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Zincore Metals Inc.

AZOD Zinc Oxide Project, Cusco, Peru, , ,NI 43-101 Technical Report on a Preliminary Feasibility Study

S b i d bSubmitted by:Mr Christopher Wright , P.Geo. (AMEC)Mr Sergio Munoz, CMC (AMEC)Mr William Bagnell P.Eng., (AMEC)Mr. Michael Valenta, Pr.Eng (Int) FSAIMM (Metallicon Process Consulting)Mr Stewart Twigg, P.Eng., (AMEC)Mr Vikram Khera, P.Eng., (AMEC)Ms Stella Searston, RM SME (AMEC)

Prepared for: Zincore Metals Inc.Effective Date: 6 August 2013

Project Number: 170848

AMEC (Perú) S.A. Calle Las Begonias 441, Piso 8 San Isidro, Lima 27, Perú Tel (511) 221-3130 Fax (511) 221-3143 www.amec.com

CERTIFICATE OF QUALIFIED PERSON

I, Christopher Wright P.Geo., was formerly employed as a Consulting Manager, Mining and Geology and Principal Geologist with AMEC (Perú) S.A.

This certificate applies to the technical report entitled “AZOD Zinc Oxide Project, Cusco, Peru, NI 43-101 Technical Report on a Preliminary Feasibility Study”, that has an effective date of 6 August 2013 and a filing date of 26 August 2013 (the “Technical Report”) prepared for Zincore Metals Inc (“Zincore”).

I am a Practising Member of The Association of Professional Geoscientists of Ontario. I graduated from McGill University with Bachelor of Science in 1997 and a Master of Science in 2001.

I have practiced my profession for 15 years. I have been directly involved in data verification and Mineral Resource estimates for base metal projects and operations in Canada, Brazil, Peru, Colombia, Chile and Ecuador for 12 years.

As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101).

I visited the AZOD Zinc Oxide Project (the “Project”) from 3–5 May 2011 and again from 4–7 September, 2011 during the last drilling programs on the Project.

I am responsible for Section 2.3 and Section 12.4 of the Technical Report.

I am independent of Zincore as independence is described by Section 1.5 of NI 43–101.

I have been involved with the Project since 2011 and have completed a site visit, data verification and mineral resource estimate in support of the Technical Report.

I have read NI 43–101 and the sections of the technical report for which I am responsible have been prepared in compliance with that Instrument.

As of the effective date of the technical report, to the best of my knowledge, information and belief, the sections of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make those sections of the technical report not misleading.

Dated: 26 August 2013

“signed and sealed”

Christopher Wright P.Geo.

AMEC (Perú) S.A Calle Las Begonias 441, Piso 8 San Isidro, Lima 27, Perú Tel (511) 221-3130 Fax (511) 221-3143 www.amec.com


I, Sergio Munoz, CMC., am employed as a Manager Mining with AMEC (Perú) S.A.


I am a Registered Member of the Chilean Mining Commission. I graduated from the Santiago de Chile University with a Bachelor of Engineering degree in Mining Engineering in 2008.

I have practiced my profession for nine years I have been directly involved in preliminary economic assessments, pre-feasibility and feasibility level studies for open pit projects in copper, zinc, gold, silver, lead and iron. I have been involved with open pit and underground mine operations in copper.


I visited the AZOD Zinc Oxide Project (the “Project”) from 4 to 7 September 2011.

I am responsible for or co-responsible for Sections 1.12, 1.13, 1.14, 1.14.1, 1.14.3, 1.14.4, 1.18, 1.19, 1.21, 1.22, all of Section 3, Sections 15.1, 15.2, 15.3, 15.5 to 15.7, 16.1 to 16.3, 16.6, 16.6.1 to 16.6.2, 16.7 to 16.17, 21.1.2, 21.4.1, 21.4.2 to 21.4.5, 21.5, all of Section 24, Sections 21.8, 25.9, 25.13, 25.15 and all of Sections 26 to 27 of the Technical Report.


I have been involved with the Project since 2011 in support of the Technical Report.




“signed”

Sergio Munoz, CMC.

AMEC Americas Ltd Mining and Metals 301 - 121 Research Drive, Saskatoon SK S7N 1K2 www.amec.com


I, William Bagnell, P.Eng., am employed as a Manager Mining with AMEC Americas Limited.


I am a member of Association of Professional Engineers and Geoscientists of Saskatchewan. I graduated from the Technical University of Nova Scotia with a B.Eng Mining Engineering in 1996.

I have practiced continuously in my profession for seventeen years, 12 in operations and 5 in consulting. I have been directly involved in pre-feasibility and feasibility level studies for underground projects in uranium, gold, potash and diamonds. I have been involved with mine operations in coal, potash, gold and base metals.


I have not visited the AZOD Zinc Oxide Project (the “Project”).

I am responsible for or co-responsible for Sections 1.12, 1.13, 1.14, 1.14.2, 1.14.3, 1.14.4, 1.18, 1.19, 1.21, 1.22, all of Section 3, Sections 15.1, 15.4, 15.5 to 15.7, 16.4, 16.5, 16.6, 16.6.3 to 16.6.4, 16.7 to 16.17, 21.1.2, 21.2, 21.4.1, 21.4.6 to 21.4.9, all of Section 24, Sections 25.1, 25.8 to 25.9, 25.13, and all of Sections 26 and 27 of the Technical Report.







William Bagnell, P.Eng.

