ZNC Reports 43 101 PFS August 2013

Zincore Metals Inc.
AZOD Zinc Oxide Project,

Cusco,, Peru,,
NI 43-101 Technical Report on a Preliminary Feasibility Study
Submitted
S b i db by:
Mr Christopher Wright , P.Geo. (AMEC)
Mr Sergio Munoz, CMC (AMEC)
Mr William Bagnell P.Eng., (AMEC)
Mr. Michael Valenta, Pr.Eng (Int) FSAIMM (Metallicon Process Consulting)
Mr Stewart Twigg, P.Eng., (AMEC)
Mr Vikram Khera, P.Eng., (AMEC)
Ms Stella Searston, RM SME (AMEC)
Prepared for: Zincore Metals Inc.

Effective Date: 6 August 2013
Project Number: 170848

CERTIFICATE OF QUALIFIED PERSON
I, Christopher Wright P.Geo., was formerly employed as a Consulting Manager, Mining and
Geology and Principal Geologist with AMEC (Perú) S.A.
This certificate applies to the technical report entitled “AZOD Zinc Oxide Project, Cusco, Peru,
NI 43-101 Technical Report on a Preliminary Feasibility Study”, that has an effective date of 6
August 2013 and a filing date of 26 August 2013 (the “Technical Report”) prepared for Zincore
Metals Inc (“Zincore”).
I am a Practising Member of The Association of Professional Geoscientists of Ontario. I

graduated from McGill University with Bachelor of Science in 1997 and a Master of Science in
2001.
I have practiced my profession for 15 years. I have been directly involved in data verification
and Mineral Resource estimates for base metal projects and operations in Canada, Brazil, Peru,
Colombia, Chile and Ecuador for 12 years.
As a result of my experience and qualifications, I am a Qualified Person as defined in National

Instrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101).
I visited the AZOD Zinc Oxide Project (the “Project”) from 3–5 May 2011 and again from 4–7
September, 2011 during the last drilling programs on the Project.
I am responsible for Section 2.3 and Section 12.4 of the Technical Report.
I am independent of Zincore as independence is described by Section 1.5 of NI 43–101.
I have been involved with the Project since 2011 and have completed a site visit, data
verification and mineral resource estimate in support of the Technical Report.
I have read NI 43–101 and the sections of the technical report for which I am responsible have
been prepared in compliance with that Instrument.
As of the effective date of the technical report, to the best of my knowledge, information and
belief, the sections of the technical report for which I am responsible contain all scientific and
technical information that is required to be disclosed to make those sections of the technical
report not misleading.
Dated: 26 August 2013
“signed and sealed”
Christopher Wright P.Geo.
AMEC (Perú) S.A.

Calle Las Begonias 441, Piso 8
San Isidro, Lima 27, Perú
Tel (511) 221-3130
Fax (511) 221-3143 www.amec.com
I, Sergio Munoz, CMC., am employed as a Manager Mining with AMEC (Perú) S.A.
I am a Registered Member of the Chilean Mining Commission. I graduated from the Santiago
de Chile University with a Bachelor of Engineering degree in Mining Engineering in 2008.
I have practiced my profession for nine years I have been directly involved in preliminary
economic assessments, pre-feasibility and feasibility level studies for open pit projects in
copper, zinc, gold, silver, lead and iron. I have been involved with open pit and underground
mine operations in copper.

I visited the AZOD Zinc Oxide Project (the “Project”) from 4 to 7 September 2011.
I am responsible for or co-responsible for Sections 1.12, 1.13, 1.14, 1.14.1, 1.14.3, 1.14.4, 1.18,
1.19, 1.21, 1.22, all of Section 3, Sections 15.1, 15.2, 15.3, 15.5 to 15.7, 16.1 to 16.3, 16.6,
16.6.1 to 16.6.2, 16.7 to 16.17, 21.1.2, 21.4.1, 21.4.2 to 21.4.5, 21.5, all of Section 24, Sections
21.8, 25.9, 25.13, 25.15 and all of Sections 26 to 27 of the Technical Report.
I have been involved with the Project since 2011 in support of the Technical Report.
“signed”
Sergio Munoz, CMC.
AMEC (Perú) S.A

Tel (511) 221-3130
I, William Bagnell, P.Eng., am employed as a Manager Mining with AMEC Americas Limited.
I am a member of Association of Professional Engineers and Geoscientists of Saskatchewan. I

graduated from the Technical University of Nova Scotia with a B.Eng Mining Engineering in
1996.
I have practiced continuously in my profession for seventeen years, 12 in operations and 5 in

consulting. I have been directly involved in pre-feasibility and feasibility level studies for
underground projects in uranium, gold, potash and diamonds. I have been involved with mine
operations in coal, potash, gold and base metals.

I have not visited the AZOD Zinc Oxide Project (the “Project”).
I am responsible for or co-responsible for Sections 1.12, 1.13, 1.14, 1.14.2, 1.14.3, 1.14.4, 1.18,
1.19, 1.21, 1.22, all of Section 3, Sections 15.1, 15.4, 15.5 to 15.7, 16.4, 16.5, 16.6, 16.6.3 to
16.6.4, 16.7 to 16.17, 21.1.2, 21.2, 21.4.1, 21.4.6 to 21.4.9, all of Section 24, Sections 25.1,
25.8 to 25.9, 25.13, and all of Sections 26 and 27 of the Technical Report.
William Bagnell, P.Eng.
AMEC Americas Ltd

Mining and Metals
301 - 121 Research Drive,
Saskatoon SK S7N 1K2 www.amec.com
I, Michael Matthew Valenta Pr.Eng (Int), FSAIMM, am the founder, managing director and chief
consulting metallurgist with Metallicon Process Consulting (Pty) Ltd (“Metallicon”).
This certificate applies to the technical report entitled “AZOD Zinc Oxide Project, Cusco, Peru, NI 43-
101 Technical Report on a Preliminary Feasibility Study”, that has an effective date of 6 August 2013
and a filing date of 26 August 2013 (the “Technical Report”) prepared for Zincore Metals Inc
(“Zincore).
I am a registered professional engineer (no. 970402) on the register of the Engineering Council of
South Africa as well as a registered professional engineer (no. 2003 60005) on the international
register as defined by the Washington Accord. I am also a Fellow (no. 55644) of the Southern
African Institute of Mining and Metallurgy. I am a member (no. 11354) of the Mine Metallurgical
Managers’ Association of South Africa and have served on the council and am a past president of the
Mine Metallurgical Managers’ Association of South Africa. I am a graduate of the University of the
Witwatersrand, South Africa, with a BSc. in Extractive Metallurgy (1990).
I have been practicing as a metallurgical engineer continuously since 1991 and have 22 years’
experience in metallurgy. I have been involved in research and development, plant operation, project
management, plant design, plant optimization, due diligence studies and management in Africa,
South America and Australia. My research and development experience has been in the formal
research sector with Mintek in South Africa, and well as with my other employers throughout my
experience. As a chief consulting metallurgist with Metallicon since 2005 I have managed and
overseen a number of test work programmes for clients with institutions such as Mintek and SGS.
My formal design experience was gained as consulting metallurgist with Hatch Africa for three years
prior to the establishment of Metallicon in 2005.

Tel: +27 (0) 12 259 0792 Fax: +27 (0)86 688 3797 E-mail: info@metallicon.co.za website:
www.metallicon.co.za
Office Suite: Sediba Plaza Hartbeespoort South Africa Reg. No: 2005/021843/07
Directors: M.M. Valenta B. Mulcahy H. Snyman

Page 1
I have been overseeing the test work at Mintek in South Africa, Cementos Pacasmayo in Peru and
IMN in Poland. I was involved throughout the test work from inception to final reporting and visited
the research facilities at critical stages of the various programmes. I also visited the SGS
laboratories in Lima, Peru to review their equipment and procedures for the preparation of the ore
samples for test work.
The management of the test work and the liaison with the relevant institutions was my responsibility.
In consultation with the client, Zincore, decisions were made as to the direction of the test work. This
was achieved through regular visits to the institutions, both local and abroad, and personal
observation of the test work by me and my professional engineers. Metallicon was responsible for
the interpretation of the test work and the compilartion of the Process Design criteria.
I am responsible for Section 13 and Section 17 and those portions of the Summary, Conclusions and
Recommendations that pertain to those sections of the Technical Report.
I am independent of Zincore as independence is described by Section 1.5 of NI 43-101.
I have been involved with the project since 2009 and have been reviewing the metallurgical test work
and metallurgical design.
I have read NI 43-101 and those portions of the Technical Report for which I am responsible have
As of the effective date of the Technical Report, to the best of my knowledge, information and belief,
the sections of the technical report for which I am responsible contain all scientific and technical
information that is required to be disclosed to make those sections of the technical report not
misleading.
“Signed”
Michael M. Valenta
Pr. Eng (Int) FSAIMM
Managing Director
Tel: +27 (0) 12 259 0792 Fax: +27 (0)86 688 3797 E-mail: info@metallicon.co.za website:
www.metallicon.co.za
Office Suite: Sediba Plaza Hartbeespoort South Africa Reg. No: 2005/021843/07
Directors: M.M. Valenta B. Mulcahy H. Snyman

Page 2
I, Stewart Twigg, P.Eng. am employed as a Project Manager with AMEC (Perú) S.A.
I am a Professional Engineer of the Association of Professional Engineers and Geoscientists of

British Columbia I graduated from Queens University in 1995 with a Bachelor of Science in
Mechanical Engineering.
I have practiced my profession for 15 years. I have been directly involved in the design,
construction, start up and operation of zinc and lead refineries including Teck Cominco’s
metallurgical facilities in Trail, British Columbia and Votorantim’s Refineria de Cajamarquilla in
Lima, Peru for eight of my 15 years. I have participated in studies and the execution of
infrastructure projects including detailed construction planning and execution of major mining
and infrastructure projects in the Middle East, Canada, Chile and Peru.

I visited the AZOD Zinc Oxide Project (the “Project”) from 4 to 7 April 2012.
I am responsible for or co-responsible for Sections 1, 1.1, 1.2, 1.3, 1.16 to 1.19, 1.21, 1.22, all of
Sections 2 and 3, all of Sections 18, 20, Sections 21 21.1, 21.1.1, 21.3, 21.4, 21.4.13 to 21.4.19,
21.5, and all of Sections 23 to 24, Section 25, 25.1, 25.11, 25.13, and all of Sections 26 and 27
of the Technical Report.
Stewart Twigg, P.Eng.
AMEC (Perú) S.A

Tel (511) 221-3130
I, Vikram Khera, P.Eng. am employed as a Senior Financial Analyst with AMEC Americas
Limited.
I am a member of Professional Engineers Ontario. I graduated from the University of British

Columbia in 2002 with a Bachelor of Applied Science degree in Chemical Engineering.
I have practiced my profession for over 10 years.

I have not visited the AZOD Zinc Oxide Project (the “Project”).
I am responsible for or co-responsible for all of Section 3, all of Section 19, all of Section 22,
and Section 25.14 of the Technical Report.
Vikram Khera, P.Eng.
AMEC Americas Ltd

Mining and Metals
700-2020 Winston Park Dr.
Oakville, ON L6H 6X7 CA
Tel: (905) 829-5400
Fax: (905) 829-5401 www.amec.com
I, Stella Searston, RM SME. am employed as a Principal Geologist with AMEC E&C Services
Inc.
I am a Registered Member of the Society for Exploration, Mining and Metallurgy (RM SME
#4168111), a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM) and a
Member of the Australian Institute of Geoscientists (MAIG). I graduated from James Cook
University of North Queensland in 1987 with a Bachelor of Science degree in geology and from
the University of Tasmania in 1999 with a Master of Economic Geology degree.
I have practiced professionally for 25 years. In that time I have been directly involved in
exploration for and review of, geological, mineralization, exploration and drilling data, geological
models, sampling, sample preparation, assaying and other resource-estimation related
analyses, quality assurance-quality control databases, and resource estimates, in Australia,
Southern Africa, the Pacific and North America.

I have not visited the AZOD Zinc Oxide Project.
I am responsible for or co-responsible for Sections 1, 1.1 to 1.8, 1.10, 1.10.1 and 1.10.2, 1.11,
1.21, 1.22, all of Sections 2, 3, 4, 6 to 12, 14, 23 to 24, Sections 25, 25.1 to 25.6, 25.8 and
25.15 and all of Sections 26 and 27 of the Technical Report.
I have been involved with the Project since 2011 in support of the Technical Report and as
reviewer of AMEC’s data verification and resource estimation work.
“signed and stamped”
Stella Searston, RM SME.
AMEC E&C Services, Inc.

961 Matley Lane, Suite 110
Reno, NV, 89502
Tel: 775 331 2375
Fax: 775-331-4153 www.amec.com
IMPORTANT NOTICE
This report was prepared as National Instrument 43-101 Technical Report for Zincore
Metals Inc. (Zincore) by AMEC (Perú) S.A. (AMEC). The quality of information,
conclusions, and estimates contained herein is consistent with the level of effort involved in
AMEC’s services, based on i) information available at the time of preparation, ii) data
supplied by outside sources, and iii) the assumptions, conditions, and qualifications set
forth in this report. This report is intended for use by Zincore subject to terms and
conditions of its contract with AMEC. Except for the purposed legislated under Canadian
provincial and territorial securities law, any other uses of this report by any third party is at
that party’s sole risk.
AZOD ZINC OXIDE PROJECT
NI 43-101 TECHNICAL REPORT
ON A PRELIMINARY FEASIBILITY STUDY
CONTENTS
1.0 SUMMARY ............................................................................................................................. 1-1

1.1 Project Setting, Location and Access .................................................................................... 1-1
1.2 History and Exploration .......................................................................................................... 1-2
1.3 Mineral Tenure, Surface Rights, and Royalties ..................................................................... 1-2
1.4 Environment, Permits, and Social License ............................................................................ 1-3
1.5 Geology and Mineralization ................................................................................................... 1-5
1.6 Drilling .................................................................................................................................... 1-6
1.7 Sample Preparation and Analysis .......................................................................................... 1-7
1.8 Data Verification ..................................................................................................................... 1-8
1.9 Metallurgical Test Work.......................................................................................................... 1-8
1.10 Mineral Resource Estimates ................................................................................................ 1-10
1.10.1 Accha .......................................................................................................................... 1-10
1.10.2 Yanque .......................................................................................................................... 1-11
1.11 Mineral Resource Statements .............................................................................................. 1-12
1.12 Mineral Reserve Estimates .................................................................................................. 1-14
1.13 Mineral Reserves Statement ................................................................................................ 1-15
1.14 Mining Methods .................................................................................................................... 1-18
1.14.1 Open Pits ....................................................................................................................... 1-18
1.14.2 Underground .................................................................................................................. 1-18
1.14.3 Mine Plan ....................................................................................................................... 1-19
1.14.4 Manpower ...................................................................................................................... 1-21
1.15 Recovery Methods ............................................................................................................... 1-21
1.16 Infrastructure ........................................................................................................................ 1-24
1.17 Marketing ............................................................................................................................. 1-25
1.18 Capital Cost Estimates ......................................................................................................... 1-26
1.19 Operating Cost Estimates .................................................................................................... 1-28
1.20 Financial Analysis ................................................................................................................ 1-29
1.21 Interpretation and Conclusions ............................................................................................ 1-32
1.22 Recommendations ............................................................................................................... 1-33
2.0 INTRODUCTION.................................................................................................................... 2-1
2.1 Terms of Reference ............................................................................................................... 2-1
2.2 Qualified Persons ................................................................................................................... 2-1
2.3 Site Visits and Scope of Personal Inspection ........................................................................ 2-3
2.4 Effective Dates ....................................................................................................................... 2-4
2.5 Information Sources and References .................................................................................... 2-4
2.6 Previous Technical Reports ................................................................................................... 2-5
3.0 RELIANCE ON OTHER EXPERTS ....................................................................................... 3-1
3.1 Project Ownership .................................................................................................................. 3-1
3.2 Mineral Tenure, Agreements and Surface Rights .................................................................. 3-2
3.3 Permitting ............................................................................................................................... 3-3
3.4 Social and Environmental ...................................................................................................... 3-3
3.5 Taxation ................................................................................................................................. 3-4
3.1 Metals Pricing......................................................................................................................... 3-4
3.2 Marketing ............................................................................................................................... 3-5
3.3 Royalties ................................................................................................................................ 3-6
4.0 PROPERTY DESCRIPTION AND LOCATION ..................................................................... 4-1
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August, 2013 TOC i
4.1 Property and Title in Peru ...................................................................................................... 4-1

4.1.1 Mining Law....................................................................................................................... 4-2
4.1.2 Taxation Regime ............................................................................................................. 4-3
4.1.3 Royalties .......................................................................................................................... 4-3
4.1.4 Surface Rights ................................................................................................................. 4-4
4.1.5 Environmental Regulations.............................................................................................. 4-5
4.1.6 Water Rights .................................................................................................................... 4-7
4.2 Project Ownership .................................................................................................................. 4-7
4.3 Mineral Tenure ....................................................................................................................... 4-8
4.4 Gema Claims Option Agreement ......................................................................................... 4-13
4.5 First Quantum Option Agreements ...................................................................................... 4-13
4.6 Work Agreement, Collasuyo–Antacollo ............................................................................... 4-16
4.7 Dolores 2 Agreements with Asociación de Pequeños Mineros Artesanales Rico Pfuyani.. 4-16
4.8 Surface Rights...................................................................................................................... 4-17
4.9 Community Access Agreements .......................................................................................... 4-17
4.10 Water Rights ........................................................................................................................ 4-18
4.11 Royalties .............................................................................................................................. 4-18
4.11.1 Government Royalties ................................................................................................... 4-18
4.11.2 Third-Party Royalties ..................................................................................................... 4-19
4.12 Permits ................................................................................................................................. 4-19
4.13 Environment ......................................................................................................................... 4-19
4.14 Environmental Liabilities ...................................................................................................... 4-19
4.15 Social License ...................................................................................................................... 4-19
4.16 Comment on Section 4......................................................................................................... 4-19
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY ...................................................................................................................................... 5-1
5.1 Accessibility ............................................................................................................................ 5-1
5.2 Climate ................................................................................................................................... 5-4
5.3 Local Resources and Infrastructure ....................................................................................... 5-5
5.4 Physiography ......................................................................................................................... 5-5
5.5 Flora ....................................................................................................................................... 5-7
5.6 Land Usage ............................................................................................................................ 5-7
5.7 Comment on Section 5........................................................................................................... 5-7
6.0 HISTORY ............................................................................................................................... 6-1
7.0 GEOLOGICAL SETTING AND MINERALIZATION ............................................................... 7-1
7.1 Regional Geology................................................................................................................... 7-1
7.2 Project Geology...................................................................................................................... 7-5
7.3 Deposits ................................................................................................................................. 7-7
7.3.1 Accha ............................................................................................................................ 7-7
7.3.2 Yanque .......................................................................................................................... 7-14
7.4 Prospects and Occurrences ................................................................................................. 7-22
7.4.1 Yanque East .................................................................................................................. 7-22
7.4.2 Puyani .......................................................................................................................... 7-24
7.4.3 Gema .......................................................................................................................... 7-24
7.4.4 Corrales ......................................................................................................................... 7-24
7.4.5 Capayocc ....................................................................................................................... 7-24
7.4.6 Yurac .......................................................................................................................... 7-25
7.4.7 Dolores .......................................................................................................................... 7-25
7.5 Comments on Section 7 ....................................................................................................... 7-25
8.0 DEPOSIT TYPES................................................................................................................... 8-1
Project No.: 170848

