The Project is located in an accreted oceanic terrane of the Western Cordillera, described as the Calima Terrane by Restrepo & Toussaint (1988). The host rocks likely belong to the Upper Cretaceous Cañasgordas Group, which is subdivided into the Barroso Formation of basalts, and the Penderisco Formation of turbidites, chert and limestone. The Project area comprises three primary lithological domains: intrusive rocks (including porphyries) in the Alacran, Montiel East and Costa Azul deposits; volcanic rocks in the Montiel West deposit; and volcaniclastic rocks in the Alacran deposit. Volcaniclastic rocks are also present in the Alacran Norte and Willian prospect areas. The volcanics and volcaniclastics likely belong to the early Cretaceous-age Barroso formation.

The Alacran deposit Cu-Au-Ag mineralization is hosted by a west-dipping Cretaceous succession comprising mafic volcanic rocks overlain by a calcareous volcaniclastic sequence and capped by preto syn-mineral, sill-like diorite and felsic sub-volcanic bodies. The sequence is approximately 550 m thick, and the diorites are about 200 m thick. Cu-Au-Ag mineralization occurs throughout the volcaniclastic package at Alacran, except within the lower mafic units. It is most strongly developed in the calcareous volcaniclastic sequence. Several different deposit models have been proposed for the Alacran deposit, including Volcanogenic Massive Sulphide (“VMS”), Skarn, Carbonate Replacement Deposit (“CRD”), and Iron Oxide Copper-Gold (“IOCG”). To better understand the Alacran deposit formation, thesis-based research was initiated with the Mineral Deposit Research Unit (“MDRU”) at the University of British Columbia (“UBC”), in partnership with the Company. The goal of this active research is to develop the deposit model through a combination of alteration-mineralization and host rock geochronology, Pb and S isotope and Electron Microprobe Analysis (“EMPA”) in magnetite.

Finally, the Cu deposition in the Alacran deposit indicates that there is a temporal relationship (~ 73 Ma) with the magmatism and Cu-Au porphyry occurrences of the Project (i.e. Montiel East porphyry). Additionally, the recent delineation of the dacite intrusive breccia, which bears stockwork-porphyry clasts in the Alacran deposit, suggests a spatial and possibly genetic relationship with the tonalitic porphyry intrusions of the district. This type of relationship is uncommon in IOCG systems where the magmatic occurrences relate to highly fractionated, mantlederived intrusions ranging from gabbronorite to granodiorite with alkaline to sub-alkaline affinity (Pollard, 2006). In this sense, the Alacran ores display more porphyry-related features than features associated with VMS, or IOCG deposits.

The Montiel East Porphyry is located near the San Matías Village 2.5 km northeast Alacran deposit in the eastern side of the San Pedro River Lineament. The shallow parts of the Montiel East Deposit display surface dimensions of approximately 100 m x 70 m and a vertical extent of 100 m. The deposit is porphyry Cu-Au-Ag mineralization associated with a series of tonalite porphyry stocks and sills that intrude basaltic andesitic volcanic rocks and host a strong stockwork of quartz- magnetite-chalcopyrite-bornite veins. Based on cross-cutting relationships, alteration assemblages and compositions, four different phases have been identified within the Montiel East porphyry suite, three of which are hornblende porphyries and one of which is a quartz feldspar porphyry.

The Montiel West deposit is located approximately 2 km northeast of the Alacran deposit in the eastern margin of the San Pedro River Lineament, and less than 1 km west of the Montiel East deposit. Diamond drill holes intersected high-density zones of both sheeted and multi-directional quartz-magnetite-chalcopyrite-bornite veining that are hosted in mafic and intermediate volcanic rocks, but no intrusive rocks. This style of wall rock Cu-Au-Ag mineralization is interpreted to be porphyry-related, as seen at both the Montiel East and Costa Azul prospects. The veinlets are generally narrower than those observed at Montiel East, possibly suggesting that there is no direct relationship between the two prospects. Alteration appears to be sodic-calcic, defined by albite, actinolite and possible diopside.

The Costa Azul porphyry deposit is located approximately 2 km southeast of the Alacran deposit in the eastern side of the San Pedro River Lineament. The Costa Azul porphyry is a shallow dipping, holocrystalline, Cretaceous porphyry diorite intrusion dominated by phenocrysts, euhedral plagioclase and anhedral to subhedral hornblende, intergrown with primary magnetite and biotite.

Porphyry-style Cu-Au-Ag mineralization is associated with sheeted quartz-magnetite-chalcopyrite- pyrite-bornite veinlets within an altered diorite porphyry. This porphyry has not been described in the same detail as Montiel East porphyry; however, the intrusive phases are equivalent to the Montiel East (i.e. Hornblende Porphyry, Hornblende Porphyry Late) and the veining paragenesis is similar to the veins observed at Montiel East.

