentrator and related facilities to
process Sulphide ore.
4.16.1 Implementation Schedule
Summaries of the DFS Oxide and Sulphide plant implementation schedule are provided in Figure 4.33
and Figure 4.34. It should be noted that a delay of 4 months has occured since that time (Section
4.16.3).
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A 29 month timeframe is projected for completion of the Oxide plant, with an additional 3 months to
complete the commissioning and commence cathode production. It is assumed that all necessary
permitting and environmental approvals are obtained within the timeframe indicated.
Similarly, a 29 month timeframe is projected for the Sulphide plant implementation, plus 3 months for
commissioning.
The key drivers of the schedules are the very long delivery lead times for some critical equipment (eg,
crushers and mills), the large quantity of concrete works required for the vat leaching area, and the time
required to construct camp accommodation.
The strategies employed in the schedule to achieve the project completion dates include the following
essential elements.
x Early award of EPCM contract: An EPCM (Engineering, Procurement and Construction
Management) approach has been assumed for the implementation of the facilities and supporting
infrastructure. Early award of the EPCM contract is necessary to progress the engineering and
tender the critical long lead time equipment packages and contracts.
x Early award of critical items: the supply of cone crushers and construction of the camp are on the
critical path. The schedule relies upon award of these critical items at the Project Release and
Financial Approval milestones. For the Sulphide plant, the mills are critical long lead equipment
and it is assumed that these will be ordered three months before the Sulphide Project Release
milestone.
x Maximum Pre-assembly: To minimise construction time, where possible, tanks, platforms, MCCs
and other equipment will be pre-assembled as much as practicable before being delivered to site.
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Figure 4.33
Mina Justa Project: Oxide Project Implementation Schedule (DFS Version)
APPENDIX V
— V-202 —
Delay of 4 months projected (Section 4.16.3)

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Figure 4.34
Mina Justa Project: Sulphide Project Implementation Schedule (DFS Version)
APPENDIX V
— V-203 —
Delay of 4 months projected (Section 4.16.3)

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4.16.2 Schedule Risks
The following risks to the schedule have been identified:

x Preparation of the documents and tendering for the critical long lead equipment and camp
construction, and turn-around time for the review and approval of critical project drawings and
documents, may take longer than planned.
x Delivery times and estimates supplied by vendors for the DFS are not firm. There is a risk that
these could change when orders are placed.
x Delay in obtaining permits that affect the milestones for finance approval, project release, or
construction start will adversely affect the schedule11.
x The camp is essential for the project because there is insufficient existing accommodation near the
site. It is planned to commence the other construction works while in the process of building the
camp. It is recommended to plan and closely manage the camp construction and contractor
mobilisation schedules to ensure that accommodation and facilities are made available ahead of
demand in order to avoid constraining the build-up of the main construction workforce.
x An allowance has not been made specifically for inclement weather, industrial strife, civil unrest,
earthquakes, unidentified community festivals, and the like. There are more than 3000 community
festivals celebrated in Peru each year, and those that apply locally have not yet been identified.
More importantly, there will be presidential elections iQ $SULO DV FXUUHQW SUHVLGHQW¶V 5 year
term expires on July 27, 2011. Presidential election years have often been marked by elevated
levels of civil unrest, most often manifested by blocking highways. It is recommended that these
risks are reviewed when more specific information is available regarding contracting strategy, local
industrial conditions, etc., and a contingency allowance be made if necessary.
4.16.3 Post-DFS Developments
The ESIA hearing took place on 8 January, 2010. The latest estimate by MDUFREUH¶VOHJDOFRXQVHOLV
that the timing will be as follows:
x ESIA approval end of July 2010
x Oxide plant construction start 1 February 2011
x Oxide plant construction complete 6 February 2013
x Oxide plant commissioning complete 29 April 2013
The updated timetable is based on the assumption that administrative proceedings will take the
maximum length of time allowed by regulations. On that basis, the schedule is anticipated to have a
delayed start of 10 months from the DFS schedule.
11
Start of construction has been delayed for ten months from the DFS schedule, due in part to a delay in approval of the
ESIA (Section 4.16.3)
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4.16.4 Contracting Strategy
The Project will be implemented with a general strategy of multiple, horizontal, discipline-oriented
contract packages (for earthworks, concrete, structural erection/mechanical/piping, tank erection, field
piping, electrical/instrumentation works, HV electrical works, process control, etc.), with the inter-
discipline construction interfaces managed by an EPCM Contractor.
This approach is aimed at minimising construction interface issues and risks. Key elements are as
follows:
x Match contractor skills with the work scope and minimise the impact of using too many lower tier
contractors.
x Optimise interfaces by using small packages for specialised or interruptive work that, if
incorporated into the larger packages, would cause disruption or loss of focus with the main
contractors.
x Focus on an orderly and timely implementation of the project philosophy, ie, schedule to allow for
progressive release of engineering, prioritised procurement and delivery of material and
equipment.
x ³)UHH-LVVXH´ VSHFLILF ORQJ OHDG HTXLSPHnt and materials to allow contract scopes to be defined
without requiring contractors to procure specialised long-lead material or equipment.
In general, competitive tendering on a lump sum basis is preferred for the Project using well-defined
detail drawings, equipment lists, standards and scope of works specification. This philosophy will apply
in particular to bulk equipment supply and fabrication.
In circumstances where engineering and vendor information is limited, and there are time schedule
constraints due to long delivery times, it may not be appropriate to enter into lump sum contracts. In
such instances, fabrication or construction contracts will be based on unit rates with provisional bills of
quantities extracted from the Project control estimate. Such an approach could be adopted for the
earthworks packages, concrete construction packages and structural steel fabrication packages.
4.16.5 Implementation Scope of Work
The Project scope of work includes the provision of facilities for mining, process plant, utilities and
services, waste disposal and the associated infrastructure to support the construction work and
on-going operations.
Marcobre will manage the EPCM Contractor, and manage or execute all other activities needed to
complete the Project, including:
x Finance, insurance, governmental approvals, environmental approvals and licences
x Land purchases, permits, security, medical, taxes and duties
x Mine planning, mine equipment supply and assembly, and mine development
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x Engagement of specialist consultants and contractors for mining, waste disposal and other
specialist scopes
x Contracts for power supply, port usage, transport of cathodes, copper concentrate, acid, other
reagents and consumables, etc.
The EPCM Contractor will be appointed to design and manage the construction of the processing plant
and associated infrastructure, including:
x Engineering and procurement of the:
Oxide process plant
Mine facilities
Infrastructure and services
Sulphide plant
x Contracting and management of construction contractors
x Management of commissioning.
The success of the implementation of the project will be dependent on the combined performance of
the EPCM Contractor and the Marcobre team. The alignment of the team members to common
objectives and the ability to work together as an efficient, cohesive group is considered critical for the
success of the Project.
4.16.6 Organisation
The implementation strategy is based on an organisation with a Marcobre project team and an EPCM
Contractor both reporting to a Marcobre Project Director.
The EPCM Project Manager will be responsible for managing the EPCM works and other specialist
consultants and subcontractors. Key personnel will be nominated to ensure that assigned areas of
responsibility are delivered safely, on time, on budget and in accordance with specifications and project
criteria.
The EPCM Construction Manager and management team will be based on-site to manage and oversee
WKHFRQVWUXFWLRQFRQWUDFWRUVZKRZLOOFDUU\RXWWKHFRQVWUXFWLRQ$3URMHFW6SRQVRU¶V&RPPLttee, made
up of senior management from Marcobre and the EPCM Contractor, will be appointed to provide
resolutions to problems or issues that cannot be resolved by the project team.
4.16.7 Health, Safety, Environment and Community
The Project HSEC Management Plan will be developed prior to project execution, and will identify the
HSEC requirements, allocate duties and responsibilities, and detail the processes and procedures that
are used to manage HSEC during the implementation of the project. The Project HSEC Management
Plan will be consistent with the Owner's Social-Environmental Management Plan, and the ESIA, as well
as Marcobre HSEC policy which requires compliance with applicable Equator Principles.
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Public meetings, consultations, systems, procedures and management plans will be used to align the
key stakeholders, namely the Marcobre Project Team, the Marcobre Operating Team, the EPCM
Contractor, contractors, vendors, the workforce and the community in order to achieve the HSEC
objectives.
4.16.8 Project Management
x Risk Management: The risk review/assessment process is a fundamental tool, and it will be used
to maximise the probability of achieving the project objectives.
x Planning and Scheduling: Progress and performance will be monitored and measured against a
base-lined Master Project Schedule. Suppliers and contractors will develop their own more
detailed schedules to manage and control their work scopes, and provide input at a summary level
into the Master Project Schedule that will be managed by the EPCM Contractor.
x Work Breakdown Structure: A defined work breakdown structure is a fundamental part of the
development of the project numbering system and the cost accounting system, and will be adopted
to define the overall project and break it down into smaller areas and sub-areas in a hierarchical
numbering system.
x Project Cost Controls: Rigorous procedures will be developed and implemented to ensure
effective control of expenditure by management, including preparation and approval of change
orders, identification of trends, and release of contingency.
The quantities and project costs will be controlled and managed against the control budget through
the EPCM Contractor¶V FRVW FRQWURO V\VWHP IRU WKDW SDUW RI WKH 3URMHFW XQGHU WKH EPCM
Contractor¶VFRQWURO0DUFREUHZLOOGLUHFWO\PDQDJHRWKHUFRVWVVXFKDV2ZQHU¶V&RVWV
7KH (3&0 &RQWUDFWRU¶V FRVW FRQWURO V\VWHP ZLOO LQYROYH WUDFNLQJ RI FRQWUDFWV SURFXUHPHQW DQG
expediting for direct costs and site services, temporary works, sub-consultants, timesheet and
manhour control, and associated expenses for indirect costs.
x Quality Assurance: Project management plans and project criteria will be developed early in the
SURMHFWLPSOHPHQWDWLRQWRHQVXUHDOLJQPHQWRIWKH(3&0&RQWUDFWRUZLWK0DUFREUH¶VUHTXLUHPHQWV
The EPCM Contractor will have an audit system in place to identify non-compliances.
6XSSOLHU¶VDQGFRQWUDFWRU¶VTXDOLW\V\VWHPVZLOOEHDVVHVVHGDWWLPHRIWHQGHUDQGFRPSOLDQFHZLWK
their systems will be monitored by the EPCM Contractor during implementation.
4.16.9 Project Phases
4.16.9.1 Permitting
The efforts to obtain all the applicable permits for the project will be grouped into two major phases. The
first phase will include obtaining the environmental approval for the project and all the construction and
operating permits required to commence mining activities and construction of the Oxide ore processing
facilities, including all supporting site infrastructure and off-site infrastructure to the extent legally
possible.
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The second phase (concentrator) will begin during the execution of the first phase. The construction of
the concentrator is scheduled to commence immediately after commissioning of the Oxide plant, and by
that time all relevant construction and operating permits required for construction of the Sulphide plant
should be obtained, to the extent legally possible.
Certain key permits required for operations, such as the water license and the beneficiation concession
(which is, in effect, the key operating permit), can only be obtained after the corresponding facilities
have first been constructed, inspected, and found to be in accordance with the associated construction
authorisation. Under the existing Peruvian legal and regulatory regime, it is therefore impossible to
obtain all necessary operating permits and approvals prior to the commencement of construction.
In accordance with applicable law, the Mine Closure Plan will be submitted within 1 year following the
approval of the ESIA and will be updated as required. Pre-production stripping cannot commence prior
to approval of the Mine Closure Plan.
4.16.9.2 Required Permits and Approvals
The competent environmental authorities for the mining sector are MINEM and the Bureau for the
Supervision of the Investments in Energy and Mines (OSINERGMIN). The former approves the
environmental management instruments, in this specific case, the ESIA and the Mine Closure Plan for
the Mina Justa Project, whereas the latter is in charge of supervising compliance with the legal
obligations in environmental matters.
Marcobre will have to obtain other governmental consents in order to develop activities that are
regulated by Peruvian legislation, ie, mining and mineral processing, construction of hydraulic
infrastructure and water use, electrical transmission, archeological evaluation projects, storage of fuel
and the use of restricted chemicals, explosives, telecommunication equipment, radioactive substances,
etc. These consents are issued by authorities within MINEM, as well as within other ministries.
A Gantt diagram and spreadsheet have been prepared, identifying each administrative procedure, the
timeframe in which it will have to be started, and the costs associated with obtaining the consents.
The following describe the main consents to be obtained in order to construct and operate the facilities
in each phase:
First Phase: Construction and Start-Up

