La Mina is mainly hosted by a sequence of predominantly basaltic to andesitic volcanics with a central felsic unit constituting the Eocene portion of the Macuchi Unit. The basalt-andesite volcanic sequence is in contact with a black shale unit to the west and a polymictic conglomerate to the east. The polymictic conglomerate is a much younger, unconformable unit covering in part the Macuchi Unit, and the black shales represent a conformable sedimentary sequence overlying the volcanic sequence.

With the exception of preferentially sulphide-replaced clasts, there are no primary sulphide textures at La Mina within the massive sulphide unit.

Well-developed planar layering in the sulphide bodies is tectonic in origin, with total textural destruction of primary features.

La Mina mineralization occurs at the contact between hanging wall basaltic to andesitic volcanics and the footwall andesitic rocks. The massive sulphide zone is usually conformably overlain by a narrow unit of jaspilitic exhalite which acts as a stratigraphic marker horizon.

Mineralization in the La Mina South and North Blocks occurs as massive to semi-massive lenses with thicknesses varying from several decimetres to a maximum of 12 meters, averaging 6 meters, with lateral extension that can reaches 100 meters. The mineralization occurs mainly as bedded layers and, to a lesser extent, as massive bodies with nondescript textures. Within a single sulphide zone, no geometrical zoning and no barite cap have been observed.

The main minerals in the sulphide horizons are chalcopyrite, pyrite, sphalerite, bornite, and galena, with subordinate fahlore (tennantite), covellite, digenite, chalcocite, and native gold. Gangue minerals are barite and accessory amounts of quartz.

Mineralization at La Mina is defined as a gold-rich polymetallic volcanic-hosted massive sulphide (VHMS) deposit which shows similarities to Noranda / La Ronde / Kuroko type Cu–Pb–Zn (±Au, Ag) massive sulphide deposits. Mineralization generally occurs as massive to semi-massive sulphide lenses within a calc-alkaline bimodal arc succession.

At La Mina, the VHMS mineralized horizons are stratiform and internally highly deformed with no discernible sulphide zonation. There is often a low-grade stockwork immediately below, and sometimes above this horizon, and is a result of secondary shearing and sulphide and metal remobilization. Barite generally occurs within and peripheral to the VHMS and stockwork mineralisation. A laminar chert (siliceous and hematite-rich layer) generally occurs several metres above the VHMS horizon. This can be used as a marker horizon.

Typically, individual deposits are 1 to 2 Mt in size and there is potential for other deposits or other mineralized horizons within the same stratigraphic package. Several similarities of La Mina deposit to the Noranda-Kuroko style mineralization are:
- Occurrence within a bimodal volcanic sequence in a sub-aqueous environment with potential for more prospective stratigraphic levels on the property;
- Lenses of massive sulphide occur at a contact between andesite and dacite which represents a key exploration guide on the property; although the rocks at La Mina are more andesitic and basaltic, rather than dacitic; and,
- Barite as a gangue mineral within sulphide zones and red banded jasper marker horizon assist in determining location in stratigraphy relative to potential mineralization.

One aspect of the La Mina deposit is that it is relatively Au-rich, compared to typical Noranda / La Ronde / Kuroko Cu–Pb–Zn massive sulphide deposits. This may be due to a secondary porphyritic mineralizing event, partially overprinting the deposit. Further exploration and investigation are needed to confirm this hypothesis.

Toachi would operate the proposed underground mine using its own labour and conventional technologies and equipment. Mine consumables such as fuel and rock bolts would be purchased from suppliers.

The La Mina VMS deposit comprises the La Mina South block and the La Mina North block. For present preliminary mine planning purposes, the La Mina North block is subdivided into two zones referred to as the “Upper North zone” and the “Lower North zone”; and the La Mina South block is referred to as the “South zone”. The proposed mine plan includes production from each of these three zones. The PEA assumes that Toachi would:
- Commence underground mine development in Year -1 by developing a new portal and a ramp to the Upper North zone. The Upper North zone is scheduled to be mined in Years 1 to 3. It is understood that a previous mine operator mined approximately 173 kt from the Upper North zone in years 1975 to 1981. The PEA assumes that some historic mine access headings would be rehabilitated and used as mine ventilation / escapeway headings.
- Develop a second new portal and ramp to access the Lower North zone and the South zone which are scheduled to be mined in Years 2 to 8 and Years 3 to 8 respectively.
- The proposed 800 tpd mill is scheduled to ramp-up and be commissioned in the first quarter of Year 1. The mine is scheduled to deliver 240 kt of material to the mill for processing in Year 1 increasing to 288 kt/yr in Year 2.