Tel: +27 (0) 12 259 0792 Fax: +27 (0)86 688 3797 E-mail: [email protected] website: www.metallicon.co.za

Office Suite: Sediba Plaza Hartbeespoort South Africa Reg. No: 2005/021843/07

Directors: M.M. Valenta B. Mulcahy H. Snyman

P a g e 1


I, Michael Matthew Valenta Pr.Eng (Int), FSAIMM, am the founder, managing director and chief consulting metallurgist with Metallicon Process Consulting (Pty) Ltd (“Metallicon”). This certificate applies to the technical report entitled “AZOD Zinc Oxide Project, Cusco, Peru, NI 43-101 Technical Report on a Preliminary Feasibility Study”, that has an effective date of 6 August 2013 and a filing date of 26 August 2013 (the “Technical Report”) prepared for Zincore Metals Inc (“Zincore). I am a registered professional engineer (no. 970402) on the register of the Engineering Council of South Africa as well as a registered professional engineer (no. 2003 60005) on the international register as defined by the Washington Accord. I am also a Fellow (no. 55644) of the Southern African Institute of Mining and Metallurgy. I am a member (no. 11354) of the Mine Metallurgical Managers’ Association of South Africa and have served on the council and am a past president of the Mine Metallurgical Managers’ Association of South Africa. I am a graduate of the University of the Witwatersrand, South Africa, with a BSc. in Extractive Metallurgy (1990). I have been practicing as a metallurgical engineer continuously since 1991 and have 22 years’ experience in metallurgy. I have been involved in research and development, plant operation, project management, plant design, plant optimization, due diligence studies and management in Africa, South America and Australia. My research and development experience has been in the formal research sector with Mintek in South Africa, and well as with my other employers throughout my experience. As a chief consulting metallurgist with Metallicon since 2005 I have managed and overseen a number of test work programmes for clients with institutions such as Mintek and SGS. My formal design experience was gained as consulting metallurgist with Hatch Africa for three years prior to the establishment of Metallicon in 2005. As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101).

Tel: +27 (0) 12 259 0792 Fax: +27 (0)86 688 3797 E-mail: [email protected] website: www.metallicon.co.za

Office Suite: Sediba Plaza Hartbeespoort South Africa Reg. No: 2005/021843/07

Directors: M.M. Valenta B. Mulcahy H. Snyman

P a g e 2

I have been overseeing the test work at Mintek in South Africa, Cementos Pacasmayo in Peru and IMN in Poland. I was involved throughout the test work from inception to final reporting and visited the research facilities at critical stages of the various programmes. I also visited the SGS laboratories in Lima, Peru to review their equipment and procedures for the preparation of the ore samples for test work. The management of the test work and the liaison with the relevant institutions was my responsibility. In consultation with the client, Zincore, decisions were made as to the direction of the test work. This was achieved through regular visits to the institutions, both local and abroad, and personal observation of the test work by me and my professional engineers. Metallicon was responsible for the interpretation of the test work and the compilartion of the Process Design criteria. I am responsible for Section 13 and Section 17 and those portions of the Summary, Conclusions and Recommendations that pertain to those sections of the Technical Report. I am independent of Zincore as independence is described by Section 1.5 of NI 43-101. I have been involved with the project since 2009 and have been reviewing the metallurgical test work and metallurgical design. I have read NI 43-101 and those portions of the Technical Report for which I am responsible have been prepared in compliance with that Instrument. As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the sections of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make those sections of the technical report not misleading. Dated: 26 August 2013 “Signed” Michael M. Valenta Pr. Eng (Int) FSAIMM Managing Director

AMEC (Perú) S.A Calle Las Begonias 441, Piso 8 San Isidro, Lima 27, Perú Tel (511) 221-3130 Fax (511) 221-3143 www.amec.com


I, Stewart Twigg, P.Eng. am employed as a Project Manager with AMEC (Perú) S.A.


I am a Professional Engineer of the Association of Professional Engineers and Geoscientists of British Columbia I graduated from Queens University in 1995 with a Bachelor of Science in Mechanical Engineering.

I have practiced my profession for 15 years. I have been directly involved in the design, construction, start up and operation of zinc and lead refineries including Teck Cominco’s metallurgical facilities in Trail, British Columbia and Votorantim’s Refineria de Cajamarquilla in Lima, Peru for eight of my 15 years. I have participated in studies and the execution of infrastructure projects including detailed construction planning and execution of major mining and infrastructure projects in the Middle East, Canada, Chile and Peru.


I visited the AZOD Zinc Oxide Project (the “Project”) from 4 to 7 April 2012.

I am responsible for or co-responsible for Sections 1, 1.1, 1.2, 1.3, 1.16 to 1.19, 1.21, 1.22, all of Sections 2 and 3, all of Sections 18, 20, Sections 21 21.1, 21.1.1, 21.3, 21.4, 21.4.13 to 21.4.19, 21.5, and all of Sections 23 to 24, Section 25, 25.1, 25.11, 25.13, and all of Sections 26 and 27 of the Technical Report.







Stewart Twigg, P.Eng.

AMEC Americas Ltd Mining and Metals 700-2020 Winston Park Dr. Oakville, ON L6H 6X7 CA Tel: (905) 829-5400 Fax: (905) 829-5401 www.amec.com


I, Vikram Khera, P.Eng. am employed as a Senior Financial Analyst with AMEC Americas Limited.


I am a member of Professional Engineers Ontario. I graduated from the University of British Columbia in 2002 with a Bachelor of Applied Science degree in Chemical Engineering.

I have practiced my profession for over 10 years.


I have not visited the AZOD Zinc Oxide Project (the “Project”).

I am responsible for or co-responsible for all of Section 3, all of Section 19, all of Section 22, and Section 25.14 of the Technical Report.







Vikram Khera, P.Eng.

AMEC E&C Services, Inc. 961 Matley Lane, Suite 110 Reno, NV, 89502 Tel: 775 331 2375 Fax: 775-331-4153 www.amec.com


I, Stella Searston, RM SME. am employed as a Principal Geologist with AMEC E&C Services Inc.


I am a Registered Member of the Society for Exploration, Mining and Metallurgy (RM SME #4168111), a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM) and a Member of the Australian Institute of Geoscientists (MAIG). I graduated from James Cook University of North Queensland in 1987 with a Bachelor of Science degree in geology and from the University of Tasmania in 1999 with a Master of Economic Geology degree.

I have practiced professionally for 25 years. In that time I have been directly involved in exploration for and review of, geological, mineralization, exploration and drilling data, geological models, sampling, sample preparation, assaying and other resource-estimation related analyses, quality assurance-quality control databases, and resource estimates, in Australia, Southern Africa, the Pacific and North America.


I have not visited the AZOD Zinc Oxide Project.