August, 2013 TOC ii

9.0 EXPLORATION...................................................................................................................... 9-1
9.1 Legacy Exploration Data ........................................................................................................ 9-1
9.2 Grids and Surveys.................................................................................................................. 9-3
9.3 Geological Mapping ............................................................................................................... 9-3
9.4 Geochemical Sampling .......................................................................................................... 9-3
9.5 Geophysical Surveys ............................................................................................................. 9-4
9.6 Pits and Trenches .................................................................................................................. 9-4
9.7 Petrology, Mineralogy, and Research Studies ....................................................................... 9-5
9.8 Exploration Potential .............................................................................................................. 9-6
10.0 DRILLING ............................................................................................................................. 10-1
10.1 Drill Methods ........................................................................................................................ 10-4
10.1.1 Legacy Programs .......................................................................................................... 10-4
10.1.2 Zincore Programs .......................................................................................................... 10-4
10.2 Geological Logging .............................................................................................................. 10-5
10.2.1 Legacy Programs .......................................................................................................... 10-5
10.3 Recoveries ........................................................................................................................... 10-6
10.3.1 Legacy Programs .......................................................................................................... 10-6
10.4 Collar Surveys ...................................................................................................................... 10-6
10.4.1 Legacy Programs .......................................................................................................... 10-6
10.5 Downhole Surveys ............................................................................................................... 10-6
10.5.1 Legacy Programs .......................................................................................................... 10-6
10.6 Geotechnical and Hydrological Drilling ................................................................................ 10-7
10.7 Metallurgical Drilling ............................................................................................................. 10-7
10.8 Sample Length/True Thickness ........................................................................................... 10-8
10.9 Comment on Section 10....................................................................................................... 10-8
11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY................................................... 11-1
11.1 Sampling Methods ............................................................................................................... 11-1
11.1.1 Legacy .......................................................................................................................... 11-1
11.1.2 Zincore .......................................................................................................................... 11-1
11.2 Density Determinations ........................................................................................................ 11-2
11.2.1 Legacy .......................................................................................................................... 11-2
11.2.2 Zincore .......................................................................................................................... 11-2
11.3 Analytical and Test Laboratories.......................................................................................... 11-2
11.4 Sample Preparation and Analysis ........................................................................................ 11-3
11.4.1 Legacy .......................................................................................................................... 11-3
11.4.2 Zincore .......................................................................................................................... 11-4
11.5 Quality Assurance and Quality Control ................................................................................ 11-5
11.5.1 Legacy Programs .......................................................................................................... 11-5
11.5.2 Zincore .......................................................................................................................... 11-6
11.6 Databases ............................................................................................................................ 11-7
11.7 Sample Storage ................................................................................................................... 11-7
11.8 Sample Security ................................................................................................................... 11-7
12.0 DATA VERIFICATION ......................................................................................................... 12-1
Project No.: 170848

August, 2013 TOC iii
12.1 Winter and Schmidt (2006) .................................................................................................. 12-1

12.2 Pincock, Allen and Holt (2008) ............................................................................................. 12-1
12.3 Micon (2010) ........................................................................................................................ 12-2
12.4 AMEC ................................................................................................................................... 12-3
12.5 Comments on Section 12 ..................................................................................................... 12-5
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING............................................ 13-7
13.1 Historic Test Work ................................................................................................................ 13-7
13.1.1 Comminution and Physical Separation Test Work ........................................................ 13-7
13.1.2 Leaching ........................................................................................................................ 13-7
13.1.3 Reductive Roasting ....................................................................................................... 13-8
13.1.4 Dissolution and Refining of Zn from Waelz Product ...................................................... 13-9
13.2 Test Work Supporting the 2013 PFS ................................................................................. 13-10
13.3 Pyrometallurgical Test Work .............................................................................................. 13-10
13.3.1 Phase 1........................................................................................................................ 13-10
13.3.2 Phase 1 Results .......................................................................................................... 13-11
13.3.3 Phase 2 Results .......................................................................................................... 13-16
13.3.4 Hydrometallurgical Test Work ..................................................................................... 13-20
13.3.5 Fume Samples ............................................................................................................ 13-22
13.3.6 Mineralogical Analysis ................................................................................................. 13-23
13.3.7 Halide Leaching ........................................................................................................... 13-23
13.3.8 Neutral Leaching ......................................................................................................... 13-24
13.3.9 Purification Test Work ................................................................................................. 13-25
13.3.10 Zinc Cementation ........................................................................................................ 13-25
13.3.11 Ion Exchange (IX) and Solvent Extraction................................................................... 13-27
13.3.12 Residue Stability Tests ................................................................................................ 13-27
13.3.13 SysCAD Modelling ....................................................................................................... 13-27
13.3.14 Comminution Test Work 2012 ..................................................................................... 13-30
13.4 Mass Balance and Recovery Estimates ............................................................................ 13-31
13.5 Geometallurgical Considerations ....................................................................................... 13-32
13.5.1 Pyrometallurgical Samples - 2012 ............................................................................... 13-32
13.5.2 Hydrometallurgical Samples ........................................................................................ 13-34
13.6 Comment on Section 13..................................................................................................... 13-34
13.6.1 Pyrometallurgical Test Work........................................................................................ 13-34
13.6.2 Hydrometallurgical Test Work ..................................................................................... 13-35
14.0 MINERAL RESOURCE ESTIMATES .................................................................................. 14-1
14.1 Basis of Estimates................................................................................................................ 14-1
14.2 Geological Models................................................................................................................ 14-2
14.2.1 Accha Geological Model ................................................................................................ 14-2
14.2.2 Yanque Geological Model ............................................................................................. 14-5
14.3 Compositing ......................................................................................................................... 14-8
14.4 Relative Elevation ................................................................................................................ 14-8
14.5 Exploratory Data Analysis .................................................................................................... 14-9
14.6 Variography ........................................................................................................................ 14-10
14.7 Density ............................................................................................................................... 14-11
14.8 Block Models ...................................................................................................................... 14-11
14.8.1 Interpolation Accha ...................................................................................................... 14-12
14.8.2 Yanque ........................................................................................................................ 14-13
14.9 Validation ........................................................................................................................... 14-15
14.10 Mineral Resource Classification ......................................................................................... 14-15
14.11 Reasonable Prospects for Economic Extraction ................................................................ 14-16
Project No.: 170848

August, 2013 TOC iv
14.12 Mineral Resource Statements ............................................................................................ 14-19

14.13 Factors That May Affect the Estimates .............................................................................. 14-22
15.0 MINERAL RESERVE ESTIMATES ..................................................................................... 15-1
15.1 Key Assumptions / Basis of Estimate .................................................................................. 15-1
15.2 Mineral Reserve Estimation, Open Pits ............................................................................... 15-1
15.2.1 SMU Size ....................................................................................................................... 15-2
15.2.2 Ore/Waste Determination .............................................................................................. 15-2
15.2.3 Dilution Considerations.................................................................................................. 15-3
15.2.4 Surface Topography ...................................................................................................... 15-3
15.2.5 Bulk Density ................................................................................................................... 15-3
15.2.6 Overall Slope Angles ..................................................................................................... 15-4
15.3 Mining Cost .......................................................................................................................... 15-4
15.3.1 G&A, Refining and Selling Cost..................................................................................... 15-5
15.3.2 Metal Prices ................................................................................................................... 15-7
15.3.3 Referential Cut-off Grade .............................................................................................. 15-7
15.4 Mineral Reserves for Underground Mining .......................................................................... 15-8
15.4.1 Cut-off Estimation .......................................................................................................... 15-8
15.4.2 Modifying Factors ........................................................................................................ 15-10
15.5 Mineral Reserves Statement .............................................................................................. 15-11
15.6 Factors that may Affect the Mineral Reserve Estimates .................................................... 15-14
15.7 Comments on Section 15 ................................................................................................... 15-14
16.0 MINING METHODS ............................................................................................................. 16-1
16.1 Open Pit Optimization .......................................................................................................... 16-1
16.1.1 Pit Optimization ............................................................................................................. 16-1
16.1.2 Final Pit Designs ............................................................................................................ 16-1
16.2 Pit Slope and Geotechnical Designs.................................................................................... 16-2
16.3 Open Pit Designs ................................................................................................................. 16-4
16.3.1 Design Criteria ............................................................................................................... 16-4
16.3.2 Final Pit Design ............................................................................................................. 16-4
16.3.3 Phase Selection and Design ......................................................................................... 16-6
16.3.4 Accha .......................................................................................................................... 16-6
16.3.5 Yanque .......................................................................................................................... 16-9
16.4 Underground Mining Accha Project ................................................................................... 16-13
16.4.1 Mine Geotechnical Design........................................................................................... 16-13
16.4.2 Underground Mining Method Selection ....................................................................... 16-14
16.5 Underground Mine Design ................................................................................................. 16-16
16.5.1 Underground Mine Design Assumptions and Design Criteria ..................................... 16-16
16.5.2 Underground Mine Design........................................................................................... 16-16
16.5.3 Stope Design ............................................................................................................... 16-23
16.6 Production Planning ........................................................................................................... 16-35
16.6.1 Open Pit Production Planning ..................................................................................... 16-35
16.6.2 Underground Production Planning .............................................................................. 16-41
16.6.3 Open Pit and Underground Production Planning ........................................................ 16-44
16.7 Waste Rock Storage Facilities ........................................................................................... 16-47
16.8 Mine Equipment Selection ................................................................................................. 16-47
16.9 Drilling and Blasting ........................................................................................................... 16-48
16.10 Loading .............................................................................................................................. 16-48
16.11 Haulage .............................................................................................................................. 16-48
16.11.1 Operations Support ..................................................................................................... 16-49
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16.12 Auxiliary Equipment ........................................................................................................... 16-49

16.13 Mine Dewatering ................................................................................................................ 16-50
16.14 Manpower .......................................................................................................................... 16-50
16.15 Primary Consumables ........................................................................................................ 16-50
16.16 Ore Control ......................................................................................................................... 16-50
17.0 RECOVERY METHODS ...................................................................................................... 17-1
17.1 Base Case Process Flow Sheet .......................................................................................... 17-1
17.2 Process Design Criteria ....................................................................................................... 17-2
17.3 Process Control Philosophy ................................................................................................. 17-4
17.4 Process Description ............................................................................................................. 17-4
17.5 Delivery and Crushing of Ore ............................................................................................... 17-5
17.6 Waelz Process (Rotary Kiln) ................................................................................................ 17-5
17.7 Fume Transportation to Refinery ......................................................................................... 17-7
17.8 Fume Dehalogenation .......................................................................................................... 17-7
17.9 Neutral and Acid Leaching Fume......................................................................................... 17-8
17.10 Cold and Hot Purification of Zinc Sulphate Solutions .......................................................... 17-9
17.11 Electrowinning .................................................................................................................... 17-10
17.12 Zinc Melting and Casting.................................................................................................... 17-11
17.13 Process Development – Fume Case ................................................................................. 17-11
17.14 Process Consumables ....................................................................................................... 17-13
17.14.1 Process Water Requirement ....................................................................................... 17-13
17.14.2 Process Power Requirement ....................................................................................... 17-13
17.14.3 Pyrometallurgical Anthracite Consumption ................................................................. 17-13
17.14.4 NaC03 – Base Case and Fume Case .......................................................................... 17-14
17.14.5 Dolomite – Base Case and Fume Case ...................................................................... 17-14
17.14.6 Sulphuric Acid – Base Case ........................................................................................ 17-14
18.0 PROJECT INFRASTRUCTURE .......................................................................................... 18-1
18.1 Proposed Mine Access ........................................................................................................ 18-1
18.2 Waste Rock Storage Facilities ............................................................................................. 18-4
18.2.1 Slag Storage Facility Design Criteria ............................................................................. 18-6
18.3 Borrow Materials .................................................................................................................. 18-7
18.4 Water Management.............................................................................................................. 18-7
18.4.1 Water Balance ............................................................................................................... 18-7
18.4.2 Geochemistry and Water Quality ................................................................................ 18-14
18.5 AZOD Area Infrastructure .................................................................................................. 18-14
18.5.1 Truck Shop Facility ...................................................................................................... 18-15
18.5.2 Pyrometallurgical Plant ................................................................................................ 18-15
18.6 Hydrometallurgical Plant Infrastructure .............................................................................. 18-15
18.7 Electrical Power Supply ..................................................................................................... 18-15
18.7.1 AZOD Area Power Supply ........................................................................................... 18-15
18.7.2 Hydrometallurgy Plant Power Supply .......................................................................... 18-16
18.8 Communications ................................................................................................................ 18-16
18.9 Fuel .................................................................................................................................... 18-17
18.10 Water Supply...................................................................................................................... 18-17
18.11 Solid Waste Management .................................................................................................. 18-18
19.0 MARKET STUDIES.............................................................................................................. 19-1
19.1 Metal Pricing ........................................................................................................................ 19-1
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19.1.1 Forecast Metal Pricing ................................................................................................... 19-1

19.1.2 Zinc Ingot ....................................................................................................................... 19-3
19.2 Product Specifications and Market Analysis ........................................................................ 19-3
19.2.1 Lead Sulphate (PbS04) .................................................................................................. 19-3
19.2.2 Zinc and Lead Fume Pricing.......................................................................................... 19-5
19.3 Contracts .............................................................................................................................. 19-8
20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT .. 20-1
20.1 Baseline Studies .................................................................................................................. 20-1
20.1.1 Physical Baseline .......................................................................................................... 20-1
20.1.2 Surface and Groundwater Quality ................................................................................. 20-2
20.1.3 Biological Baseline ........................................................................................................ 20-2
20.1.4 Socioeconomic Baseline ............................................................................................... 20-3
20.1.5 Accha District ................................................................................................................. 20-3
20.1.6 Parrco Community ......................................................................................................... 20-3
20.1.7 Colquemarca District ..................................................................................................... 20-4
20.1.8 Lacca Lacca–Yanque–Parccobamba–(Gran Chico) Rural Community ........................ 20-4
20.1.9 Considerations of Social and Community Impacts ........................................................ 20-4
20.2 Current Environmental Liabilities ......................................................................................... 20-5
20.3 Closure Plan ......................................................................................................................... 20-6
20.4 Permitting ............................................................................................................................. 20-7
20.4.1 Exploration ..................................................................................................................... 20-7
20.4.2 Development.................................................................................................................. 20-7
21.0 CAPITAL AND OPERATING COSTS .................................................................................. 21-1
21.1 Capital Cost Estimates ......................................................................................................... 21-1
21.1.1 Process Plant Basis of Estimate ................................................................................... 21-2
21.1.2 Mining Capital Cost ....................................................................................................... 21-3
21.2 Underground Mining Costs .................................................................................................. 21-5
21.3 Sustaining Capital Cost ........................................................................................................ 21-6
21.4 Operating Cost Estimates .................................................................................................... 21-6
21.4.1 Mining Operating Costs ................................................................................................. 21-7
21.4.2 Open Pit Mining Costs ................................................................................................... 21-9
21.4.3 Open Pit Cost of Major Consumables ........................................................................... 21-9
21.4.4 Open Pit Mine Staff and Contractor Salaries .............................................................. 21-10
21.4.5 Open Pit Operating Cost Estimate .............................................................................. 21-10
21.4.6 Underground Mine Operating Cost Summary ............................................................. 21-12
21.4.7 Underground Cost of Major Consumables .................................................................. 21-13
21.4.8 Underground Mine Staff and Contractor Salaries ....................................................... 21-13
21.4.9 Underground Mine Operating Cost Summary ............................................................. 21-13
21.4.10 Process Operating Costs............................................................................................. 21-16
21.4.11 Process Labour Costs ................................................................................................. 21-18
21.4.12 Fuels ........................................................................................................................ 21-18
21.4.13 Utilities ........................................................................................................................ 21-20
21.4.14 Reagents and Consumables ....................................................................................... 21-21
21.4.15 Maintenance ................................................................................................................ 21-23
21.4.16 Fume Transport Cost................................................................................................... 21-23
21.4.17 Waste Management .................................................................................................... 21-23
21.4.18 General and Administration ......................................................................................... 21-23
21.4.19 Contingency ................................................................................................................. 21-24
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22.0 ECONOMIC ANALYSIS ....................................................................................................... 22-1
22.1 Valuation Methodology......................................................................................................... 22-4
22.2 Financial Model Parameters ................................................................................................ 22-5
22.2.1 Smelting and Refining Terms ........................................................................................ 22-5
22.2.2 Metal Prices ................................................................................................................... 22-5
22.2.3 Operating Costs ............................................................................................................. 22-6
22.2.4 Capital Costs ................................................................................................................. 22-6
22.2.5 Mineral Reserves ........................................................................................................... 22-7
22.3 Working Capital .................................................................................................................... 22-7
22.3.1 Taxes .......................................................................................................................... 22-7
22.3.2 Royalties ........................................................................................................................ 22-7
22.3.3 Special Mining Tax ........................................................................................................ 22-8
22.3.4 Depreciation and Amortization ...................................................................................... 22-8
22.3.5 Closure Costs and Salvage Value ................................................................................. 22-8
22.3.6 Financing ....................................................................................................................... 22-8
22.3.7 Inflation .......................................................................................................................... 22-8
22.4 Results of the Economic Analysis ........................................................................................ 22-8
22.5 Sensitivity Analysis............................................................................................................. 22-14
23.0 ADJACENT PROPERTIES .................................................................................................. 23-1
24.0 OTHER RELEVANT DATA AND INFORMATION ............................................................... 24-1
24.1 Risks and Opportunities ....................................................................................................... 24-1
24.1.1 Risks .......................................................................................................................... 24-1
24.1.2 Opportunities ................................................................................................................. 24-3
25.0 INTERPRETATION AND CONCLUSIONS.......................................................................... 25-1
25.1 Mineral Tenure, Royalties and Surface Rights .................................................................... 25-1
25.2 Environment, Social and Permits ......................................................................................... 25-1
25.3 Geology and Mineralization ................................................................................................. 25-2
25.4 Exploration and Drilling ........................................................................................................ 25-2
25.5 Sample Preparation and Analysis ........................................................................................ 25-3
25.6 Data Verification ................................................................................................................... 25-3
25.7 Metallurgical Test Work........................................................................................................ 25-4
25.8 Mineral Resource and Mineral Reserve Estimates .............................................................. 25-4
25.9 Mine Plan ............................................................................................................................. 25-5
25.10 Process Recovery Plan ........................................................................................................ 25-7
25.11 Infrastructure Requirements ................................................................................................ 25-7
25.12 Marketing and Price Forecasts ............................................................................................ 25-7
25.13 Capital and Operating Costs ................................................................................................ 25-8
25.14 Financial Analysis ................................................................................................................ 25-8
25.15 Risks and Opportunities ....................................................................................................... 25-9
26.0 RECOMMENDATIONS ........................................................................................................ 26-1
26.1 Phase 1 ................................................................................................................................ 26-2
26.2 Phase 2 ................................................................................................................................ 26-2
27.0 REFERENCES..................................................................................................................... 27-1
TABLES
Table 1-1: Mineral Resource Estimate, Accha ..................................................................................... 1-13