Before the start of the first phase it is necessary to obtain general Project permits and approvals,
including approval of the ESIA, and obtaining the Certificate of Nonexistence of Archeological Remains
for the area that will be involved during Project implementation. As noted, Marcobre has to apply for
the approval of the Mine Closure Plan within 1 year after the approval of the ESIA.
During this phase the principal permits and approvals to be obtained are the:
x Beneficiation concession construction authorisation, and following construction and inspection, the
beneficiation concession itself, which constitutes the principal approval for the operation.
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x Authorisation to start mining exploitation activities in the Mina Justa Pit, the Magnetite Manto Pit
and the construction material quarries.
x Authorisation to construct well field facilities and the water pipeline to the mine site.
x Licence to use groundwater for domestic and mining purposes, which can only be issued after the
construction and inspection of the hydraulic infrastructure.
x Definitive Electrical Transmission Concessions for the 220 kV and the 22.9 kV electrical lines.
x Effluent Treatment and Reuse (in case Marcobre decides to discharge effluents into the
environment).
Second Phase: Concentrator Construction and Ongoing Operations

The ESIA submission and approval activities for the Sulphide Project occur as part of the same
application as the Oxide Project in the project implementation schedules.
This phase should be developed once the consents required for its construction are obtained. During
this phase modification of the beneficiation concession (includes construction authorisation) will be
obtained.
4.16.9.3 Engineering
Engineering will be conducted from a well-equipped and well-resourced Project office, by a competent
group of engineers with the appropriate level of skills and experience, utilising standard documents and
procedures.
The Marcobre project team will play an important role in reviewing engineering documents and
drawings provided by the EPCM Contractor. To ensure Marcobre has input to process and plant
control issues, meetings will be conducted progressively with Marcobre representatives during the
development of process flow sheets, process control philosophy, P&IDs and design criteria.
4.16.9.4 Procurement and Contracting
Procurement and contracting for that portion of the Project scope under the control of the EPCM
Contractor ZLOO EH XQGHUWDNHQ E\ WKH(3&0 WHDP VXSHUYLVHG E\ WKH 2ZQHU¶V3URMHFW7HDP 9HQGRU
and contractor lists will be prepared for Marcobre approval, with consideration given to capability,
product quality, and performance and delivery record. Priority will be placed on sourcing materials and
services in Peru.
All packages will be tendered, awarded, and administered through to close-out in the name of
0DUFREUHZLWKWKH(3&0&RQWUDFWRUDFWLQJDVWKH0DUFREUH¶VUHSUHVHQWDWLYHIRUH[HFXWLRQRIWKHZRUN
Invoices and progress claims will be forwarded to the EPCM Project Manager for
quantity/delivery/condition verification and approval where applicable. Marcobre will control final
authorisation and payment.
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Peru-based transport companies familiar with local law, customs requirements and the transportation of
processing equipment will be used to manage and coordinate logistics.
Procurement and contracting for that portion of the scope that is under the control of Marcobre will be
undertaken by the Marcobre Project Team working together with the Marcobre Operating Team. Which
organisation would take the lead on a particular contract or procurement process would depend on
whether it is largely an operating concern (eg, acid suppy) or a construction concern (eg, construction
period security and catering).
4.16.9.5 Construction
The EPCM Contractor will manage the construction contractors on behalf of Marcobre. The EPCM
Contractor and the Marcobre Project Director will be responsible for ensuring that no activity within their
respective scopes commences or continues without all applicable permits and approvals required for
the commencement or continuation of that activity being in hand.
The first construction activity involves clearing of any vegetation and the recovery and placement of any
topsoil into stockpiles for future rehabilitation.
The principal construction materials are cement, sand, and aggregate for concrete works. Sand of
suitable quality is in plentiful supply in the project area, and will be accessed from a borrow pit in the
mine area. A small quarry will be established within a waste area of one of the initial open pits to
provide feed to a mobile crusher to produce aggregate. Material for the base of the access road and
mine area roads will be locally derived, using crushed rock from waste areas of the proposed open pits
as required to supplement broken material at surface.
Early activities comprise the construction of the access road and internal roads, and establishment of
temporary accommodation for the workforce, temporary power and temporary water supplies.
Permanent power and water supplies will be developed during the construction period, but are not
required until production machinery and equipment has been installed and is ready for testing.
Depending on local conditions, which have been determined by geotechnical surveys, ground
preparation will be required to form firm foundations, particularly for larger machinery such as crushers,
mills and vats. A batch plant for concrete will be established on site for use during the construction
period, but will not be a permanent facility.
Once the process equipment has been installed, and power and water brought to and reticulated
around the site, the equipment will be commissioned. Prior to this, the mining fleet and support facilities
will be established on site, pre-stripping of waste will commence (about 9 months prior to start-up of the
Oxide processing facilities), and initial ore stockpiles will be established to allow commissioning and
subsequent ramp-up of the plant to full production.
Manning numbers will vary greatly over time during construction, depending on the activities being
undertaken, but it is estimated that the peak construction labour force will number approximately 1400
workers, not including Marcobre employees or support services contractor employees such as catering,
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security, explosives, heavy vehicle maintenance, and laboratory. Of these, it is estimated that up to
70% will be brought in from outside the area and will require accommodation on site during specific
construction phases. The camp has been designed to accommodate up to 980 people during
construction, which is estimated to be sufficient to accommodate all those on site at any one time.
Towards the end of the construction phase, a portion of the camp will be renovated and upgraded to
provide offices and a permanent camp for Marcobre employees not living in San Juan de Marcona or
Nazca.
Most of the construction camp will consist of portable modules which will be decommissioned and
transported off site following construction of the Sulphide plant.
4.16.9.6 Commissioning
7KH &RPPLVVLRQLQJ 0DQDJHU ZLOO OHDG WKH (3&0 &RQWUDFWRU¶V FRPPLVVLRQLQJ WHDP ZLWK GLVFLSOLQH
engineers reporting directly to the Commissioning Manager. It will be necessary to overlap
construction, pre-commissioning and commissioning activities, particularly considering that two
processing plants are being built in sequence. Responsibilities will be clearly defined, together with
authorised signatories for documentation such as check lists, test documentation, punch lists and
handover certificates.
As sections of plant become available, wet commissioning will be undertaken, followed by ore
commissioning, which would be under the management of the Marcobre Project Team, with assistance
from the Marcobre Operations Team.
4.17 PROJECT OPERATIONAL PLAN
4.17.1 Operational Labour Levels and Sourcing
The workforce required to operate the Project is shown in Table 4.23. The expectation is that 60% of
the workforce will be drawn from the towns of San Juan de Marcona and Nazca, and will be transported
to site by bus each day. The remainder will be based outside the region and will require
accommodation in the camp. The operations camp is designed to hold 300 people in single person
quarters.
Initially, it is expected that local skills will be limited to security, clerks, general labouring, drivers,
technical assistants and plant operators. However, Marcobre will employ full-time personnel officers to
conduct training courses to build up the skills base of local labour so that over time the proportion of
local labour will rise to 90% of the total work force and will be strongly represented in management and
technical areas.
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Table 4.23
Summary Operations Manning Levels
Phase 1 Phase 2 Phase 3
Oxide Oxide + Sulphide Sulphide
Mine
All manning excl. maintenance 227 236 97
Maintenance manning 65 65 65
Mine - Total: 292 301 162
Process Plants
Oxide 124 124 0
Sulphide 0 104 104
Subtotal (excl. Maintenance): 124 228 104
Cleaners 8 8 8
Maintenance manning 71 107 70
Plants - Total: 203 343 182
Site Organisation (excl. Maintenance) 75 84 75
Total Site Manning 570 728 419
4.17.2 Closure/Post-closure Plan
A preliminary closure and post-closure plan has been prepared as part of the DFS. The focus is on
addressing potential impacts from waste rock, ripios and tailings disposal, and the closure plan ensures
that any harmful components of these three waste streams are shielded permanently from the
environment. The intention is that the Project will have no material, long term, negative impacts on the
environment of the project area. Following mine closure, all surface buildings and equipment will be
removed from site unless otherwise agreed with the Peruvian authorities in accordance with applicable
regulations (eg, power lines and water supply lines may be retained).
Closure of the operations will take place in stages. Vat leaching, SX/EW facilities and the ripios dump
would be decommissioned and the sites reclaimed while the Sulphide ore continues to be mined and
processed.
Monitoring of the effectiveness of the closure plan will continue for a period of time to be determined in
the corresponding Mine Closure Plan as approved by the regulatory authorities.
4.18 CAPITAL COST
4.18.1 Preamble ± Cost Escalation from 1Q09
Capital and operating costs estimates within this report have a base date of 15 February 2009 (1Q09).
This means that costs in the estimate were obtained during the few months prior to the 15 February
2009 and therefore reflect market conditions that prevailed at that time. This also means that costs
