The Touro deposit is hosted in a continuous, highly deformed and metamorphosed horizon of metabasite and paragneiss of the Arinteiro Unit (Ordenes Complex). This horizon outcrops along the flanks and hinge zone of a broad north plunging antiformal structure for at least 8km along strike and up to 2km across strike. It extends beyond the project area and is open to depth.

The Arinteiro Unit is composed mainly by metabasites with minor lenses of ultramafic rocks and paragneisses (Gomez Barreiro, 2007). The mineralogy, grain size, and homogeneity of the metabasites are variable, most of the rock types are hornblende-plagioclase rocks with or without garnet (almandine), clinopyroxene (salite), and quartz. The rocks have undergone varying degrees of cataclasis commonly associated with retrogressive greenschist facies assemblages. The metabasites are strongly deformed showing tectonic banding, intrafoliar folds and oriented nematoblastic texture. Very locally, relict igneous textures have been described supporting the theory of a gabbroic protolith (Castineiras et al., 2002; Gomez Barreiro, 2007).

The metasediments of the O Pino Unit lie above and below the metabasites that have been interpreted as representing a flysh sequence (Gomez Barreiro, 2007). This unit is composed mainly of paragneisses with predominant greywacke composition. Minor pelitic metasediments, biotitic shists (sometimes rich in graphite), and amphibolite gneisses are also described in this unit.

According to Atalaya Mining, there is a main horizon of paragneiss in the project area with an estimated thickness of around 400m that hosts metabasites that are represented mainly by amphibolites interbedded within the metasediments. The metabasites appear to represent a single level event of volcanic or subvolcanic origin. The thickness of the amphibolite horizon based on the drilling data of Atalaya Mining, varies from a few meters to up to 90 m.

Rock weathering is limited to a few meters below the surface.

Mineralization.
The ore zone consists of one or two mineralized horizons of disseminated mineralization closely associated with coarse grained garnet amphibolite that is poor in calcium. Garnet content is up the 90% of the volume of the rock (garnetite). The garnet amphibolite grades into non-mineralized normal amphibolite with decreasing garnet content.

The whole amphibolite horizon is surrounded by metasediments, mainly paragneisses that are normally barren or weakly mineralized although mineralized paragneiss has been described in Arca and Monte das Minas in the lower paragneiss.

In general, the ore bodies are tabular, shallow dipping, very consistent and continuous in terms of geometry but with variable thickness. The mineralization hosting amphibolitic metabasites are composed by gedrite, almandine and minor staurolite, and albite-oligoclase.

The mineralization is represented in order of abundance by pyrrhotite, chalcopyrite and minor pyrite and sphalerite. Williams (1983) described evidences of pre- and syn-deformation in garnets and sulphides (pyrrhotite and chalcopyrite).

The sulphides in the amphibolite are mainly disseminated and aligned with foliation planes, are either interstitial to amphibole crystals, infill the cracks of garnet porphyroblasts together with quartz, concentrated in pressure/strain shadows, or form veinlets parallel to the rock schistosity, with quartz, chlorite, and carbonates.

The semi-massive sulphide horizon is represented by rounded fragments of the host rocks within a pyrrhotite matrix with lesser amounts of chalcopyrite and minor pyrite and sphalerite. Massive sulphide orebodies in shear zones are also described in Fornas and Manoca, further west of Touro. The zinc contents increase significantly in this type of mineralization compared with the disseminated ore type.

Seven open pits will be developed around the arc of mineralization at Touro: Arca, Arinteiro-Vieiro, Bama, Brandelos, and three separate pits in the Monte de las Minas area.

The mineralization at Arinteiro is hosted in a single ore zone of garnet amphibolite of roughly N-S to N20E orientation and dipping around 25° to the East. The mineralized garnet amphibolite is flanked by paragneiss in both hanging wall and footwall.

Average thickness of the ore zone ranges from 20 meters up to a maximum of 56 meters (mineralized intersection in drill hole IAR11) and it appears to end at depth towards the east. Average grade is 0.62% Cu. Sulfide mineral assemblage is represented by pyrrhotite, chalcopyrite and minor pyrite (Figure 7.6).

The Arinterio deposit is aligned with and extends to the Vieiro deposit to the north along a N170 trend.

Vieiro is located immediately north of Arinteiro deposit. The mineralization is also hosted in garnet amphibolite that occurs as interdigitated lenses within the paragneisses (Figure 7.7), therefore making the geometry of the orebody more complex than Arinteiro. This complexity is responsible for significant variations in thickness of the ore zone. The general dip of the ore zone is 25° to the east, but on the northern side of the deposit the structure plunges around 15° to the north.

Maximum ore zone thickness intercepted by Atalaya Mining drilling is 56 meters at 0.60% Cu with the best grade intersection of 16 meters at 1.46% Cu.

Bama is located on the hinge zone and western limb of the anticline. Mineralization is also hosted in garnet-rich amphibolite and flanked by paragneisses. It consists of disseminated pyrrhotite and chalcopyrite. Thickness of the mineralized ore zone varies from 15 meters up to 60 meters.

In Atalaya's opinion, the main Bama ore zone has a "graben-like" geometry that is thought to be associated to synsedimentary faults. The shape of the orebody is gently adapted from the margin of the deposit to the center, where the orebody has a greater thickness.