I am responsible for or co-responsible for Sections 1, 1.1 to 1.8, 1.10, 1.10.1 and 1.10.2, 1.11, 1.21, 1.22, all of Sections 2, 3, 4, 6 to 12, 14, 23 to 24, Sections 25, 25.1 to 25.6, 25.8 and 25.15 and all of Sections 26 and 27 of the Technical Report.


I have been involved with the Project since 2011 in support of the Technical Report and as reviewer of AMEC’s data verification and resource estimation work.




“signed and stamped”

Stella Searston, RM SME.

IMPORTANT NOTICE This report was prepared as National Instrument 43-101 Technical Report for Zincore Metals Inc. (Zincore) by AMEC (Perú) S.A. (AMEC). The quality of information, conclusions, and estimates contained herein is consistent with the level of effort involved in AMEC’s services, based on i) information available at the time of preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by Zincore subject to terms and conditions of its contract with AMEC. Except for the purposed legislated under Canadian provincial and territorial securities law, any other uses of this report by any third party is at that party’s sole risk.

AZOD ZINC OXIDE PROJECTNI 43-101 TECHNICAL REPORT

ON A PRELIMINARY FEASIBILITY STUDY

Project No.: 170848 August, 2013 TOC i

C O N T E N T S

1.0 SUMMARY ............................................................................................................................. 1-1 1.1 Project Setting, Location and Access .................................................................................... 1-1 1.2 History and Exploration .......................................................................................................... 1-2 1.3 Mineral Tenure, Surface Rights, and Royalties ..................................................................... 1-2 1.4 Environment, Permits, and Social License ............................................................................ 1-3 1.5 Geology and Mineralization ................................................................................................... 1-5 1.6 Drilling .................................................................................................................................... 1-6 1.7 Sample Preparation and Analysis .......................................................................................... 1-7 1.8 Data Verification ..................................................................................................................... 1-8 1.9 Metallurgical Test Work .......................................................................................................... 1-8 1.10 Mineral Resource Estimates ................................................................................................ 1-10

1.10.1 Accha .......................................................................................................................... 1-10 1.10.2 Yanque .......................................................................................................................... 1-11

1.11 Mineral Resource Statements .............................................................................................. 1-12 1.12 Mineral Reserve Estimates .................................................................................................. 1-14 1.13 Mineral Reserves Statement ................................................................................................ 1-15 1.14 Mining Methods .................................................................................................................... 1-18

1.14.1 Open Pits ....................................................................................................................... 1-18 1.14.2 Underground .................................................................................................................. 1-18 1.14.3 Mine Plan ....................................................................................................................... 1-19 1.14.4 Manpower ...................................................................................................................... 1-21

1.15 Recovery Methods ............................................................................................................... 1-21 1.16 Infrastructure ........................................................................................................................ 1-24 1.17 Marketing ............................................................................................................................. 1-25 1.18 Capital Cost Estimates ......................................................................................................... 1-26 1.19 Operating Cost Estimates .................................................................................................... 1-28 1.20 Financial Analysis ................................................................................................................ 1-29 1.21 Interpretation and Conclusions ............................................................................................ 1-32 1.22 Recommendations ............................................................................................................... 1-33

2.0 INTRODUCTION .................................................................................................................... 2-1 2.1 Terms of Reference ............................................................................................................... 2-1 2.2 Qualified Persons ................................................................................................................... 2-1 2.3 Site Visits and Scope of Personal Inspection ........................................................................ 2-3 2.4 Effective Dates ....................................................................................................................... 2-4 2.5 Information Sources and References .................................................................................... 2-4 2.6 Previous Technical Reports ................................................................................................... 2-5

3.0 RELIANCE ON OTHER EXPERTS ....................................................................................... 3-1 3.1 Project Ownership .................................................................................................................. 3-1 3.2 Mineral Tenure, Agreements and Surface Rights .................................................................. 3-2 3.3 Permitting ............................................................................................................................... 3-3 3.4 Social and Environmental ...................................................................................................... 3-3 3.5 Taxation ................................................................................................................................. 3-4 3.1 Metals Pricing ......................................................................................................................... 3-4 3.2 Marketing ............................................................................................................................... 3-5 3.3 Royalties ................................................................................................................................ 3-6

4.0 PROPERTY DESCRIPTION AND LOCATION ..................................................................... 4-1



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4.1 Property and Title in Peru ...................................................................................................... 4-1 4.1.1 Mining Law ....................................................................................................................... 4-2 4.1.2 Taxation Regime ............................................................................................................. 4-3 4.1.3 Royalties .......................................................................................................................... 4-3 4.1.4 Surface Rights ................................................................................................................. 4-4 4.1.5 Environmental Regulations .............................................................................................. 4-5 4.1.6 Water Rights .................................................................................................................... 4-7

4.2 Project Ownership .................................................................................................................. 4-7 4.3 Mineral Tenure ....................................................................................................................... 4-8 4.4 Gema Claims Option Agreement ......................................................................................... 4-13 4.5 First Quantum Option Agreements ...................................................................................... 4-13 4.6 Work Agreement, Collasuyo–Antacollo ............................................................................... 4-16 4.7 Dolores 2 Agreements with Asociación de Pequeños Mineros Artesanales Rico Pfuyani .. 4-16 4.8 Surface Rights ...................................................................................................................... 4-17 4.9 Community Access Agreements .......................................................................................... 4-17 4.10 Water Rights ........................................................................................................................ 4-18 4.11 Royalties .............................................................................................................................. 4-18

4.11.1 Government Royalties ................................................................................................... 4-18 4.11.2 Third-Party Royalties ..................................................................................................... 4-19

4.12 Permits ................................................................................................................................. 4-19 4.13 Environment ......................................................................................................................... 4-19 4.14 Environmental Liabilities ...................................................................................................... 4-19 4.15 Social License ...................................................................................................................... 4-19 4.16 Comment on Section 4 ......................................................................................................... 4-19

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...................................................................................................................................... 5-1

5.1 Accessibility ............................................................................................................................ 5-1 5.2 Climate ................................................................................................................................... 5-4 5.3 Local Resources and Infrastructure ....................................................................................... 5-5 5.4 Physiography ......................................................................................................................... 5-5 5.5 Flora ....................................................................................................................................... 5-7 5.6 Land Usage ............................................................................................................................ 5-7 5.7 Comment on Section 5 ........................................................................................................... 5-7