presented for inclusion in the estimate in currencies other than the base currency have been converted
to US$ at exchange rates that prevailed at that time.
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China Sci-tech has required an update of both capital and operating costs to 31 January 2010, as part
of this Technical Report. An accurate update would require very time-consuming revalidation of every
quotation received from vendors and contractors, and well as an update of the foreign currency rates of
exchange. Due to time constraints in compiling this report, AMEC Minproc has used information from
the US Bureau of Economic Analysis website: National Income and product Accounts Table, Table
1.1.9 Implicit Price Deflators for Gross Domestic Product (Index Numbers, 2005=100) Seasonally
Adjusted. From this table, the Gross Domestic Implicit Price Index, which is the broadest measure of
U.S. inflation, shows an increase from 109.691 to 109.946 for the period 1Q09 to 4Q09. This equates
to a percentage increase of 0.23% which AMEC Minproc has used to adjust both capital and operating
cost estimates. No adjustments have been made to foreign currency exchange rates.
Amounts shown in key tables in this report have not been changed from the original report, but
additional tables have been included below each of these key tables showing the original cost at 1Q09,
the adjustment percentage, adjustment amount and the final updated cost to 1Q10.
4.18.2 Project Capital
AMEC Minproc developed or supervised the capital cost estimates for the mining equipment, mine
development, process plant, and associated in-plant and ex-plant infrastructure. Additional information
and costs were supplied by Knight Piésold IRU WKH 76) 0DUFREUH GHYHORSHG WKH 2ZQHU¶V &RVW
estimates. These are presented as an Oxide Plant DFS estimate (which includes the Mine DFS
estimate) and as a Sulphide Plant PFS estimate.
The capital cost estimates are structured to encompass the following major categories:
x Direct Capital Costs: Includes expenditures incurred for the construction of the process plant and
infrastructure, mining and associated capital costs as defined in the Oxide Plant (DFS) and
Sulphide Plant (PFS) scope of work. The costs include permanent materials and equipment,
freigKW WR VLWH FRQVWUXFWLRQ ODERXU DQG HTXLSPHQW LQFOXGLQJ FRQWUDFWRUV¶ VXSHUYLVLRQ RYHUKHDGV
and profit), temporary construction facilities, construction mobile equipment, and commissioning
assistance. (Note: GMI has considered the vendor representatives, first fill consumables and
start-up spares within its Indirect costs for the infrastructure components.)
x Indirect Capital Costs: The expenditures related to the engineering design, procurement, project
management, site construction management and commissioning supervision by the EPCM
Contractor. Indirect costs also provide for consultants required to supplement design engineering
and construction activities.
x Accuracy Provisions: These reflect the level of definition available relating to the scope of work,
process design, conceptual engineering design and cost data at the time of the capital estimate
development. These make appropriate allowances for uncertain elements of cost, for estimating
anomalies and omission in quantification, thereby reducing the risk of cost variation within the
required accuracy level.
x 2ZQHU¶VCosts: IQFOXGHFXVWRPVGXWLHVLQVXUDQFH2ZQHU¶VSURMHFWWHDP2ZQHU¶VRSHUDWLQJWHDP
SULRUWRSURGXFWLRQSURSHUW\FRVWVVXUIDFHULJKWVDQGPLQHUDOULJKWVDQGRWKHU2ZQHU¶VLQWDQJLbles,
excluding sunk costs.
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The estimated total costs are summarised in Table 4.24 (Oxide plant and mine ± Base Date 1Q09),
Table 4.25 (Oxide plant and mine ± escalated to 1Q10), Table 4.26 (Sulphide plant ± base date 1Q09)
and Table 4.27 (Sulphide plant ± escalated to 1Q10). Details of mine capital costs are included in
Section 4.7.8.
The unescalated capital cost estimate for the oxide plant as shown in Table 4.24 has a level of
accuracy of ±10%, while the unescalated estimate for the sulphide plant in Table 4.26 has a level of
accuracy of ±20%. Costs originally in currencies other than US$ have been converted to US$ at the
exchange rates shown in Table 4.28.
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Table 4.24
Oxide Plant DFS Capital Cost Estimate (1Q09), Summarised by Area
No. ($) (%) ($) ($)
001 General Plant 11 055 834 11.4% 1 261 807 12 317 641
010 Crushing and Screening 1 097 296 10.0% 109 731 1 207 027
011 Primary Crushing 12 011 627 8.9% 1 063 609 13 075 236
012 Primary Stockpile and Reclaim 5 399 360 9.3% 501 547 5 900 907
013 Secondary Screening/Crushing and Tertiary Crushing 20 287 527 6.1% 1 228 564 21 516 091
014 Tertiary Screening and Quaternary Crushing 22 968 439 6.0% 1 387 639 24 356 078
015 Quaternary Screening 10 418 274 7.3% 758 199 11 176 473
020 Vat Leaching 67 288 240 9.3% 6 248 419 73 536 659
030 Solvent Extraction 18 772 003 11.2% 2 094 912 20 866 915
040 Electrowinning 29 898 230 7.6% 2 262 348 32 160 578
050 Reagents ± Oxide 2 391 151 10.3% 246 951 2 638 102
060 Services ± Oxide 3 469 873 11.4% 395 997 3 865 870
070 Infrastructure ± Oxide 21 533 336 9.7% 2 097 806 23 631 142
081 Commissioning ± Oxide 2 020 961 10.0% 202 096 2 223 057
082 Vendor Representatives 1 058 439 10.0% 105 844 1 164 283
083 First Fills and Spares 11 512 650 10.0% 1 151 265 12 663 915
084 Loose Tools and Equipment 1 221 938 10.0% 122 193 1 344 131
095 Power Supply 11 545 443 10.0% 1 154 545 12 699 988
096 Plant Access Road 7 134 713 13.6% 968 895 8 103 608
097 Construction Camp and Village 17 008 679 10.0% 1 700 868 18 709 547
098 Water Supply 16 576 532 13.7% 2 270 740 18 847 272
200 Mining 123 150 502 0.2% 224 776 123 375 278
EPCM 51 080 140 10.0% 5 108 014 56 188 154
2ZQHU¶V&RVWV 37 242 013 0.0% 0 37 242 013
Totals 513 447 511 6.5% 33 418 038 546 865 549
Table 4.25
Oxide Plant DFS Capital Cost Estimate, Escalated to 1Q10
1Q09($) (%) ($) 1Q10
($)
Total escalated Oxide plant capital cost estimate 546 865 549 0.23% 1 257 791 548 123 340
The PFS capital cost estimate for the Sulphide plant (Table 4.26) has a level of accuracy of ±20%, and
is expressed in 1Q09 US$. Escalated costs to 1Q10 are shown Table 4.27.
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Table 4.26
Sulphide Concentrator PFS Capital Cost Estimate (1Q09), Summarised by Area
No. ($) (%) ($) ($)
001 General Plant 4 651 645 18.5% 860 088 5 511 733
098 Water Supply 3 598 297 12.8% 460 312 4 058 609
110 Sulphide Primary Crushing 15 066 043 14.3% 2 157 212 17 223 255
120 Sulphide Grinding 36 804 910 9.6% 3 545 430 40 350 340
130 Sulphide Flotation 17 230 211 15.2% 2 615 714 19 845 925
140 Sulphide Concentrate Thickening and Filtration 7 579 799 13.8% 1 045 210 8 625 009
160 Sulphide Tailings Thickening and Disposal 15 102 265 18.2% 2 753 420 17 855 685
170 Sulphide Reagents 2 444 480 16.9% 414 113 2 858 593
180 Sulphide Services 7 592 634 16.7% 1 265 847 8 858 481
191 Commissioning 485 763 14.3% 69 596 555 359
192 Vendor Representatives 535 528 15.0% 80 329 615 857
193 First Fills and Spares 3 681 004 19.9% 732 099 4 413 103
EPCM 22 129 233 0.0% 0 22 129 233
2ZQHU¶V&RVWV 10 529 709 0.0% 0 10 529 709
Totals 151 693 661 11.0% 16 613 409 168 307 070
Table 4.27
Sulphide Concentrator PFS Capital Cost Estimate, Escalated to 1Q10
IQ09($) (%) ($) IQ10 ($)
Total escalated sulphide concentrator capital cost estimate 168 307 070 0.23% 387 106 168 694 176
Costs originally in currencies other than US$ have been converted to US$ at the exchange rates shown
in Table 4.28.
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Table 4.28
Exchange Rates (1Q09)
Currency Unit Units per US$
AUD Australia Dollars 1.54
CLP Chile Pesos 595
EUR Euro 0.785
JPY Japan Yen 91.7
PEN Peru Nuevos Soles 3.26
USD United States Dollars 1
ZAR South Africa Rand 10.1
CAD Canadian Dollar 1.24
Note: Base date 16 February 2009
4.18.3 Estimation Methodology
The estimate methodology applies to the AMEC Minproc scope of work only, unless otherwise stated.
Generally, for earthworks, concrete, structural steelwork and platework fabrication and installation
supply rates and unit man-hours are based on information provided by GMI, a major local contractor,
for the off-site infrastructure. AMEC Minproc has independently checked GMI-provided rates against
other Peruvian contractors. Quantities were determined from material take-offs based on preliminary
designs and layout drawings.
Equipment specifications were prepared and issued with tender packages for all major equipment
items, and budget equipment prices were obtained. The balance of costing was derived from
AMEC Minproc¶VGDWDEDVHDQGIURPDOORZDQFHVEDVHGRQWKHGDWDEDVH
In-plant piping is derived from the actual costs of similar plants completed by, or currently in the process
of being completed by AMEC Minproc and adjusted to Peruvian costs and productivity. The basis of
the piping estimate is installed piping to number of pumps per area, for equivalent type areas.
Electrical equipment prices were obtained from multiple Peruvian suppliers for all major items of
electrical equipment; the balance of pricing was based on quotes from suppliers for recent
AMEC Minproc projects. Some minor items were based on the AMEC Minproc electrical estimating
database. The majority of unit rate items were built up from unit rates supplied by GMI. Site installation
hours have been calculated from the AMEC Minproc in-house database, using Peruvian norms as the
basis.
For the buildings a budget quotation was received from a local contractor and used within the estimate.
Building area costs were compared and verified against similar buildings on current projects.
Transport of concrete-related bulk materials is included in the all-in concrete rate (reinforcing, cast-in
steelwork, culverts, etc.). Transport rates for steelwork and platework bulk materials were derived from
rates received from installation contractors.
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Transport for all equipment items is based on information received for steelwork and platework
transport. Where this method of calculating freight costs was inappropriate, an allowance varying from
5% to 12% was applied, based on historical information, depending on the original source of
equipment, volume, weight, etc.
No equipment suppliers provided freight costs with their quotes other than to their closest port of
departure in some instances.
Subsequent to original pricing requests some transport information has been received from suppliers
and incorporated into the estimate.
4.18.4 Sunk Costs
In addition to the costs presented in Table 4.24 and Table 4.26, the project carries sunk costs of
US$99.6 M to 31 December 2008, and was projected to incur additional costs through 30 September
2009 of $6.4 M.
GRD Minproc did not prepare estimates for the following:

