This project is 50km south of the world-class Antamina mine in the Ancash department in Peru. It is a skarn field with zinc, lead and silver mineralization, easy to access, and comprising 11,476ha of concessions.

The project completed 18,025 meters of diamond drilling, allowing for the designation of 30.5mn tons of measured and indicated resources grading 4.23% zinc, 1.09 oz per ton silver and 0.78% lead. These exploration efforts have shown positive results, including continuous mineralization throughout the northwest section of the project area.

The deposit’s geological potential includes the El Padrino prospect, 5km directly to the northeast of the Hilarión project and included in the concession: this has shown evidence of mineralization (25-mt structures) that management believes may be continuous with all of the mineralization of Hilarión.

At 5 km northwest of Hilarion, the El Padrino prospect is located, with polymetallic mineralization in skarn, veins and blanket-shaped replacement structures with a thickness
varying from 4 to 22 meters.

Between 2005 and 2013, this site was explored intensely, drilling 241,703 meters in 592 diamond drills, locating and delimiting mineralized PB - Ag bodies, with additional
content of Cu in depth. Drilling demonstrates that the mineralization continues in the open towards the Northwest, Southeast and in depth.

The Hilarión Project contemplates the exploitation of the Mineral Resources of the Hilarión deposit at a planned rate of 10,000 tpd over a sixteen-year period.

Proposed mining methods include Sub-level Longhole Stoping (SLS) with backfill and Transverse Longhole Stoping (TLS), which are suitable for the ground conditions and geological setting of the Hilarión deposit.

The backfill design using both paste fill and waste rock fill will provide the support requirements necessary for mining the Hilari?n deposit, based on work by Golder and RPA’s assessment.

RPA has reviewed information about the locations from which the Hilarión 2015 pilot plant composite samples were sourced and considers them sufficiently representative to provide indicative product quality and metallurgical response to the optimized pilot plant flow sheet.

Metallurgical test work has been conducted by several laboratories using samples from Hilarión since 2006, culminating in flotation pilot test work by Certimin in 2015.

Flotation is complicated by the presence of non-sulphide lead minerals and high concentrations of pyrrhotite.

The quality of the zinc concentrate is directly related to the quantity of pyrrhotite in the samples. High quantities of pyrrhotite result in zinc concentrate that contains high concentrations of iron which correspondingly reduces the zinc grade of the concentrate.