Table 1-2: Mineral Resource Estimate, Yanque .................................................................................. 1-14
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Table 1-3: Mineral Reserves Statement assuming Base Case ........................................................... 1-16
Table 1-4: Mineral Reserves Statement assuming Fume Case .......................................................... 1-17
Table 1-5: Total Capital Cost Summary – US$ M ................................................................................. 1-27
Table 1-6: Operating Cost Summary (Base Case) ............................................................................... 1-28
Table 1-7: Operating Cost Summary (Fume Case) .............................................................................. 1-29
Table 1-8: Summary of Cash Flow Showing Sensitivities to Discount Rate ......................................... 1-31
Table 1-9: Summary of Cash Costs – Base Case ................................................................................ 1-31
Table 1-10: Summary of Cash Costs – Fume Case ............................................................................... 1-31
Table 1-11: Summary of Base Case Economic Sensitivity to Changes in Key Variables (After-Tax) .... 1-32
Table 1-12: Summary of Fume Case Economic Sensitivity to Changes in Key Variables (After-Tax) ... 1-32
Table 4-1: Summary of Environmental Requirements for Mining Exploration Programs ....................... 4-5
Table 4-2: Mineral Tenure Summary Table - Collasuyo ...................................................................... 4-10
Table 4-3: Mineral Tenure Summary Table- Antacollo ........................................................................ 4-12
Table 7-1: Mineralization Styles, Accha ............................................................................................... 7-13
Table 9-1: Legacy Exploration Programs ............................................................................................... 9-2
Table 9-2: Trench Summary Table......................................................................................................... 9-5
Table 10-1: Drilling on the AZOD Project ................................................................................................ 10-1
Table 11-1: Detection Limits, ALS ........................................................................................................... 11-4
Table 11-2: Detection Limits, Acme ........................................................................................................ 11-5
Table 11-3: Analytical Methods and Laboratories, Dolores Campaigns ................................................ 11-5
Table 11-4: SGS Analytical Methods...................................................................................................... 11-6
Table 11-5: ACME and ALS Check Assay Analytical Methods .............................................................. 11-6
Table 13-1: Bunte-Baum-Reerink Test Results .................................................................................... 13-11
Table 13-2: Conditions for Pilot Waelz Kiln ........................................................................................... 13-14
Table 13-3: Phase 2 Bunte-Baum-Reerink Test Results ...................................................................... 13-16
Table 13-4: Comparison of Phase 1 and 2 Results .............................................................................. 13-16
Table 13-5: Comparison of Phase 1 and 2 Dolomite ............................................................................ 13-17
Table 13-6: Chemical Analysis of the Pilot Waelz Kiln Fume ............................................................... 13-18
Table 13-7: Pilot Waelz Kiln Test Results ............................................................................................. 13-19
Table 13-8: Chemical Composition of the Yanque Fume Sample ........................................................ 13-22
Table 13-9: Comparison of the Reagent Consumptions for all Scenarios ............................................ 13-29
Table 13-10: Process Recovery Summary – Base Case ................................................................. 13-31
Table 13-11: Accha and Yanque Product and Metal Balance Summary – Base Case ................... 13-31
Table 13-12: Process Recovery Summary – Fume Case ................................................................ 13-32
Table 13-13: Accha and Yanque Product and Metal Balance Summary – Fume Case .................. 13-32
Table 13-14: Mine Plan Grades for Metallurgical Samples ............................................................. 13-33
Table 13-15: Accha Metallurgical Sample Sources.............................................................................. 13-34
Table 14-1: Sampling Campaigns Used in the Construction of the Accha 2013 Model ......................... 14-1
Table 14-2: Sampling Campaigns Used in the Construction of the Yanque 3b Model ........................... 14-1
Table 14-3: Density Determinations by Estimation Domains, Accha .................................................... 14-11
Table 14-4: Reasonable Prospects Assumptions, Accha ..................................................................... 14-17
Table 14-5: Reasonable Prospects Assumptions, Yanque ................................................................... 14-19
Table 14-6: Accha Mineral Resource Estimate Showing Sensitivity of the Estimate to Cut-off Grades
(Base Case is highlighted) ................................................................................................. 14-20
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Table 14-7: Yanque Mineral Resource Estimate Showing Sensitivity of the Estimate to Cut-off Grades
(Base Case is highlighted) ................................................................................................. 14-22
Table 15-1: Net Economic Benefit Calculation Methodology ................................................................. 15-2
Table 15-2: Bulk Density for Accha and Yanque deposits ...................................................................... 15-3
Table 15-3: Overall Slope Angle for Accha Pit ........................................................................................ 15-4
Table 15-4: Mining Criteria for the Accha and Yanque Pit Optimization for Base and Fume ................. 15-5
Table 15-5: Metallurgical Criteria for Accha and Yanque Pit Optimization for Base Case ..................... 15-6
Table 15-6: Metallurgical Criteria for Accha and Yanque Pit Optimization for Fume Case .................... 15-6
Table 15-7: Open Pit Cut-off Grade Estimation ...................................................................................... 15-7
Table 15-8: Cut-off Grade Base Case Estimate...................................................................................... 15-8
Table 15-9: Cut-off Grade Fume Case Estimate..................................................................................... 15-9
Table 15-10: Mineral Reserves Statement assuming Base Case .................................................... 15-12
Table 15-11: Mineral Reserves Statement assuming Fume Case ................................................... 15-13
Table 16-1: Pit Slope Consideration for Accha Pit ................................................................................. 16-3
Table 16-2: Pit Slope Considerations for Yanque Pit .............................................................................. 16-3
Table 16-3: Pit Design Criteria ................................................................................................................ 16-4
Table 16-4: RMR Statistical Summary ................................................................................................. 16-14
Table 16-5: Geotechnical Numerical Modelling Assumptions ............................................................... 16-14
Table 16-6: Mining Methods in Relation to Ground Conditions ............................................................ 16-15
Table 16-7: Waste Rock Management .................................................................................................. 16-21
Table 16-8: Waste Rock Management (units in m3) ............................................................................. 16-22
Table 16-9: Ground Support Design ..................................................................................................... 16-27
Table 16-10: Underground Mine Total Development (Base Case) .................................................. 16-29
Table 16-11: Underground Mine Total Development (Fume Case) ................................................. 16-29
Table 16-12: Underground Pre-production and Ongoing Schedule (Base Case) ............................ 16-30
Table 16-13: Underground Pre-production and Ongoing Schedule (Fume Case) ........................... 16-31
Table 16-14: Accha Open Pit Mine Production Schedule for Base Case ........................................ 16-36
Table 16-15: Yanque Open Pit Mine Production Schedule for Base Case ...................................... 16-36
Table 16-16: Accha Open Pit Mine Production Schedule for Fume Case ....................................... 16-39
Table 16-17: Yanque Open Pit Mine Production Schedule for Fume Case ..................................... 16-39
Table 16-18: Underground Pre Production Development Schedule (Base Case) ............................... 16-43
Table 16-19: Underground Pre Production Development Schedule (Fume Case) .............................. 16-43
Table 16-20: Accha and Yanque Mine Plan (Open Pit and Underground) Base Case ........................ 16-44
Table 16-21: Accha and Yanque Mine Plan (Open Pit and Underground) Fume Case ....................... 16-46
Table 16-22: Support Equipment ...................................................................................................... 16-49
Table 16-23: Auxiliary Equipment ..................................................................................................... 16-49
Table 16-24: Pit Dewatering Operating Years and Installed Pumps ................................................ 16-50
Table 17-1: Major Process Design Criteria Summary – Base Case ....................................................... 17-2
Table 17-2: Process Recovery Assumptions ......................................................................................... 17-3
Table 17-3: Major Process Design Criteria Summary – Fume Case .................................................... 17-12
Table 18-1: Waste Dumps Design Parameters ....................................................................................... 18-6
Table 18-2: Design Criteria for Slag Storage Facility .............................................................................. 18-6
Table 18-3: AZOD Area – Water Consumption....................................................................................... 18-9
Table 19-1: Lead Sulphate Product Specification ................................................................................... 19-3
Table 19-2: Lead Sulphate Treatment Charges ...................................................................................... 19-5
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Table 19-3: Fume Product Composition ................................................................................................. 19-6

Table 19-4: Wood Mackenzie Bulk Concentrate (Fume) Treatment Charges ........................................ 19-8
Table 21-1: Total Capital Cost Summary – US$ M ................................................................................. 21-2
Table 21-2: Mining Capital Cost for the Base Case ................................................................................ 21-4
Table 21-3: Mining Capital Cost for the Fume Case ............................................................................... 21-4
Table 21-4: Base Case Capital and Sustaining Capital Costs ................................................................ 21-5
Table 21-5: Fume Capital and Sustaining Capital Costs ........................................................................ 21-5
Table 21-6: Operating Cost Summary (Base Case) ............................................................................... 21-6
Table 21-7: Operating Cost Summary (Fume Case) .............................................................................. 21-6
Table 21-8: Mine Contractor Operational Cost for the Base Case ......................................................... 21-8
Table 21-9: Mine Contractor Operational Cost for the Fume Case ........................................................ 21-8
Table 21-10: Detail of Contractor Operational Profit Assumptions ..................................................... 21-9
Table 21-11: Major Consumable Unit Costs ..................................................................................... 21-10
Table 21-12: Equipment Capital and Service Covered by the Contractor ........................................ 21-11
Table 21-13: Mine Operating Cost by Cost Area .............................................................................. 21-11
Table 21-14: Annual Mine Operating Costs for Base & Fume Case ................................................ 21-12
Table 21-15: Detail of Contractor Operational Profit Assumptions ................................................... 21-13
Table 21-16: Major Consumable Unit Prices .................................................................................... 21-13
Table 21-17: Equipment Capital and Service Covered by the Contractor ........................................ 21-15
Table 21-18: Underground Operating Cost by Activities .................................................................. 21-16
Table 21-19: Process Operating Cost Summary (Base Case) ......................................................... 21-16
Table 21-20: Process Operating Cost Summary (Fume Case) ........................................................ 21-17
Table 21-21: Process Operating Cost by Area – (Base Case) ......................................................... 21-17
Table 21-22: Process Operating Cost by Area (Fume Case) ........................................................... 21-18
Table 21-23: Fuel costs (Base Case) ............................................................................................... 21-19
Table 21-24: Fuel costs (Fume Case) .............................................................................................. 21-19
Table 21-25: Utility Costs (Base Case)............................................................................................. 21-20
Table 21-26: Utility Costs (Fume Case)............................................................................................ 21-20
Table 21-27: Reagents Costs (Base Case) ...................................................................................... 21-21
Table 21-28: Reagents Costs (Fume Case) ..................................................................................... 21-22
Table 22-1: Summary of Cash Flow Showing Sensitivities to Discount Rate ......................................... 22-2
Table 22-2: Summary of Cash Costs – Base Case ................................................................................ 22-2
Table 22-3: Summary of Cash Costs – Fume Case ............................................................................... 22-3
Table 22-4: Project Pricing Assumptions ................................................................................................ 22-6
Table 22-5: Tax Assumptions.................................................................................................................. 22-7
Table 22-6: Base Case Cash Flow Model ............................................................................................... 22-9
Table 22-7: Fume Case Cash Flow Model ............................................................................................ 22-11
Table 22-8: Summary of Base Case Economic Sensitivity to Changes in Key Variables (After-Tax) .. 22-14
Table 22-9: Summary of Fume Case Economic Sensitivity to Changes in Key Variables (After-Tax) . 22-14
Table 26-1: Recommended AZOD Project Work Plan Budget ............................................................... 26-1
FIGURES
Figure 2-1: AZOD Project Location .......................................................................................................... 2-2

Figure 4-1: Holding Entity Relationships .................................................................................................. 4-7
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Figure 4-2: Mineral Tenure Plan ............................................................................................................... 4-9

Figure 5-1: Accha Area - Social Zone of Influence................................................................................... 5-1
Figure 5-2: Yanque Area - Social Zone of Influence ................................................................................ 5-3
Figure 5-3: Accha Site Landform .............................................................................................................. 5-6
Figure 5-4: Pyrometallurgical Plant Site Landform ................................................................................... 5-6
Figure 5-5: Hydrometallurgical Plant Site Landform................................................................................. 5-7
Figure 7-1: Regional Structural Geology of the Andahuaylas-Yauri Belt ................................................. 7-3
Figure 7-2: Regional Geology of the Andahuaylas-Yauri Belt .................................................................. 7-4
Figure 7-3: Mesozoic-Cenozoic Stratigraphy of the Andahuaylas-Yauri Belt .......................................... 7-5
Figure 7-4: Regional Geology Plan .......................................................................................................... 7-6
Figure 7-5: Geology Plan of the Accha Deposit ....................................................................................... 7-8
Figure 7-6: Detail Inset Plan, Accha Deposit............................................................................................ 7-9
Figure 7-7: Example Cross-Section 186350, Accha .............................................................................. 7-11
Figure 7-8: Example Cross-Section 186750, Accha .............................................................................. 7-12
Figure 7-9: Local Geology of the Yanque Deposit ................................................................................. 7-16
Figure 7-10: Inset Plan, Yanque Deposit................................................................................................ 7-17
Figure 7-11: Example Cross-Section 8430175, Yanque ........................................................................ 7-20
Figure 7-12: Example Cross-Section 8430450, Yanque ........................................................................ 7-21
Figure 7-13: Prospect Location Plan ........................................................................................................ 7-23
Figure 7-14: Dolores Prospect................................................................................................................. 7-26
Figure 10-1: Drill Hole and Trench Locations at Accha ............................................................................ 10-2
Figure 10-2: Drill Collar and Trench Locations at Yanque ....................................................................... 10-3
Figure 13-1: Updated Anthracite-Recovery Relationship for Accha and Yanque .................................. 13-12
Figure 13-2: Pilot Waelz Kiln .................................................................................................................. 13-15
Figure 13-3: Hydrometallurgical Test Work Flow Sheets ....................................................................... 13-21
Figure 13-4: Concentration Profiles of the Halides in Solution ............................................................... 13-24
Figure 13-5: Neutral Leach Kinetics ..................................................................................................... 13-25
Figure 13-6: Flow Sheet used for SysCAD® Simulation ........................................................................ 13-28
Figure 14-1: Plan View of Surface Geology, Geological Model and Drill Collar Locations ...................... 14-3
Figure 14-2: Cross Section of Lithology and Mineralization Models with Drill Hole Traces ..................... 14-4
Figure 14-3: Plan View of Surface Geology, Geological Model and Drill Collar Locations ...................... 14-6
Figure 14-4: Cross Section of Lithology and Mineralization Models with Drill Hole Traces ..................... 14-7
Figure 14-5: Cross Section through Accha Mineral Open Pit and Underground Mineral Resources
(showing the relationship of the mineralization considered amenable to open pit methods
and that amenable to underground mining methods) ........................................................ 14-18
Figure 15-1: Overall Slope Angle Zones for Yanque Pit ......................................................................... 15-4
Figure 15-2: Longitudinal Section of Accha Underground Mineral Zones................................................ 15-9
Figure 16-1: Accha Smoothed Final Pit for Base and Fume Case .......................................................... 16-5
Figure 16-2: Yanque Smoothed Final Pit for Base Case ........................................................................ 16-5
Figure 16-3: Yanque Smoothed Final Pit for Fume Case ....................................................................... 16-6
Figure 16-4: Pit Shells for Phase Selection at Accha .............................................................................. 16-7
Figure 16-5: Accha Phase 1 (Starter Pit) – Base and Fume Case ......................................................... 16-8
Figure 16-6: Accha Phase 2 (Ultimate Pit) – Base and Fume Case ....................................................... 16-9
Figure 16-7: Pit Shell for Phase Selection for the Yanque Deposit – Base Case .................................. 16-10
Figure 16-8: Pit Shell for Phase Selection for the Yanque Deposit – Fume Case ................................. 16-10
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Figure 16-9: Yanque Pit Phases – Base Case ....................................................................................... 16-11

Figure 16-10: Yanque Pit Phases – Fume Case ............................................................................... 16-12
Figure 16-11: Main Entry Access and Principal Ramp Layout .......................................................... 16-18
Figure 16-12: Service Ramps (Isometric View) ................................................................................. 16-19
Figure 16-13: Main Ventilation Shaft.................................................................................................. 16-20
Figure 16-14: Backfill Raise ............................................................................................................... 16-21
Figure 16-15: Cross Section of Typical Stope Access....................................................................... 16-24
Figure 16-16: Cross Section of Typical Cut & Fill Stope Access ....................................................... 16-25
Figure 16-17: Underground Pre-production and Ongoing Schedule (Plan View).............................. 16-32
Figure 16-18: Underground Pre-production and Ongoing Schedule (Cross Section View) .............. 16-33
Figure 16-19: Underground Pre-production and Ongoing Schedule (Isometric View) ...................... 16-34
Figure 16-20: Accha Open Pit Mine Material Movement for Base Case ........................................... 16-37
Figure 16-21: Yanque Open Pit Mine Material Movement for Base Case......................................... 16-38
Figure 16-22: Accha Open Pit Mine Material Movement for Fume Case.............................................. 16-40
Figure 16-23: Yanque Open Pit Mine Material Movement for Fume Case ........................................... 16-40
Figure 16-24: Underground Mining Schedule Base Case ..................................................................... 16-41
Figure 16-25: Underground Mining Schedule Base Case ..................................................................... 16-42
Figure 16-26: Accha and Yanque Mine Plan (Open Pit and Underground) Base Case ....................... 16-45
Figure 16-27: Crusher Feed Schedule for the Base Case .................................................................... 16-45
Figure 16-28: Accha and Yanque Mine Plan (Open Pit and Underground) Fume Case ...................... 16-46
Figure 16-29: Crusher Feed Schedule for the Fume Case ................................................................... 16-47
Figure 17-1: Simplified Proposed Process Flow Sheet for the AZOD Project ......................................... 17-1
Figure 17-2: Simplified Proposed Process Flow Sheet for the AZOD Project – Fume Case................. 17-12
Figure 18-1: AZOD Area Main Access ..................................................................................................... 18-2
Figure 18-2: Hydrometallurgical Plant Access ......................................................................................... 18-3
Figure 18-3: Proposed Accha WRD Location .......................................................................................... 18-5
Figure 18-4: Yanque Waste Dump Location Options ............................................................................... 18-5
Figure 18-5: Flow Chart for Yanque Mining Unit .................................................................................... 18-11
Figure 18-6: Flow Chart for Accha Mining Unit ...................................................................................... 18-13
Figure 19-1: Zinc Pricing Forecasts........................................................................................................ 19-2
Figure 19-2: Lead Pricing Forecasts ...................................................................................................... 19-2
Figure 22-1: Base Case after Tax Net Cash Flow (Undiscounted) .......................................................... 22-3
Figure 22-2: Fume Case After Tax Net Cash Flow (Undiscounted)......................................................... 22-4
Figure 22-3: Summary of Base Case Economic Sensitivity to Changes in Key Variables (After-Tax) .. 22-15
Figure 22-4: Summary of Fume Case Economic Sensitivity to Changes in Key Variables (After-Tax) . 22-15
Project No.: 170848

August, 2013 TOC xiii
1.0 SUMMARY
Zincore Metals Inc. (Zincore) requested that AMEC (Perú) S.A. (AMEC) prepare a NI
43-101 Technical Report (the Report) that summarizes a prefeasibility study (PFS) on
the wholly-owned Accha Zinc Oxide District (AZOD) Project (the Project), located
65 km south of Cuzco, the regional capital of the Cuzco Region of Peru.
The Report was prepared in support of Zincore’s press release dated 6 August 2013
entitled “Zincore Receives Positive Pre-Feasibility Study for Accha Zinc Oxide District
Project”. The Report discloses a first-time Mineral Reserve estimate for the Project.
Zincore uses an indirectly wholly-owned subsidiary, Exploraciones Collasuyo SAC

