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Reserves and Resources

 

TECHNICAL REPORT ON THE MINERAL RESOURCE ESTIMATE, FRUTA DEL NORTE PROJECT, ECUADOR

The Feasibility Study has been prepared by Amec Foster Wheeler, with the support of four other globally recognized, leading engineering firms and is summarized into a Technical Report (the "FDN Technical Report") filed on SEDAR in accordance with National Instrument 43-101 ("NI 43-101").

Feasibility Study Details

Mineral Resources

Mineral Resources for the FDN deposit were estimated using drill hole data available to December 31, 2015 as shown in Tables 1 and 2 at a cutoff grade of 3.5 g/t Au. The Mineral Resources are contained within three main geological domains; Xh_Vn, Xh_Ip, and M_South. The Xh_Vn domain represents 85% of the tonnage classified within the Indicated Mineral Resource category. It also has the highest average gold grade compared to the other two domains. More than half the tonnage in Xp_Ip is classified into the Indicated Mineral Resource category. All of M_South domain is classified as Inferred Mineral Resources.

Table 1 -- Mineral Resources, inclusive of Mineral Reserves as at December 31, 2015
Category Tonnage Grade Contained Metal Grade Contained Metal
(M t) (g/t Au) (M oz Au) (g/t Ag) (M oz Ag)
Indicated 23.8 9.61 7.35 12.9 9.89
Inferred 11.6 5.69 2.13 10.8 4.05


Table 2 -- Mineral Resources by Domain as at December 31, 2015
Category Tonnage Grade Contained Metal Grade Contained Metal
(M t) (g/t Au) (M oz Au) (g/t Ag) (M oz Ag)
Indicated

Xh_Vn

20.2

9.94

6.44

13.0

8.46

Xp_Ip

3.6

7.70

0.91

12.3

1.43

Total Indicated

23.8

9.61

7.35

12.9

9.89

Inferred

Xh_Vn

3.0

5.67

0.55

6.0

0.58

Xp_Ip

2.3

6.48

0.49

10.5

0.79

M South

6.3

5.41

1.09

13.3

2.68

Total Inferred

11.6

5.69

2.13

10.8

4.05

Notes:
  1. The Qualified Person for the estimate is David Ross, P.Geo., an employee of Roscoe Postle and Associates ("RPA"). The estimate has an effective date of December 31, 2015.
  2. Mineral Resources are reported inclusive of those Mineral Resources that were converted to Mineral Reserves; Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  3. Mineral Resources are reported at a cut-off grade of 3.5 g/t Au; which was calculated using a long-term gold price of $1,500/oz.
  4. Mineral Resources are constrained within underground mineable shapes that assume a minimum thickness of 2 m; metallurgical recovery of 94%; total operating costs of $145/t milled (mining cost of $60/t milled; process costs of $35/t milled; G&A costs of $15/t milled; surface infrastructure costs of $28/t milled; concentrate transport and treatment costs of $7/t milled); royalties of $71/oz and selling costs of $65/oz.
  5. Numbers may not add due to rounding.
Mineral Reserves and Mining

The estimated Mineral Reserves, presented by mining method, are shown in the following table.

Table 3 -- Probable Mineral Reserves as at April 30, 2016
Material Source Tonnes
(kt)
Au Grade
(g/t)
Contained Metal
(koz Au)
Ag Grade
(g/t)
Contained Metal
(koz Ag)
Transverse Long Hole Stope 8,404 8.97 2,423 10.4 2,813
Drift & Fill 5,533 11.15 1,984 16.9 3,003
Development >4.7 g/t Au 1,158 9.70 361 11.6 434
Development >2.7 g/t Au 394 3.72 47 7.4 94
Total 15,490 9.67 4,816 12.7 6,344

Notes:
  1. The Qualified Person for the Mineral Reserve estimate is Alejandro Sepulveda, RM CMC an NCL employee.
  2. Mineral Reserves have an effective date of April 30, 2016. All Mineral Reserves in this table are Probable Mineral Reserves. No Proven Mineral Reserves were estimated.
  3. Mineral Reserves were estimated using a $1,250/oz gold price. Mining cost assumptions for transverse stoping (TS) $61.0/t; mining costs for drift-and-fill (D&F) stoping $80/t. Other costs and factors common to both mining methods were process and other costs $75.8/t, dilution factor 10%, concentrate transport and treatment charges of $6.7/t. A royalty of $71.1/oz/t Au and a gold metallurgical recovery of 93.9% was assumed.
  4. Gold cutoff grades were 4.7 g/t for TS and 5.3 g/t (elevated to 6.8 g/t) for the D&F.
  5. Silver was not used in the estimation of cutoff grades but is recovered and contributes to the revenue stream. The average silver metallurgical recovery is 81.6%. The silver price assumption was $20/oz.
  6. Tonnages are rounded to the nearest 1,000 t, gold grades are rounded to two decimal places, and silver grades are rounded to one decimal place. Tonnage and grade measurements are in metric units; contained gold and silver are reported as thousands of troy ounces.
  7. Rounding as required by reporting guidelines may result in summation differences.
The Qualified Persons (QPs) for the FDN Technical Report includes:
  • Amec Foster Wheeler: Ignacy (Tony) Lipiec, P.Eng., Juleen Brown, MAusIMM CP, Simon Allard, P.Eng., Charles Masala, P.Eng. and Stella Searston, RM SME
  • Klohn Crippen Berger: Bryan D. Watts, P.Eng.
  • MM Consultores: Anthony Maycock, P.Eng.
  • NCL: Alejandro Sepulveda, RM CMC
  • RPA: David Ross, P.Geo.
See Technical Report for full disclosure of Sampling Methods and Approach, Sample Preparation and Analysis, and Quality Assurance and Control.
 
 
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