The Montiel East, Montiel West and Costa Azul deposits can all be broadly classified as Cu-Au porphyry systems as defined by Sillitoe (2000). Cu-Au porphyries are typically associated with I- type magnetite-series intrusive rocks and typically contain significant hydrothermal magnetite, indicating the host intrusions are highly oxidized and sulphur-poor members of this series of magmas. The porphyry stocks in these types of rocks span a range of compositions from diorites, quartz diorite and tonalite through to quartz monzonite, monzonite and syenite. The porphyry deposits of the Project area are of low-potassium, calc-alkaline dioritic and tonalitic composition.

The Project is in a light agricultural area abutting the Paramillo mountain range to the south, with the nearest larger municipality being Puerto Libertador to the north. The main deposit, Alacran, straddles two large hills to the west of the San Pedro River. On the opposite side of the river, the Montiel East and Montiel West deposits are to the northeast of the Alacran deposit, and Costa Azul is to the southeast.

These four deposits were designed to be mined using a conventional drill, blast and shovel/truck open pit mining methods, and processed at the mill on-site. Mining activities will be performed by a contractor-owned mining fleet for Years 1 – 5 of operation and switch to an owneroperated fleet in Year 6 and onward. The initial mining will be from the Alacran conceptual open pit and is planned to target the high-grade, low-waste strip blocks located in the centre of the deposit. Three small pushbacks are planned within the first five years of the operation to ensure consistent high-grade resources are being fed to the mill maximizing NPV.

The Alacran conceptual open pit will be approximately 1.5 km long in a north-south direction, and a maximum of 630 m wide. The satellite conceptual open pits are considerably smaller, at between 500 m and 600 m long each, and about half as wide. The depths of the conceptual open pits from the road pit access elevations are 195 m for the Alacran pit, 60 m for the Costa Azul pit, 75 m for the Montiel East pit, and 45 m for the Montiel West pit.

The stripping ratio for the selected Alacran pit is 0.92:1 and is approximately 0.2:1 for the satellite pits. The production rates scheduled are 8,000 t/d of mill feed for the first five years, and 16,000 t/d of mill feed thereafter. All mill feed is expected from the Alacran pit for the first 17 years. During years 17 to 23, 8,000 t/d of mill feed is expected from the Alacran complemented by 8,000 t/d from the satellite pits. The satellite pits begin production simultaneously in order to provide a sustainable supply of mill feed and increase operational flexibility. During Years 17 to 23, 8,000 t/d of mill feed is expected from the Alacran pit complemented by 8,000 t/d from the satellite pits. Mineralized saprolite will be mined and a portion of this material to be stockpiled in order to maintain a set rate of blending with fresh rock prior to being processed through the mill.

Primary Crushing
Run-of-mine (“RoM”) material will be trucked from the mine to the crushing area on the surface where the mill feed material will be discharged into a RoM hopper. The hopper will be installed with a static grizzly and a hydraulic rock breaker to classify/fracture muck exceeding the specified top size for the crusher.

An apron feeder will motivate the hopper discharge, feeding mineralized material to the vibrating grizzly where first coarse classification occurs. The oversize mill feed material will be sent to a primary jaw crusher, while both the crushed and undersize passing material will be transported by conveyor belts to the coarse stockpile. Tramp metal will be removed at the belt conveyor transfer points via electromagnet to protect the equipment downstream and minimize material flow issues.

Grinding Circuit
The SAG mill discharge will be screened by a trommel. The trommel oversize will report to a pebble crusher prior to returning to the SAG feed, with the trommel undersize reporting to a pump box along with the ball mill discharge. At the pump box, a centrifugal pump will feed a hydrocyclone cluster prior to the ball mill feed. Overflow from the hydrocyclone cluster at 134 µm will report to the rougher feed circuit, and underflow will be further processed through the ball mill. A bond ball mill work index (Wi) of 16.8 kWh/t has been used for design and sizing of the grinding circuit.

The material at the correct size fraction (hydrocyclone overflow) will be transported to a rougher conditioner stage prior to being sent to the Cu flotation circuit. This will provide adequate time and area to introduce and blend the required reagents prior to flotation.

The secondary grinding discharge will feed the Cu flotation unit cells. This circuit will comprise of rougher and cleaner flotation stages.

The Cordoba concentrator has been designed to process 8,000 t/d for the initial five years of operation and increasing to 16,000 t/d for the next 18 years. The process flowsheet includes a primary crushing stage prior to a conventional SABC circuit, rougher flotation, two stages of cleaners and scavenger circuit as well as a pyrite flotation circuit fed from rougher and scavenger flotation tailings. The final concentrate reports to a thickener prior to dewatering via pressure filtration. Process water will be recycled as much as possible to minimize water usage.

The processing plant will consist of the following unit operations:
-primary jaw crushing;
-crushed ore handling;
-SAG milling;
-ball mill secondary grinding in a closed circuit;
-rougher flotation unit cells fed from ball mill hydrocyclone overflow with subsequent cleaning and scavenger stages;
-concentrate thickening and dewatering (Cu-Au-Ag concentrates);
-final tailings thickeni ........