COPPER IN PERU: FACTS AND CHALLENGES

Jorge ACOSTA(1), Alberto BUSTAMANTE(2) & Miguel CARDOZO(2, 3)

(1) INGEMMET (2) EXPLOANDES (3) ALTURAS MINERALS Arequipa, Peru

September 2013

Content

• Statistical facts

• Peruvian copper belts

• Deposit types and metal contents in the main porphyry belts

• Geological models of the main porphyry belts in Peru

• Facts and challenges

Statistical Facts

0.5 0.7

0.9

1.3

2.7

5.1 5.4

0.05 0.21 0.28

0.35 0.44

0.98

1.26

1.0 1.2

1.6 1.2

1.8

1.2 1.1

3.1

5.0

7.4

8.4

10.4

14.6

16.5

0

2

4

6

8

10

12

14

16

18

0

1

2

3

4

5

6

7

8

9

1950s 1960s 1970s 1980s 1990s 2000s 2010-2012

Me

tric

To

ns o

f F

ine

C

op

per

(Mil

lio

ns)

Average for each decade

Australia

Canada

Chile

China

Peru

United States

Others

World production

Worldwide Copper Production Trends (average for each 10 years)

Sources: Global Copper Production from http://minerals.usgs.gov/ds/2005/140/ds140-coppe.pdf Peruvian Historic Copper Production from http://www.minem.gob.pe/estadistica.php?idSector=1&idEstadistica=5818 Chilean Historic and Forecast Copper Production from http://www.cochilco.cl

Peru and Chile Copper Production to 2021 (actual + forecast)

0

2

4

6

8

10

12

14

16

18

Met

ric

Ton

s o

f Fi

ne

Co

pp

er

(Mill

ion

s)

World Peru ChileSources: Global Copper Production from http://minerals.usgs.gov/ds/2005/140/ds140-coppe.pdf Peruvian Historic Copper Production from http://www.minem.gob.pe/estadistica.php?idSector=1&idEstadistica=5818 Chilean Historic and Forecast Copper Production from http://www.cochilco.cl

463

279

162 149

47 38 34 21 20

6 5 4 2 2 0

100

200

300

400

500

Met

ric

Ton

s o

f Fi

ne

Co

pp

er

x 1

00

0

Copper Mines in Peru - 2012

1-10

10-50

50-200

200-500

Annual Production Metric Tons of Copper

X 1000

Mines

Atacocha

Cerro Corona

Chungar

Raura

Antamina

Cobriza

Tintaya

Cerro Verde

Toquepala

Cerro Lindo

Raul-Condestable

Chapi

Cuajone

Antapacay

Source: Mining Yearbook 2012 - MEM

Future Copper Producers in Peru

500

350

315

275

225 200 190 187

160

120 119 110 107 103 80 80

60 54 31

0

100

200

300

400

500

600

Pla

nn

ed

An

nu

al P

rod

uct

ion

M

etri

c To

ns

of

Fin

e C

op

pe

r X

10

00

Cañariaco (2019) La Granja (2017)

El Galeno (2016) Michiquillay (2019)

Magistral (2016)

Minas Conga (2017)

Río Blanco (2019)

Toromocho (2014)

Los Chancas (2017) Las Bambas (2014)

Haquira (2019)

Mina Justa (2015)

Los Calatos (2018) Zafranal (2019)

Tía María (2015)

Constancia (2015) Quechua (2014)

1-10

10-50

50-200

200-500

Planned Annual Production Metric Tons of Copper

X 1000 Projects

Quellaveco (2016)

Source: Mining Yearbook 2012 - MEM

Copper Exploration Projects

Trapiche Antilla

Antabamba Coroccohuayco

Ataspaca

La Mancha

El Chorro

Los Latinos Rondoni

El Tambo

Pashpap

La Arena

Puquio Lara

Katanga

Aguas Verdes

Angostura

Pukaqaqa

Colpayoc Cascabamba

Potrobayo

Papayo

Tambogrande

Pachagón

Pucacorral

Alpamarca

Aucapampa

Adriana

El Toro Alto Dorado

Utupara

Pampa Colorada

Sombrero

La Arena

Trapiche

Tambogrande

Cotabambas

Coroccohuayco

Pukaqaqa Antilla

Pashpap Katanga Rondoni

Aguas Verdes Ataspaca Lara

Cascabamba Colpayoc El Chorro El Tambo

Adriana La Mancha Los Latinos Pachagón

Puquio Utupara Pucacorral Potrobayo Papayo

Alto Dorado Alpamarca Sombrero Aucapampa

Angostura Antabamba Pampa Colorada

Projects with resources < 1 MMT

Prospects Projects with resources > 1 MMT

Source: Mining Yearbook 2012 - MEM Reserves and Resources from Annual Reports of Mining Companies Ore Mineral Deposits Data Base from http://geocatmin.ingemmet.gob.pe/geocatmin/

