INFORMATION MEMORANDUM COLCA MINING PROJECT

Transcription

1 INFORMATION MEMORANDUM COLCA MINING PROJECT

2 Project Description Location: Province of Cotabambas, Apurimac and Cusco region, Peru. Inside the porphyry belt. Area: ha Status: Carried out prospection, geophysics and geochemistry Potential contained mineral: Cu/Au Property: Peruvian Government Investment highlights Colca is a reserved area of the Government with an extension of ha in the Apurimac and Cusco region, where exists a cluster of copper porphyry deposits. The Geological, Mining and Metallurgical Institute (INGEMMET) is the Government entity that is allowed to perform prospection labors. Detailed geochemistry, geology and geophysics allowed to identify two porphyry Cu-Au anomalies. Lima Colca Cusco Significant growth potential and solid macroeconomic environment Recovering metal prices and favorable global economic conditions Peru is one of the countries with the greater expected GDP growth among Latin American peers, mainly driven by the mining industry backed by the track record of private and public investment. Expected inflation is the lowest among Latin American peers which is supported by one of the most recognized Central Banks. Rising copper price with long term favorable view. China and USA are increasing demand and reduction of inventories could boost long term prices.

3 GEOLOGY AND PROSPECTION Large available areas for exploration and located in proved mining jurisdiction near large-scale mining projects Located within the porphyry belt with ha of extension. Laid between several of the largest mining projects in Peru, such as Cotabambas and Antilla (Panoro Minerals), Las Bambas (MMG), Los Chancas (Southern Copper), Trapiche (Buenaventura), Haquira (First Quantum) and Constancia (Hudbay). a. Huallpachaca Zone (3 x 2 km) 170 geochemistry samples were taken in this zone that showed values around 815 ppb Au and 4% Cu. Huallpachaca is located near the porphyry corridor of Cotabambas, property of Panoro Minerals. b. Colca Zone (7 x 2 km) 418 rock samples have been analyzed, evidencing anomalous values of up to 3063 ppb Au and up to 7.49% Cu. It also registered an extended anomaly of IP chargeability. Main anomalies identified in Colca Stable and known mining regulatory framework Regulatory framework governing mining activities has been in force since 1992, which allowed the successful development of large scale projects such as Las Bambas, Magistral and Toromocho. 70% of the mining projects tendered by the Peruvian Government in the past years have started commercial operations or are in construction phase. Source: INGEMMET Immediate access to infrastructure Proximity to other large scale mining projects offer potential shared infrastructure benefits. Southern Peru counts with transmission grids, paved roads, large highways, railway and port.

4 PROSPECTION ACTIVITIES CARRIED OUT IN HUALLPACHACA The INGEMMET, between 2011 and 2013, carried out systematic prospective works over the Colca s area. Mapping of the ha was carried out, identifying littoral units, areas with hydrothermal alteration and mapping of structures. Sediment sampling was carried out in Colca, with 2020 samples and one detailed sample in the Project with a density of 1 to 2km between samples. In the area, 33 sediment samples were taken, defining anomalies of copper (90 to 500 ppm) and high gold values in two locations (57 to 96 ppm). From the 143 samples (between 2011 and 2012), 11 presented anomalies between 300 ppm and 4.3% Cu; and in the 2013 sampling, 10 out of 27 were obtained in that range. It was done km of IP and km of terrestrial magnetometry. With this, it has been defined that the NE structural control that controls Cotabambas porphyry continues in this sector; and that there are magnetic anomalies associated with magnetite mineralization. Three IP loadability anomalies have also been identified. PROSPECTION ACTIVITIES CARRIED OUT IN COLCA Geological mapping was carried out in detail, differentiating the intrusive rocks of the Batolito of Abancay and the andesitas of the Tacasa Group, areas with hydrothermal alteration and local and regional structures. 445 geochemical samples were taken with a spacing of 200m.This defined 2 anomalous zones in intrusive rocks, with values >950 ppm Cu and >250 ppb Au, in the sector of Ninaraura and Pamparqui. Two anomalies have been defined in volcanic rocks, one in Huayllaje (200 to ppb), and the other in Cerro Puma (600 to ppm) with associated lead-zinc. There have been 4 geophysics campaigns totaling 44.9 km of IP, and 92.8 km of magnetometry. Within the Project area, 7 communities have been identified: Colca, Pamparqui, Churoc, Paruro, Huamancharpa, Huañec and Chinchaypuquio. Communities identified in Colca Samples of rock fragments of the most interested areas in Colca SAMPLE EAST NORTH Au (PPB) Cu (PPM) Pb (PPM) Pb (PPM) TARGET ROCOL-335 ROCOL NWW de Marangallay (Tunasera area) ROCOL-365 ROCOL-370 ROCOL-371 ROCOL North of Marangallay (C Puma) ROCOL ROCOL ROCOL-422 ROCOL Qda. Mayhuarje Qda. Aquilano ROCOL ROCOL Right margin of Qda. Aquilano ROCOL ROCOL ROCOL ROCOL-573 ROCOL C Puma ROCOL ROCOL-595 ROCOL-604 ROCOL C Hecontoy C Puma Source: INGEMMET Source: INGEMMET.