6.0 HISTORY ............................................................................................................................... 6-1 7.0 GEOLOGICAL SETTING AND MINERALIZATION ............................................................... 7-1

7.1 Regional Geology ................................................................................................................... 7-1 7.2 Project Geology ...................................................................................................................... 7-5 7.3 Deposits ................................................................................................................................. 7-7

7.3.1 Accha ............................................................................................................................ 7-7 7.3.2 Yanque .......................................................................................................................... 7-14

7.4 Prospects and Occurrences ................................................................................................. 7-22 7.4.1 Yanque East .................................................................................................................. 7-22 7.4.2 Puyani .......................................................................................................................... 7-24 7.4.3 Gema .......................................................................................................................... 7-24 7.4.4 Corrales ......................................................................................................................... 7-24 7.4.5 Capayocc ....................................................................................................................... 7-24 7.4.6 Yurac .......................................................................................................................... 7-25 7.4.7 Dolores .......................................................................................................................... 7-25

7.5 Comments on Section 7 ....................................................................................................... 7-25 8.0 DEPOSIT TYPES ................................................................................................................... 8-1



Project No.: 170848 August, 2013 TOC iii

8.1 Comment on Section 8 ........................................................................................................... 8-2 9.0 EXPLORATION ...................................................................................................................... 9-1

9.1 Legacy Exploration Data ........................................................................................................ 9-1 9.2 Grids and Surveys .................................................................................................................. 9-3 9.3 Geological Mapping ............................................................................................................... 9-3 9.4 Geochemical Sampling .......................................................................................................... 9-3 9.5 Geophysical Surveys ............................................................................................................. 9-4 9.6 Pits and Trenches .................................................................................................................. 9-4 9.7 Petrology, Mineralogy, and Research Studies ....................................................................... 9-5 9.8 Exploration Potential .............................................................................................................. 9-6 9.9 Comment on Section 9 ........................................................................................................... 9-6

10.0 DRILLING ............................................................................................................................. 10-1 10.1 Drill Methods ........................................................................................................................ 10-4

10.1.1 Legacy Programs .......................................................................................................... 10-4 10.1.2 Zincore Programs .......................................................................................................... 10-4

10.2 Geological Logging .............................................................................................................. 10-5 10.2.1 Legacy Programs .......................................................................................................... 10-5 10.2.2 Zincore Programs .......................................................................................................... 10-5

10.3 Recoveries ........................................................................................................................... 10-6 10.3.1 Legacy Programs .......................................................................................................... 10-6 10.3.2 Zincore Programs .......................................................................................................... 10-6

10.4 Collar Surveys ...................................................................................................................... 10-6 10.4.1 Legacy Programs .......................................................................................................... 10-6 10.4.2 Zincore Programs .......................................................................................................... 10-6

10.5 Downhole Surveys ............................................................................................................... 10-6 10.5.1 Legacy Programs .......................................................................................................... 10-6 10.5.2 Zincore Programs .......................................................................................................... 10-7

10.6 Geotechnical and Hydrological Drilling ................................................................................ 10-7 10.7 Metallurgical Drilling ............................................................................................................. 10-7 10.8 Sample Length/True Thickness ........................................................................................... 10-8 10.9 Comment on Section 10....................................................................................................... 10-8

11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY ................................................... 11-1 11.1 Sampling Methods ............................................................................................................... 11-1

11.1.1 Legacy .......................................................................................................................... 11-1 11.1.2 Zincore .......................................................................................................................... 11-1

11.2 Density Determinations ........................................................................................................ 11-2 11.2.1 Legacy .......................................................................................................................... 11-2 11.2.2 Zincore .......................................................................................................................... 11-2

11.3 Analytical and Test Laboratories .......................................................................................... 11-2 11.4 Sample Preparation and Analysis ........................................................................................ 11-3

11.4.1 Legacy .......................................................................................................................... 11-3 11.4.2 Zincore .......................................................................................................................... 11-4

11.5 Quality Assurance and Quality Control ................................................................................ 11-5 11.5.1 Legacy Programs .......................................................................................................... 11-5 11.5.2 Zincore .......................................................................................................................... 11-6

11.6 Databases ............................................................................................................................ 11-7 11.7 Sample Storage ................................................................................................................... 11-7 11.8 Sample Security ................................................................................................................... 11-7 11.9 Comment on Section 11....................................................................................................... 11-8

12.0 DATA VERIFICATION ......................................................................................................... 12-1



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12.1 Winter and Schmidt (2006) .................................................................................................. 12-1 12.2 Pincock, Allen and Holt (2008) ............................................................................................. 12-1 12.3 Micon (2010) ........................................................................................................................ 12-2 12.4 AMEC ................................................................................................................................... 12-3 12.5 Comments on Section 12 ..................................................................................................... 12-5

13.0 MINERAL PROCESSING AND METALLURGICAL TESTING ............................................ 13-7 13.1 Historic Test Work ................................................................................................................ 13-7

13.1.1 Comminution and Physical Separation Test Work ........................................................ 13-7 13.1.2 Leaching ........................................................................................................................ 13-7 13.1.3 Reductive Roasting ....................................................................................................... 13-8 13.1.4 Dissolution and Refining of Zn from Waelz Product ...................................................... 13-9

13.2 Test Work Supporting the 2013 PFS ................................................................................. 13-10 13.3 Pyrometallurgical Test Work .............................................................................................. 13-10

13.3.1 Phase 1 ........................................................................................................................ 13-10 13.3.2 Phase 1 Results .......................................................................................................... 13-11 13.3.3 Phase 2 Results .......................................................................................................... 13-16 13.3.4 Hydrometallurgical Test Work ..................................................................................... 13-20 13.3.5 Fume Samples ............................................................................................................ 13-22 13.3.6 Mineralogical Analysis ................................................................................................. 13-23 13.3.7 Halide Leaching ........................................................................................................... 13-23 13.3.8 Neutral Leaching ......................................................................................................... 13-24 13.3.9 Purification Test Work ................................................................................................. 13-25 13.3.10 Zinc Cementation ........................................................................................................ 13-25 13.3.11 Ion Exchange (IX) and Solvent Extraction ................................................................... 13-27 13.3.12 Residue Stability Tests ................................................................................................ 13-27 13.3.13 SysCAD Modelling ....................................................................................................... 13-27 13.3.14 Comminution Test Work 2012 ..................................................................................... 13-30