(Collasuyo) for its Peruvian lead and zinc holdings. For the purposes of this Report
“Zincore” is used interchangeably for the parent and subsidiary companies.
1.1 Project Setting, Location and Access
The AZOD Project is situated in the southwest of the Region of Cusco, Provinces of
Chumbivilcas and Paururo and the Districts of Accha and Colquemarca. The Project
includes the Accha and Yanque deposits.
The Accha camp within the Project area can be reached by road from Cusco, a
distance of 115 km via the Regional Highway and a private graded road. The Yanque
camp and deposit can be reached by following the Regional Highway another 15 km
south of the Accha turn-off and turning west along a private access road 20 km to the
Yanque camp and deposit.
The proposed area where the hydrometallurgical facility would be located is south of
the port at Ilo, and can be reached from the Project using the Regional Highway,
turning off at Imata at the junction with Highway 28 which leads to Arequipa. From
Arequipa, it is about 230 km using Highway 34 to Ilo. From the Yanque camp, it is
420 km to Arequipa, and it is a total of 650 km from the camp to the port at Ilo.
The Project area has a mild temperate climate with dry winters and warm summers.
The Ilo area is a semi-warm desert, with low rainfall during the summer; however, the
El Nino effect can result in increased rainfall when it occurs.
The Accha area is characterized by barren rocky ridges rising above broad, gently
sloping valleys, and is situated on a high plain above the Velille River valley at an
elevation of 4,300 m. The Yanque area is situated on a gently-rolling plain at an
elevation of approximately 3,500 m, above a steep slope down to the Rio Santo
Tomas valley.
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August, 2013 Page 1-1
Sixty-three plant species, grouped in 23 families, were identified in the Accha district.
A total of 59 plant species were identified in the Yanque area, grouped in four families.
In the Accha district, 13 species of mammals and two species of reptiles were
identified. Twelve species of mammals have been identified in the Yanque area.
1.2 History and Exploration
Some remnant artisanal mining activity is visible in the Project area; however, all such
workings are currently inactive. Prior to Zincore’s tenure, Minera del Suroeste S.A.C.,
Savage Resources Ltd., Pasminco Limited, and Rio Tinto Minera Peru conducted
exploration activities in the period 1994 to 2006. Work completed included
prospecting, trenching, core drilling, auto magneto telluric (AMT), induced polarization
(IP) and magnetometer geophysical surveys.
Zincore acquired the Project in 2006, and has subsequently completed geological
mapping, core drilling, metallurgical test work, Mineral Resource estimation, and
mining and technical studies.
The QPs are of the opinion that the exploration programs completed to date are
appropriate to the style of the deposits and prospects. Additional exploration has a
likelihood of generating further exploration successes particularly down-dip of known
ore bodies.
1.3 Mineral Tenure, Surface Rights, and Royalties
Zincore uses an indirectly wholly-owned subsidiary, Exploraciones Collasuyo SAC

(Collasuyo), for its Peruvian lead/zinc operations. A separate subsidiary,
Exploraciones Antacollo S.A.C. (Antacollo), is used for other commodities.
The Project area comprises 75 contiguous mining concessions, which collectively have
an area of 58,532 ha. A total of 59 of the concessions are held in the name of
Collasuyo. The five Gema concessions are held by Minera del Suroeste S.A.C
(Suroeste), and are situated to the west and northwest of the Yanque deposit, and are
under option to Collasuyo. The remaining 11 concessions are held in the name of
Exploraciones Antacollo S.A.C.
The Accha deposit area is about 3,000 ha in extent, with the deposit covered by the
Accha 4 concession. The Yanque deposit area is about 1,600 ha in extent, and is
covered by the Jaguar 1 and Jaguar 2 concessions.
Project No.: 170848

Mining concessions in Peru are irrevocable and perpetual provided that the title is
current with respect to payment of good standing fees. AMEC was provided with legal
opinion that support that all concessions were in good standing as at 11 July, 2013.
Surface rights in the Accha deposit area are held by the community of Parcco. Zincore
has signed agreements with Parcco and the neighbouring community for temporary
use of the surface lands to allow exploration activities. Surface rights in the Yanque
deposit area are held by the Yanque community. Collasuyo has a current five-year
access agreement, signed in 2010, with the community which allows exploration
activities. Any future mine development and mining operations will require additional
agreements with these communities to allow mining activities, or a purchase of the
land under which the deposits lie may be required.
The Peruvian government currently levies a sliding-scale royalty on gross sales from
mining operations that ranges between 1% and 3%. The mining royalty payable is: 1%
for annual sales of under US$60 M, 2% for gross sales from US$60 M to US$120 M
and 3% for gross sales in excess of US$120 M.
Third-party royalties will be payable on any production from the Puyani, four Dolores,
and five Gema concessions; however, these concessions are not within the current
area of the Mineral Resource or Mineral Reserve estimates.
The legal opinions provided on the mineral tenure held by Zincore support the Mineral
Resource and Mineral Reserve estimates. Zincore will need to either negotiate mining
agreements or purchase the surface rights to the areas where mining or infrastructure
are planned.
1.4 Environment, Permits, and Social License
Preliminary baseline studies have commenced, and include assessments of the

physical baseline, air quality, surface and groundwater quality, flora and fauna, and
social conditions. The current closure plan is preliminary and will be refined during
permitting studies on the Project. The financial analysis includes mine closure
provisions of $10 M, based on benchmarking to similar operations.
During applications for the Category II exploration permits for the Accha and Yanque
deposits, a survey was performed on the Accha 3, Accha 4, Jaguar 1 and Jaguar 2
concessions to evaluate whether major environmental liabilities were present. No
major such liabilities were noted. Current environmental liabilities associated with the
exploration programs consist of the exploration camps, drill pads and drill pad access
roads, and general project access routes through private lands. There is an
expectation that there may be some minor environmental contamination associated
Project No.: 170848

with the historic artisanal workings that have exploited surface outcroppings for
pottery.
In support of the Category II exploration permits for the Accha and Yanque deposits,
archaeological surveys were performed over the areas intended to have drill pad
construction. No archaeological remains were noted in these surveys. A full
archaeological survey to encompass the areas planned as infrastructure sites and
along the road and power line traverses will need to be conducted. The Yanque area
has a colonial church which will need to be evaluated to assess any Project impact on
the cultural heritage.
Zincore has successfully negotiated community agreements that allowed the company
to carry out exploration activities at the Accha and Yanque deposits.
The Cusco Region and Chumbivilcas and Paruro districts, where the Project site is
located, already host operating large and medium mining projects and similar-size
projects under development. Reviews of conflict issues that have occurred in the
districts indicate that there is no radical opposition to mining per se. Opposition to
project development or operations has primarily been motivated by breach of
agreements, requests for additional expenditures for local development, environmental
pollution and refusal to allow artisanal mining presences in the region.
It is expected that negotiations with the local communities will be on a timescale that is
appropriate to each community and to the infrastructure development contemplated in
the community holdings.
There is an expectation that some hamlets and isolated farmsteads may need to be
relocated to avoid mining impacts on the inhabitants. Such areas may include housing
or farming located within the expected blast zones of the open pits, or along the
proposed road and power line traverses. No formal identification of the number of
households that would be affected has been undertaken, and no surveys of the areas
of land that may be required have been completed. Resettlement will require
appropriate negotiation with affected parties and is likely to include some form of
compensation payments for land usage.
Exploration and drill programs conducted to date at Yanque and Accha have been
performed under the relevant local and national permits. No drilling has occurred at
either Accha or Yanque since September 2011. Additional permits will be required for
further development. The number and type of permits would be reviewed during any
feasibility-level studies conducted on the Project.
Project No.: 170848

1.5 Geology and Mineralization
The Accha and Yanque deposits are interpreted to be supergene non-sulphide zinc
(+lead)-style deposits. Supergene non-sulphide zinc and lead deposits are interpreted
to be the product of hypogene sulphide or oxide deposits that have been extensively
altered or weathered.
The Project is located in the Andahuaylas-Yauri belt, which is dominated by the

Eocene to Early Oligocene Andahuaylas–Yauri batholith (intruding Precambrian to
Palaeozoic basement rocks) and Mesozoic to Early Cenozoic clastic and marine
sediment sequences. The Project area is underlain by marine clastic sediments of the
Upper Cretaceous Soraya and Ferrobamba Formations. Sedimentary rocks are
broadly folded around the west, north and eastern sides of a lobe of the Andahuaylas-
Yauri Batholith.
The Accha deposit is hosted within Upper Cretaceous bituminous silty limestones.
Mineralization occurs in a bed of reef-facies and fossiliferous limestone that has been
folded to occupy the north and south limb of an anticline. The anticline is roughly
cylindrical, slightly overturned and gently doubly-plunging to the east and west.
Mineralization is primarily developed at the nose of the fold and outcrops in an
elongated dome shape. The east end and part of the hinge of the anticline hosting the
Accha deposit have been eroded; however, both limbs, especially the north limb, and
the western extension of the anticline have the potential to host additional
mineralization. Gossans rich in zinc carbonates, silicates and oxides are exposed at
surface over an area measuring about 300 m by 100 m and drilling shows that the
main body of oxide mineralization forms an east–west to west–northwest-striking
mineralized panel approximately 700 m long and 5 m to 20 m thick, dipping at 50º to
60º to the south. Mineralization consists of laminated, highly porous, brown to yellow–
brown limonite with white to translucent, banded smithsonite and clear crystalline
hemimorphite filling voids, and fractures from 1.0 mm to 1.5 m in diameter.
The Yanque deposit is stratabound and hosted in micro-conglomerates of alluvial

origin, representing the top of the Mara Formation directly below the Ferrobamba
Formation carbonate succession. The deposit is interpreted to have formed along a
north–south-striking fault that may have had a role as a feeder along which
mineralizing fluids were able to pass and access the relatively porous inter-formational
breccia where zinc–lead mineralization occurred. An interpreted series of cross faults
or broad open folding along a northeast-striking axis may be responsible the gently-
undulating form of the deposit. Mineralization forms a tabular stratabound blanket
measuring approximately 1,200 m long, 800 m wide and 100 m thick. In longitudinal
section, the lenses have a broadly open undulating form with axial planes spaced
Project No.: 170848

approximately 200 m apart. The mineralized zone consists of smithsonite,

hydrozincite, hemimorphite, cerussite and galena.
In the opinion of the QPs, the geological understanding of the settings, lithologies,
structural and alteration controls on mineralization and mineralization continuity and
geometry in the different deposits is sufficient to support estimation of Mineral
Resources and Mineral Reserves. The geological knowledge of the area is also
considered sufficient to reliably inform mine planning. The mineralization style and
setting is well understood and can support declaration of Mineral Resources and
Mineral Reserves. The QPs concur with the deposit type interpretation and consider
the model and interpreted deposit genesis to be appropriate to support exploration
activities.
1.6 Drilling
A total of 345 drill holes (60,827.60 m) have been completed over the entire Project
area in the period 1994 to 2012. Of the drill total, 291 holes (51,151.60 m) were
completed by Zincore during the period 2006 to 2012. This total includes regional
exploration, exploration, metallurgical and geotechnical drilling.
Drill holes completed by precursor companies have typically been re-logged and
collars resurveyed by Zincore. Down-hole surveys are not available for the legacy
drilling during the drill campaigns, however, because the holes are relatively shallow,
the assumption is that there is limited deviation. By way of check, the small number of
Zincore twin holes drilled to confirm selected legacy holes in the centre of the deposits
do not show significant down-hole deviations.
Drill holes completed by Zincore were designed to intersect the mineralization as

perpendicular as possible; reported mineralized intercepts are typically longer than the
true thickness of the mineralization. Drill core was logged using pre-set logging codes
for lithology units and rock quality designation (RQD) measurements were taken of
each drill run. Drill core recoveries are acceptable. At Accha, drill core recovery for
intervals having zinc grades of greater than 2% averages 94.9% in drill holes drilled by
Zincore. Drill core recovery for mineralized intervals having the sum of zinc and lead
grades of greater than 2% average 97.3% from drill holes drilled by Zincore at Yanque.
Drill holes were initially located using a hand-held GPS and were later surveyed by a
topographic survey team using differential GPS. Down-hole surveys have been
recorded at 50 m down-hole intervals for drill holes drilled by Zincore at Accha and
Yanque. Down-hole surveys used a Flexit or Reflex Easyshot magnetic down-hole
survey instrument.
Project No.: 170848

In the opinion of the QPs, the quantity and quality of the litho logical, geotechnical,
collar and down hole survey data collected in the exploration and infill delineation drill
programs are sufficient to support Mineral Resource and Mineral Reserve estimation.
1.7 Sample Preparation and Analysis
All legacy core (pre-Zincore) was half sawn and sampled at 0.2 m to 3.0 m lengths.
The Cominco drill core assays were performed by the in-house Cominco laboratory.
Laboratory accreditations at the time are not known. Savage and Pasminco appear,
based on the analytical assay receipts, to have used SGS del Peru S.A. and ALS
Geolab S.A. Laboratory accreditations at the time are not known. Rio Tinto used
Anamet Laboratories during their drill program at Yanque. Laboratory accreditations at
the time are also not known.
A standard half-core sample length of 1 m was used within mineralized zones, and 2 m
outside mineralized zones for all Zincore programs. All Zincore core was
photographed.
Density determinations were performed by Zincore personnel on 124 core samples

from Accha; 50 of these samples were subsequently re-determined at ALS Lima. Both
the on-site and check determinations followed the paraffin wax-coated immersion
density determination method. A total of 503 determinations were performed on
Yanque core by Zincore personnel, using the wax-immersion technique.
ALS and ACME Laboratories in Lima have acted as the primary laboratories during the
Zincore drill programs. Check assays were performed by SGS Peru, also in Lima. All
three are accredited third-party commercial laboratories.
Samples analysed by ALS were crushed to P70 -2 mm then split and pulverized to
P85 -75 µm. The samples were digested using a three-acid digestion and analyzed by
two packages. Lead and zinc were determined by atomic absorption (AA62) and if the
results exceeded 30%, samples were re-assayed by volumetric methods (VOL70). All
samples were also analyzed by inductively-coupled plasma mass-spectroscopy (ICP)
for 25 elements using a three acid digestion for complete dissolution (ME_ICP61a).
Sample preparation at Acme consisted of crushing to 95% passing 7 mm, then

pulverising to 95% passing 75 µm. Zn and Pb grades were determined by atomic
absorption methods, and if the analytical results exceeded 10%, samples were re-
assayed by volumetric methods. In addition, all samples were assayed by ICP
emission spectroscopy methods for a 37-element suite.
Project No.: 170848

For the Zincore programs, certified standard samples have been inserted at a rate of
one per 20 drill core samples, blanks have been inserted at a rate of one per 16 core
samples.
A total of 170 Accha pulps were sent to SGS Peru for check analysis. A review by
Micon Consultants indicated no significant analytical issues when comparing check to
original assays.
Project assay, survey and lithological data are stored in an Access database that is
regularly backed up. All remaining legacy and Zincore drill core is stored at the Accha
camp. Zincore core and coarse crushed rejects and assay pulps, once returned from
the laboratory, are stored in permanent storage sheds at the Accha camp.
Sample security was not generally practiced at either Accha or Yanque during the
drilling programs, due to the remote nature of the sites. Sample security relied upon
the fact that the samples were always attended or stored in the on-site sample
dispatch facility.
The QPs consider that sampling methods are acceptable, meet industry-standard
practice, and are acceptable for Mineral Resource and Mineral Reserve estimation and
mine planning purposes. The quality of the analytical data is reliable and sample
preparation, analysis, and security are generally performed in accordance with
exploration best practices and industry standards.
1.8 Data Verification
The process of data verification and auditing for the Project has been performed by
external consultant firms from 2006 to date, in support of preparation of technical
reports and Mineral Resource estimates. The QPs consider that as a result of this
work, the audit findings acceptably support the geological interpretations and the
database quality, and therefore support the use of the data in Mineral Resource and
Mineral Reserve estimation, and in mine planning.
1.9 Metallurgical Test Work
Extensive test work on both the Yanque and Accha deposits has been conducted over
the life of the Project. Initial process options considered included comminution,
physical separation and alkali leaching, test work for the latter two were discarded.
Starting in 2010 a reductive roasting test work program was initiated. Based on the
2010 and 2011 test work results, Metallicon concluded that Yanque and Accha ores
should be processed separately due to their different temperature profiles and reaction
Project No.: 170848

kinetics. This has formed the basis of the separate pyrometallurgical processing
streams used in the 2013 pre-feasibility study (PFS).
During the course of 2012 pyrometallurgical and hydrometallurgical test work was
undertaken to generate design criteria. The pyrometallurgical test work was
conducted in two stages at the Instytut Metali Niezelasnych (IMN), in Gliwice, Poland.
The first stage consisted of parameter test work in September 2012 to confirm
previous results obtained regarding the influence of temperature, dolomite and
reducing agent addition on melting point and zinc extraction of the Yanque ore. This
was followed by bulk test work on approximately 6 t of Yanque ore in early December
2012. The Yanque deposit was divided into two zones by the Zincore geologists –
Yanque l with a high zinc and low lead content from the early production period and
Yanque ll with low zinc and high lead content from the later production years.
Hydrometallurgical test work was undertaken at Mintek, South Africa on a sample of

Yanque fume from the 2010 Pacasmayo pilot plant test work. The aim of this
hydrometallurgical test work was to evaluate various process options for the recovery
of zinc from the Yanque uncalcined fume. The Yanque Waelz fume was selected over
the Accha Waelz fume due to the higher level of deleterious elements in the Yanque
fume being the worst case scenario.
Pyrometallurgical pilot test work conducted to date on samples from Accha indicates
that conventional Waelz kiln processing can be used to recover zinc and lead to a
fume product and that a high zinc recovery of about 95% can be expected at a zinc
fume grade of about 60–61%. Lead recovery is expected to exceed 97%.
The Yanque ore melted in a number of tests with a subsequent reduction in recovery
of lead and zinc to the fume. The differences in melting temperatures for the Yanque
ore determined by the 2011 Mintek additive test work, and both IMN phases, indicates
significant variability across the Yanque ore body. Phase 2 of the IMN test work
showed that the lower than expected melting point of the ore was not significantly
raised by the addition of dolomite as expected from Phase 1 test work results, as the
dolomite appeared not to react with the gangue phases in the ores. Phase 1 test work
showed that an anthracite addition of 25 % with a dolomite addition of 10% at 1100 °C
produced the best overall results both for zinc and lead recovery. The recovery of zinc
was 88.51% while the lead recovery was >97%. A fume grade of 15.50% zinc and
69.60% lead can be expected when using these test conditions. Phase 2, however,
showed recoveries of up to 85% and 89% for zinc and lead respectively, which was
lower than expected.
Hydrometallurgical test work indicated that halide removal from the fume via sodium
carbonate leach, followed by zinc extraction via a neutral leach would provide a
Project No.: 170848

recovery of zinc to the PLS in excess of 98%. Hydrometallurgical purification of the

PLS via zinc cementation would be an acceptable processing route for the Waelz kiln
fume, and would produce an advance electrolyte to the electrowinning circuit for the
production of special high-grade (SHG) zinc meeting the required specifications. The
overall zinc yield to saleable zinc cathodes in the hydrometallurgical circuit was
predicted using the SysCAD® simulation package at 96.4%.
Overall, the fume was found to be amenable to conventional zinc leaching and
pregnant leach solution (PLS) to subsequent refining.
1.10 Mineral Resource Estimates
1.10.1 Accha
The Accha geological model was constructed from a database consisting of 127 drill
holes, and 10 trenches. Trench data are used both to inform geological interpretation
and provide grade data for interpolation.
The model consists of three domains, the Coral Zone, the Reef Complex, and the
Laminated Limestone. A composite length of 2.5 m was used in ordinary kriging
interpolation. Composite selection for the first estimation pass required a minimum of
four composites from two different drill holes to a maximum of three composites from
four holes to estimate a block grade inside the mineralized zone. An outlier restriction
was applied which allowed composites over designated threshold grades to participate
in estimation of block grades to a maximum distance of 50 m for Coral and 25 m for
Reef Complex. Measured Mineral Resources were assigned where drill spacing was
at a nominal 25 m, and Indicated Mineral Resources at a nominal drill spacing of 50 m.
The model was validated using visual inspection, a comparison of OK and nearest
neighbour (NN) distributions, and swath plots. No significant biases were observed.
Mineral Resources considered amenable to open pit mining were estimated using a
conceptual Lerchs– Grossman pit shell, designed to maximise the amount of material
able to be extracted by lower-cost open pit mining methods, and used a zinc price of
US$1.28/lb, a lead price of US$1.05/lb, selling costs of US$0.14/lb for zinc and
US$0.25/lb for lead, metallurgical recovery of 86.9% for zinc and 97.7% for lead, a
mining cost of US$2.09/t, average pit slope angle of 33º and transportation, processing
and general and administrative costs of US$48.15/t.
Mineral Resources considered amenable to underground cut-and-fill mining methods

were defined within conceptual stope outlines defined at a break-even cut-off grade of
3.79% ZnEq, with material >2.2% ZnEq but <3.79% ZnEq considered as marginal.
Project No.: 170848