x Project Contingency: Marcobre has elected to determine the Project Contingency allowance as nil
for the purpose of economic assessment. AMEC Minproc has strongly recommended to Marcobre
that a contingency allowance be included as part of the project costs.
x Escalation: AW0DUFREUH¶VUHTXHVWHVFDODWLRQwas excluded from the original project estimates.
4.18.5 Sustaining Capital
Sustaining capital represents the amount of capital investment, at current day costs (1Q09), required to
support the process plant operation over the life of the operation. This includes deferred capital such
as a tailings dam lift, and sustaining capital such as the replacement of mining equipment, other heavy
mobile equipment, computer hardware, light vehicles, etc.
The summary of the sustaining capital requirements is presented in Table 4.29.
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Table 4.29
Sustaining/Deferred Capital Summary (1Q09)
Total Cost
Plant Description
($)
Deferred Capital
Sulphide Recleaner concentrate pump 2 28 600
Sulphide Pressure Filter Upgrade 510 000
Sub-Total Deferred Capital 8 398 600
Sustaining Capital
Oxide/Sulphide Replacement of computers 1 411 000
Oxide/Sulphide Mining Sustaining Capital 15 185 638
Oxide/Sulphide Vehicles Sustaining Capital 7 859 997
Sub-Total Sustaining Capital 24 456 635
Total 32 855 235
Table 4.30
Total Sustaining/Deferred Capital, Escalated to 1Q10
IQ09($) (%) ($) IQ10
($)
Total escalated sustaining/deferred capital cost estimate 32 855 235 0.23% 75 567 32 930 802
4.19 OPERATING COSTS
The operating costs for the project have been determined for the following categories:
x Mining
x Oxide plant
x Sulphide plant
x General and administration (site and Lima office)
x Land transport, port, ocean freight, marketing, treatment and refining charges.
The operating cost estimate has an accuracy of ±10% (except the Sulphide plant which was developed
to a PFS level of ±20%). Operating costs are in US$ and reflect an estimate base date of 1Q09 unless
otherwise stated. Foreign currency conversion rates are as shown in Table 4.28.
IGV tax is not included in the operating cost estimates. It is expected to be fully recovered by Marcobre
with a 3 month lag.
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Except where specifically noted, no allowance has been made in the operating cost estimate for
financing charges, contingency, escalation or exchange rate variations, depreciation and accounting
effects, sustaining capital (which is included in capital expenditures), and exploration on other
prospects.
Key unit operating costs provided by Marcobre are summarised in Table 4.31. These costs have a
base date of 1Q09.
Table 4.31
Key Unit Costs Provided by Marcobre (1Q09)
Item Unit Cost
Diesel (delivered to site, including site storage and dispensing) US$/litre 0.636
Electricity (including transmission) US$/MWh 55.00
Sulphuric acid (delivered to site)
Via San Martin US$/tonne 90.40
Via San Juan US$/tonne 62.50
A summary of Project unit operating costs per ROM tonne is provided in Table 4.32, while Project
closure costs are shown by year in Table 4.34.
4.19.1 Mining Cost
Mine operating costs have been determined largely as Owner mining costs, based on equipment and
labour requirements to achieve the mine schedule. Unit costs include appropriate allowances for
technical labour and materials to control the mining operation, including grade control.
Mining equipment maintenance and repair costs are assumed to be carried out under a maintenance
and repair contract with the mining equipment vendor, while blasting is assumed to be carried out by
the explosives supplier under contract to Marcobre.
The average mine operating cost for life of the mine is $1.14/t mined (base date 1Q09). Costs in the
earlier years are lower, but increase in later years as haul distances increase and the total tonnage
mined decreases. Further details are supplied in Section 4.7.7.
4.19.2 Oxide Plant
Plant operating costs have been developed for the Oxide Plant under the following categories:
x Labour
x Power
x Maintenance materials
x Reagents
x Consumables
x Miscellaneous items.
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The accuracy of the Oxide plant operating cost estimate is ±10% and reflects the plant operating at
design capacity.
4.19.3 Sulphide Plant
The Mina Justa Sulphide plant is designed to process 5 Mt/a of sulphide ore to produce copper
concentrates (also containing silver and lesser gold) for sale on world markets.
Operating costs have been developed for the Sulphide plant under same categories as for the Oxide
plant.
The accuracy of the Sulphide plant operating cost estimate is ±20% and reflects the plant operating at
design capacity.
4.19.4 Transport
San Martin port is selected for cathode and acid shipments initially, and Matarani port for copper
concentrates, switching to the Port of San Juan de Marcona once available.
Reagents and consumables have been priced by suppliers on the basis of delivery to site where
possible, or shipped via the port of Callao. Additional road transport costs from Callao to Mina Justa
site have been estimated on the basis of the transportation cost assessment undertaken by Marcobre
and Sandwell.
4.19.5 General and Administration
The G&A costs cover labour and miscellaneous items required to support site operations.
The Labour cost in this category includes administration, community relations, environmental, safety,
security, accounting, logistics, laboratory and centralised maintenance personnel.
Miscellaneous items include administration costs, insurance, personnel transport and accommodation,
site services, administration vehicles, road maintenance, consultants and health, safety and
environmental management related costs.
G&A costs encompass both site administration and Lima corporate office costs, but exclude costs
DWWULEXWDEOHWRH[SORUDWLRQRQ0DUFREUH¶VRWKHUSURVSHFWVRQWKH0DUFRQD&RSSHU3URSHUW\
4.19.6 Environmental
The environmental costs considered are related to the construction, operation, closure and post-closure
phases of the project.
7KHFRVWRIHQYLURQPHQWDOPRQLWRULQJLVEDVHGRQ9HFWRU¶VZRUNZKLFKLQFOXGHVFRVWVDVVRFLDWHGZLWK
x Atmospheric condition monitoring
x Air quality and noise
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x Biological monitoring
x Water quality (TSF and ripios dump seepage)
x Inspection and audit costs by governmental authorities, related to health, safety and environment
x Other costs including dust control program, management of effluents and management of domestic
and industrial solid wastes.
Closure costs were estimated by Vector, following review of Knight Piésold¶VGHVLJQV
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Table 4.32
APPENDIX V
Summary of Project Operating Costs (US$/t ROM Processed) Model 090821

Area Period
Yr -1 2012 2013 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023
Mining 0 9.88 5.47 3.72 3.60 3.68 3.84 3.74 3.74 2.98 1.85 2.24 2.07
Oxide Plant 0 5.76 5.68 5.68 5.69 5.69 4.50 4.49 4.52 4.52 4.46 4.57 -
Sulphide Plant 0 - - 4.90 4.82 5.20 5.12 5.06 4.81 5.24 4.80 5.16 4.92
General and Administration 0 2.14 1.30 1.08 1.04 1.05 1.05 1.05 1.05 1.04 1.03 1.88 2.95
Corporate Office (Lima) 0 0.25 0.15 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.22 0.38
Transport/ Marketing 0 0.23 0.23 3.42 3.08 4.74 4.88 2.65 2.60 2.66 2.61 7.18 11.92
Total 0 18.27 12.84 18.91 18.34 20.46 19.49 17.10 16.83 16.54 14.85 21.24 22.25
Table 4.33
— V-223 —
Summary of Operating Costs (US$/t ROM Process Model 090821, Escalated to IQ10)
Description Period
Yr -1 2012 2013 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total Cost IQ09 0 18.27 12.84 18.91 18.34 20.46 19.49 17.1 16.83 16.54 14.85 21.24 22.25
Total Escalated Cost IQ10 0 18.30 12.86 18.95 18.38 20.52 19.54 17.14 16.87 16.59 14.89 21.30 22.29

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APPENDIX V
Table 4.34
Summary of Project Closure Costs
Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Progressive 688 468 323 212 155 209 1 656 698 851 302 - - -
1)
Closure
2)
Final Closure - - - - 3 008 260 5 556 186 3 217 554 144 125
Total 688 468 323 212 155 209 1 656 698 3 859 563 5 556 186 3 217 554 144 125
1)
Progressive closure costs include costs related to pits mined out before cessation of production and closure of the oxide treatment facilities (including the ripios dump) which cease
operation prior to the concentrator.
2)
Final closure costs include sulphide processing facilities, waste dumps, tailings pond, concentrator facilities, camp and infrastructure.
Table 4.35
Summary of Project Closure Costs: Escalated to IQ10
— V-224 —
Description Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Total Cost IQ09 688 468 323 212 155 209 1 656 698 3 859 563 5 556 186 3 217 554 144 125
Total escalated 690 051 323 955 155 566 1 660 508 3 868 440 5 568 965 3 224 954 144 456
cost 1Q10