13.4 Mass Balance and Recovery Estimates ............................................................................ 13-31 13.5 Geometallurgical Considerations ....................................................................................... 13-32

13.5.1 Pyrometallurgical Samples - 2012 ............................................................................... 13-32 13.5.2 Hydrometallurgical Samples ........................................................................................ 13-34

13.6 Comment on Section 13..................................................................................................... 13-34 13.6.1 Pyrometallurgical Test Work ........................................................................................ 13-34 13.6.2 Hydrometallurgical Test Work ..................................................................................... 13-35

14.0 MINERAL RESOURCE ESTIMATES .................................................................................. 14-1 14.1 Basis of Estimates ................................................................................................................ 14-1 14.2 Geological Models ................................................................................................................ 14-2

14.2.1 Accha Geological Model ................................................................................................ 14-2 14.2.2 Yanque Geological Model ............................................................................................. 14-5

14.3 Compositing ......................................................................................................................... 14-8 14.4 Relative Elevation ................................................................................................................ 14-8 14.5 Exploratory Data Analysis .................................................................................................... 14-9 14.6 Variography ........................................................................................................................ 14-10 14.7 Density ............................................................................................................................... 14-11 14.8 Block Models ...................................................................................................................... 14-11

14.8.1 Interpolation Accha ...................................................................................................... 14-12 14.8.2 Yanque ........................................................................................................................ 14-13

14.9 Validation ........................................................................................................................... 14-15 14.10 Mineral Resource Classification ......................................................................................... 14-15 14.11 Reasonable Prospects for Economic Extraction ................................................................ 14-16



Project No.: 170848 August, 2013 TOC v

14.12 Mineral Resource Statements ............................................................................................ 14-19 14.13 Factors That May Affect the Estimates .............................................................................. 14-22 14.14 Comment on Section 14..................................................................................................... 14-23

15.0 MINERAL RESERVE ESTIMATES ..................................................................................... 15-1 15.1 Key Assumptions / Basis of Estimate .................................................................................. 15-1 15.2 Mineral Reserve Estimation, Open Pits ............................................................................... 15-1

15.2.1 SMU Size ....................................................................................................................... 15-2 15.2.2 Ore/Waste Determination .............................................................................................. 15-2 15.2.3 Dilution Considerations .................................................................................................. 15-3 15.2.4 Surface Topography ...................................................................................................... 15-3 15.2.5 Bulk Density ................................................................................................................... 15-3 15.2.6 Overall Slope Angles ..................................................................................................... 15-4

15.3 Mining Cost .......................................................................................................................... 15-4 15.3.1 G&A, Refining and Selling Cost..................................................................................... 15-5 15.3.2 Metal Prices ................................................................................................................... 15-7 15.3.3 Referential Cut-off Grade .............................................................................................. 15-7

15.4 Mineral Reserves for Underground Mining .......................................................................... 15-8 15.4.1 Cut-off Estimation .......................................................................................................... 15-8 15.4.2 Modifying Factors ........................................................................................................ 15-10

15.5 Mineral Reserves Statement .............................................................................................. 15-11 15.6 Factors that may Affect the Mineral Reserve Estimates .................................................... 15-14 15.7 Comments on Section 15 ................................................................................................... 15-14

16.0 MINING METHODS ............................................................................................................. 16-1 16.1 Open Pit Optimization .......................................................................................................... 16-1

16.1.1 Pit Optimization ............................................................................................................. 16-1 16.1.2 Final Pit Designs ............................................................................................................ 16-1

16.2 Pit Slope and Geotechnical Designs .................................................................................... 16-2 16.3 Open Pit Designs ................................................................................................................. 16-4

16.3.1 Design Criteria ............................................................................................................... 16-4 16.3.2 Final Pit Design ............................................................................................................. 16-4 16.3.3 Phase Selection and Design ......................................................................................... 16-6 16.3.4 Accha .......................................................................................................................... 16-6 16.3.5 Yanque .......................................................................................................................... 16-9

16.4 Underground Mining Accha Project ................................................................................... 16-13 16.4.1 Mine Geotechnical Design ........................................................................................... 16-13 16.4.2 Underground Mining Method Selection ....................................................................... 16-14

16.5 Underground Mine Design ................................................................................................. 16-16 16.5.1 Underground Mine Design Assumptions and Design Criteria ..................................... 16-16 16.5.2 Underground Mine Design ........................................................................................... 16-16 16.5.3 Stope Design ............................................................................................................... 16-23

16.6 Production Planning ........................................................................................................... 16-35 16.6.1 Open Pit Production Planning ..................................................................................... 16-35 16.6.2 Underground Production Planning .............................................................................. 16-41 16.6.3 Open Pit and Underground Production Planning ........................................................ 16-44

16.7 Waste Rock Storage Facilities ........................................................................................... 16-47 16.8 Mine Equipment Selection ................................................................................................. 16-47 16.9 Drilling and Blasting ........................................................................................................... 16-48 16.10 Loading .............................................................................................................................. 16-48 16.11 Haulage .............................................................................................................................. 16-48

16.11.1 Operations Support ..................................................................................................... 16-49



Project No.: 170848 August, 2013 TOC vi

16.12 Auxiliary Equipment ........................................................................................................... 16-49 16.13 Mine Dewatering ................................................................................................................ 16-50 16.14 Manpower .......................................................................................................................... 16-50 16.15 Primary Consumables ........................................................................................................ 16-50 16.16 Ore Control ......................................................................................................................... 16-50 16.17 Comments on Section 16 ................................................................................................... 16-51