The assumptions used for reasonable prospects of economic extraction were a zinc
price of US$1.28/lb, a lead price of US$1.05/lb, selling costs of US$0.14/lb for zinc and
US$0.25/lb for lead, metallurgical recovery of 86.9% for zinc and 97.7% for lead, a
mining cost of US$34.92/t and transportation, processing and general and
administrative costs of US$48.15/t.
1.10.2 Yanque
The Mineral Resource estimate for Yanque is based on 144 drill holes and nine
trenches. Trenches excavated at Yanque are used for geological interpretation but do
not inform the resource estimate.
The geological model used in the estimation of the Yanque deposit consists of
wireframe solids for major lithological units (Breccia, Diorite and Sediments) and a
mineralization model consisting of a grade shell marking the limits of the mineralized
mantos. The grade shell was constructed at a nominal 1% Zn+Pb threshold. A
composite length of 2.5 m was used in ordinary kriging interpolation. Composite
selection for the first pass required a minimum of five composites from three different
drill holes or trenches to a maximum of six composites from three holes to estimate a
block grade inside the mineralized zone. Outside the mineralized zone, a maximum of
eight composites was used for the first pass. In the second pass, the minimum
number of composites was reduced to three from two different drill holes or trenches to
allow more isolated blocks and blocks at the edge of the estimation domains to be
interpolated. An outlier restriction was applied which allowed composites over
designated threshold grades to participate in estimation of block grades to a maximum
distance of 25 m.
The model was validated using visual inspection, a comparison of OK and NN

distributions, and swath plots. No significant biases were observed. Indicated Mineral
Resources were assigned at a nominal drill spacing of 50 m.
Mineral Resources considered amenable to open pit mining were estimated using a
conceptual Lerchs Grossman pit shell, constructed using a zinc price of US$1.28/lb Zn
and US$1.05/lb Pb and reported using a marginal cut-off grade of 1.67% zinc
equivalent (ZnEq). Other assumptions included overall pit slope angles of 40º,
metallurgical recovery of 86.9% for zinc and 97.7% for lead, a mining cost of
US$1.89/t, zinc premium of 5%, lead payability of 94.1%, marketing, treatment and
refining costs of US$0.201/lb for zinc and US$0.289/lb for lead, and processing,
general and administrative costs of US$36.66/t.
Project No.: 170848

1.11 Mineral Resource Statements
Mineral Resources take into account geologic, mining, processing and economic
constraints, and have been defined within a conceptual stope design, and therefore
are classified in accordance with the 2010 CIM Definition Standards for Mineral
Resources and Mineral Reserves and the 2003 CIM Estimation of Mineral Resources
and Mineral Reserves Best Practice Guidelines.
The geological models and estimates were prepared by Mr Chris Wright, P.Geo., an
AMEC employee, and reviewed by Ms Stella Searston, RM SME, also an AMEC
employee, who is the Qualified Person for the estimate. Mineral Resources are
reported inclusive of Mineral Reserves; AMEC cautions that Mineral Resources that
are not Mineral Reserves do not have demonstrated economic viability.
In the opinion of the QPs, Mineral Resources for the Project, which have been
estimated using core drill data and trench data, appropriately consider modifying
factors, have been estimated using industry best practices, and conform to the
requirements of CIM (2010).
Mineral Resources for Accha are reported in Table 1-1 and for Yanque in Table 1-2.
Factors which may affect the Mineral Resource statements include assumptions used
for consideration of reasonable prospects of economic extraction (including metal
prices, elevations at which open pit mining will cease in favour of underground
operations, variations in local interpretations of mineralization geometry and continuity
of mineralization zones that cannot be recognized at the current drill spacing,
geotechnical, hydrogeological and operating cost assumptions); issues related to
mineral processing that could affect reasonable prospects for economic extraction
include reliable supply of coal for use in the Waelz kiln process, production of high
quality fume, and hydrometallurgical issues related to the production of zinc ingot;
permit delays or other issues in reaching agreements with local communities and
obtaining surface rights.
Project No.: 170848

Table 1-1: Mineral Resource Estimate, Accha

ZnEq Contained Contained Contained
Tonnage ZnEq Zn Pb
Category Cut-Off ZnEq Zn Pb
(kt) (%) (%) (%)
(%) (Mlb) (Mlb) (Mlb)
Mineral Resources Amenable to Open Pit Mining Methods
2.20 2,119 8.75 8.11 0.93 408.8 378.9 43.4
3.00 1,983 9.17 8.49 0.97 400.7 371.4 42.6
Measured
4.00 1,751 9.91 9.18 1.06 382.6 354.4 40.9
5.00 1,527 10.71 9.91 1.16 360.4 333.5 38.9
2.20 4,494 6.03 5.55 0.71 597.4 549.9 70.3
3.00 3,700 6.77 6.23 0.79 552.5 507.9 64.6
Indicated
4.00 2,916 7.66 7.04 0.89 492.2 452.8 57.1
5.00 2,286 8.53 7.85 0.98 429.9 395.8 49.4
2.20 6,613 6.90 6.37 0.78 1,006.0 928.7 113.7
Measured
3.00 5,683 7.61 7.02 0.86 953.2 879.3 107.2
and
4.00 4,667 8.50 7.85 0.95 874.8 807.2 98.0
Indicated
5.00 3,813 9.40 8.68 1.05 790.3 729.4 88.3
2.20 197 4.95 4.60 0.51 21.5 20.0 2.2
3.00 151 5.66 5.25 0.60 18.8 17.5 2.0
Inferred
4.00 124 6.13 5.69 0.64 16.8 15.6 1.7
5.00 89 6.77 6.29 0.69 13.3 12.3 1.4
Mineral Resources Amenable to Underground Mining Methods
3.79 17 5.73 4.58 1.66 2.1 1.7 0.6
Measured 4.00 17 5.74 4.60 1.66 2.2 1.7 0.6
5.00 12 6.24 5.06 1.72 1.7 1.3 0.5
3.79 920 6.24 5.58 0.95 126.5 113.3 19.2
Indicated 4.00 840 6.46 5.79 0.98 119.6 107.1 18.1
5.00 554 7.49 6.72 1.12 91.4 82.0 13.6
Measured 3.79 937 6.23 5.57 0.96 128.6 115.0 19.8
and 4.00 857 6.45 5.76 0.99 121.8 108.9 18.7
Indicated 5.00 566 7.46 6.68 1.13 93.1 83.4 14.1
3.79 553 5.63 5.07 0.81 68.6 61.8 9.9
Inferred 4.00 514 5.76 5.19 0.82 65.3 58.8 9.3
5.00 277 6.95 6.34 0.90 42.5 38.7 5.5
(1) Mineral Resources have an effective date of 5 July 2013. The Mineral Resource estimates and geological
models were prepared by Christopher Wright, P.Geo. of AMEC and reviewed by Stella Searston, RM
SME of AMEC who is the Qualified Person as defined under NI 43-101 for the estimate.
(2) Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral
Reserves do not have demonstrated economic viability.
(3) The estimate uses Ordinary Kriging as the interpolation method in a percent block model with a block size
of 5 x 5 x 5 m. Density utilized in the mineral resource estimates was 2.51 t/m3 for mineralization and
3
2.57 t/m for waste.
(4) Mineral Resources are estimated using a conceptual Lerchs–Grossmann pit shell and conceptual stope
outlines that assumed a US$1.28 lb zinc price, a US$1.05/lb lead price, marketing treatment, and refining
costs of US$0.201/lb for zinc and US$0.289/lb for lead, metallurgical recovery of 86.9% for zinc and
97.7% for lead, a mining cost of US$2.09/t for open pit and of US$34.92/t for underground mining, and
processing, general and administrative costs of US$48.15/t. The overall slope angle for the Accha open
pit is 33º.
(5) Mineral Resources are reported above a marginal cut-off grade of 2.20% ZnEq for the open pit estimate.
Underground Mineral Resources are reported above a cut-off grade of 2.20% ZnEq, below the resource
pit shell and within conceptual stope outlines defined at a break-even cut-off grade of 3.79% ZnEq. Zinc
equivalent (ZnEq) was calculated by applying the differential of metallurgical recoveries and metal prices
net of selling costs to zinc and lead grades.
Project No.: 170848

(6) Contained zinc and contained lead represent estimated metal contained in the ground and have not been
adjusted for metallurgical or other recovery factors
(7) The metal prices used for the Mineral Resources estimates are based on a combination of AMEC`s
internal guidelines (based on long-term consensus prices) and those sourced from Wood Mackenzie and
the World Bank. It is industry practice to apply higher long-term metal prices used for Mineral Resources
than that used for Mineral Reserves
(8) Rounding as required by reporting guidelines may result in apparent summation differences between
tonnes, grade and contained metal content.
Table 1-2: Mineral Resource Estimate, Yanque

Tonnage ZnEq Zn Pb
(kt) (%) (%) (%)
Indicated 1.67 26,491 3.87 2.37 2.18 2,261.5 1,385.3 1,270.0
2.00 23,242 4.16 2.55 2.33 2,129.9 1,306.7 1,193.1
4.00 8,701 6.34 4.05 3.32 1,216.0 777.4 635.7
Inferred 1.67 1,169 2.91 2.17 1.09 75.1 55.8 28.0
2.00 1,081 3.00 2.24 1.11 71.5 53.3 26.3
4.00 20 5.21 3.32 2.75 2.3 1.5 1.2
(1) Mineral Resources have an effective date of 5 July 2013. The Mineral Resource estimates and geological
models were prepared by Christopher Wright, P.Geo. of AMEC and reviewed by Stella Searston, RM
SME of AMEC who is the Qualified Person as defined under NI 43-101 for the estimate.
(2) Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral
(3) The estimate used Ordinary Kriging as the interpolation method in a percent block model with a block size
of 5x5x5 m. The density utilized in the mineral resource estimates was 2.37 t/m3 for mineralized material
3
and 2.49 t/m for waste.
(4) Mineral Resources are confined within a conceptual Lerchs–Grossmann pit shell and are estimated using
a US$1.28/lb zinc price, a US$1.05/lb lead price, overall pit slope angles of 40º, metallurgical recovery of
86.9% for zinc and 97.7% for lead, a mining cost of US$1.89/t, zinc premium of 5%, lead payability of
94.1%, marketing, treatment and refining costs of US$0.201/lb for zinc and US$0.289/lb for lead, and
processing, general and administrative costs of US$36.66/t. Zinc equivalent (ZnEq) was calculated by
applying the differential of metallurgical recoveries and metal prices net of selling costs to zinc and lead
grades.
(5) Contained zinc and contained lead represent estimated metal contained in the ground and have not been
adjusted for metallurgical or other recovery factors.
(6) The metal prices used for the Mineral Resources estimates are based on a combination of AMEC`s
internal guidelines (based on long-term consensus prices) and those sourced from Wood Mackenzie and
the World Bank. It is industry practice to apply higher long-term metal prices used for Mineral Resources
than that used for Mineral Reserves.
1.12 Mineral Reserve Estimates
Mineral Reserves were developed assuming two scenarios for the production of final
saleable products. A Base Case investigated further processing of fume to produce a
special high grade zinc ingot and lead sulphate by-product. An alternate scenario, the
Fume Case, investigated selling the zinc–lead fume to third-party refineries. Mineral
Project No.: 170848

Reserves discussed for the Fume Case are an alternative and are not additive to the
Mineral Reserves of the Base Case.
Mineral Reserves have been estimated from the geological resource block model
developed for the Yanque and Accha deposits during the PFS. All zones in the
geological model are considered for conversion from Mineral Resource to Mineral
Reserve as the models are updated. A mine plan was developed to extract the
Measured and Indicated Mineral Resources of the AZOD Project, dilution and recovery
assumptions were applied and cut-off grades were calculated using costs developed
for the study and long-term consensus metal price valuations. Open pit and
underground Mineral Reserves were estimated independently based upon criteria
specific to the applicable mining method.
Mineral Reserve estimates are based on a mining schedule for Base Case and Fume
Case and consider an average crusher throughput of 1,340 kt/a and 1,349 kt/a
respectively. Approximately 435 kt/a will be produced from the proposed Accha mine
including underground production, while 915 kt/a will be produced from the planned
Yanque Mine. Prices utilized were US$1.03/lb zinc and US$0.95 /lb for lead.
1.13 Mineral Reserves Statement
Mineral Reserves, by definition, have taken into account environmental, permitting,

legal, title, taxation, socio-economic, marketing and political factors and constraints.
The Mineral Reserves are acceptable to support mine planning. Mineral Reserves are
classified in accordance with the 2010 CIM Definition Standards for Mineral Resources
and Mineral Reserves and the 2003 CIM Estimation of Mineral Resources and Mineral
Reserves Best Practice Guidelines.
Mineral Reserves for the Project have been estimated using the available geological
block models. Modifying factors have been estimated using industry best practices,
and conform to the requirements of CIM (2010). Dilution for the cut-and-fill mining
stopes was estimated at 10% and mining recovery was estimated at 95%.
The optimized pit shell used to constrain the Mineral Resources to meet reasonable
prospects of economic extraction used more optimistic assumptions on metal price
and costs. Final pit definition for the Mineral Reserve estimates optimized net present
value (NPV) and internal rates of return (IRR) resulting in a change to the interface
between the open pit and underground mine. As a result, a portion of the Accha
underground Proven and Probable Mineral Reserves were converted from the Accha
open pit portion of the Measured and Indicated Mineral Resources.
Project No.: 170848

Mineral Reserves are reported for the Base Case in Table 1-3 and for the Fume Case
in Table 1-4. Mineral Reserves presented as the Fume Case in addition to the Base
Case and are not additive to the Base Case Mineral Reserves.
Mineral Reserves that can be mined by open pit methods were reported using a net
economic benefit function that considered metal prices, recoveries, operating costs,
and selling costs. To allow comparison with the Mineral Resources, a referential zinc
cut-off grade was back-calculated after the estimate was completed, and is included in
the table footnotes.
Table 1-3: Mineral Reserves Statement assuming Base Case

Tonnes Zn Grade Pb Grade Zn Pb
Category
(kt) (%) (%) (Mlb) (Mlb)
Accha Open Pit
Proven 754 8.43 0.73 140.2 12.2
Probable 468 7.39 0.59 76.3 6.1
Proven & Probable 1,223 8.03 0.68 216.5 18.3
Accha Underground
Proven 307 11.79 1.70 79.8 11.5
Probable 704 9.74 1.25 151.3 19.4
Proven & Probable 1,011 10.36 1.39 231.1 30.9
Yanque Open Pit
Proven 0 0.00 0.00 0.0 0.0
Probable 8,338 3.97 2.60 730.5 477.1
Proven & Probable 8,338 3.97 2.60 730.5 477.1
TOTAL – Accha & Yanque
Proven 1,061 9.40 1.01 219.9 23.7
Probable 9,510 4.57 2.40 958.0 502.5
TOTAL Accha & Yanque
Proven & Probable 10,571 5.05 2.26 1,177.9 526.2
(1) Mineral Reserve estimates have an effective date of 11 July 2013. The Mineral Reserves estimates
assuming open pit mining methods were prepared by Sergio Muñoz, Senior Mining Eng., RM Comisión
Minera (Chile) of AMEC, and by William Bagnell P.Eng. of AMEC for the estimates assuming
underground mining methods.
(2) Mineral Reserves are estimated using the following assumptions: a US$1.03/lb zinc price, a US$0.95/lb
lead price, and an economic function that includes an average processing, G&A, and ore haulage costs of
US$60.59/t in Accha and US$37.50/t in Yanque and, marketing, treatment and refining costs of
US$0.201/lb for zinc and US$0.289/lb for lead, a zinc premium of 5%, a lead payability of 94.1%, and
metallurgical recoveries for zinc of 89.6% in Accha and 86.9% in Yanque, and lead recoveries of 97% in
Accha and 97.7% in Yanque. Open pit mine designs assumed average inter-ramp pit slope angles of 37°
and 46° for Accha and Yanque respectively.
(3) The open pit referential cut-off grades for Accha are 3.5% Zn and for Yanque are 2.2% Zn. The
referential cut-off grade for underground is 6.0% Zn
(4) The projected life-of-mine strip ratio for the Accha pit is 3.32 and for the Yanque pit is 1.36
(5) Material within the crown pillar corresponds to 76.2 kt grading 11.33% Zn and 1.31% Pb that is classified
as Probable Mineral Reserves
(6) The metal prices used for the Mineral Reserves estimates are based on AMEC`s internal guidelines
(which are based on long-term consensus prices)
Project No.: 170848

Table 1-4: Mineral Reserves Statement assuming Fume Case

Category
(kt) (%) (%) (Mlb) (Mlb)
Accha Open Pit
Proven 651 9.26 0.80 132.9 11.4
Probable 388 8.26 0.66 70.7 5.6
Proven & Probable 1,039 8.88 0.74 203.5 17.1
Accha Underground
Proven 237 13.78 1.97 71.9 10.3
Probable 547 11.17 1.43 134.6 17.2
Proven & Probable 783 11.96 1.59 206.5 27.5
Yanque Open Pit
Proven 0 0.00 0.00 0.0 0.0
Probable 9,711 3.57 2.86 763.3 611.5
Proven & Probable 9,711 3.57 2.86 763.3 611.5
Proven 888 10.46 1.11 204.8 21.7
Probable 10,646 4.13 2.70 968.5 634.4
Proven & Probable 11,533 4.61 2.58 1,173.3 656.1
Minera (Chile) of AMEC by William Bagnell P.Eng. of AMEC (for the estimates assuming underground
mining methods
lead price, and an economic function that include an average processing, G&A ore haulage of US$60.12/t
in Accha and US$36.80/t in Yanque, marketing, treatment and refining cost of US$0.290/lb for zinc and
US$0.190/lb for lead, zinc payability of 79.4%, lead playability of 89%, and metallurgical recoveries for
zinc of 91% in Yanque and 93.8% in Accha, and lead recoveries of 97.7% in Yanque and 97% in Accha.
A percent model was used with a blocks size of 5x5x5 m. Open pit mine designs assumed average inter-
ramp pit slope angles of 37° and 46° for Accha and Yanque respectively
(3) The life-of-mine strip ratio for the Accha pit is 4.08 and for the Yanque pit is 1.36
(4) The Fume Case open pit referential (marginal) cut-off grades for Accha are 5.5% Zn, and for Yanque are
2.9% Zn. The referential (marginal) cut-off grade for Accha underground is 8.6% Zn
(5) Material within the crown pillar corresponds to 64.9 kt grading 12.47% Zn and 1.31% Pb that is classified
(based on long-term consensus prices)
(7) Mineral Reserves in the Fume Case are not additive to the Mineral Reserves in the Base Case
tonnes, grade and contained metal content
Factors which may affect the Mineral Reserve estimate include metal prices, mining
and metallurgical recovery assumptions, assumptions relating to geotechnical and
hydrogeological parameters used in mine design, assumptions that go into defining the
net economic benefit and zinc cut-off grade criteria; appropriate dilution control being
able to be maintained; variations to the expected revenue through the use of short-
term marketing and/or sales contracts; and variations to the permitting, operating or
social license regime assumptions.
Project No.: 170848

