COLCA AND JALAOCA MINING PROJECTS ProInversion and the Promotion of Mining Projects Luis Ducassi Project Director
GAP IN INFRASTRUCTURE 2016-2025 Others 28% Gap by sectors 2025 Energy 19% Strategic pillar: Telecommunications 17% Transport 36% Total of the gap: US$ 159,6 MM Source: Association for the National Infrastructure Promotion - AFIN (by its initials in Spanish) 2
EVOLUTION OF AWARDS Evolution of awarded projects Investment amount in million dollars (Without Vat) Number of APP process 3
CHALLENGES 2018 14 projects - US$ 1,206 MM US$ 3,065 MM 24 PROJECTS - US$ 4,835 MM TRANSPORT ENERGY MINING TELECOMMUNICATIONS SANITATION *Amount to be defined. 4
PROINVERSION: MINING UNITS AWARDED Main Projects transferred to private investors between 1992 and 2011 Mining project Year of award Project Holder Estimated Investment (USD million) Quellaveco 1992 Anglo American 5000 Cerro Verde 1993 Freeport-McMoRan 850 ** Antamina 1996 BHP Billiton, Glencore, Teck & Mitsubishi Alto Chicama 2002 Barrick Misquichilca 400 2260 Las Bambas 2003 MMG Limited, CITIC Metal & Guoxin International Investment 6938* La Granja 2005 Río Tinto 642* Toromocho 2008 Chinalco 2344* Magistral 2011 Nexa Resources 480 * Amount audited by Activos Mineros S.A.C. ** Does not include expansions. 5
PROINVERSION: AWARDED MINING UNITS Last State-owned Mining Unit awarded Michiquillay Mining Project Copper porphyry deposit with more than 1000 million MT at the following grades: 0.63% Cu and 0,014% Mo, and with a processing rate of 80 thousand TPD. Competent Entity: Ministry of Energy and Mines Modality: Project in Assets Location: Department of Cajamarca Transfer Price and Royalties: USD 400 million - 3% of the net sales of mineral Awardee: Southern Peru Copper Corporation Transition to a new form of promotion of mining projects 6
PROINVERSION: BUILDING THE FUTURE New mining promotion strategy Michiquillay transfer marks the end of a mining asset type and the start of a new strategy in the promotion of projects at an early stage The Peruvian State will be at the forefront with new innovative mechanisms that encourage the construction of the "pipeline of mining projects" The development of projects will be assured in early stages with defined medium and long term but at the same time flexible milestones 7
PROINVERSION: UNDERSTANDING ANAPS Main characteristics of the areas of non-admission of petitions - ANAP (By its initials in Spanish) It is an area that MINEM reserves for the State INGEMMET is entitled to carry out mine prospecting in the ANAP Based on the potential, it is defined if PROINVERSION* will be in charge of its promotion PROINVERSION, in agreement with the Regional Government Authority, can perform the private investment promotion in an ANAP ANAP is transformed in concession for its transfer to a private investment * Before being included in the Multi-annual Report of Investments in MINEM APP 8
COLCA MINING PROJECT IN TRANSACTION Copper porphyry gold deposit. It is a mining area which covers 14 100 hectares. Two major mineralized zones surrounded by other important mining properties with defined potential have been identified. The size and potential of the deposit shall be defined with drilling works. Competent Entity: Ministry of Energy and Mines Modality: Project in Assets Location: Department of Apurimac and Cusco Estimated date of award: Third quarter of 2018 9
JALAOCA MINING PROJECT IN TRANSACTION Cu-Au porphyry-skarn type deposit and Cu-Mo porphyry deposit. It is a mining area which covers 6400 hectares. Four important mineralized zones have been identified. The size and potential of the deposit shall be defined with drilling works. Competent Entity: Ministry of Energy and Mines Modality: Project in Assets Location: Department of Apurimac Estimated date of award: Third quarter of 2018 10
OUTSTANDING ASPECTS OF BOTH PROJECTS Peru: Great growth potential and solid macroeconomic environment Metal's price recovery and favorable global situation Availability of a large area to explore, located in a region in favor of the mining development and close to major mining projects Stable and known mining policy and regulatory framework Immediate access to infrastructure 11
COLCA AND JALAOCA MINING PROJECTS Geological Aspects Andres Quiroz PROJECT ADVISOR
COLCA MINING PROJECT Summary of performed studies Concept PROPERTY EXPANSION LOCATION Neighboring projects TRAGETS Description ANAP (Areas of Non-Admission of Petitions) 14 100 ha Apurimac Region; Cotabambas province 3800 1800 m.a.s.l. 170 km from Cusco 5 hours Cotabambas porphyries Cluster (Panoro) Colca (6200 ha) Huallpachaca (5600 ha) 13