17.0 RECOVERY METHODS ...................................................................................................... 17-1 17.1 Base Case Process Flow Sheet .......................................................................................... 17-1 17.2 Process Design Criteria ....................................................................................................... 17-2 17.3 Process Control Philosophy ................................................................................................. 17-4 17.4 Process Description ............................................................................................................. 17-4 17.5 Delivery and Crushing of Ore ............................................................................................... 17-5 17.6 Waelz Process (Rotary Kiln) ................................................................................................ 17-5 17.7 Fume Transportation to Refinery ......................................................................................... 17-7 17.8 Fume Dehalogenation .......................................................................................................... 17-7 17.9 Neutral and Acid Leaching Fume ......................................................................................... 17-8 17.10 Cold and Hot Purification of Zinc Sulphate Solutions .......................................................... 17-9 17.11 Electrowinning .................................................................................................................... 17-10 17.12 Zinc Melting and Casting.................................................................................................... 17-11 17.13 Process Development – Fume Case ................................................................................. 17-11 17.14 Process Consumables ....................................................................................................... 17-13

17.14.1 Process Water Requirement ....................................................................................... 17-13 17.14.2 Process Power Requirement ....................................................................................... 17-13 17.14.3 Pyrometallurgical Anthracite Consumption ................................................................. 17-13 17.14.4 NaC03 – Base Case and Fume Case .......................................................................... 17-14 17.14.5 Dolomite – Base Case and Fume Case ...................................................................... 17-14 17.14.6 Sulphuric Acid – Base Case ........................................................................................ 17-14

17.15 Comment on Section 17..................................................................................................... 17-14 18.0 PROJECT INFRASTRUCTURE .......................................................................................... 18-1

18.1 Proposed Mine Access ........................................................................................................ 18-1 18.2 Waste Rock Storage Facilities ............................................................................................. 18-4

18.2.1 Slag Storage Facility Design Criteria ............................................................................. 18-6 18.3 Borrow Materials .................................................................................................................. 18-7 18.4 Water Management .............................................................................................................. 18-7

18.4.1 Water Balance ............................................................................................................... 18-7 18.4.2 Geochemistry and Water Quality ................................................................................ 18-14

18.5 AZOD Area Infrastructure .................................................................................................. 18-14 18.5.1 Truck Shop Facility ...................................................................................................... 18-15 18.5.2 Pyrometallurgical Plant ................................................................................................ 18-15

18.6 Hydrometallurgical Plant Infrastructure .............................................................................. 18-15 18.7 Electrical Power Supply ..................................................................................................... 18-15

18.7.1 AZOD Area Power Supply ........................................................................................... 18-15 18.7.2 Hydrometallurgy Plant Power Supply .......................................................................... 18-16

18.8 Communications ................................................................................................................ 18-16 18.9 Fuel .................................................................................................................................... 18-17 18.10 Water Supply ...................................................................................................................... 18-17 18.11 Solid Waste Management .................................................................................................. 18-18 18.12 Comment on Section 18..................................................................................................... 18-18

19.0 MARKET STUDIES .............................................................................................................. 19-1 19.1 Metal Pricing ........................................................................................................................ 19-1



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19.1.1 Forecast Metal Pricing ................................................................................................... 19-1 19.1.2 Zinc Ingot ....................................................................................................................... 19-3

19.2 Product Specifications and Market Analysis ........................................................................ 19-3 19.2.1 Lead Sulphate (PbS04) .................................................................................................. 19-3 19.2.2 Zinc and Lead Fume Pricing .......................................................................................... 19-5

19.3 Contracts .............................................................................................................................. 19-8 19.4 Comment on Section 19....................................................................................................... 19-8

20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT .. 20-1 20.1 Baseline Studies .................................................................................................................. 20-1

20.1.1 Physical Baseline .......................................................................................................... 20-1 20.1.2 Surface and Groundwater Quality ................................................................................. 20-2 20.1.3 Biological Baseline ........................................................................................................ 20-2 20.1.4 Socioeconomic Baseline ............................................................................................... 20-3 20.1.5 Accha District ................................................................................................................. 20-3 20.1.6 Parrco Community ......................................................................................................... 20-3 20.1.7 Colquemarca District ..................................................................................................... 20-4 20.1.8 Lacca Lacca–Yanque–Parccobamba–(Gran Chico) Rural Community ........................ 20-4 20.1.9 Considerations of Social and Community Impacts ........................................................ 20-4

20.2 Current Environmental Liabilities ......................................................................................... 20-5 20.3 Closure Plan ......................................................................................................................... 20-6 20.4 Permitting ............................................................................................................................. 20-7

20.4.1 Exploration ..................................................................................................................... 20-7 20.4.2 Development.................................................................................................................. 20-7

20.5 Comment on Section 20..................................................................................................... 20-14 21.0 CAPITAL AND OPERATING COSTS .................................................................................. 21-1

21.1 Capital Cost Estimates ......................................................................................................... 21-1 21.1.1 Process Plant Basis of Estimate ................................................................................... 21-2 21.1.2 Mining Capital Cost ....................................................................................................... 21-3

21.2 Underground Mining Costs .................................................................................................. 21-5 21.3 Sustaining Capital Cost ........................................................................................................ 21-6 21.4 Operating Cost Estimates .................................................................................................... 21-6

21.4.1 Mining Operating Costs ................................................................................................. 21-7 21.4.2 Open Pit Mining Costs ................................................................................................... 21-9 21.4.3 Open Pit Cost of Major Consumables ........................................................................... 21-9 21.4.4 Open Pit Mine Staff and Contractor Salaries .............................................................. 21-10 21.4.5 Open Pit Operating Cost Estimate .............................................................................. 21-10 21.4.6 Underground Mine Operating Cost Summary ............................................................. 21-12 21.4.7 Underground Cost of Major Consumables .................................................................. 21-13 21.4.8 Underground Mine Staff and Contractor Salaries ....................................................... 21-13 21.4.9 Underground Mine Operating Cost Summary ............................................................. 21-13 21.4.10 Process Operating Costs ............................................................................................. 21-16 21.4.11 Process Labour Costs ................................................................................................. 21-18 21.4.12 Fuels ........................................................................................................................ 21-18 21.4.13 Utilities ........................................................................................................................ 21-20 21.4.14 Reagents and Consumables ....................................................................................... 21-21 21.4.15 Maintenance ................................................................................................................ 21-23 21.4.16 Fume Transport Cost ................................................................................................... 21-23 21.4.17 Waste Management .................................................................................................... 21-23 21.4.18 General and Administration ......................................................................................... 21-23 21.4.19 Contingency ................................................................................................................. 21-24