1.14 Mining Methods
1.14.1 Open Pits
Pit optimization was carried out using the Lerchs–Grossmann algorithm, and pit
designs were constructed using the mining, processing, general and administration,
refining, treatment and marketing costs determined in the prefeasibility study.
Pit designs assume a number of pit phases for each proposed open pit mine. In each
case, the starter pits, intermediate pit phases and final pits were smoothed to include
ramp accesses, berms, minimum mining widths and other operative criteria. The haul
roads are designed to accommodate 30 t and 35 t haul trucks with a maximum
gradient of 10% and an overall width of 14 m, although, access into the final pit bottom
will be gained via a section of single-lane road of 10 m width.
Ground conditions are expected to be poor. Open pit mine designs assumed average
inter-ramp pit slope angles of 37° and 46° for Accha and Yanque respectively. It is
expected that the Yanque pit will require dewatering when the pit elevation reaches the
phreatic standing water level at 3,500 masl. The current mine plan will see this level
reached in the base of Phase 1 and Phase 5.
1.14.2 Underground
AMEC has evaluated several alternatives for the mining of underground stopes at
Accha. Taking into account the expected poor rock quality, an intermediate angle of
the mineralized bodies and continuity of the mineralization, the planned mining method
will be cut and fill using breasting on single cuts as this will allow for stabilization of the
rock mass and adequate dilution control.
A crown pillar will be used between the Accha open pit and underground stopes. The
underground access portal will be located at an elevation of 4,075 masl. From that
point, a 521 m adit drift has been designed with a +1.5% gradient to reach a haulage
drive at 4,085 masl, which is the elevation of the lowest part of the Z-1 zone.
The main haulage drive will be the main level of extraction, water drainage, access
and fresh air ingress to the mining workings. Stope accesses will have a 4.0 m x 4.0
m cross section to facilitate movement of drill rigs and load-haul-dump (LHD)
equipment operation.
Stope length will vary to a maximum of 65 m in areas where it is possible to take five
cuts per stope. Stoping will start at bottom of the mineralized zones and ascend up dip
through the ore body. Systematic ground support in the form of bolting and screening
Project No.: 170848

will be used in the permanent openings supplemented with shotcrete where required in
stoping areas.
Waste from stope development will be used as backfill where possible with additional
backfill to be supplied from surface through the backfill raises or waste passes. Where
the mining width does not exceed 6 m and subsequent cuts are not required, un-
cemented waste will be used as backfill. In areas that exceed the 6 m mining width a
layer of cement slurry will be applied on top and alongside the waste fill.
1.14.3 Mine Plan
The mining operation will begin with the pre-stripping stage at Accha. The following
year, the Yanque open pit operations are scheduled to begin as the open pit mine
does not require any pre-stripping. Plant feed is expected to be initiated in the second
year of mining operations, and in the third year underground operations will begin in
Accha.
Open Pit
While the underground and open pit operations in Accha are mined simultaneously a
50 m safety zone including a 20 m crown pillar will be required. The safety zone and
the crown pillar will be mined at the end of the open pit operation. The open pit mining
activities will include: drilling, blasting, loading and haulage of material. Mine
production will average for the Base Case 3,090 t/d of ore and for the Fume Case
3,200 t/d of ore, with the use of 30-35 t capacity trucks Ore from the Accha mine will
be hauled to Yanque using 30–35 t highway trucks. Waste will be hauled to waste
rock disposal facilities that will be located 1.4 km from the Accha pit by 35 t trucks, and
1.9 km from the Yanque pit by 35 t trucks.
The average mine capacity will be approximately 3.3 Mt/a (considering both open pit
mines) with an average ore delivery of approximately 1,340 kt/a to the primary
crusher. The open pit mine life is seven years for Accha (including one year of pre-
stripping) and nine years for Yanque in the Base Case. For the Fume Case following
the pre-production period, the mines are planned to deliver 1,334 kt/a of mineral to the
primary crusher. The open pit mine life is five years for Accha (six years including the
pre-strip period) and nine years for Yanque.
The planned Accha and Yanque mine fleets are designed as conventional diesel-
powered fleets. In both options, the fleet will be operating on 5 m benches until the pit
base is reached. The average operating elevation for the open pits is 4,250 masl for
Accha and 3,550 masl for Yanque. Equipment requirements were estimated
Project No.: 170848

considering the plant feed, the pit geometry and AMEC’s experience in similar-size
projects at that elevation in South America.
The haulage fleet for the Accha ore will consist of 30 t road trucks. The trucks
assigned to the waste material are assumed to have a 35 t capacity. Nine trucks are
initially required in Year 1, increasing to a peak of 11 trucks in Year 4 in the Base Case
and in Year 3 in the Fume Case. Support equipment will be needed at both Accha and
Yanque operations until the Accha operations are completed; after which, only one
mine fleet will be required.
Primary consumables for mine operations include diesel fuel, blasting agents, ground
support materials and tires.
Underground
The projected start of production is January, 2017. Ramp-up will take six months in
which an average of 250 t/d will be mined. . Underground production is expected to
average for the Base Case 520 t/d of ore and 475 t/d for the Fume Case over the life
of the operation.
The Base Case foresees a total production of 1.011 Mt with 10.37 % Zn and 1.39 %
Pb over a mine life of 6 years. The Fume Case anticipates total production of 0.783 Mt
with 11.95 % Zn and 1.6 % Pb over a mine life of five years. For the Base Case and
Fume cases, AMEC has considered a 60% recovery of the crown pillar. Pillar
recovery will take place at the end of the mine life in 2021 and 2022.
The production plan is based on a highly mechanized operation consisting of diesel

powered trackless equipment for development and production. Equipment has been
selected based on estimated mine cycles and productivity calculations in order to
reach production targets. Mine production scheduling was performed using Minesched
software.
In terms of sequencing, of the three underground stoping zones, the Z-1 zone is
planned to be mined starting in January 2017. Production will continue in Z-1 until
Mineral Reserves are depleted in 2021 (crown pillar). The second zone to start
production will be Z3 in the second half of 2017. Zone Z3 Mineral Reserves will be
mined out in less than a year (nine months). Zone Z2 will start production in the last
quarter of 2017 and will continue until the first quarter of 2021.
Project No.: 170848

1.14.4 Manpower
Accha and Yanque will operate seven days a week, 24 hours a day with four crews
rotating to fill the mine roster of 12 hours per shift. Manpower rises to 231 mine
employees (Base Case) and 237 employees (Fume Case) in Year 3.
1.15 Recovery Methods
The proposed processing facilities for the Base Case for the Project include a
pyrometallurgical plant for the reductive roasting of Yanque and Accha Zn-Pb
mineralization to fume, and a conventional hydrometallurgical route for fume refining.
The preliminary flow sheet includes the following process steps:
Pyrometallurgy:
 Crushing to a particle size of 100% of -3 mm.

 Pelletization of ore mixed with anthracite coal (Accha ore)
 Pelletization of ore mixed with anthracite coal and Dolomite (Yanque ore)
 Waelz rotary kiln process, cooling and fume capture in a baghouse.
Hydrometallurgy:
 Fume dehalogenated by a hydrometallurgical process.

 Neutral and acid leaching of dehalogenated oxide fume.
 Cold and hot purification of the impure solution of zinc sulphate solution
 Electrowinning of the pure zinc sulphate solution in a tank house and stripping to
obtain zinc cathodes
 Smelting and casting to produce refined zinc slabs of SHG quality of 99.99 % purity
and a by−product a lead sulphate residue (51% Pb)
 Dewatering and dispatch (or in-pond storage) of lead sulphate residue by-product
 The process developed for the Fume Case is fundamentally the same as the Base
Case except for two differences:
- The hydrometallurgical metal production restriction is removed. The production
limit was based on maximum production capacity of the kilns
- Dehalogenation (alkaline leach) will be done at the pyrometallurgical plant.
Project No.: 170848

Accha and Yanque run-of-mine (ROM) material will be delivered from Accha by 30t or
from Yanque by 35 t trucks. The ROM feed will be campaign-crushed. The crushing
plant will process 3,683 t/d at an average throughput rate of 232 t/h, providing 67%
availability per day. ROM material will either be discharged into a 270 t dump hopper
(five truck capacity), or to a drying storage area. The primary crusher discharge will be
conveyed to a double-deck banana screen. The screen oversize material >11 mm will
pass through the secondary cone crusher before dropping on the tertiary feed
conveyor. The fine ore passing through the screen and the material passing through
the secondary crushing will be conveyed to a vibrating double-deck screen feeding the
tertiary crusher. The vibrating double deck screen receiving material from secondary
crushing will discharge oversize to a tertiary vertical impact crusher. The tertiary
crusher discharge will recycle back to the tertiary feed vibrating screen. Fine
undersize material from the vibrating double deck screen will be conveyed by bucket
elevator and conveyor to the fine material storage silos. Separate storage silos will be
provided for Yanque and Accha fine material.
Crushed fine feed will be fed to the pyrometallurgical plant at total feed rate of 176 t/h;
based on three separate kiln lines. The two dedicated lines for Yanque will process
102 t/h and the Accha line will be processing 74 t/h. Anthracite coal that will range in
size from 3.5–6.5 mm will be delivered to the plant, stockpiled and then conveyed to
hopper silos of 300 m3 and 700 m3 capacity. The Accha fine material will be blended
with anthracite coal by means of a helical mixer before entering the rotary kilns, while
the Yanque fine material will be blended with coal and dolomite by means of two
helical mixers before entering the rotary kiln.
The processes which will occur inside the rotary kiln are: mineral drying, reduction of
oxides, carbonates, and silicates, then vaporization of metals such as zinc, lead,
cadmium together with halogens such as chlorine and fluorine, and finally oxidation of
metal vapours to oxide fume in the flow of air which will be supplied. The gas stream,
which will exit the rotary kilns, will consist mainly of zinc and lead oxide fume. A screw
conveyor will collect the hot fume and will convey it to a fume storage hopper. It is
estimated that 10–15% of the fume produced will be recovered in this stage. Hot gas
from each kiln will be cooled by a gas cooler, reducing the outgoing fume temperature
to a maximum of 200°C. The fume will then be sent to its corresponding bag house for
final fume recovery.
The three rotary kiln furnaces will produce on average 93 t/h of slag. The furnace slag
will also contain some un-reacted coarse anthracite. Slag will be cooled in a slag
sump and then a screw conveyor will be used to transport the slag into a slag pile from
where it will be trucked to a slag storage facility.
Project No.: 170848

Hopper trucks of 30 t capacity will transport fume from the pyrometallurgical facilities to
the coastal refinery facilities that will be located close to the port of Ilo. Trucks will
discharge to a 1,500 m3 underground silo. Dehalogenation (Cl and F removal) will be
achieved using an alkaline wash stage at 50°C prior to processing the fume by acid
leach digestion. The filter discharge cake (16.1 t/h) will be reslurried and pumped to a
neutral leach stage. Neutral leaching will be a continuous process. The neutral leach
residue will mainly be lead sulphate with a minor zinc content.
The impure zinc sulphate solution produced in the neutral leach stage will be pumped
to the purification plant to remove impurities such as cadmium, arsenic and antimony.
Filtered solution from the purification filters will undergo a polishing purification stage.
Purified solution will be sent to an electrowinning plant which will operate with an
availability of 97% and produce zinc cathode. Cathodes will be loaded to an 800 kW
electric induction furnace to produce refined zinc quality ingots which will be Special
High Grade (SHG) 99.99%.
In the case of the Base Case pyrometallurgical plant, water consumption is

300,000 m3/year. In the Fume Case, dehalogenation will be carried out at the the
pyrometallurgical plant. This will require an additional 56,940 m3/year of make up
water over that required by the Base Case. With current water availability information,
there is sufficient water in the Yanque area to meet this extra demand. Fume
generated from the Fume Case will be transported directly to the port at Ilo/Matarani
for export.
The level of automation in the plants is expected to be in line with industry standards.
The average annual power consumption for the pyrometallurgical plant is estimated at
39 MW/a while the power consumption at the hydrometallurgical plant is estimated at
208 MW/a. The high power consumption for the hydrometallurgical plant is mainly to
supply the electrolytic process.
Anthracite consumption for the Base Case is estimated to be 227,842 t/a, which is
slightly higher than that of the Fume Case requirement of 225,825 t/a. The anthracite
consumption estimates in the PFS are based on an anthracite/zinc ratio in the kiln feed
of 2.7 and 2.3 for Accha and Yanque respectively, and have been determined by test
work.
In the QPs’ opinion, the test work indicates that the Base Case and Fume Case
process flow sheets are viable options for recovering zinc and lead from the Accha and
Yanque deposits. The conceptual-level process design adequately defines the Project
flow sheets, process equipment, operation, and water, power and anthracite
consumption for use in the 2013 PFS and supports the Mineral Reserve estimates.
Project No.: 170848

1.16 Infrastructure
For the operation and management of the mine it will be necessary to construct
numerous buildings and facilities ranging from industrial facilities for the mine and
plant, accommodation and services for the work force to security and recreational
facilities.
The AZOD Project consists of two work sites corresponding to each deposit that will be
mined. The Yanque site, where the majority of activities will be concentrated and
where the pyrometallurgical plant will be located, consists of: a campsite (which
includes recreational areas, administrative offices, medical centre, dormitories, and a
dining room/kitchen area), a truck shop facility (equipped with a heavy and light vehicle
maintenance area, a welding area, offices and a mine storage area), and infrastructure
corresponding to the pyrometallurgical plant area (emergency response, medical
centre, operations offices, warehouse, and workshops).
Infrastructure at the Accha site consists of a medical centre, dining room, mine
warehouse and offices, and a main access control gate. An explosive magazine
facility has been considered at both areas, however only the Yanque site considers a
nitrate and emulsion storage facility. During mining operations fuel will be stored in two
700 m3 tanks located adjacent to the truck shop facilities.
Two waste rock facilities have been considered for the AZOD area, each located at
each mining site. The Accha site waste rock facility, designed to store 18 Mt of waste
rock; and the Yanque site waste rock facility designed to store 41.4 Mt of waste rock.
Additionally at the Yanque site, a slag storage facility designed to store 4.7 Mt of slag
waste from the pyrometallurgical plant was considered.
A point 30 km from the 60 km haul road between the Accha and Yanque mine will be
the main access point to the Project. It is a graded, gravel, government-maintained
regional highway which is currently being upgraded. The other 20 km of the haul road
is currently maintained by Zincore and the Parcco Community, whereas the remaining
10 km is a single line, dirt road which will need to be upgraded in order to meet haul
road standards for mine roads with high traffic requirements.
Additionally, six potential borrow areas consisting of quartzite and limestone materials
were identified alongside the proposed haul road between Yanque and Accha. This
material could be used during construction for road aggregate or further crushed to
serve as concrete aggregate.
Water for the AZOD area will be obtained from bore holes located around the Yanque
pit. This water will be transported and treated at the Yanque camp, where it will be
Project No.: 170848

distributed to all the project sites. Power for the AZOD area will be supplied from the
Quencoro sub-station via a 75 km, 60 kV transmission line to the distribution
substation located at the pyrometallurgical plant. From this main sub-station power will
be distributed to all the project sites; this includes the 23 kV transmission line to the
Accha site.
Overhead power supply lines will be installed with optical fibres. The communication
networks between areas will have to meet the needs of the following areas: process
control systems, access control, VoIP, Zincore’s corporate network, closed-circuit
television (CCTV), radio network system, fire detection, security (SCADA) system,
Internet access, wireless communication and global position system instrumentation
requirements.
In addition to the infrastructure facilities described above, the Base Case for this
project considers the construction of a hydrometallurgical plant with the following
infrastructure facilities: operation offices, medical centre, change house, laboratory,
dining room/kitchen, warehouse and workshops. A camp is not considered at this
location because of its proximity to the city of Ilo. Water for the hydro plant will be
supplied by a salt water intake to be processed in the desalinization plant. From here,
fresh water will be pumped to all the project areas or further treated at the potable
water plant. Power for the hydro plant will be supplied by the 220kV Ilo 2 substation
(located next to the hydrometallurgical plant) to the distribution substation at the
hydrometallurgical plant. From here power will be distributed to all areas of the plant.
Since the proposed location of the hydrometallurgical plant is situated next to the
southern coastal highway, no consideration or further road improvements to access
the refinery were considered.
The infrastructure as proposed is considered by the QPs to be appropriate to support

the envisaged PFS mine plan and Mineral Reserve declaration.
1.17 Marketing
During the development of the study a number of authorities in the metals market,
including Wood Mackenzie, carried out reviews of the saleability and pricing of the
potential Project products. Included in these reviews were discussions with smelters
and potential purchasers of the products. While there is agreement amongst these
sources that prices for these metals will increase in the mid to long term, differences
do exist between the price forecasts. In order to establish a not overly-optimistic
pricing model that takes into account potential pricing volatility, project sensitivities to
pricing fluctuations and the variances in long-range pricing forecasts between
reputable sources, an average price based on Wood Mackenzie and World Bank
Prices was established.
Project No.: 170848

While lead sulphate residues are traded, overall the market is small and there are wide
variations in the quality. Zincore commissioned an independent review of lead
sulphate specifications. At Zincore’s direction, AMEC has assumed that customers for
the lead sulphate product would come from China. Among the market professionals
commissioned by Zincore, there was agreement that the Project lead sulphate product
would attract standard commercial terms for a bulk lead concentrate. Treatment
charges for lead would also be based on standard lead concentrate treatment charges
but could draw additional penalties.
The likely fume product market is within China. Specialists and potential purchasers
who reviewed the product specification were in agreement that the fume production
could be sold under bulk concentrate terms. The bulk concentrate market is small and
contracts are agreed on an individual basis over a wide variety of qualities.
Consequently, as opposed to zinc concentrates, it is more difficult to define a
‘benchmark’ contract value. It is now usual for bulk contract terms to be agreed at the
same level as the ‘benchmark’ zinc concentrate contract plus a premium or discount.
In discussions with third parties and specialists, deleterious elements which could draw
penalties were noted for the lead sulphate and fume production. However, at this PFS
level of Project assessment, no penalties were included in the financial model.
The pyrometallurgical route envisaged for the Project Fume Case encompasses blast
furnace (Imperial Smelting Furnace; ISF), electrothermic and vertical retort smelting.
ISF smelters are distinguished from electrolytic/electrothermic smelters in that they are
able to process bulk concentrates, i.e. low-grade zinc concentrates with elevated lead
grades, which is how Zincore Fume Case product would be classified. ISF smelters
are being phased out, and there are currently eight operating smelters today with one
of these scheduled to close in 2014.
No buyers have been directly approached by Zincore to confirm the assumed levels of
payability for lead sulphates and fume, nor do any contracts exist for sale of the
products.
1.18 Capital Cost Estimates
The PFS capital cost estimate is considered to be a Class 4 estimate in accordance

with the Association for the Advancement of Cost Engineers (AACE) capital cost
estimate definitions. The accuracy of the capital cost estimate for this study, taking
into account the current state of design and procurement, is considered to be within
±20% of final project costs. The level of definition is in the range of 1% to 15% and
engineering completion is within a range of 1–5%.
Project No.: 170848

