The Shalipayco deposit is interpreted to be a Mississippi Valley-type (MVT) deposit. The following is taken from Leach et al. (1995).

The mineralization at Shalipayco consists of stratabound mantos and lenses subparallel to the stratigraphy. Vein mineralization (Veta Eddy) has also been identified at the Project site, however, it is not considered part of the resources because of insufficient drill hole information and lack of structural interpretation.

The main mantos are the Resurgidora, Intermedio, San Luis, Pucará, and Virgencita mantos. The mantos do not generally display extensive lateral continuity. Length varies between 50 m and 400 m and thickness averages 1.50 m. However, the Intermedio and Resurgidora Mantos can reach up to 3.0 km and 4.0 km in length, respectively, and a thickness of up to 18 m.

Mineralization in the Project consists of sphalerite, galena, and pyrite, with a gangue of marcasite, bravoíte, barite, dolomite, calcite, quartz, and dolo-sparite. Mineralization occurs with varying textures like rhythmites, replacements, collapse breccias, crackle breccias, mosaic breccias, veinlets, and evaporitic textures among others. The zinc and lead content may vary up to 51% Zn (Intermedio Manto) and 17% Pb (Intermedio Manto). The average grades for mineralization are 4.9% Zn and 0.5% Pb, respectively. The Zn/Pb ratio varies from 73.2 in the Resurgidora to 304.6 in the Intermedio Manto.

INTERMEDIO AND RESURGIDORA MANTOS< ........

The production plan envisages mining with a variety of underground mining methods dependent on the vein characteristics. The mine design is based on the use of a combination of Room and Pillar and Bench and Fill methods. Stoping development will be predominantly carried out within the mineralization. The particular variant of the mining method applied depends largely on the vein thickness and continuity of the mineralization. Three different variations of the method are envisaged for veins with the following average widths: 3.2 m, 6.8 m, and 14.3 m.

The mine was geologically broken into four separate areas, Zones One, Two, Three, and Four. The four zones will have independent ramp systems, which will ensure that steady state production can be achieved. Mineralized material from all four zones will be trucked into a central primary crushing station.

Three separate portals will be constructed to access the deposit. The portals are located at Level 4,220 m, 4,290 m, and 4,340 m. A principal level driven at elevation 4,270 m will connect all three portals, as well as all four mineral zones.

The mine was assumed to be operating on a 360 days per year rotation, with two 12-hour shifts per day. The effective operating hours per day were calculated to be 12.75 hours per day. The mine plan was envisaged with a 3,000 tpd or 1,080 ktpa production scenario.

The mining operation will be carried out by a contractor, who will be supervised by th ........

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