COLCA MINING PROJECT Summary of performed studies Concept Description GEOLOGY Lithology Andesites of Tacaza Group (Paleogeno Neogeno) Diorites, tonalites and granodiorite of Andahuaylas Yauri Batholith (Eocene Oligocene) Alteration type Propylitic and argillic in igneous rocks, and skarn Mineralization Epithermal veins, skarn. Cu oxides and carbonates in outcrops Structure NE-SW structural corridor, like Cotabambas porphyry GEOCHEMISTRY Regional Stream sediment Rocks 2020 samples, included 27 samples around Colca Project. Plus 33 samples into the project area, and 6 control samples (duplicates, blanks, standards) 445 samples QA/QC: 48 samples control 14
COLCA MINING PROJECT Summary of performed studies Concepto Descripción Anomalies Au, Cu, Pb, Zn GEOPHYSICS IP 79 km over 1000 ha Magnetometry 242 km over 1450 ha DESCRIPTION The Colca ANAP is located in the metallogenic strip of Porphyry and Skarns of Copper- Molybdenum-Gold of the Oligocene Eocene within the Andahuaylas - Yauri Batholith, and is adjacent to the east of the Cotabambas Project of Panoro Minerals Ltd. On surface, mineralization of copper oxides with limonites, calcite veiling, patchy argillic alterations, and an extensive propylitic alteration can be observed Colca zone (6200 ha) 418 rock samples have been analyzed, evidencing anomalous values of up to 3,063 ppb Au and up to 7.49% Cu. It also registered an extended Huallpachaca zone (600 ha) anomaly of IP chargeability. 170 geochemistry samples were taken in this zone that showed values around 815ppm and 4% of Cu. Huallpachaca is located near the porphyry corridor of Cotabambas, property of Panoro Minerals. 15
JALAOCA MINING PROJECT Summary of performed studies Concept PROPERTY EXPANSION LOCATION Main neighboring projects TRAGETS Description ANAP (Areas of Non-Admission of Petitions) 6400 ha Apurimac Region; Aymaraes and Antabamba province 4500 m.a.s.l. 30 km Chalhuanca 8 hours from Cusco Los Chancas La Antilla Utupara Trapiche Antabamba (Lahuani) Pucasalla (1048 ha); Llamoja (1877 ha); Huarajo (100 ha); Mesaorco (369 ha) 16
JALAOCA MINING PROJECT Summary of performed studies Concept Description GEOLOGY Lithology sandstone, shales and limestone of Fm. Socosani (Jurasic) Andahuaylas Yauri Batholith (Eocene Oligocene) Quartz-monzonite and dacitic porphyries Alteration type Skarn, potassic, silicification, phyllic, propylitic Structure Mollebamba fault associated with Trapiche and Panchita porphyries. GEOCHEMISTRY Stream sediment 49 samples QA/QC: 13 samples control Rocks 333 samples QA/QC: 73 samples control GEOPHYSICS IP 39.3 km Magnetometry 152 km 17
JALAOCA MINING PROJECT Summary of performed studies Concept DESCRIPTION Description In the Jalaoca sector, the intrusives cut the Ferrobamba sedimentary sequence and produce hydrothermal alteration and copper - molybdenum anomalies. It is close to Mollebamaba Fault, which is the dominant structural control for the Trapiche and Lahuani deposits. Pucasalla zone (1048 ha) Llamoja zone (1900 ha) It presents consistent geochemical anomalies (62 samples) of gold, copper and molybdenum and IP geophysical anomaly >28.5 mv/v and magnetic anomaly >24,380, <24,565. Hydrotermal alteration and veinlets in skarn and porphyry rocks It presents a large number of mineralized veins. Copper anomalies, over 162 samples, have values of between 50 to 2630 ppb with molybdenum anomaly of 362 to 842 ppm. There are the potassic alteration in intrusive rocks, chalcopyrite disseminated, and copper oxides on surface. 18
COLCA AND JALAOCA MINING PROJECTS Contractual Structure Carlos Salazar Project Advisor
Warranty Commitments CONTRACTUAL STRUCTURE Start 24 m 48 m Year 7 Year 11 Year 14 +2 +4 +4 Exploration Feasibility Construction Production Signing of the contract End of the period without commitments Investment Commitment PEA 43-101 EFB Start of Production US$ 2M 5k US$ 8M 25k US$ 2M US$ 1M % CAPEX PEA % CAPEX EFB 20
Resolution Expansions CONTRACTUAL STRUCTURE Start 24 m 48 m Year 7 Year 11 Year 14 Exploration Feasibility Construction Production Signing of the contract End of the period without commitments Investment Commitment PEA 43-101 EFB Start of Production + 2 years + 4 years + 4 years To have access: Accredit USD 10M To have access: Accredit USD 10M Resolution if CMI are not accredited within the established deadline Resolution if milestones are not completed within deadlines (more expansions) 21
IN SUMMARY Colca & Jalaoca Geographical location with a history of development of mining projects Geological potential Accompaniment of the Peruvian State Structures of flexible schedules Payment schemes based on project progress They are two different projects. The register as a bidder, submission of consultations, among others, is done separately. 22
CONTACT INFORMATION ProInversión Luis Augusto Ducassi Project Director +51 1 200 1200 extension 1203 lducassi@proinversion.gob.pe Institutional e-mails proyectocolca@proinversion.gob.pe proyectojalaoca@proinversion.gob.pe Advisers 23