Copper Mines and Projects in Peru

La Granja

El Galeno Minas Conga

Río Blanco

Toromocho

Los Chancas Las Bambas

Quechua Mina Justa

Quellaveco

Tía María

Antamina

Cerro Verde Toquepala

Cuajone

Tintaya

Zafranal

Projects

1-10

10-50

50-200

200-500

Actual and Planned Annual Production

Metric Tons of Fine Copper X 1000

Mines

Cerro Corona

Michiquillay

Act

ual

/Pla

nn

ed A

nn

ual

Pro

du

ctio

n

Met

ric

To

ns

of

Fin

e C

op

per

X

10

00

0

100

200

300

400

500

600Magistral

Source: Mining Yearbook 2012 - MEM

Peruvian Copper Belts

Main Porphyry Belts, Mines and Projects in Peru

Metallogenic belts

0

1-10

10-50

50-200

200-500

Actual and Planned Annual Production in Metric Tons of

Fine Copper X 1000

Mines Projects

Miocene porphyry belt

Eocene-Oligocene porphyry belt

Paleocene-Eocene porphyry belt

Source: Metallogenic Map of Peru 2011 – INGEMMET Mining Yearbook 2012 - MEM

Other Copper Belts in Peru

Metallogenic belts

Upper-Middle Jurassic IOCG & Porphyry Cu

Upper Jurassic - Albian VMS Cu-Zn-Au

Lower Cretaceous IOCG

Upper Cretaceous Porphyry Cu

Upper Cretaceous-Paleocene VMS Cu-Zn-Au

Permian skarns Cu

0

1-10

10-50

50-200

200-500

Metric Tons of Fine Copper X 1000

Mines Projects

Source: Metallogenic Map of Peru 2011 – INGEMMET Mining Yearbook 2012 - MEM

Peruvian Copper Production 1998-2025 M

etri

c To

ns

of

Fin

e C

op

pe

r (

Mill

ion

s)

0.0

1.0

2.0

3.0

4.0

5.0

6.0 Río Blanco Cañariaco

Michiquillay Haquira Zafranal

Los Calatos

+Cuajone

Met

ric

Ton

s o

f F

ine

Co

pp

er

(M

illio

ns)

actual forecast

Miocene Porphyry Belt

Eocene-Oligogocene Porphyry Belt

Paleocene-Eocene Porphyry Belt

Other type of deposits

Tía María Mina Justa Constancia

La Granja Minas Conga Los Chancas

El Galeno Magistral

Quellaveco +Cerro Verde

2.5

4.9

4.1

3.4

4.2

1.5

Toromocho Las Bambas

Quechua +Toquepala

2.2

Source: Copper Production 1998-2012 from Mining Yearbook 2000-2012 - MEM

Porphyry

Deposit Types

State

Exploration projets Future Producers

Mines

Deposit Types in the Main Porphyry Belts in Peru

Metallogenic belts Miocene porphyry belt

Eocene-oligocene porphyry belt

Paleocene-Eocene porphyry belt

Skarn

Other

Source: Belts from Metallogenic Map of Peru 2011 - INGEMMET

Deposits Types in Other Belts in Peru

Porphyry

Deposit Types

State

Exploration projets Future Producers

Mines

Skarn

Other

Metallogenic belts

Upper-Middle Jurassic IOCG & Porphyry Cu

Upper Jurassic - Albian VMS Cu-Zn-Au

Lower Cretaceous IOCG

Upper Cretaceous Porphyry Cu

Upper Cretaceous-Paleocene VMS Cu-Zn-Au

Permian Skarns Cu

Source: Belts from Metallogenic Map of Peru 2011 - INGEMMET

Peruvian Copper Production by Deposit Types

0.04 0.02 0.03 0.03 0.03 0.03 0.03 0.04 0.05 0.06

0.08 0.09 0.10

0.12 0.12 0.08

0.11 0.12

0.27

0.38 0.35

0.52 0.52

0.53 0.49

0.50 0.48 0.45

0.47

0.54

0.36 0.41

0.41

0.42

0.43

0.46

0.49 0.45

0.46

0.64

0.69 0.71 0.70

0.65

0.63

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1998 1999 2000 2001 2002 2003 2004 2005 2006 2006 2008 2009 2010 2011 2012

Met

ric

Ton

s o

f Fi

ne

Co

pp

er

(Mill

ion

s) Porphyry

Skarn

Others

Source: Copper Producction from Mining Yearbook 2000-2012 - MEM

Historic Cumulative Copper Production in Peru

< 1

1-3

3-5

5-7

Million Metric Tons of Fine copper

Metallogenic belts

5 MMT 18%

2 MMT 7%

16 MMT 57%

Antamina 4.1 MMT

Toquepala 6.7 MMT

Tintaya 2.0 MMT

Miocene porphyry belt

Eocene-oligocene porphyry belt

Paleocene porphyry belt

Mines

Total Production in Peru

28 MMT (100%) Production from main porphyry belts

23 MMT (82%)

Other Cu belts: 2 MMT (7%) Other non-Cu belts: 3 MMT (11%)