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4.20 MARKETING AND PRODUCT PRICING
4.20.1 Copper Cathode Sales Contract
0DUFREUH¶V PDUNHWLQJ DSSURDFK IRU LWV FRSSHU FDWKRGH SURGXFWLRQ FRQVLGHUV UHTXLUHPHQWV XQGHU WKH
Shareholders Agreement as well as financing requirements. Current plans would commit 100% of the
first 10 \HDUV¶SURGXFWLRQRIFRSSHUFDWKRGHVWR/6-Nikko and Norddeutsche Affinerie AG (NA).
LS-Nikko
Subject to finalisation of the formal sales contract, Marcobre has agreed to sell 70% of its copper
cathode production to LS-Nikko. The Shareholders Agreement specifies that the contract will contain
the following principal terms:
x Quantity: 70% of annual production reducing to 35% of annual production if the joint interest of
LS-Nikko and Korea Resources in Marcobre is less than 20% but at least 15%, reducing to nil if
their joint interest is below 15%.
x Term: 120 months from commencement of cathode production.
x Marketing Fee and Cathode Premium: Annual negotiation, with dispute settlement by arbitration.
x Other terms and conditions will be on standard industry terms and conditions for the sale of copper
cathodes on a long-term basis.
NA
Marcobre has entered into a letter of intent with NA covering the remaining 30% of annual production
for 10 years from the commencement of copper cathode production. The key terms of the letter of
intent are as follows:
x Term: 120 months from commencement of cathode production.
x Shipment: Equal monthly shipments.
x %DVLV&,)ODQGHGLQWRFXVWRPHU¶VEDUJHDORQJ-side vessel.
x Marketing fee: To be agreed.
x Cathode premium: Related to the benchmark premium/discount of major producers.
x Quotational Period: Either the month prior to the month of shipment or the month following the
month of arrival at the port of discharge.
x Other terms and conditions: On a basis that is standard and normal in the industry for the long-
term sale of copper cathodes.
4.20.2 Copper Concentrates
4.20.2.1 LS-Nikko
Pursuant to the Shareholders Agreement, it was agreed that Marcobre would sell 90% of its copper
concentrate production to LS-Nikko for 10 years from the commencement of copper concentrate
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production. The sales contract has not been finalised, but the Shareholders Agreement specifies that
the contract will contain the following principal terms:
x Quantity: 90% of annual production, reducing to 45% of annual production if the joint interest of
LS-Nikko and Korea Resources in Marcobre is less than 20% but at least 15%, further reducing to
nil if their joint interest is less than 15%.
x Term: 120 months from commencement of concentrate production.
x Delivery: &,))22QVDQ.RUHD+LEL3RUW-DSDQRU6DJDQRVHNL-DSDQDW%X\HU¶VRSWLRQ.
x Payable Cu: For copper concentrates grading 35% Cu or less, pay 96.5%; for copper concentrates
grading more than 35%, pay 96.75%; subject to a minimum deduction of 1 unit.
x Payable Ag: Less than 30 g Ag/dmt, 0; 30 g Ag/dmt or more, 90%.
x Payable Au: Less than 1 g Au/dmt, 0; between 1 g Au/dmt and 3 g, 90%; 3 g Au/dmt or more, to
be agreed in the long term sales contract.
x Pricing Basis:
Copper: AYHUDJH RI WKH GDLO\ /0( *UDGH ³$´ VHWWOHPHQW TXRWDWLRQV GXULQJ WKH 4XRWDWLRQDO
Period
Silver: Average of the daily London Bullion Market fine silver spot quotations during the
Quotational Period
Gold: Average of the London Bullion Market a.m. and p.m. quotations during the Quotational
Period.
x Quotational Period: Third month after month of arrival.
x Allocation to Market Terms and Price Sharing Terms: 60% Market-Related Terms, 40% Price
Sharing Terms.
x Copper Treatment and Refining Charges, Market-Related Terms:
Copper treatment charge and refining charge: negotiated annually on a 2 year block basis,
based on then current international transactions and agreements for similar quantities
between major mines and major custom smelters in Korea and Japan for quantities of not less
than 30 000 t/a
Copper price participation, ±10% on the basis of ¢90/lb for first 2 years, and thereafter subject
to biannual negotiation based on market terms.
x Copper Treatment and Refining Charges, Price Sharing Terms:
&RPELQHG WUHDWPHQW DQG UHILQLQJ FKDUJH DV D SHUFHQWDJH RI /0( &RSSHU *UDGH ³$´
settlement price for the Quotational Period, 24% for first 60 months, and 25% for second
60 months, subject to a minimum of US$0.19 per pound of payable copper, no maximum.
x Refining charge for gold and silver: annual negotiation based on market terms.
x Payment Terms: 90% of provisional invoice on second business day after arrival of vessel at port
of discharge; 10% of provisional invoice 60 days after arrival; final payment on 3rd GD\DIWHU%X\HU¶V
FRQILUPDWLRQRI6HOOHU¶VILQDOLQYRLFHDOOSD\PHQWVPDGHXQGHULUUHYRFDEOHOHWWHURIFUHGLW.
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x Insurance: Seller pays for insurance at 110% of value stated in the provisional invoice, subject to
adjustment to 110% of final value.
x Other terms: On terms standard and normal in the industry for the sale of copper concentrates on
a long-term basis.
4.20.2.2 Other Copper Concentrate Contracts
The 10% balance of the copper concentrates not committed to LS-Nikko would constitute 1 or 2
shipments a year in most years, insufficient to support a long term sales contract. Marcobre intends to
sell the uncommitted production on a spot basis, most likely to smelters in the Far East to take
advantage of freight savings from combining shipments with the volume going to LS-Nikko. For the
purposes of the DFS, it has been assumed that the 10% balance of production is sold to LS-Nikko on
the same terms as the market portion of the long-term contract.
4.20.3 Market Review (Copper and Sulphuric Acid)
Marcobre contracted Brook Hunt and Associates Limited (Brook Hunt) to provide a market review of the
following:
x Supply and demand for copper cathodes and copper concentrates.
x Copper price forecast.
x Copper concentrate treatment and refining charge forecast.
x Copper cathode premium forecast.
x Penalty elements and standard penalty rates.
x Freight rate forecast for copper concentrates to South Korea and copper cathodes to South Korea
and Northern Europe.
x Sulphuric acid supply, demand and price forecast in the Chile-Peru market.
x Elemental sulphur price forecast FOB Vancouver.
x Sulphur freight rate forecast from Vancouver to major Peruvian ports.
The initial report was completed in August 2008 and subsequently updated to February 12, 2009. The
Brook Hunt projections are in 1Q08 US$ terms. US CPI inflation from 1Q08 to 1Q09 was -0.04%;
accordingly, Marcobre determined that no inflation adjustment was required to convert the Brook Hunt
forecasts to a 1Q09 basis.
Table 4.36 summarises the key forecasts as of 1Q09 from the updated Brook Hunt report, and
compares the forecasts with the assumptions used in the DFS financial analysis.
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Table 4.36
Summary of Forecast Prices and Terms
1Q09 US$ terms, 2012 to 2023 Average
1)
Brook Hunt Cases DFS
Low Base High Case
Price
LME *UDGH³$´&RSSHUOE 1.82 1.93 2.12 2.00
Cathode premium, $/t
South Korea 63.82 69.17 77.50 69.55
Germany 82.08 89.17 100.42 89.55
Reagents
Sulphuric Acid, $/t, CIF Main Peruvian Ports 33.33 44.17 57.50 45.00
Ocean Freight Rates
Cathodes: South Korea, $/t 53.83 57.08 61.50 56.91
Cathodes: Germany, $/t 59.58 64.00 67.58 63.64
Concentrates: South Korea, $/t 41.83 45.17 61.00 45.50
Market Treatment and Refining Charges, Copper Concentrates
Treatment Charge US$/t 79.17 86.25 87.50 87.00
Refining Charge c/lb 0.07917 0.08625 0.0875 0.087
Price Participation Base commencing 2015 1.50 1.60 1.75 1.60
Precious Metal Refining Charges
Au (US$/payable oz) 5.00 5.00 5.00 5.00
Ag (US$/payable oz) 0.35 0.35 0.35 0.35
1)
Brook Hunt cases copyright Brook Hunt and Associates Limited
The Brook Hunt forecasts are cyclical. For the DFS base case cash flow projections, Marcobre has
elected to use the simple average of the Brook Hunt base case projections over the relevant period,
being 2012 to 2022 for costs affecting cathode production, and 2014 to 2023 for costs affecting copper
concentrates. The assumptions derived in this matter are shown in the DFS Case column in Table
4.36.
4.20.4 Transport, Marketing and Realisation Costs
The operating costs covered under this category include the following:
x Product trucking
x Port storage and handling
x Ship loading
x Ocean freight
x Marketing fee in the case of copper cathodes
x Copper concentrate treatment and refining charges
x Marine Cargo Insurance for copper cathodes and copper concentrates.
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Mina Justa copper cathodes and copper concentrates will be trucked to port and shipped to overseas
customers, while sulphuric acid will be transported by ship to port and trucked to site. For the first
5 years of operations, (2012 to 2016), transport of cathodes and acid are assumed to be via Port of San
Martin, switching to the Port of San Juan de Marcona in 2017. Concentrates are assumed to be
shipped via the Port of Matarani in the first year of production (2014), switching to San Juan de
Marcona in 2015.
Cost estimates are shown in Table 4.37. The costs expressed in this table have a base date of 1Q09.
Table 4.37
Transportation, Marketing and Realisation Costs (1Q09)
Category Units $
Copper Cathodes
Truck to port, San Martin/San Juan US$/t 19.59/5.48
Port handling and storage charges, Martin/San Juan US$/t 18.20/14.50
Ocean freight: South Korea US$/t 56.91
Ocean freight: Northern Europe US$/t 63.64
Marketing fee US$/t 13.00
Copper Concentrates
Truck to port, Matarani/San Juan US$/wmt 35.72/5.48
Port handling and storage charges, Matarani/ San Juan US$/wmt 10.50/22.00
Ocean freight US$/wmt 45.50
Market Portion (60% of LS-Nikko and 100% of other)
Copper concentrate treatment charge US$/dmt 87.00
Copper refining charge US¢/payable lb Cu 8.7
Price-Sharing Portion (40% of LS-Nikko)
Note 1
Combined treatment and refining charge % of Copper Price 24.5%
Gold refining charge US$/payable oz Au 5.00
Silver refining charge US$/payable oz Ag 0.35
Note 1: 24% for first 5 years, 25% for second five years, floor of 19 cents per payable pound.
4.21 DFS RISK ASSESSMENT
4.21.1 Hazard Identification
A formal hazard identification and risk assessment study was conducted by AMEC Minproc to identify
issues affecting the safety and health of people working in the Oxide plant (note that the Sulphide
facility was not considered in this study).
The focus of the study was the identification of process hazards applicable during the operational phase
of the Project and a review of the engineered safeguards included in the design that mitigate or reduce
the risks of those hazards causing harm to personnel, members of the public or the environment.
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The vat leaching system has been designed by Indec S.A, which conducted its own review and
produced a separate Hazard Identification report.
Seven extreme risk topics were identified and recorded during the workshop. These risks and
mitigating factors are:
x Vehicle collisions: Vehicle collisions are a significant hazard both with equipment within the plant
and with other vehicles on and off-site, resulting in potential equipment damage and uncontrolled
release of leach solution/acid to the environment. The key risk is the potential for human fatalities.
This risk will be mitigated by adopting a transport logistics plan and site traffic management plan as
the project moves into implementation phase. The plan layout and mine, haul and access roads
are designed to minimise the risks for collision.
x Seismic events: The region has a high occurrence of seismic events. If the earthquake protection
features in the design and construction of pits, dumps, plant buildings and other infrastructure fail,
catastrophic consequences in terms of production, environmental and safety impacts could occur.
To mitigate this risk, the design criteria are established to comply with all relevant standards for
type of facilities and location with input provided from Peruvian consultants that have relevant
experience with such events. Mine and plant are designed for 500 year occurance for
earthquakes. The plant and building heights are minimised to mitigate potential impacts of
earthquakes.
x Ripios disposal system hazards: The original ripios disposal system involved a series of fixed and
movable conveyors, introducing electrocution hazards. Potential for personnel fatigue, resulting
from working continuous 12 hour production shifts and moving gear on ripios dumps during night
shift and under poor lighting, creates the potential for serious safety incidents. The ripios disposal
system has been modified to include mine trucks in place of the movable conveyor system. For
remaining (fixed) conveyors the risks will be mitigated by implementing relevant operation and
maintenance procedures, having a specialist HV electrician, and incorporating international
standard HV protection systems into the conveying system design.
x Acid delivery traffic volume: Acid transport and delivery will result in high traffic volumes within the
Oxide facility. This risk will be mitigated by adopting the transport logistics plan, site traffic
management plan and relevant procedures by Marcobre and its contractors.
x Unsafe equipment operation: Inadequate or poorly enforced site-wide project standards and
equipment naming conventions increase the likelihood of incorrect, unsafe operation of equipment
with potential significant production and safety impacts resulting from poor isolation. In addition, it
may also create the need for holding excessive operating spares. This risk will be addressed
during the engineering and procurement phases of the project, and training of personnel.
x Emergency communication system: Lack of site-wide communications in an emergency has the
potential to increase injuries and/or death in an event such as an earthquake or fire. This risk will
be addressed during the implementation phase of the project and training of personnel.
x SX area fire: There is a high risk of serious fire in the SX plant and fuel storage area. Adequate
allowances for the fire detection and suppression systems have been made in the DFS, and
correct equiment and materials of construction are selected. Details of the system require further
development during the engineering phase and during the training of personnel.
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4.21.2 Technical Risks
BatteryLimits Pty Ltd (BatteryLimits) conducted a technical risk assessment for the Project. Thirty-four
risks were identified from discussions with the various participants, although the technical risk profile
contains a relatively low number of top priority risks.
The key issue identified is that the study is at DFS level for the Oxide project and at PFS level for the
Sulphide project. The Sulphide project is expected to be a major contributor to project economics, but
more work is required to support a DFS level study. This risk is expected to be mitigated by further
studies.
The second priority group of risks incorporated issues that need on-going attention from Marcobre,
including transport logistics, lease restrictions, port availability and project execution.
4.21.3 Commercial Risks
The Mina Justa Project faces the normal commercial risks faced by a base metal mining project. These
can be considered in three main categories: market risks, legal risks, and political risks, although the
latter, in particular is unrelated to this technical review and is not considered further.
Operating Cost Inputs