Project No.: 170848 August, 2013 TOC viii

21.5 Comments on Section 21 ................................................................................................... 21-24 22.0 ECONOMIC ANALYSIS ....................................................................................................... 22-1

22.1 Valuation Methodology ......................................................................................................... 22-4 22.2 Financial Model Parameters ................................................................................................ 22-5

22.2.1 Smelting and Refining Terms ........................................................................................ 22-5 22.2.2 Metal Prices ................................................................................................................... 22-5 22.2.3 Operating Costs ............................................................................................................. 22-6 22.2.4 Capital Costs ................................................................................................................. 22-6 22.2.5 Mineral Reserves ........................................................................................................... 22-7

22.3 Working Capital .................................................................................................................... 22-7 22.3.1 Taxes .......................................................................................................................... 22-7 22.3.2 Royalties ........................................................................................................................ 22-7 22.3.3 Special Mining Tax ........................................................................................................ 22-8 22.3.4 Depreciation and Amortization ...................................................................................... 22-8 22.3.5 Closure Costs and Salvage Value ................................................................................. 22-8 22.3.6 Financing ....................................................................................................................... 22-8 22.3.7 Inflation .......................................................................................................................... 22-8

22.4 Results of the Economic Analysis ........................................................................................ 22-8 22.5 Sensitivity Analysis ............................................................................................................. 22-14

23.0 ADJACENT PROPERTIES .................................................................................................. 23-1 24.0 OTHER RELEVANT DATA AND INFORMATION ............................................................... 24-1

24.1 Risks and Opportunities ....................................................................................................... 24-1 24.1.1 Risks .......................................................................................................................... 24-1 24.1.2 Opportunities ................................................................................................................. 24-3

25.0 INTERPRETATION AND CONCLUSIONS .......................................................................... 25-1 25.1 Mineral Tenure, Royalties and Surface Rights .................................................................... 25-1 25.2 Environment, Social and Permits ......................................................................................... 25-1 25.3 Geology and Mineralization ................................................................................................. 25-2 25.4 Exploration and Drilling ........................................................................................................ 25-2 25.5 Sample Preparation and Analysis ........................................................................................ 25-3 25.6 Data Verification ................................................................................................................... 25-3 25.7 Metallurgical Test Work ........................................................................................................ 25-4 25.8 Mineral Resource and Mineral Reserve Estimates .............................................................. 25-4 25.9 Mine Plan ............................................................................................................................. 25-5 25.10 Process Recovery Plan ........................................................................................................ 25-7 25.11 Infrastructure Requirements ................................................................................................ 25-7 25.12 Marketing and Price Forecasts ............................................................................................ 25-7 25.13 Capital and Operating Costs ................................................................................................ 25-8 25.14 Financial Analysis ................................................................................................................ 25-8 25.15 Risks and Opportunities ....................................................................................................... 25-9

26.0 RECOMMENDATIONS ........................................................................................................ 26-1 26.1 Phase 1 ................................................................................................................................ 26-2 26.2 Phase 2 ................................................................................................................................ 26-2

27.0 REFERENCES ..................................................................................................................... 27-1

T A B L E S

Table 1-1: Mineral Resource Estimate, Accha ..................................................................................... 1-13 Table 1-2: Mineral Resource Estimate, Yanque .................................................................................. 1-14



Project No.: 170848 August, 2013 TOC ix

Table 1-3: Mineral Reserves Statement assuming Base Case ........................................................... 1-16 Table 1-4: Mineral Reserves Statement assuming Fume Case .......................................................... 1-17 Table 1-5: Total Capital Cost Summary – US$ M ................................................................................. 1-27 Table 1-6: Operating Cost Summary (Base Case) ............................................................................... 1-28 Table 1-7: Operating Cost Summary (Fume Case) .............................................................................. 1-29 Table 1-8: Summary of Cash Flow Showing Sensitivities to Discount Rate ......................................... 1-31 Table 1-9: Summary of Cash Costs – Base Case ................................................................................ 1-31 Table 1-10: Summary of Cash Costs – Fume Case ............................................................................... 1-31 Table 1-11: Summary of Base Case Economic Sensitivity to Changes in Key Variables (After-Tax) .... 1-32 Table 1-12: Summary of Fume Case Economic Sensitivity to Changes in Key Variables (After-Tax) ... 1-32 Table 4-1: Summary of Environmental Requirements for Mining Exploration Programs ....................... 4-5 Table 4-2: Mineral Tenure Summary Table - Collasuyo ...................................................................... 4-10 Table 4-3: Mineral Tenure Summary Table- Antacollo ........................................................................ 4-12 Table 7-1: Mineralization Styles, Accha ............................................................................................... 7-13 Table 9-1: Legacy Exploration Programs ............................................................................................... 9-2 Table 9-2: Trench Summary Table......................................................................................................... 9-5 Table 10-1: Drilling on the AZOD Project ................................................................................................ 10-1 Table 11-1: Detection Limits, ALS ........................................................................................................... 11-4 Table 11-2: Detection Limits, Acme ........................................................................................................ 11-5 Table 11-3: Analytical Methods and Laboratories, Dolores Campaigns ................................................ 11-5 Table 11-4: SGS Analytical Methods ...................................................................................................... 11-6 Table 11-5: ACME and ALS Check Assay Analytical Methods .............................................................. 11-6 Table 13-1: Bunte-Baum-Reerink Test Results .................................................................................... 13-11 Table 13-2: Conditions for Pilot Waelz Kiln ........................................................................................... 13-14 Table 13-3: Phase 2 Bunte-Baum-Reerink Test Results ...................................................................... 13-16 Table 13-4: Comparison of Phase 1 and 2 Results .............................................................................. 13-16 Table 13-5: Comparison of Phase 1 and 2 Dolomite ............................................................................ 13-17 Table 13-6: Chemical Analysis of the Pilot Waelz Kiln Fume ............................................................... 13-18 Table 13-7: Pilot Waelz Kiln Test Results ............................................................................................. 13-19 Table 13-8: Chemical Composition of the Yanque Fume Sample ........................................................ 13-22 Table 13-9: Comparison of the Reagent Consumptions for all Scenarios ............................................ 13-29 Table 13-10: Process Recovery Summary – Base Case ................................................................. 13-31 Table 13-11: Accha and Yanque Product and Metal Balance Summary – Base Case ................... 13-31 Table 13-12: Process Recovery Summary – Fume Case ................................................................ 13-32 Table 13-13: Accha and Yanque Product and Metal Balance Summary – Fume Case .................. 13-32 Table 13-14: Mine Plan Grades for Metallurgical Samples ............................................................. 13-33 Table 13-15: Accha Metallurgical Sample Sources .............................................................................. 13-34 Table 14-1: Sampling Campaigns Used in the Construction of the Accha 2013 Model ......................... 14-1 Table 14-2: Sampling Campaigns Used in the Construction of the Yanque 3b Model ........................... 14-1 Table 14-3: Density Determinations by Estimation Domains, Accha .................................................... 14-11 Table 14-4: Reasonable Prospects Assumptions, Accha ..................................................................... 14-17 Table 14-5: Reasonable Prospects Assumptions, Yanque ................................................................... 14-19 Table 14-6: Accha Mineral Resource Estimate Showing Sensitivity of the Estimate to Cut-off Grades