Capital costs for surface facilities include the detail design, furnishing and the
construction / installation of all structures, utilities, materials, and equipment as well as
all associated indirect and management costs. The capital costs include contractor
and engineering support for commissioning of the facilities to ensure all systems are
operational. At the point of handover of the plant to the operations group, all
operational cost including ramp-up to full production are considered operations cost.
Costs were estimated for both the Base Case and Fume Case. In the Fume Case the
dehalogenation circuit is incorporated into the Pyrometallurgical facilities at the mine
site.
The total initial capital cost for the Project considering an outsourced strategy of mining
operation is summarized in Table 1-5.
Table 1-5: Total Capital Cost Summary – US$ M

Description Base Case (US Fume Case (US
$M) $M)
Mining Direct Costs
Pre-Strip and pioneering 10.9 10.9
Process Plant Direct Costs
Mine infrastructure 6.9 6.9
Site development 4.5 4.1
Pyrometallurgical process plant 69.5 80.5
Hydrometallurgical refinery 79.9 0.0
Site utilities 15.4 9.2
Ancillary building 13.9 7.5
Waste storage facilities 7.5 7.5
Off project boundary services 20.1 15.4
Sub-Total Direct Mining Costs 228.6 142.0
Indirect costs
Indirect capital 62.0 39.3
Owner’s cost 11.4 7.1
Contingency – plant (20% of plant direct costs) 43.5 26.2
Sub-Total Indirect Costs 116.9 72.5
Total Project Costs 345.5 214.5
(1) Mining equipment is considered to be part of the contractor supply and is included as part of the operational costs in
Section 21.2. Infrastructure for the mine is included in the capital costs
(2) Project indirect costs for mining pre-strip and pioneering roads are included in the capital cost and are not broken out in
the table as a line item.
(3) Dehalogenation of the fume will be carried out using hydrometallurgical facilities in the Base Case and
pyrometallurgical facilities in the Fume Case.
(4) Contingency is based on an assumed 20% of direct costs.
(5) Owner’s costs are based on an assumed 10% of direct costs.
(6) Currency Exchange Rates used were $1USD = 2.78 Peruvian Nuevo Sol
(7) Estimate is based on 2nd Qtr. 2013
(8) Taxes not included
(9) Costs have been rounded
Project No.: 170848

1.19 Operating Cost Estimates
Mining operating cost estimates per tonne for Accha and Yanque open pits and Accha
underground are US$4.57/t and US$64.74/t respectively for the Base Case and
US$4.18/t and US$64.15/t for the Fume Case.
Accha ore haulage cost are affected by the 60 km haul between the Accha mine site
and the Yanque pyrometallurgical facility. Transport costs are approximately US$9.66/t
for Accha open pit and US$11.3/t for the underground operation.
The process operating cost on a per tonne basis for the Base Case and the Fume
Case over the life of mine is US$50.58/t and US$35.97/t respectively.
The total average life of mine G&A cost on a per tonne basis for the Base Case and
Fume Case are US$2.53/t and US$1.44/t respectively.
Operating costs for the Base Case are included as Table 1-6 and for the Fume Case
as Table 1-7.
Table 1-6: Operating Cost Summary (Base Case)

US$/t Mined US$/t Ore
Open Pit Mining Cost - Contract 4.57 11.70

Underground Mining Cost - Contract 64.70
Subtotal (weighted average of combined open pit and underground
16.80
mining costs)
Processing - Crushing/Pyrometallurgical 33.00
Processing - Hydrometallurgical (Refinery) 17.50
Subtotal (Process) 50.50
G&A – Total 4.90
Total 72.20
Note: Figures have been rounded
Project No.: 170848

Table 1-7: Operating Cost Summary (Fume Case)


14.50
mining costs)
Processing - Crushing/Pyrometallurgical 32.80
Processing - Hydrometallurgical (Refinery) 3.20
G&A – Total 3.70
Total 54.20
Note: Figures have been rounded
Mine operating costs are based on contract mining, production quantities, local rates
for major consumable costs, equipment quotations from vendors, and a staffing plan.
After the estimation of open pit mining cost, a factor was applied to estimate mine
contractor operational costs. An assumed profit 12% was applied to specific costs
while a 15% rate of interest to capital expenditure was applied to contractor
equipment. Based on discussions with contractors, a 12% profit was also applied to
the capital equipment cost.
Process operating costs are based on the consumption defined by the project mass
balance and design criteria and the yearly production mine schedule. Reagent pricing
is based on recent quotations or in house data, power is based on quotations from
local suppliers and bench marked against other data sources. Anthracite is assumed
to be sourced from the north of Peru. A 3% contingency was applied to all process
operating costs except anthracite.
1.20 Financial Analysis
The results of the economic analysis represent forward-looking information that are
subject to a number of known and unknown risks, uncertainties, and other factors that
may cause actual results to differ materially from those presented here.
Forward-looking statements in this Report include, but are not limited to, statements
with respect to future metal prices, the estimation of Mineral Reserves and Mineral
Resources, metallurgical recoveries, in particular zinc recoveries, concentrate sales
contracts, the inability to confirm specific buyers and terms for the Fume product, the
timing and amount of estimated future production, costs of production, capital
expenditures and any requirements for additional capital, costs and timing of the
Project No.: 170848

development of the deposits, permitting time lines, government regulation of mining

operations, environmental risks, unanticipated reclamation expenses, title disputes or
claims and limitations on insurance coverage.
Additional risk can come from conclusions of economic evaluations; changes in Project
parameters as mine and process plans continue to be refined, possible variations in
Mineral Reserves, grade or recovery rates; geotechnical considerations during mining;
failure of plant, equipment or processes to operate as anticipated; accidents, labour
disputes and other risks of the mining industry; and delays in obtaining additional
governmental approvals.
A preliminary mine schedule, operating and capital costs estimates were established
for the AZOD Project. Two cases were evaluated: a hydrometallurgical option, and
Fume Case. The hydrometallurgical case is considered to be the Base Case. This
case is based upon the production of refined SHG zinc ingots and a lead sulphate
residue by-product.
The economic results are shown in Table 1-8. In Table 1-9 and Table 1-10 cash costs
are as defined by Wood Mackenzie (formerly Brook Hunt) and are shown as costs per
pound of payable zinc for the Base Case and Fume Case respectively.
A sensitivity analysis was performed, taking into account variations in capital costs,
operating costs, metal prices, anthracite prices, and grade. The results are shown in
Table 1-11 and Table 1-12. The results from the analysis showed that the Project
sensitivity is (in order from highest to lowest) metal price, grade, operating
expenditure, capital expenditure and anthracite prices.
Cash flow models were also prepared considering the current three-year moving
average zinc and lead prices and resulted in after tax undiscounted cumulative net
cash flows of US$169.9 M for the Base Case and US$64.3 M for the Fume Case.
Project No.: 170848

Table 1-8: Summary of Cash Flow Showing Sensitivities to Discount Rate

Base Case Fume Case
After-Tax Pre-Tax After-Tax Pre-Tax
(US$’000) (US$’000) (US$’000) (US$’000)
Cumulative net cash flow
(undiscounted) 377,268 528,683 243,384 336,980
1
Net present value (2015)
Discounted at 5% 217,024 332,216 135,342 205,805
Discounted at 8% 150,123 248,917 91,073 151,221
Discounted at 10% 114,287 203,823 67,617 121,986
Discounted at 12% 84,081 165,472 48,011 97,321
Internal rate of return 20.5% 28.6% 19.2% 26.7%
Payback period (years) 3.8 3.0 3.9 3.2
Total start-up capital 345.5M 214.5M
Total life of mine capital 357.7M 225.9M
Projected life of mine (years) 8.0 9.0
1
NPV is as of 2015
Table 1-9: Summary of Cash Costs – Base Case

Cost per tonne Cost per pound Zn
milled (US$/t) payable (US$/lb)
Payable Metal
Cash costs
Mining 16.76 0.17
Process 50.50 0.52
G&A 4.91 0.05
Smelter deductions 2.97 0.03
Treatment charges 12.28 0.13
Concentrate transport 2.51 0.03
Sub-total 89.94 0.92
Credits
Zinc premium (7.84) (0.08)
Lead (50.52) (0.52)
Sub-total (58.36) (0.60)
Adjusted cash costs
Total 31.58 0.32
Table 1-10: Summary of Cash Costs – Fume Case

Payable Metal
Cash costs
Mining 14.53 0.16
Process 36.02 0.39
G&A 3.70 0.04
Sub-total 122.78 1.31
Credits
Project No.: 170848


Zinc premium (not applicable)
Lead (57.78) (0.62)
Sub-total (57.78) (0.62)
Adjusted cash costs
Total 65.00 0.70
Table 1-11: Summary of Base Case Economic Sensitivity to Changes in Key Variables
(After-Tax)
SENSITIVITY OF NPV @ 8% Change in Factor (US$ ‘000)
(2015) -30% -20% -10% 0% 10% 20% 30%
Capital expenditure 213,943 192,783 171,509 150,123 128,678 107,132 85,573
Operating expenditure 233,379 205,975 178,280 150,123 121,603 92,814 62,670
Metal price (63,269) 12,252 83,044 150,123 216,251 281,677 346,670
Anthracite price 174,419 166,341 158,234 150,123 141,987 133,806 125,597
Grade (23,059) 36,395 94,119 150,123 205,635 260,686 315,526
1. Metal prices represent a ±10, 20, and 30% change applied to both to zinc and lead price
2. Grade represents a ±10, 20, and 30% change applied to both zinc and lead grades
Table 1-12: Summary of Fume Case Economic Sensitivity to Changes in Key

Variables (After-Tax)
SENSITIVITY OF NPV @ Change in Factor (US$ ‘000)
8%
(2015) -30% -20% -10% 0% 10% 20% 30%
Capital expenditure 131,928 118,337 104,725 91,073 77,380 63,656 49,897
Operating expenditure 159,214 136,783 114,070 91,073 67,806 44,226 20,369
Metal price (125,567) (40,995) 29,491 91,073 151,599 211,439 270,774
Anthracite price 116,821 108,269 99,685 91,073 82,406 73,713 64,990
Grade (73,829) (12,658) 41,161 91,073 140,576 190,163 239,921
3. Metal prices represent a ±10, 20, and 30% change applied to both to zinc and lead price
4. Grade represents a ±10, 20, and 30% change applied to both zinc and lead grades
1.21 Interpretation and Conclusions
The QPs are of the opinion that the PFS study supports the proposed mine plan and
the Mineral Reserve estimates.
The main risks facing Project development in the timeline envisaged in the PFS
include delays in obtaining key permits, delays and costs incurred in obtaining social
licence and surface rights, contract execution risks associated with road development
and access during Project construction activities, and fluctuations in metal pricing and
product sales pricing.
Project No.: 170848

Opportunities include potential reductions in the amount of pre-stripping required at

Accha, reductions in the overall plant footprints, and consideration of alternative haul
and transmission line routes to minimize costs.
1.22 Recommendations
A two-phase work program is recommended. The first phase will consist of activities
required to support completion of an EIA while the second phase will consist of the
completion of the feasibility study. The phases can be conducted concurrently,
however, work on the environmental baseline and surface rights should commence
immediately. The intent of the work program is to finalize the EIA and FS in parallel
such that both are available to support the permitting process. Estimated costs are
provided as a range as Zincore may choose to execute some work internally as
opposed to using third-party consultants.
The Phase 1 work program will include an assessment of surface rights ownership,
environmental baseline studies, and compilation of an EIA, which could range from
$2.6–$3.55 M.
The Phase 2 work program will incorporate Project and engineering studies sufficient
to complete a Feasibility Study. This could range from $9.2–11.65 M.
The total Phase 1 and Phase 2 programs are estimated at $11.8–$15.2 M.
Project No.: 170848

2.0 INTRODUCTION
2.1 Terms of Reference
Zincore Metals Inc. (Zincore) requested that AMEC (Perú) S.A. (AMEC) prepare a NI
43-101 Technical Report (the Report) that summarizes a prefeasibility study (PFS) on
the wholly-owned Accha Zinc Oxide District (AZOD) Project (the Project), located
65 km south of Cuzco, the regional capital of the Cuzco Region of Peru (Figure 2-1).
The Report was prepared in support of Zincore’s press release dated 6 August 2013
entitled “Zincore Receives Positive Pre-Feasibility Study for Accha Zinc Oxide District
Project”. The Report discloses a first-time Mineral Reserve estimate for the Project.
Zincore uses an indirectly-wholly owned subsidiary, Exploraciones Collasuyo SAC

(Collasuyo) for its Peruvian lead and zinc holdings. For the purposes of this report
“Zincore” is used interchangeably for the parent and subsidiary companies.
2.2 Qualified Persons
The following serve as the qualified persons for this Technical Report as defined in
National Instrument 43-101, Standards of Disclosure for Mineral Projects, and in
compliance with Form 43-101F1:
 Christopher Wright, P.Geo.: formerly Consulting Manager, Geology and Mining for
AMEC (Perú) S.A. (AMEC Peru)
 Stella Searston, RM SME, Principal Geologist (AMEC Reno)
 Sergio Munoz, CMC, Principal Mining Engineer (AMEC Peru)
 William Bagnell, P.Eng., Principal Mining Engineer (AMEC Saskatoon)
 Michael Valenta, FSAIMM, Managing Director (Metallicon Process Consulting)
 Stewart Twigg, P.Eng., Project Manager (AMEC Peru)
 Vikram Khera, P.Eng., Financial Analyst (AMEC Oakville)
Project No.: 170848

Figure 2-1: AZOD Project Location
Note: Figure courtesy Zincore, 2013.
Project No.: 170848

2.3 Site Visits and Scope of Personal Inspection
The following QPs have visited site:
 Mr Christopher Wright visited the Project from 3–5 May 2011 and again from 4–7
September, 2011. Mr Wright inspected the geology of the Accha and Yanque
deposits on the ground, and reviewed Project geology with Zincore staff. During
the second site visit, Mr Wright inspected site layouts, accesses and inspected drill
core completed during the May to September 2011 drill campaigns.
 Mr Sergio Munoz visited site from 4 to 7 September 2011, and inspected the areas
of the proposed open pits, site access and locations of potential infrastructure.
 Mr Stewart Twigg visited site between 4 and 7 April 2012, during which time he
visited the Yanque and Accha deposits and inspected access road and plant site
location options and reviewed infrastructure considerations with Zincore staff. Mr
Twigg also visited the proposed Ilo port facility between 18 and 19 October 2012.
During this visit, he inspected the proposed hydrometallurgical plant location site to
assess the applicability of the use of the port of Ilo and review the feasibility of
constructing the hydrometallurgical facilities at that location.
In addition to these personal inspections by the QPs, other AMEC staff members
visited site and provided information in their specialist areas to the QPs as follows:
 Mr Humberto Preciado (Geotechnical Manager, PE) and Rosario Basurto

(Geomechanist Specialist) visited site on several occasions from April 2012 to
September 2013. During these visits, they participated in the geotechnical
campaign and geotechnical drilling supervision and provided information on
geotechnical aspects of the proposed the open pits, underground mine, waste
dumps, slag dump and plant site.
 Mr Marc Etienne (Senior Hydrogeologist) and his team visited site on several
occasions from April 2012 to December 2012 and provided information on the
water quality, geochemical and water availability for the Project.
 Mr Jorge Mera (Sociologist) and Yerson Guarniz (Sociologist) visited site from 4 to
9 August 2012 and provided information on the socio-economic setting.
 Mr Carlos Salas (Principal Underground Mining Engineer) and Wilfried Claeys
(Associate Rock Mechanics Engineer) visited site from 18 and 20 December 2012
and provided information on locating the underground mine entrance and its
geotechnical properties.
Project No.: 170848

 Mr Jorge Zapata (Senior Geologist) visited site from 21 to 31 October 2012 and
again from 18 to 21 December 2012 and collected information on the suitability of
local dolomites for quarries to supply the Project during operations.
 Mr Salvador Meza (Project Engineer) and Mr Juan Guevara (senior civil designer),
visited site from 18 to 21 March 2013, provided information on the proposed
Yanque–Accha haul road design.
2.4 Effective Dates
This Technical Report has several effective dates:
 The date of supply of the latest legal opinion on mineral tenure, surface rights,
agreements, and project ownership for Exploraciones Collasuyo SAC is 11 July,
2013
 The date of supply of the latest legal opinion on mineral tenure, surface rights,
agreements, and project ownership for Exploraciones Antacollo S.A.C. is 15
August, 2013
 The date of supply of the latest information on property agreements is 22 August
2013
 The effective date of the Mineral Resource estimate for the Accha and Yanque
deposits is 11 July, 2013
 The effective date of the Mineral Reserve estimates for the Accha and Yanque
deposits is 11 July, 2013
 The effective date of the final open pit mine plan and mine design is 11 July, 2013
 The effective date of the financial model is 6 August, 2013.
The overall effective date for the Technical Report is based on the date of completion
of the financial model, and is 6 August, 2013.
There were no material changes to the scientific and technical information on the
Project between the effective date and the signature date of the Report.
2.5 Information Sources and References
The principal reference sources used for this Report are:
 AMEC, 2013: AZOD Project Final Pre-Feasibility Study Report: unpublished

internal pre-feasibility study (PFS) report prepared by AMEC Peru for Zincore
dated 15 August, 2013.
Project No.: 170848

 AMEC, 2011: AZOD Project PEA Study Report: unpublished internal preliminary
economic assessment report prepared by AMEC Peru for Zincore dated 15
September 2011.
AMEC has also used the information and references cited in Section 27 and Section 3
as the basis for the Report. Additional information on the operations was provided to
the QPs from other AMEC employees in specialist discipline areas. Unless otherwise
noted, figures and tables were prepared by AMEC.
2.6 Previous Technical Reports
Zincore has previously filed the following technical reports for the Accha and Yanque
Deposits which are part of the AZOD Project:
 Wright, C., Stubens, T.C, Göpfert, H., Hernando, M., and Colquhoun, W., 2011:
Technical Report on the AZOD Project Preliminary Economic Assessment:
unpublished NI 43-101 Technical Report prepared by AMEC Peru for Zincore
Metals Inc, effective date 1 September, 2011, 198 p.
 Stubens, T.C., 2011: Technical Report on the Mineral Resources of the Accha
Deposit, Cusco Department, Peru: unpublished NI 43-101 Technical Report
prepared by Micon International Ltd. for Zincore Metals Inc., effective date 5 May,
2011, 96 p.
 McMahon, A.M., Miranda, H.M. and de Wet, K., 2008. Technical Report for the
Accha Zinc Property, Peru: unpublished Technical Report prepared by Pincock,
Allen Holt and Green Team International (Pty) Ltd for Zincore Metals Inc., effective
date 9 June 2008, 92 p.
 McMahon, A.M., 2008a: Technical Report for the Yanque Deposit, Peru:
unpublished NI 43-101 Technical Report prepared by Pincock, Allen and Holt for
Zincore Metals Inc., effective date 14 April, 2008, 64 p.
 McMahon, A.M., 2008b: Technical Report for the Accha Deposit, Peru:
unpublished NI 43-101 Technical Report prepared by Pincock, Allen and Holt for
Zincore Metals Inc., effective date 18 January, 2008, 83 p.
 Winter, L.D.S., and Schmidt, P.R., 2006: National Instrument 43-101 Technical
Report, Zincore Metals Inc., Accha-Yanque Zinc Belt Project, Department of
Cusco, Peru, August 31, 2006, revised 2 October, 2006
 Winter, L.D.S, 2006: National Instrument 43-101 Technical Report, Zincore Metals
Inc., Accha-Yanque Zinc Belt Project, Department of Cusco, Peru, 31 August 2006.
Project No.: 170848