Key operating cost components are the prices for acid, diesel and electricity, which represent 21%,
13% and 12% of site costs respectively. Analysis by Marcobre shows that a 1% change in acid price
results in a 0.4% change in NPV, while a 1% change in diesel prices results in a 0.2% change in NPV.
The result for electricity is similar to diesel. Unexpected increases in price of these consumables
constitute a significant risk to the economics of the project.
Sulphuric Acid
Sulphuric acid is a vital input to the Oxide process with no practical substitute. While Marcobre intends
to enter into long term supply contracts with reliable, proven suppliers, prices would not be fixed, but set
by reference to the prevailing market.
0DUFREUH¶VORQJWHUPDFLGVXSSO\FRQWUDFWVwill require some flexibility in quantity, since there is some

uncertainty about unit gangue acid consumption rates, and consumption varies with ore grade
Acid prices (and availability) have varied over a large range in the past few years, and there is an
unknown degree of risk relating to the Brook Hunt costs used in the operating costs.
Power Supply
The Mina Justa Project will be a relatively large regional power consumer. Generating capacity and
transmission capacity have been strained in recent years. The power supply situation has been
improved with the construction of gas-fired generating capacity on the central Peruvian coast following
the completion of the Camisea natural gas pipeline, but electricity transmission constraints remain.
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Marcobre intends to negotiate long-term power supply agreements with a reliable generator, but there
is no certainty that the cost used for the operating cost estimate will be realised.
Diesel Supply
Security of supply should not be a concern, since several commercial competitors exist. Fuel supply
risks are largely logistical, since the fuel will have to be transported over fairly long distances by tanker
truck, either from Lima or from Pisco depending on the supplier and the type of diesel.
The operating and capital cost estimates contemplate that fuel supply will be provided under long term
contract with a reliable and reputable supplier that is capable of providing the required amount of fuel
and safely transporting it to site, as well as constructing and operating the site fuel storage and
dispensing facilities. The price anticipated in DFS for diesel delivered and dispensed on site was
$0.636/L, but re-pricing in February 2010 gave a cost estimate of $0.819/L. The volatility of diesel on
the world market, creates a moderate degree of risk for the project.
Land Transport and Port

Land transportation and port costs for cathodes, concentrates and acid stand to have a significant
impact on operating costs. It is anticipated that Marcobre will negotiate port service contracts with
existing ports (and the planned new port of San Juan de Marcona when it becomes available), and also
road transportation contracts. The cost of these contracts could vary from those assumed in the DFS.
More importantly, should the nearby proposed port of San Juan de Marcona be delayed for several
years, or not be completed, the cost to the project of trucking acid and concentrates over far greater
distances would run to several million dollars per annum, with a modest impact on total operating costs
and Project NPV.
4.21.4 Legal Risks to Infrastructure Development
Water Supply
Marcobre¶V intension is to PHHWWKH3URMHFW¶VZDWHr requirements by obtaining a water license over the
Upper Jahuay aquifer. Options exist in the event that this is not possible, but there would be significant
additional capital and operating cost implications.
Infrastructure Easements
The current plans call for easements to be obtained for the 220 kV power line, access road, water
pipeline and associated 22.9 kV power line involve surface lands owned by the Peruvian State, and,
possibly part of a mining concession belonging to Shougang. Post-DFS, GMI has identified alternative
URXWHV IRU WKHVH LQIUDVWUXFWXUH LWHPV DYRLGLQJ 6KRXJDQJ¶V SURSHUW\ :KLOH WKHUH PD\ EH PLQRU
additional capital cost associated with longer access routes, the alternatives are deemed to be
technically and socially acceptable, with little risk attached.
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4.22 OPPORTUNITIES
4.22.1 Additional Ore Reserves
Two Whittle runs were performed to test the potential to expand the reserve, based on the current DFS
parameters. These parameters include the selling prices of copper, process recoveries and concentrate
grades, and costs associated with the transportation, smelting and refinery of copper, etc.
If DFS recoveries and costs are used at the $1.65 copper price, then the potential ore reserves could
result in a 19% increase in recovered metal. However, the benefit associated with additional oxide may
be reduced due to its lower average grade. The mining (total rock handling) increases by 29%.
For the $2.00/lb copper case (with the DFS parameters), further marginal grade material could be
added with a potential of 30% more recoverable copper for a 40% increase in total mining.
As outlined in Section 4.23.2, further development scenarios have been simulated using Whittle
analysis that have the potential to increase the reserve and pit size, and extend the project life.
Additional reserves have not been determined, but the potential to increase the life of the operation
constitutes an obvious opportunity to improve project economics.
4.22.2 Sulphide Ore Processing Only Option
This option was first conceived when sulphuric acid prices increased sharply in 2007 and 2008, and
concerns were expressed about the long-run cost and availability of acid. Since that time, acid prices
have returned to more normal levels and long term supply shortages are no longer a concern.
Nevertheless, this option has been examined in some detail.
A Sulphide-Only option would have relatively high pre-production stripping costs to develop the
sulphide ore at depth. However, this would be offset by the capital cost reduction arising from not
having to build the oxide processing facilities. Furthermore, in this case, the oxide material mined to
access the sulphide ore would not necessarily be wasted; for a modest additional cost it could be
stockpiled for possible future treatment.
A Sulphide-Only mine plan was developed based on the DFS base case pit shells, but excluding those
parts of the deposit such as Magnetite Manto and the Northern Oxides. Mining capital and operating
costs were then developed for this mine plan. Capital costs for process and infrastructure were
factored from the DFS capital costs, eliminating those portions of the Project which relate solely to
Oxide processing. Process and G&A operating costs for the Sulphide-Only case were already available
because Phase 3 of the combined Oxide/Sulphide project is Sulphide-Only.
The preliminary analysis of the Sulphide-Only case indicates that this alternative is feasible, and could
be optimised further.
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4.22.3 Vat Leach Operation
Assay Accountability
Check analyses by a third party laboratory (SGS-Peru) at the end of the Phase 2 pilot tests indicated
that, while the head assays were in good agreement, residue assays for CuT and CuSS from SGS-
Peru were consistently lower and the divergence appeared to increase as the grade of the residue
increased. This leads to the possiblility that estimated metallurgical recoveries could be biased low by
about 0.5% for average grade ore and as much as 1% for high grade ore (>1% Cu). However, a major
re-assaying program would be required to determine which laboratory was in error.
pH Control
Testwork has shown that the pH must be less than about 1.5 (free acid higher than 1.5 g/L) to get
effective extraction. However, there is evidence to suggest that acid was not well controlled toward the
end of the 6 day leach cycles in the Phase 2 pilot plant tests. In 27 of the 37 tests, the final pH was
above 1.5 and in 22 of the tests, the final free acid content was less than 1.0 g/L. In 5 of these runs the
final free acid was actually 0.0 g/L. These results suggest that the acid level was too low toward the
end of the tests and this may have retarded extraction to some degree. Supporting this hypothesis is
the observation that in virtually every test, extraction was continuing when the 6 day leach cycle was
terminated. Also supporting this was the rapid initial extraction of additional copper when the vat
residues were re-leached in 20 g/L acid.
At this point there is no way of assessing whether or not the low acid levels (high pH values) actually
retarded extraction. Also, there is no way of knowing whether the additional acid consumption would be
justified by the higher recovery. However, once the commercial plant is in operation, there may be an
opportunity to increase recovery through better control of the acid level in the final stage of leaching.
This will have to be balanced so that the cost of the additional acid does not exceed the value of the
addition copper output.
4.22.4 Sulphide Circuit
Magnetite Recovery Circuit Option

AMEC Minproc completed a process option study to evaluate magnetite recovery from scavenger
flotation tailings. This stream, comprising approximately 80% of the total solid mass flow in the circuit,
contains recoverable quantities of magnetite. A circuit was configured for the production of magnetite
concentrate containing more than 63% iron.
Based on the preliminary process design, the conclusions are:

x The production of market grade magnetite concentrate (>63% Fe) is technically feasible. Typically,
the quantity of concentrate produced will range between 388 000 t and 788 000 t, depending on
the ore processed.
x There is no information regarding the marketability of the product.
x The estimated annual operating cost for a magnetite recovery circuit is expected to be $3.8 M.
x Capital expenditure for the magnetite recovery facility is estimated at $29.3 M.
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x Additional tailings characterisation testwork will be required to define the expected tailings if a
magnetite recovery circuit is considered.
AMEC Minproc has recommended that additional testwork be performed to optimise the circuit design.
Capital and operating cost savings may be realised if the regrind circuit capacity can be reduced. In
addition, the magnetite reserve needs to be defined in order to determine if magnetite recovery from
this resource is viable. However, the current mine model does not indicate the magnetite distribution
and would need to be revised to include this.
Crusher Circuit Design