(Base Case is highlighted) ................................................................................................. 14-20



Project No.: 170848 August, 2013 TOC x

Table 14-7: Yanque Mineral Resource Estimate Showing Sensitivity of the Estimate to Cut-off Grades (Base Case is highlighted) ................................................................................................. 14-22

Table 15-1: Net Economic Benefit Calculation Methodology ................................................................. 15-2 Table 15-2: Bulk Density for Accha and Yanque deposits ...................................................................... 15-3 Table 15-3: Overall Slope Angle for Accha Pit ........................................................................................ 15-4 Table 15-4: Mining Criteria for the Accha and Yanque Pit Optimization for Base and Fume ................. 15-5 Table 15-5: Metallurgical Criteria for Accha and Yanque Pit Optimization for Base Case ..................... 15-6 Table 15-6: Metallurgical Criteria for Accha and Yanque Pit Optimization for Fume Case .................... 15-6 Table 15-7: Open Pit Cut-off Grade Estimation ...................................................................................... 15-7 Table 15-8: Cut-off Grade Base Case Estimate ...................................................................................... 15-8 Table 15-9: Cut-off Grade Fume Case Estimate ..................................................................................... 15-9 Table 15-10: Mineral Reserves Statement assuming Base Case .................................................... 15-12 Table 15-11: Mineral Reserves Statement assuming Fume Case ................................................... 15-13 Table 16-1: Pit Slope Consideration for Accha Pit ................................................................................. 16-3 Table 16-2: Pit Slope Considerations for Yanque Pit .............................................................................. 16-3 Table 16-3: Pit Design Criteria ................................................................................................................ 16-4 Table 16-4: RMR Statistical Summary ................................................................................................. 16-14 Table 16-5: Geotechnical Numerical Modelling Assumptions ............................................................... 16-14 Table 16-6: Mining Methods in Relation to Ground Conditions ............................................................ 16-15 Table 16-7: Waste Rock Management .................................................................................................. 16-21 Table 16-8: Waste Rock Management (units in m3) ............................................................................. 16-22 Table 16-9: Ground Support Design ..................................................................................................... 16-27 Table 16-10: Underground Mine Total Development (Base Case) .................................................. 16-29 Table 16-11: Underground Mine Total Development (Fume Case) ................................................. 16-29 Table 16-12: Underground Pre-production and Ongoing Schedule (Base Case) ............................ 16-30 Table 16-13: Underground Pre-production and Ongoing Schedule (Fume Case) ........................... 16-31 Table 16-14: Accha Open Pit Mine Production Schedule for Base Case ........................................ 16-36 Table 16-15: Yanque Open Pit Mine Production Schedule for Base Case ...................................... 16-36 Table 16-16: Accha Open Pit Mine Production Schedule for Fume Case ....................................... 16-39 Table 16-17: Yanque Open Pit Mine Production Schedule for Fume Case ..................................... 16-39 Table 16-18: Underground Pre Production Development Schedule (Base Case) ............................... 16-43 Table 16-19: Underground Pre Production Development Schedule (Fume Case) .............................. 16-43 Table 16-20: Accha and Yanque Mine Plan (Open Pit and Underground) Base Case ........................ 16-44 Table 16-21: Accha and Yanque Mine Plan (Open Pit and Underground) Fume Case ....................... 16-46 Table 16-22: Support Equipment ...................................................................................................... 16-49 Table 16-23: Auxiliary Equipment ..................................................................................................... 16-49 Table 16-24: Pit Dewatering Operating Years and Installed Pumps ................................................ 16-50 Table 17-1: Major Process Design Criteria Summary – Base Case ....................................................... 17-2 Table 17-2: Process Recovery Assumptions ......................................................................................... 17-3 Table 17-3: Major Process Design Criteria Summary – Fume Case .................................................... 17-12 Table 18-1: Waste Dumps Design Parameters ....................................................................................... 18-6 Table 18-2: Design Criteria for Slag Storage Facility .............................................................................. 18-6 Table 18-3: AZOD Area – Water Consumption ....................................................................................... 18-9 Table 19-1: Lead Sulphate Product Specification ................................................................................... 19-3 Table 19-2: Lead Sulphate Treatment Charges ...................................................................................... 19-5



Project No.: 170848 August, 2013 TOC xi

Table 19-3: Fume Product Composition ................................................................................................. 19-6 Table 19-4: Wood Mackenzie Bulk Concentrate (Fume) Treatment Charges ........................................ 19-8 Table 21-1: Total Capital Cost Summary – US$ M ................................................................................. 21-2 Table 21-2: Mining Capital Cost for the Base Case ................................................................................ 21-4 Table 21-3: Mining Capital Cost for the Fume Case ............................................................................... 21-4 Table 21-4: Base Case Capital and Sustaining Capital Costs ................................................................ 21-5 Table 21-5: Fume Capital and Sustaining Capital Costs .................................................

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