Sources: Belts from Metalogenic Map of Peru 2011- INGEMMET Historic Copper Production from http://www.minem.gob.pe/estadistica.php?idSector=1&idEstadistica=5818

Copper Resources and Reserves in the Main Porphyry Belts

in Peru

85 MMT 39%

44 MMT 20%

63 MMT 29%

Total reported resources in Peru

218 MMT (100%) Resources from porphyry belts

192 MMT (88%)

Other Cu belts: 11 MMT (5%) Other non-Cu belts: 15 MMT (7%)

Millions Metric Tons of Fine Copper

< 1

1-5

5-10

10-15

> 15

Mines Future

Producers Exploration

Projects

Sources: Belts from Metalogenic Map of Peru 2011- INGEMMET Reserves and Resources from Annual Reports of Mining Companies

21 20 19

15 14

10 10 9 9 7 7

5 4 4 4 4 3 3 3 3 3 2 2 2 2 2 2 2 1 1

0

5

10

15

20

25

Main Copper Resources and Reserves in Peru (> 1 Million MT)

Mill

ion

Met

ric

To

ns

of

Fin

e C

op

pe

r

Millions Metric Tons of Fine Copper

< 1

1-5

5-10

10-15

> 15

Mines Future

Producers Exploration

Projects

Source: Reserves and Resources from Annual Reports of Mining Companies

Geological Models of the Main Porphyry Belts in peru

Geological Models - Paleocene Magmatic Belt

Andesite

Sources: Presentations from SPCC - 2007, Sociedad Minera Cerro Verde - 2007

Geological Models - Eocene-Oligocene Magmatic Belt

Andesite

Sources: Articles from SEG, Peruvian Geological Congress, ProExplos, Annual Reports from Mining Companies

Geological Models - Miocene Magmatic Belt

Yanacocha

Andesite

Sources: Articles from SEG, Peruvian Geological Congress, ProExplos, Annual Reports from Mining Companies

Facts and Challenges

Distinctive Features of Main Deposit Belts and Types

Mostly large to very large,

+300 MMT to 4,000 MMT

Mid- to large, +400 MMT to

1,800 MMT

Mid- to very large, +400 MMT

to 4,000 MMT

Copper 0.39 - 0.47 % Cu 0.44 - 0.93 % Cu 0.28 - 0.69 % Cu

Gold 0.03 g/t Au 0.04 - 0.25 g/t Au 0.05 - 0.90 g/t Au

Silver 2.20 - 3.10 g/t Ag 1.45 - 4.75 g/t Ag 1.24 - 6.90 g/t Ag

Moly 0.02 % Mo 0.013 - 0.030 % Mo up to 0.010 % Mo

Commonly, intense

development of oxide and

secondary sulphide vertical

zones

Limited Limited

Clusters of mid- to large-

sized porphyry.

Mineralization occurs in the

intrusives as well as in their

country rocks.

Complex, mineralized skarn

bodies are small- to mid-size

and irregular, mostly above

porphyries but also

underneath intrusive bodies.

Gold mineralization occurs

Structurally aligned

porphyries. Mineralization

occurs in the intrusives as

well as in their country

rocks. Gold mineralization in

sandstones and bulk-

tonnage, polymetallic

mineralization in skarns

frequently associated

Geometry

Size

Paleocene Eocene-Oligocene Miocene

Weathering

Aver

age

grad

e

Belt

Features

Exploration Challenges

• Among the challenges we have in the short term is to guarantee the implementation of future copper producers in Peru and ensure that the initial exploration projects become mining operations. In the long term it is necessary to increase investment in mineral exploration to expand reserves and resources and discovery of new deposits, so it will need to improve, innovate and implement new geophysical methods.

• Worldwide investment in mineral exploration is expected to drop in 2013 by no less than 40%.

• Last decrease was 42% in 2009, while it dropped only 18% in Peru as major mining houses maintained their drilling programs whereas junior exploration companies cut their programs.

• In 2013, investment in mineral exploration in Peru will likely follow the international tendency, as exploration cuts and significant delays in environmental permitting are affecting all companies.

• Promoting mineral exploration is essential to increase both metal production and long-term resources.

• Both financial and technical incentives are required and social barriers have to be removed.

• INGEMMET offers 1:100,000 and 1:50,000 scale regional maps covering the whole of the country and most of the territory is also covered by drainage geochemical sampling.

• Regional geophysical surveys (magnetic and radiometric) are insufficient.

• Radiometric age data is extensive, but still needs to be expanded.

• Isotopic studies useful to distinguish most productive mineralized systems and to identify mineralization sources are still very limited.

• Studies of magmatic arcs related to mineralized systems are insufficient.

Exploration Challenges

COPPER IN PERU: FACTS AND CHALLENGES

Jorge ACOSTA(1), Alberto BUSTAMANTE(2) & Miguel CARDOZO(2, 3)

(1) INGEMMET (2) EXPLOANDES (3) ALTURAS MINERALS Arequipa, Peru

September 2013