Potential exists to optimise the crushers, as CWi testwork data was not available for the DFS design.
The crusher specifications were based on correlations of CWi from Drop Weight Index (DWi) data,
which indicated the ore as competent. The primary crusher selected is on the upper limit in terms of
power, and the design can be revisited when test data is available. In order to reduce the stresses on
WKH PDFKLQH WKH PLQH¶V EODVWLQJ VL]H OLPLWV VKRXOG EH UHYLHZHG WR RSWLPLVH WKH PD[LPXP 520 VL]H
presented to the crusher.
Grinding Circuit Design

Variable test data on ore competency and grindability was available for the PFS. The current Bond
work index distribution tends to the higher end of range. AMEC Minproc recommends that the existing
database be expanded using core samples taken from the full spatial range of the proposed mining
areas. Increasing ore competency within the domains is considered a key project risk and will impact
on the comminution circuit design and operating throughput.
Conversely, if further testwork shows the highly competent result for the Primary and Secondary
sulphide ore is anomalous, a reduction in the proposed comminution circuit size will result. Alternative
circuit designs such as three stage crushing with ball milling or two stage crushing with HPGR-ball
milling may be advantageous if the average ore competency is high to extreme. Specific energy input
reductions may result, with associated savings in capital and operating costs. Three stage crushing
followed by ball milling may be a viable option, but crushing test results were not available and
therefore this circuit was not considered.
Flash Flotation Circuit

A flash flotation stage has not been included into the circuit, as testwork was not available to form a
design basis. Based on the rapid flotation behaviour exhibited during tests, flash flotation may be a
beneficial process option, but testwork is required to confirm this approach.
Bulk Flotation Optimisation

Sodium sulphide was used in the rougher flotation circuit to promote the flotation of partially oxidised
copper minerals. Further testwork is required to evaluate the benefits of adding this reagent to rougher
flotation, as a baseline test (without the use of the chemical) was not available for comparison. If
negligible effects are observed in future, the sodium sulphide mixing and dosage system can be
removed from the flow sheet.
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Variable collector schemes were evaluated in the PFS. Incorporating a collector and dosage rate
selection campaign into the next stage of testwork could result in improved bulk flotation performance
or operating cost savings. Additionally, mineralogical characterisation of the bulk flotation products will
also assist to verify if the circuit configuration is optimal.
Defining and characterising the copper minerals lost in the final flotation tailings may provide an
indication of whether the selected circuit configuration is the optimum arrangement for extracting the
recoverable copper fraction.
Cleaner Flotation Circuit Optimisation

Limited reagent optimisation tests were performed during the testwork campaigns. Opportunity exists
to improve the cleaner flotation performance.
Regrind Circuit Optimisation

Limited particle size analysis was performed on flotation concentrates during the PFS testwork
campaign. Determining the mass fractions to be processed in the regrind milling of concentrates may
provide circuit optimisation possibilities.

The preliminary TSF design incorporates separate disposal of RST and CST, based on the acid
generation potential of the CST. Additional tailings characterisation studies are required to investigate if
combined tailings deposition will result in non-acid generating tailings. If it is the case, a simplified
tailings deposition system could result, with capital, operating and closure cost savings.
4.22.5 Plant Design
Ripios Disposal System

The cost estimate was based on the use of mining equipment, including trucks and dozers, for ripios
disposal. Late in the study, an alternative disposal system was identified, namely a modular conveying
system. The system comprises a fully enclosed conveyor, which can be lengthened almost indefinitely
and with slewing capability. This system could provide an operating and capital cost saving. A cost
comparison and detailed technical evaluation is required to confirm this opportunity.
Dual Media Electrolyte Filters

Dual media electrolyte filters have been selected for the electrolyte filtration duty. CoMatrix filters are a
new technology and can offer a significant cost saving due to higher specific flowrates and hence
smaller vessels.
Dual media filters have been selected as CoMatrix filters were considered too aggressive an approach
at the DFS stage as they are new technology and suppliers indicated the pricing for fabrication of
stainless steel pressure vessels is rather volatile. However, the opportunity to save on capital cost by
the use of CoMatrix filters should be investigated.
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EW Building Ventilation System

A proprietary ventilation system has been selected as it included a performance guarantee. The
guarantee states that the acid mist concentration in the EW building will not exceed the exposure levels
stipulated by the American Conference of Governmental Industrial Hygienists.
The ventilation system selected has a high capital cost, high power requirement and is complicated,
(includes 30 separate fans, each with discharge ductwork). This system is, however, considered the
most economical means of achieving guaranteed mist exposure levels.
There is an opportunity to reduce capital cost and complexity of the system using a non-proprietary
system that would greatly reduce capital cost. However careful checking is required to ensure that the
system is sufficient to ensure exposure levels are not exceeded. A significant effort will be required to
find a suitable ventilation system designer/fabricator, as preliminary efforts during the DFS were
unsuccessful.
4.22.6 Cost and Implementation
Changed Market Conditions

Price reductions to the cost estimate resulting from the change to the estimate base date from 2Q08 to
1Q09 reflected the impact of the slow down in the global economy at the time the estimate costs were
updated. The market conditions going forward are highly uncertain and could impact negatively or
positively on costs.
The methodology applied to update Capex costs from1Q09 to 1Q10 is a gross simplification and is not
considered accurate. Further inaccuracy arises from changes in foreign currency rates of exchange
that have not been altered as part of this update. Actual current market conditions could impact
negatively or positively on costs.
Explore Secondhand Plant and Cancelled Orders

In the current environment, there may be an opportunity to take advantage of the expected increase in
secondhand plant and cancelled orders. This may reduce capital costs, however this approach was not
incorporated into the DFS estimate.
Oxide and Sulphide Plant Overlap

Increased overlap between the Oxide and Sulphide construction programs could result in greater
synergies between the two projects and therefore cost savings such as more efficient utilisation of the
accommodation camp.
4.23 POST DFS ACTIVITIES
4.23.1 Exploration Drilling
A press release by Chariot Resources dated 6 January 2010 summarises results of exploration drilling
in and around the Mina Justa deposit following the cut-off date for the October 2008 resource model.
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Results from a total of 136 holes have been added to the database, including extensions to 28 pre-
existing holes. Collar locations are shown in Figure 4.35.
Significant mineralisation was recorded in three key areas, namely:

x Northern Oxide and Western Extension areas: Copper oxides have been intersected outside DFS
pit boundaries to the northeast and northwest.
x MA67 area to the west of the Main pit, where oxide mineralisation has been intersected in four
adjacent holes, possibly indicating a new satellite pit area.
x Copper 40 area: Continuing intersection of copper sulphide mineralistion over significant intervals,
peripheral to the Cu40 pit. Three holes intersected over 100 m at 1% copper, above 300 m depth,
and all three confirmed narrower high grade zones at moderate depths as follows:
MJV-07-083: 10 m at 2.88% Cu
MJV-08-038: 6 m at 3.85% Cu
MJV-08-065: 22 m at 2.83% Cu.
This recently intersected mineralisation indicates that there is potential WR H[SDQG WKH SURMHFW¶V
resources and reserves.
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Figure 4.35
Drill Hold Location Plan ± Recent Exploration Drilling
APPENDIX V
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4.23.2 Additional Mine Planning
Subsequent to the DFS, AMEC Minproc performed additional mine planning tasks as summarised in
the following:
Run 6 Pit Design and Scheduling

The Run 6 optimisation indicated the potential to increase the pit size by 29% and realise a 19%
increase in recovered copper. Affected pit stages were re-designed resulting in a 30% increase in the
pit size and an 18% increase in recoverable copper.
The DFS and Run 6 pit inventories are shown in Table 4.38.
Table 4.38
DFS and Updated Pit Inventories
Total Vat Ore Total Float Ore Total Strip

Case Ore Cu CuSS Ore Cu CuSS Au Ag Waste Ratio
(Mt) (%) (%) (Mt) (%) (%) (g/t) (g/t) (Mt)
DFS 114.6 0.56%0.46% 48.8 1.37% 0.17% 0.029 14.1 402.4 2.46
Update 138.1 0.53%0.43% 70.5 1.16% 0.20% 0.030 12.4 528.7 2.53
Both the vat and float ore overall quality drops as a result of the marginal grade material added in the
expanded pits. Overall strip ratio increases.
A mine and process schedule using similar annual rates and a similar development sequence to the
DFS schedule was generated. Both mine and process schedules are very similar to the DFS in the
initial years. However, there is a deferral in copper production in the early years as a result of lower ore
cut-offs and the earlier inclusion of more marginal ore. Potential project life increases from 12 to
16 years.
Run 6a and 6b Optimisations

These pit optimisations assess potential pit expansions that could be justified if mining was allowed on
Shougang ground and current Inferred mineralisation was confirmed by further investigations.
Table 4.39 summarises these results compared with Run 5 (the basis for the DFS) and Run 6 above.
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Table 4.39
Pit Optimisation Shell Comparisons
Total
Total Vat Inventory Float Total
Optimisation Strip
Inventory Waste
Version Ratio
Ore Cu CuSS Ore Cu Ag (kts)
(kts) (%) (%) (kts) (%) (g/t)
Run 5 120 0.57% 0.46% 48 1.39% 14.0 376 2.23
Run 6 142 0.53% 0.43% 71 1.16% 12.0 491 2.30
Run 6a 143 0.53% 0.43% 89 1.07% 10.0 574 2.47
Run 6b 144 0.53% 0.43% 92 1.05% 10.0 574 2.43
Run 5 Basis for DFS