The ramps and stope access headings would be developed 5 m high x 4.5 m wide with gradients ranging from -15% to +15%.

The PEA is based on mining the deposit using two variations of the widely-used and flexible mechanized cut and fill mining method:
- A mechanized drift and slash mining with cemented rock fill (CRF) approach would be used in most stopes.
- A mechanized room and pillar with CRF approach would be used to mine stopes in the flatter dip uppermost part of the South zone.

The proposed mining methods were selected following the review and assessment of: the geology; the mineral deposit characteristics including faulting; the local topography; geotechnical, hydrogeological and hydrological aspects that affect stope design and mining method selection; climate data; local settlements and land and water uses; available information on the historic mine; the resource tonnage and grade distributions; projected metallurgical recoveries; health and safety and ecological protection aspects; estimated mine development and infrastructure requirements and development time lines; projected stoping cycles; projected training requirements; projected internal and external dilution factors and production losses; projected cut-off grade; relevant Republic of Ecuador legislation; mine planning guidelines and best management practices; and mining method and backfilling options. As part of this process, SGS reviewed the ranges of the footwall and hangingwall dips and resource mineralization widths in the Upper North, Lower North and South zones and applied this and other factors to select the proposed mining methods.

In the drift and slash mining with CRF approach:
• Stopes would be accessed from the main ramp and mined in 3 m high lifts. The access heading would include: a decline portion to access the lifts in the lower section of the stope; and another ramp to access the lifts in the upper section of the stope – see Figure 43. Once a lift is mined and CRF backfilled, the back of the access ramp would be slashed as required to provide access to the next lift. Some lifts would be developed under a CRF back. The PEA assumes that an 8 wt% cement CRF mixture would be used to backfill lifts that would be undermined later.
• Each stope would be developed between the footwall and hangingwall and extend over a strike distance of about 10 to 80 metres. In many cases a single lift would be used to mine adjacent lenses along strike.

The lifts in the stopes would be mined using conventional mining equipment where:
• A 3 m H x 4.1 m W pilot drift would be developed in mineralization along strike. After a pilot drift round has been drilled, blasted and excavated the drift back and walls would be manually bolted and screened.

• The mineralization between the pilot drift and the footwall would be drilled-off, loaded and blasted (slashed) to create a shanty footwall. The back and footwall would be manually bolted and screened.

• The mineralization between the pilot drift and the hangingwall would be drilled-off, loaded and blasted (slashed) to create a shanty hangingwall. The hangingwall would be manually bolted and screened. Figures 44, 45 and 46 show conceptual sections of lifts in the Upper North, Lower North and South zones.

A mechanized room and pillar with CRF backfilling approach would be used to mine the flatter-dip uppermost part of the South zone. In this approach a 4.5 m H x 4.5 m W drift would be developed transversely in mineralization using conventional equipment with the blasted stope material trucked to a surface stockpile. The drift would then be backfilled using CRF, and the back of the stope access ramp would be slashed to allow access to the next lift. Following an assumed CRF cure time of about 10 days, the next lift would be developed above the backfilled lift. Lifts would be successively developed up to the hangingwall.

The primary transverse drifts (e.g. primary stopes) would be separated by pillars. Once the primary stopes are mined, the secondary stopes (e.g. the mineralized pillars) would be mined using a similar mechanized approach. This approach would allow waste zones between lenses to be left in place as permanent pillars. Dilution and losses are estimated to average 15% and 5% respectively.

In plant conceptual design:
- The crushing plant would process the run-of-mine (ROM) material by using a primary jaw crusher to reduce the material from a nominal 30-45 cm (12-18 inches) to approximately 100% passing (P100) of 249 mm (P80 of 114 mm).
- The grinding circuit would be a semi-autogenous (SAG) mill - ball mill grinding circuit with subsequent processing in a flotation circuit. The SAG mill would operate in closed circuit with a vibrating screen. The ball mill would operate in closed circuit with hydrocyclones.
- Cyclone overflow, the grinding circuit product, is fed to the flotation plant. The flotation plant would consist of copper/lead and zinc flotation circuits. The copper/lead flotation circuit would consist of rougher flotation and three-stage cleaner flotation. The zinc flotation circuit would consist of rougher flotation and two-stage cleaner flotation.
- Both copper/lead and zinc concentrates are thickened, filtered, and stored in concentrate s ........