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 Oxid ........

OP mining was considered a viable option for the study given that the mineralization is on or near surface. OP mining will include conventional drilling and blasting with a combination of a backhoe type excavator and front end loader type excavator loading broken rock into haul trucks, which will haul the material from the bench to the crusher, ROM stockpile, or WMF depending on the material type. Ancillary equipment includes dozers, graders, and various maintenance, support, service, and utility vehicles.

During pre-production, the mineralized material (above cut-off grade) will be hauled to designated stockpiles. The higher grade mill feed material will be hauled to a stockpile near the ROM pad located near the primary crusher. The saprolite material and lower grade mill feed will be hauled and stockpiled in a stockpile located south of the mill and crusher areas.

During production, higher grade mill feed material will be hauled directly to the primary crusher and either direct tipped into the crusher or stockpiled temporarily on the ROM pad. For the first three years of production, lower grade mill feed material (8.85 = NSR < 16.85) will continue to be stockpiled for later rehandling and processing. In the fourth and fifth year of production, mill feed material with NSR = 14.85 (Bin 7 and Bin 8) will be hauled directly to the crusher, while stockpiling material with 8.85 = NSR < 14.85. After the fifth year of production, all fresh material with NSR = ........

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