Run 6 Re-run using final DFS parameters
Run 6a Post DFS simulating mining on Shougang ground
Run 6b Post DFS simulating mining on Shougang ground and Inferred conversion
Run 6a indicates that allowing mining to proceed onto Shougang ground would increase the potential
float plant feed and extend the mining and processing life as a result of mining the deeper sulfides in
the Cu40 orebody that occur (at depth) adjacent to the Shougang boundary. While sulfide inventory
increases, average ore quality decreases. Vat inventories are not impacted.
As detailed elsewhere in this section, Shougang is applying to expand its mining operations and may
have alternative, conflicting uses for this potential pit expansion area.
Run 6b shows that conversion of current Inferred mineralisation will have a minor impact on potential pit
inventories.
4.23.3 Identification of Alternative Access Routes
Subsequent to completion of the DFS, but prior to submission of the Mina Justa ESIA, Shougang
submitted its own EIA to allow for a major expansion of the mine over the next 13 years. Additional
open pits and waste dumps close to the western and southern bRXQGDULHV RI 0DUFREUH¶V 7$1
concession overlap with the proposed access routes for the 220 kV powerline, the fresh water pipeline,
the 22.9 kV powerline and the site access road.
GMI has completed preliminary studies for Marcobre to identify 2 or 3 alternative routes for these
infrastructure items. In all cases the alternatives are considered to be viable and with low impact on
environmental and socio-cultural grounds, with the exception of a northern option for the access road
which crosses some plant habitats, archeological sites, and lies closer to the San Fernando Reserve.
The other two access road alternatives lie close to parts of the mine infrastructure (pits and waste
dumps) and careful traffic management would be required if these are adopted.
Detailed route survey and design work has not been undertaken, and thus capital costs for the
alternatives are not available. However, in general there is little change in overall length of the affected
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infrastructure (Table 4.40), and it is not anticipated that there will be any material change to the overall
capital cost estimate.
The original routes and all alternatives have been included in the ESIA.
Table 4.40
Comparison of Distances of Affected Infrastructure Items (km)
Item DFS Alternative 1 Alternative 2 Alternative 3
220 kV powerline 14.7 16.6 18.3
22.9 kV powerline 35.7 28.9 34.5
Water pipeline 31 22 23
Access road 7.5 7.8 12.7 23.5*
* northern access route ± not recommended
4.23.4 Project Schedule
The DFS assumed that the ESIA application would be filed for approval by July 1, 2009. Given that the
actual date of filing was November 6, 2009, there is an impact on the overall project schedule and
timing to obtain the main consents to construct and operate the facilities of the Mina Justa Project.
(VWXGLR 2VWHUOLQJ 0DFREUH¶V OHJDO FRXnsel, has reassessed the project permitting schedule and
advised on the following changes to key project dates:
x ESIA approval End of July 2010 (end of March 2010 in the DFS)
x Oxide plant construction start 1 February 2011 (1 April 2010 in the DFS)
x Oxide plant construction complete 6 February 2013 (6 April 2012 in the DFS)
x Oxide plant commissioning complete 29 April 2013 (29 June 2012 in the DFS).
The sulphide plant schedule will consequently be delayed in accordance with this new oxide plant
schedule.
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5. REFERENCES
AMEC, 2004. Updated technical report on the Marcona Cu Project, Department of Ica, Peru. AMEC
Report No. 146769, Effective Date November 1st, 2004. 291p.
Chen, H., 2008. The Marcona-Mina Justa District, South-central Peru: Implications for the Genesis and
Definition of the Iron-Oxide-Copper (-Gold) Ore Deposit Clan. Unpublished Ph.D. thesis, Queens
University, Kingston, Ontario, Canada. 266p.
CIM Definition Standards, 2005 CIM Definition Standards on Mineral Resources and Mineral Reserves.
Prepared by the CIM Standing Committee on Reserve Definitions, Adopted by the CIM Council,
December 11th 2005. 10p.
GRD Minproc, 2006. Mina Justa Prospect Preliminary Assessment Report. NI 43-101 Technical
Report on the Marcona Copper Property, Peru. 194p.
GRD Minproc, 2009. Marcona Copper Property, Mina Justa Prospect Definitive Feasibility Study
NI 43-101 Technical Report on the Marcona Copper Property, Peru. 299p.
GRD Minproc, 2009. Mina Justa Copper Project Definitive Feasibility Study (11 volumes +
appendices).
Snowden, 2007. Mina Justa Prospect Resource Update. NI 43-101 Technical Report on the Marcona
Cu Project, Peru, prepared for Chariot Resources Ltd. By Snowden Mining Industry Consultants Inc.,
Report No. V492, Effective Date 13 February 2007, Vancouver, Canada. 143p.
60254-00000-00-002-001
Page 232
— V-243 —

6. STATEMENT OF CAPABILITY
This report has been prepared by Dan Greig, Branislav Grbovic, Ross Oliver, Dean David and George
Kalivitis, all employees of AMEC Minproc, based in Perth, Western Australia. AMEC Minproc
specialises in feasibility studies, engineering design and construction of mineral projects, including
resource, mining and process engineering.
AMEC Minproc is a subsidiary of AMEC Limited, an international supplier of consultancy, engineering

and projeFW PDQDJHPHQW VHUYLFHV WR WKH ZRUOG¶V QDWXUDO UHVRXUFHV QXFOHDU FOHDQ HQHUJ\ ZDWHU DQG
environmental sectors, with its head office in London, UK.
The qualifications of the technical experts are provided as follows:
Mr Branislav Grbovic, B.Sc. (Mech Eng), M.Sc. (Processing Tech), Member of Australasian Institute
of Mining and Metallurgy (AusIMM), Australian Institute of Project Managers (AIPM) and Engineers
Australia (EA), have worked as an Engineer, Design, Study and Project Manager on studies and
projects in the minerals processing, power and environmental industries world-wide for a total of 27
years since graduation from university. Work covering a range of commodities including copper and
other base metals, gold, coal and industrial minerals.
Mr Dan Greig, B.Sc. Hons (Geology), Member Australian Institute of Geoscientists, is a geologist with
over 40 years experience world-wide in exploration and resource geology, project evaluation and
feasibility studies, project reviews and due diligence audits covering a range of commodities including
copper and other base metals, gold/silver, mineral sands and industrial minerals.
Mr Ross Oliver, B.Eng (Mining), MAusIMM, is a mining engineer with more than 30 years of industry
and consulting experience including management and execution of feasibility studies (scoping,
preliminary and definitive) and technical reviews. He has Australian and international experience in an
extensive range of commodities with a particular focus on the evaluation of all mining aspects of large
scale open pit deposits.
Mr Dean David, B App Sc (Metallurgy), SAIT, is a metallurgist with over 27 years experience in all
aspects of physical processing of ores from mining through to generation of concentrates or prepared
feeds for downstream processing. Dean has conducted work on projects worldwide partaking in study,
implementation, commissioning and optimisation phases and covering all major commodities and many
minor ones.
Mr George Kalivitis, B.Sc. Quantity Surveying, has 30 years international experience in the process
engineering field including estimating, cost engineering, cost controls and contracts. As Estimating
Manager for AMEC Minproc in Perth, George is responsible for overall delivery of capital cost
estimates.
60254-00000-00-002-001
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— V-244 —

7. STATEMENT OF INDEPENDENCE
Neither the authors nor AMEC Minproc have any interest or entitlement to securities or assets of
Marcobre, Chariot Resources or China Sci-tech. AMEC Minproc will be paid a fee for this report based
on its normal professional rates and reimbursable expenses. The fee is not contingent on the
conclusions of this report.
60254-00000-00-002-001
Page 234
— V-245 —

8. LIMITATIONS AND CONSENT
This report has been based on data, reports and other information provided by Chariot and Marcobre
as recorded in this report. AMEC Minproc has been advised that this information is complete as to
material detail, and is not misleading.
AMEC Minproc has reviewed the data, reports and information provided and has employed professional
personnel with experience appropriate to the technical aspects of the Mina Justa Project. The opinions
stated here are given in good faith. AMEC Minproc believes that the assumptions are factual and
correct, and the interpretations reasonable.
AMEC Minproc does not accept any liability other than its statutory liability to any individual,
organisation or company, and takes no responsibility for any damages arising from the use of this
report, or information, data or assumptions contained therein.
The report is provided to the directors of China Sci-tech for the purpose of assisting them in assessing
the technical issues and associated risks of the proposed project, and for use in a listing document on
the Hong Kong Stock Exchange; it should not be used or relied upon for any other purpose. The report
does not constitute a technical or legal audit. Neither the whole nor any part of this report may be
included in, with, or attached to any document or used for any purpose without AMEC Minproc¶VZULWWHQ
consent to the form and context in which it appears.
Yours Faithfully,
AMEC Minproc Limited
Branislav Grbovic
Signed
Branislav Grbovic
Project Manager, AMEC Minproc Limited
Dan Greig
Signed
Dan Greig
Principal Geologist, AMEC Minproc Limited
60254-00000-00-002-001
Page 235
— V-246 —

Ross Oliver
Signed
Ross Oliver
Manager Mining, AMEC Minproc Limited
Dean David
Signed
Dean David
Process Consultant, AMEC Minproc Limited
George Kalivitis
Signed
George Kalivitis
Estimating Manager, AMEC Minproc Limited
60254-00000-00-002-001
Page 236
— V-247 —

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APPENDIX V TECHNICAL REPORT ON THE MINA JUSTA PROJECT

China Sci-tech Holdings Limited

Marcona Project ± Mina Justa Definitive

Technical Report to Hong Kong Stock Exchange

Document No. 60254-00000-00-002-001

Marcona Project ± Mina Justa Definitive Feasibility Study

A 02/03/10 Issued for review D.Greig D.David B.Grbovic

2 11/04/10 Minor Corrections Incorporated D.Greig P,Nofal B.Grbovic

3 15/04/10 Minor Corrections Incorporated D.Greig D.Pether B.Grbovic

4 16/04/10 Minor Corrections Incorporated D.Greig B.Grbovic

5 19/04/10 Reissued for HKSE D.Greig D.Pether B.Grbovic

Item Page Section Comments

* Use after Rev. 0

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

1. INTRODUCTION AND PROJECT OVERVIEW .......................................................... 1

2. EXECUTIVE SUMMARY .......................................................................................... 3

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

2.8.2 Sulphide Ore Processing ................................................................................................... 25

3. PROJECT RISK SUMMARY ................................................................................... 64

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

3.3 RISK MITIGATION FACTORS ......................................................................................................... 70

4. PROJECT DETAILS ............................................................................................... 73

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

4.7.2 Pit Optimisation ................................................................................................................ 124

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

4.17 PROJECT OPERATIONAL PLAN .................................................................................................. 200

5. REFERENCES ...................................................................................................... 232

6. STATEMENT OF CAPABILITY ............................................................................. 233

7. STATEMENT OF INDEPENDENCE....................................................................... 234

8. LIMITATIONS AND CONSENT ............................................................................ 235

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

Table 2.1 Global Classified Resources ................................................................................................... 12

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

Table 4.20 Flash Flotation Concentrate Performance ............................................................................ 142

Figure 2.1 Marcona Copper Project Location Plan .................................................................................... 4

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

1. INTRODUCTION AND PROJECT OVERVIEW

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

AMEC Minproc /LPLWHG¶VDGGUHVVLV/HYHO6W*HRUJHV7HUUDFH3HUWK:HVWHUQ$XVWUDOLD

AMEC Minproc is a subsidiary of AMEC Limited, an international supplier of consultancy, engineering

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

2.2 PROJECT SETTING

2.2.2 Topography and Vegetation

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

Rev 5 ± Issued to Client ± 19 Apr 2010

Marcona Project ± Mina Justa Definitive Feasibility Study

2.2.4 Local Resources and Infrastructure

2.3 LAND OWNERSHIP

AMEC Minproc /LPLWHG¶VDGGUHVVLV/HYHO6W*HRUJHV7HUUDFH3HUWK:HVWHUQ$XVWUDOLD

0DUFREUH¶VVLWHVHFXULW\LQFOXGHVDSULYDWHURDGHQWUDQFHJDWHDQGDURXQG-the-clock site-based security