Brandelos is located in the western limb of the anticline and dips gently to the west about 10° to 20°. The ore zone is hosted in garnet amphibolite and flanked above and below by paragneisses. The ore zone forms a tabular lens with thickness varying between 15 to 50 meters and average grade of 0.40% Cu. Brandelos is the western extension of the Bama ore zone and remains open to depth down-dip to the west.

Area is located in the west-central part of the Project area and connects with Monte das Minas to the north.

Drilling has identified the occurrence of several mineralized lenses, of which the biggest one is located on the western part of Arca. The ore zones are sub-horizontal in the central area, and dip 20°-30° to west in the western side. Most of the lenses are garnet amphibolite with thickness varying from 10 meters up to 100 meters with an average grade of 0.42% Cu (Figure 7.8). The thickest drill hole intersection of Atalaya Mining drilling is 112 meters at 0.46% Cu. The lower mineralized horizon is represented by breccia textured semi-massive sulphides hosted in paragneiss.

Monte das Minas is located in the northern zone of the project area, mostly in the hinge zone of the antiform, this deposit is the extension of the Arca ore zone.

The deposit consists of up to 5 lenses of disseminated sulfides, the upper ones hosted in garnet amphibolite and the lower one in paragneiss (Figure 7.9). The lenses are sub-horizontal and occur at shallow depths, ranging in width between 10 meters and 60 meters. Average grade is 0.45% Cu, although there are some high-grade zones with up to 1% Cu.

Open pit copper mining operations have been conducted within the Touro project site during the 1970s and 1980s before being shut down in 1986 due to low metal prices. Old pit walls are presently standing well and vehicular access exists into the pit areas. Some pit dewatering will be required prior to new development work, particularly in the Vieiro pit.

Redevelopment of copper mining operations will use conventional, open pit methods, mining from benches on 10-m vertical intervals. Contractors' small-to medium-scale mining equipment will be used, including: rock drills capable of drilling 102- to 127-mm-diameter blastholes, hydraulic excavators and/or front-end loaders with bucket capacities of approximately 6-13 m3, off-highway trucks with 55- to 91-t payload capacities, and suitably sized support equipment.

Mining Pits/Phases.
Seven pits were developed using Lerchs-Grossmann (LG) pit shells based on a copper price of $2.60/lb, the final pushbacks for which are: Arinteiro-Vieiro, Arca 2, Bama 2, Brandelos 2, Monte 3, Monte 4, and Monte 5. Arinteiro-Vieiro has high Cu grades along with a high stripping ratio, and is the primary development target in the early years of operation. Five initial phases were designed to improve mill head grades during the first 6-7 years of operation, targeting smaller pit extents identified by $1.75 and $2.00/lb Cu LG shells. These phases are identified as: Arca 1, Bama 1, Brandelos 1, Monte 1, and Monte 2. "Monte" refers to the Monte de las Minas deposit area.

Pit bottom sinking rates were limited to about four benches per year. Typically, mining activity would occur in 4-5 phases during each year to smooth fluctuations in head grade and stripping rates. Two to three phases would be active at any given time.

Mine Production Schedule Summary.
Preproduction stripping, totaling about 35.7 Mt, would commence about 18-24 months prior to mill startup depending on the details of sequencing waste rock placement in the initial tailings dam. Only the Arinteiro-Vieiro would be active during this period.

Peak stripping rates would extend through the latter part of year 3. Mining from the Arinteiro-Vieiro pit comprises just over 90% of the total material movement through the end of Year 3 and 85% through the end of year 5. Over 3.0 Mt of low grade ore would be stockpiled from preproduction stripping through Year 5. Total daily material movement during Years 1-3 would average nearly 97,000 t, assuming a mine operating schedule of 360 days per year.

Stripping rates fall off during years 4-6, but would increase afterwards to open up Arca 2, Bama 2, and the remaining Monte phases. Ore mining and processing rates would increase after Year 5 to compensate for lower head grades. Arinteiro-Vieiro would be mined out in the third quarter of Year 6. Stockpiled low grade ore would be fed to the plant in Years 11 and 12 to augment ore production from the remaining mining phases - primarily Arca 2, Monte 4, and Monte 5. Total daily material movement during Years 711 would range between 62,000 and 71,000 t/d (at 360 operating days per year).

The proposed process flowsheet uses a conventional SAG mill - ball mill (SAB) grinding circuit followed by a copper flotation recovery circuit. The initial concentrator includes:

• Primary crushing.
• Primary and secondary grinding.
• Rougher flotation.
• Regrinding.
• Three stages of cleaner flotation.
• Concentrate thickening and filtration.

The concentrator and associated service facilities will process run-of-mine (ROM) ore as delivered to the ROM pad to produce a dewatered copper concentrate and tailings slurry. The preliminary mining schedule is outlined as follows:
• In the first year of operation, annual ore movement to the plant ramps up to 5.1 million tonnes.
• In the following two years of operation, the peak annual ore movement to the plant is 6.0 million tonnes.
• From year 8 on, the annual ore movement to the plant ramps up again to 10.0 million tonnes.
• Over the life of mine, the peak annual ore movement ........