Geology
The Pulacayo Deposit supported the second largest silver mine in the history of Bolivia, with over 600 million reported ounces of past silver production. The deposit is associated with a low sulphidation epithermal system that hosts both precious and base metal mineralization within Tertiary sediments of the Quenhua Formation and intruding andesitic volcanic rocks of the Rotchild and Megacristal units. Of the 1,000 m vertical extent of sulphide mineralization, the top 450 m section is hosted within the intruding volcanic unit and the bottom 550 m is hosted in the underlying sedimentary unit. Mineralization hosted by volcanic rocks occurs over tens of meters in thickness as a stockwork of narrow veins and veinlets accompanied by disseminations in associated argillicly-altered marginal areas. The intruded sedimentary rocks host spatially constrained, bonanza style, high-grade veins that locally measure up to several meters in width. These typically bifurcate into the wider stockwork and disseminated zones that characterize the overlying volcanic sequence. Veins are commonly banded in texture and can contain semi-massive to massive sulphides, with the primary minerals of economic importance being galena, sphalerite, tetrahedrite and other silver sulfosalts. In combination, these comprise the Tajo Vein System that constitutes the main Pulacayo deposit that is the subject of this Feasibility Study.
Mineral Resources & Reserves
Mineral resources (Table 4) were reported by Michael Cullen (P.Geo) of Mercator Geological Services Limited and Eugene Puritch (P.Eng.) of P&E Mining Consultants Inc. at an effective date of September 28th, 2012. Mineral reserves based on the September 28th, 2012 resource estimate were reported by Professor Jim Porter of TWP at an effective date of December 11, 2012 (Table 5). Please refer to the Company's press releases dated September 28th, 2012 and November 14, 2012 regarding disclosure of the resource estimate and associated technical report.
Table 4 - Pulacayo Mineral Resource Summary as of September 28,2012(11,12,13,14)--------------------------------------------------------------------------------------------------------------------------------------------------------Resource Class Type Tonnes Ag g/t Pb %---------------------------------------------------------------------------- Combined Open Pit and Underground Resources including Oxide and Sulphide Zones---------------------------------------------------------------------------- Open Pit Resources (Base case 42 degrees Average Pit Wall Slope Angle)--------------------------------------------------------------------------------------------------------------------------------------------------------Open Pit Indicated Oxide 1,500,000 95.9 0.96----------------------------------------------------------------------------Open Pit Inferred Oxide 248,000 71.2 0.55----------------------------------------------------------------------------Open Pit Indicated Sulphide 9,283,000 44.1 0.66----------------------------------------------------------------------------Open Pit Inferred Sulphide 2,572,000 33.4 0.92---------------------------------------------------------------------------- Waste Rock 71,679,000 approx. approx.-------------------------------------------------------------------------------------------------------------------------------------------------------- Underground Resources (all blocks below 4159 m ASL with NSR greater than $US 58)----------------------------------------------------------------------------Underground Indicated Sulphide 6,197,000 213.6 0.86----------------------------------------------------------------------------Underground Inferred Sulphide 943,000 193.1 0.43-------------------------------------------------------------------------------------------------------------------------------------------------------- Oxide +Total Indicated Sulphide 16,980,000 110.5 0.74---------------------------------------------------------------------------- Oxide +Total Inferred Sulphide 3,763,000 75.9 0.797---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Ag Pb ZnResource Class Zn % (Oz) (lbs.) (lbs.)---------------------------------------------------------------------------- Combined Open Pit and Underground Resources including Oxide and Sulphide Zones---------------------------------------------------------------------------- Open Pit Resources (Base case 42 degrees Average Pit Wall Slope Angle)--------------------------------------------------------------------------------------------------------------------------------------------------------Open Pit Indicated 0.13 4,626,000 approx. approx.----------------------------------------------------------------------------Open Pit Inferred 0.31 569,000 approx. approx.----------------------------------------------------------------------------Open Pit Indicated 1.32 13,168,000 135,896,000 269,540,000----------------------------------------------------------------------------Open Pit Inferred 1.36 2,765,000 51,989,000 76,878,000---------------------------------------------------------------------------- Waste Rock approx. Strip Ratio 5.3 : 1-------------------------------------------------------------------------------------------------------------------------------------------------------- Underground Resources (all blocks below 4159 m ASL with NSR greater than $US 58)----------------------------------------------------------------------------Underground Indicated 1.74 42,547,000 117,492,000 237,717,000----------------------------------------------------------------------------Underground Inferred 1.61 5,853,000 8,939,000 43,471,000--------------------------------------------------------------------------------------------------------------------------------------------------------Total Indicated 1.49 60,341,000 253,388,000 507,257,000----------------------------------------------------------------------------Total Inferred 1.43 9,187,000 60,928,000 120,349,000--------------------------------------------------------------------------------------------------------------------------------------------------------