5 Details of nearby projects Main companies located near the project Cotabambas 2020 US$ 1.9 billion MT/year Haquira 2019 US$ 2.8 billion MT/year Source: INGEMMET ANCASH HUÁNUCO Las Bambas In production MT/year Lurín MAIN INFORMATION INCLUDED IN THE DATAROOM Los Chancas 2021 US$ 1.6 billion MT/year Social studies. Technical study, including: Geology results and analysis: Litology, alteration, mineralization. Geochemistry results and analysis: Sediment samples (2020 samples), rocks (445 samples), QA/QC. Geophysics results and analysis: IP (79 km) and Magnetometry (242 km) Relevant maps of the technical studies carried out in Colca. Trapiche 2021 US$ 1.0 billion COPPER

6 Transportation Access GROUND The Access to Colca is made through asphalted roads and affirmed roads. The main path is as follows: - Use the asphalted road Cusco Abancay and take the detour at km 936. Estimated time 40 minutes. - Take the detour along affirmed road until you reach the district of Cotabambas. Estimated time 3 hours y 20 minutes. - Continue along the road from Cotabambas to Colca. Estimated time of 40 minutes. Infrastructure Access ACCESS TO ELECTRICITY The Peruvian Electrical System is composed mainly of a main grid (National Electric Power Grid SEIN by its initials in Spanish) that consists of several interconnected transmission lines that allow the transmission of energy to almost all the departments of Peru. Various medium and low voltage transmission lines cross the Apurímac department. Due to Las Bambas mining project, several roads are being improved, including the road linking Antapaccay and Las Bambas, which allows the transportation of heavy machinery. The section Antapaccay-Imata (location of a railway station), which has an asphalted road, has a length of 130km. RAILWAY Major nearby mining projects such as Las Bambas and Antapaccay use the Transandino Railway to transport ore concentrate to the port of Matarani. PORT Map of the National Electric Power Grid Matarani Port was awarded for 30 years to TISUR (Grupo Romero). During 2015, the movement of cargo reached 3.8 million tons. Antapacay Imata Transandino railway Current access roads Access road under upgrade Matarani port/arequipa Colca project/apurimac Source: MINEM

7 Regulatory Framework FOREIGN INVESTMENT he Peruvian government has established certain rules and special regimes to provide economic stability to new private investors. These stability rules will protect the private investor from any arbitrary change in the legal framework and conditions, reducing the interference of the government in the market. It is important to highlight that no Peruvian law or regulation distinguishes between national and foreign investors. As a result, foreign investors receive exactly the same treatment as national investors, except for what is indicated in article 71 of the Political Constitution of Peru, which states that foreigners cannot acquire or possess by any title mines, lands, forests, waters, energy sources, among others, within 50 km of the Peruvian borders. USE OF LAND SURFACE It is important to consider that the concession holders are not the owners of the surface of the land. ENVIRONMENTAL CERTIFICATION The holder of the concession has the right to request an easement over the land of third parties, with prior compensation, so as to be able to carry out any other necessary activity. Mining Concession holders must present and obtain the approval of an Environmental Certification that could be an Environmental Impact Declaration - DIA, a Semi-detailed Environmental Impact Assessment - EIA-sd, or a Detailed Environmental Impact Assessment - EIA-d depending on the amount of drilling platforms, the size of the interrupted area and the construction of tunnels, and/or if the mining activity is exploration or exploitation. Depending of which Environmental Certification is required to develop mining activities, the authority in charge of the approval shall be the Ministry of Energy and Mines - MINEM or the National Environmental Certification Service for Sustainable Investment SENACE by is initials in Spanish. The OEFA is in charge of monitoring all the commitments. USE OF WATER USE DE EXPLOSIVES The water rights are independent from the concession rights and are granted by the ANA. To be able to use the water for mining activities, the Peruvian legal framework determines that the company must have an authorization for the use of the water. The use of explosives in Peru is regulated, controlled and supervised by the National Superintendence of Control of Safety Services, Weapons, Ammunitions and Explosives for Civil Use SUCAMEC by its initials in Spanish. The Explosives Regulation establishes that companies which use explosives in their mining activities must observe specific rules during the placement and transport of these goods.

8 CONTRACTUAL STRUCTURE Start 24m 48m Year 7 Year 11 Year 14 EXPLORATION FEASIBILITY CONSTRUCTION PRODUCTION TERMINATION EXTENSIONS GUARANTEES COMMITMENTS Contract signing date End of period without guarantees CMI USD 2mm 5000 meters USD 2mm Investment Commitment-IC Termination if the CMI is not accredited in the defined term USD 8mm meters PEA USD 1mm % Capex PEA Bankable Feasibility Study - BFS % Capex BFS +2 years +4 years +4 years To access: Accredit USD 10mm To access: Accredit USD 10mm Termination if the milestones are not completed within the permitted timeframe plus extensions Start of production

9 Proinversión Perú Proinversión Perú Proinversión Perú Proinversión Perú