3.0 RELIANCE ON OTHER EXPERTS
The QPs state that they are qualified persons for those areas as identified in the
appropriate QP “Certificate of Qualified Person” attached to this Report. The authors
have relied upon and disclaim responsibility for information derived from the following
reports pertaining to mineral or land tenure, permitting, social and environmental
aspects of the Project.
3.1 Project Ownership
The QPs have fully relied upon, and disclaim responsibility for, information supplied by
Zincore staff and experts retained by Zincore for information relating to the Project
ownership and the relationship between Zincore, Collasuyo and Antacollo as follows:
 Benavides, O., 2010: Legal Opinion Letter for Exploraciones Collasuyo S.A.C:
unpublished legal opinion prepared for Collasuyo by Rodrigo, Elias & Medrano
dated 9 November, 2010, 9p.
dated 23 September, 2011, 31p.
 Rodrigo, Elias & Medrano, 2013: Executive Summary, “Dolores” Project Mining
Concessions: unpublished legal opinion prepared for Collasuyo by Rodrigo, Elias
& Medrano, dated 15 August 2013.
 Susin, G., 2013a: Agreement with First Quantum: confirmation letter as to First
Quantum interest in the Dolores claims prepared by Giovanni Susin, Zincore Vice
President and CFO for AMEC, 8 August 2013, 3p.
 Tong, F. and Pachas, D., 2013a: Legal Opinion Letter for Exploraciones Collasuyo
S.A.C: unpublished legal opinion prepared for Collasuyo by Rodrigo, Elias &
Medrano dated 3 June, 2013, 27p.
 Tong, F. and Pachas, D., 2013b: Legal Opinion Letter for Exploraciones Collasuyo
Medrano, dated 11 July, 2013, 27p.
This information is used in Sections 4.2, 4.6 and Section 4.7 of this Report.
Project No.: 170848

3.2 Mineral Tenure, Agreements and Surface Rights
Zincore staff and experts retained by Zincore for information relating to mineral tenure
and land availability in the Ilo area as follows:
 Susin, G., 2013a: Agreement with First Quantum: confirmation letter as to First
Quantum interest in the Dolores claims prepared by Giovanni Susin, Zincore Vice
President and CFO for AMEC, 8 August 2013, 3p.
 Susin, G., 2013b: Copper Rec JV: confirmation email as to First Quantum interest
in the Copper Reconnaissance Agreement: prepared by Giovanni Susin, Zincore
Vice President and CFO for AMEC, 23 August 2013
This information is used in Sections 4.3 to 4.9 of this Report.
 Carrera, G., Corzo, D., Escalante, G. & Olivera, A., 2013: Informe de Identificación
de Predios en la Localidad de Ilo: unpublished opinion prepared by Social &
Critical Solutions Consulting S.A.C., dated 22 January, 2013, 47p.
This information is used in Sections 18.0 of this Report.
Project No.: 170848

3.3 Permitting
Zincore staff and experts retained by Zincore for information related to permitting as
follows:
This information is used in Sections 4.11 and 20.0 of this Report.
3.4 Social and Environmental
The QPs have relied upon information supplied by Zincore staff and experts retained
by Zincore for information related to environmental permitting studies as follows:
 Coaquira, A. 2011a. Estudio de Impacto Ambiental semidetallado Proyecto de

Exploración ACCHA – Categoría II. Unpublished semi-detailed environmental
impact assessment study report prepared by EQUUS Equilibrio y Desarrollo EIRL
for Zincore.
 Coaquira, A. 2011b. Estudio de Impacto Ambiental semidetallado Proyecto de
Exploración “Yanque- Dolores” – Categoría II. Unpublished semi-detailed
environmental impact assessment study report prepared by EQUUS Equilibrio y
Desarrollo EIRL for Zincore.
This information is used in Sections 4.13 to 4.14 and 20.0 of this Report.
Project No.: 170848

Zincore staff and experts retained by Zincore for information related to environmental
permitting as follows:
This information is used in Sections 4.12, 4.13 and Section 20.0 of this Report.
3.5 Taxation
Zincore staff and experts retained by Zincore for information related to taxation as
applied to the financial model as follows:
 Thornton, G., 2013: Tax Opinion Letter for Exploraciones Collasuyo SAC:
unpublished tax opinion prepared by Grant Thornton SAC, July 2013, 9p.
This information is used in Sections 4.1.2 and 22.0 of this Report.
3.1 Metals Pricing
The QPs have relied upon information supplied by Zincore staff and experts retained
by Zincore for information related to the metal pricing of zinc, lead, zinc sulphate and
fume as follows:
Project No.: 170848

 Wood Mackenzie 2013: Metals Market Service - Long Term Outlook – Zinc, March
2013, 38p
 Wood Mackenzie2013: Metals Market Service - Long Term Outlook – Lead, March
2013, 34p
 Wood Mackenzie 2013: Lead and Bulk Concentrate Study: unpublished report
prepared for Collasuyo Explorations by Wood Mackenzie Metals Consulting, May
2013, 35p.
 World Bank, 2013: World Bank, Development Prospects Group, Commodity Price
Forecast Update, 14 May 2013, 6p.
This information is used in Sections 19.0 and 22.0 of this Report and to support the
optimization assumptions in Section 16.
Metals price forecasting is a specialized business requiring knowledge of supply and

demand, economic activity and other factors that are highly specialized and requires
an extensive global database that is outside of the pervade of a QP.
The QPs consider it reasonable to rely upon Wood Mackenzie as the company
provides up-to-date, in-depth insight and analysis into all facets of the metals industry,
including production supply and costs as well as consumption demand, and metal
price forecasts. Wood Mackenzie recently acquired the UK-based metals analysts
Brook Hunt.
The QPs were able to view a confidential study completed by a third-party on Zincore’s
behalf. This company provides in-depth and up-to-date coverage and analysis of base
metal markets, focusing on the global lead and zinc industries. Overall the study
supports the Wood Mackenzie conclusions as to increasing metal price forecasts.
3.2 Marketing
Zincore staff and experts retained by Zincore for information related to marketing as
applied to the marketing as follows:
 Wood Mackenzie 2013: Metals Market Service - Long Term Outlook – Zinc, March
2013, 38p
 Wood Mackenzie 2013: Metals Market Service - Long Term Outlook – Lead,
March 2013, 34p
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 Wood Mackenzie 2013: Lead and Bulk Concentrate Study: unpublished report
prepared for Collasuyo Explorations by Wood Mackenzie Metals Consulting, May
2013, 35p.
 World Bank, 2013: World Bank, Development Prospects Group, Commodity Price
Forecast Update, 14 May 2013, 6p.
This information is used in Sections 19.0 and 22.0 of this Report.
Metals marketing is a specialized business requiring knowledge of supply and

demand, economic activity and other factors that are highly specialized and requires
an extensive database that is outside of the pervade of a QP.
The QPs consider it reasonable to rely upon Wood Mackenzie as the company
provides up-to-date, in-depth insight and analysis into all facets of the metals industry,
including production supply and costs as well as consumption demand, and metal
price forecasts. Wood Mackenzie recently acquired the UK-based metals analysts
Brook Hunt, who were an industry leader in marketing studies.
The QPs were able to view a confidential study completed by a third-party on Zincore’s
behalf. This company provides in-depth and up-to-date coverage and analysis of base
metal markets, focusing on the global lead and zinc industries. Overall the study
supports the Wood Mackenzie conclusions in relation to the ability to market Project
material.
3.3 Royalties
Zincore staff and experts retained by Zincore for information related to Royalties as
applied to the financial model as follows:
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 Thornton, G., 2013: Tax Opinion Letter for Exploraciones Collasuyo SAC:
unpublished tax opinion prepared by Grant Thornton SAC, July 2013, p9.
This information is used in Sections 4.4, 4.5, 4.6., 4.11, and 22.0 of this Report.
Project No.: 170848

4.0 PROPERTY DESCRIPTION AND LOCATION
The AZOD Project is situated 65 km south of the regional centre of Cusco. Centroids
for the key project elements are:
 Accha deposit: 186,700 m E and 8,453,750 m N

 Yanque deposit: 167,700 m E and 8,430,100 m N
 Proposed pyrometallurgical facilities: 168,750 m E and 8,431,600 m N
 Proposed hydrometallurgical facilities: 267,300 m E and 8,034,300 m N
UTM co-ordinates use the UTM WGS 84 coordinate system for zone 18.
4.1 Property and Title in Peru
Mining in Peru is primarily regulated by national laws and regulations enacted by the
Peruvian Congress and the executive branch of government, as follows (Orihuela,
2012):
 Mining law: 1992 General Mining Law and its amendments; Law and Regulations
on Organization and Functions; both of which are overseen by the Ministry of
Energy of Mines (MEM)
 Environmental: MEM, Ministry of the Environment (MINAM), Agency for the
Supervision of Investments in Energy and Mining (Osinergmin), Ministry of
Agriculture (MINAG), National Service of Protected Areas (Sernanp), General
Directorate of Coastguards (Dicapi), National Institute for the Development of
Andean, Amazonian and Afro-Peruvian (Indepa), National Authority of Water
(ANA), and local government
 Tax: MEM, National Tax Authority (SUNAT), Ministry of Finance (MEF)
 Administrative: MEM, Mining and Metallurgical Geological Institute (Ingemmet),
Ministry of Transport and Communications (MTC), Ministry of Culture (MC),
National Port Authority (APN), DICAPI, General Directorate of Arms, Ammunition
and Explosives (Dicscamec), Public Registry (Sunarp)
 Labour: Ministry of Labour (Mintra)
 Safety and Security: Osinergmin, APN, Mintra, National Institute of Civil Defence
(Indeci), General Directorate of Environmental Health (Digesa).
Local governments can assume some of the responsibilities of the MEM and may also
put in place rules regarding mining in their jurisdictional area, providing the enacted
Project No.: 170848

rules and local laws do not conflict with MEM rules or other Peruvian laws and
regulations.
4.1.1 Mining Law
The General Mining Law of Peru defines and regulates different categories of mining
activities, prospecting, exploration, exploitation, and processing (D.S. No. 014-92-EM,
19921; Ministry of Energy and Mines – General Mining Bureau, 2006).
Mining concessions are established using Universal Transverse Mercator (UTM)

coordinates, and their areas usually exceed 100 ha up to 1,000 ha each. Mining titles
are irrevocable and perpetual provided that the title is current with respect to payment
of good standing fees, any penalties that may be imposed, and that a mining operation
has commenced within the title area. The amount payable as good standing fee is
US$3 per hectare per year (ha/a) and must be paid prior to June 30 each year
(Ministry of Energy and Mines – General Mining Bureau, 2006). From the first semi-
annual period of the 7th year computed from the year when mining concession title had
been granted, the concessionaire must pay a penalty of US$6.00/ha/a or its equivalent
in local currency per year and per hectare, until the year when the concessions meets
a minimum annual production of US$100/ha/a. Should the non-production continue
until Year 11, then from the 12th year a penalty of US$20/ha/a must be paid. In order
to be exempted from penalty, a mining holder must prove a minimum investment that
is equal to or greater than ten times the amount of the penalty. The minimum
production and investments are declared on an annual basis under an “Affidavit of
Minimum Production/Investment” filed with the Ministry of Energy and Mines.
The holder of a mining concession is entitled to all the protection available to holders
of private property rights under the Peruvian Constitution, the Civil Code, and other
applicable laws. A Peruvian mining concession is a property-related right; distinct and
independent from the ownership of land on which it is located, even when both belong
to the same person. The rights granted by a mining concession are defensible against
third parties, are transferable and chargeable, and, in general, may be the subject of
any transaction or contract (Ministry of Energy and Mines – General Mining Bureau,
2006).
To be enforceable, any and all transactions and contracts pertaining to a mining

concession must be entered into a public deed and registered with the Public Mining
Registry (Registro Publico de Mineria). Conversely, the holder of a mining concession
must develop and operate his/her concession in a progressive manner, in compliance
with applicable safety and environmental regulations, and with all necessary steps to
1 See http://www.minera.gob.pe/mineria/legislacion/data/D.S.N_014-92-LSM.doc
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avoid third-party damages. The concession holder must permit access to those mining
authorities responsible for assessing that the concession holder is meeting all
obligations (Ministry of Energy and Mines – General Mining Bureau, 2006).
4.1.2 Taxation Regime
Peru taxes mining companies with the same taxes applicable to other economic
activities. Based on publicly available information, the main taxes and fees imposed
on investors operating in the mining sector are:
 Corporate Income Tax (Impuesto a la Renta); currently the top income tax rate is
30%
 Royalties (Regalias); based on operating margins
 Concession Rights (Derechos a vigencia)
 Value Added Tax (VAT); currently at 18%.
Orihuela (2012) states that “Peru offers legal stability agreements that can be entered
into by private investors with the Peruvian government for 10 or 15-year terms to
protect their investments and enjoy a number of benefits. Mining investors with stability
agreements will benefit from tax stability (including income, export, labour, and certain
tax exemptions), free disposition of currency generated by exports, non-discrimination
with respect to the exchange rate, accelerated depreciation for certain assets and the
option of maintaining accounting in a foreign currency. Also, mining concession title-
holders that have projects in the exploration stage may apply to have the right of early
recovery of sales tax paid during the exploration phase”.
Mining companies are required sign a five-year agreement (Convenio) with the
Government in which the company contributes to two funds, one regional and one
local (Peru Investment Review, 2013). Companies also have to distribute a certain
proportion of their pre-tax profits to their workers.
The Peruvian Tax Regulation requires the effective tax rate be rounded off to two
decimal places (Grant Thornton, 2013).
4.1.3 Royalties
Mining companies are subject to three royalty-type imposts (PWC, 2012; BN

Americas, 2011):
 Mining royalties (MR): This royalty has been defined as the administrative charge
that mining companies shall pay to the Peruvian State for extracting metallic and
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non-metallic mineral resources from its mining concessions. This royalty is

calculated on the basis of the value of the mineral concentrates produced,
according to their international market value, and it should be calculated monthly
and paid in respect of the concentrates effectively sold. It is applied to operational
profit at a marginal-increment rate, rising from 1.00% to 12.00%, depending on
operational margin, in 17 separate bands. The lowest band is up to 10% operating
margin, with bands rising by 5% increments up to an operating margin of 85%.
 Special Mining Tax (SMT): follows the same mechanism as the mining royalties,
and is applied as a marginal rate from 2.00% to 8.4% on operational profit in
successive bands for different operating margins.
 Special Mining Duty (SMD): a tax payable only by companies that have enacted
legal stability agreements. The duty is also applied as a marginal rate, but ranges
from 4.00% to 13.12% on operational profit in successive bands for operating
margins.
Companies without legal stability agreements have to pay the MR and SMT but do not
pay the SMD. Companies with legal stability agreements pay the SMD only. Imposts
are typically paid on a quarterly basis.
Additional information provided to AMEC notes (Grant Thornton, 2013) that:
The operating profit is obtained by deducting the income generated from the sale of
any metallic and non-metallic production, in each calendar quarter, from the cost of
sales and operating expenditure incurred in such income generation. The calculation
takes into account the level of post-mining processing undertaken. Once the operating
profit is determined, the effective rate established under Peruvian law is applied in
accordance with the operating margin for the quarter under consideration. The final
result is the amount of mining royalty to be paid, provided that such amount is not less
than the 1% of the monthly sales income, in which case the amount of mining royalty
would be the last mentioned amount. As with taxation, the effective royalty payment
must be rounded off to two decimal places.
4.1.4 Surface Rights
Permits for surface land use must be obtained from the individual landowners via
agreements entered into between the mining title holder and the landowner. Where
land is owned by an agrarian (peasant) community, the agreement must be approved
by a minimum vote of the assembly of the members of the community. Mining rights
holders can also petition the MEM via an administrative process for an easement to be
imposed on the landowner. The application requires a valuation of the land and a
payment of compensation to the landowner.
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4.1.5 Environmental Regulations
The General Mining Law of Peru is the primary body of law with regard to
environmental regulation of exploration and mining activities (Ministry of Energy and
Mines – General Mining Bureau, 2006). The General Mining Law is administered by
the MEM. A detailed description of Peru’s environmental regulations is found on the
MEM website2. Generally, the MEM requires exploration and mining companies to
prepare an Environmental Impact Statement (DIA) – Category I, Environmental Impact
Study Semi Detailed (EIAsd)–Category II (Table 4-1), an Environmental Impact
Assessment (EIA), a Program for Environmental Management and Adjustment
(PAMA), and a mine closure plan. Mining companies are also subject to annual
environmental audits of operations by Osinergmin.
Table 4-1: Summary of Environmental Requirements for Mining Exploration Programs

Application Application Approval
Classification Description
Requirements Fees Time
Required
Category I – information as 5% of Unit Tax
Mineral exploration with
Environmental shown in Art. 5 of Unit is
less than 20 drill holes 10 days
Impact Environmental ~US$1,000
within a 10 ha area
Statement - DIA Regulations for Tax = US $50
Mining Exploration
Prepare an
Mineral exploration with Environmental
Category II –
more than 20 drill holes, Evaluation (EA) 40% of Unit Tax
Environmental
exploration areas greater report as per Unit is
Impact Study 30 days
than 10 ha, and/or Appendix 2 of ~US$1,000
Semi Detailed -
construction of more than Environmental Tax = US $400
EIAsd
50 m of tunnels Regulations for
Mining Exploration
Under Peruvian regulations (D.S. 020-2008-EM y la R.M. 167-2008-MEM-DM) a DIA–

Category I covers drilling of less than 20 drill holes within a 10 ha area. An EIAsd–
Category II is applicable to mining and exploration programs with either more than 20
drill holes, exploration areas greater than 10 ha, or construction of more than 50 m of
tunnels.
Both classifications require development of public community involvement processes,

which are administered under regulations D.S. 028-2008-EM and R.M. 304-2008-
MEM-DM.
2 See http://www.minem.gob.pe
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The MEM typically gives automatic approval of DIA–Category I studies, and

turnaround is of the order of 10 days. An EIAsd–Category II study typically can take
several months for approval, due to notification periods and public community
participation processes.
A mining company that has completed its exploration stage work program must submit
an EIA or a modified EIA either when applying for a new mining or processing
concession, increasing the size of existing processing operations by more than 50%;
or executing any other changes to an existing mining project that results in a >50%
change in the mining rate or expected profit (DS 016-93-EM. Cap III, Art° 20):
 A new EIS must be developed when additional, previously unmined areas are
proposed to be added to an operation (DS 016-93-EM, D.S. 028-2008-EM and
R.M. 304 -2008-MEM-DM, review articles 15 and 16), and must include
preparation of an executive summary and scheduling of workshops and public
community participation.
 The EIA must incorporate planned expenditure on environmental programs at a
rate that is no less than 1% of the value of annual production of the planned
operation. The MEM must review and make a decision on the project within 120
days, including initial notification, and the initial stage of the public consultation
process. The process of actual project approval may take 8–12 months. Within
this period the applicant company must organize hearings and workshops to
present project data and coordinate the dates and locations of such hearings with
the MEM.
If the proposed project in a <50% change in the mining rate or expected profit, the
changes to the existing EIA may be accepted, subject to informational workshops and
public hearings being held. The MEM must review and make a decision on the
existing project EIA within 30 days, including initial notification, and the initial stage of
the public consultation process. The approvals process may take 6–8 months.
A mining company must also prepare and submit a closure plan (Plan de Cierre) for
each component of its operation. The closure plan must outline what measures will be
taken to protect the environment over the short-, medium- and long-term from solids,
liquids and gases generated by the mining operation.
The General Mining Law of Peru has in place a system of sanctions or financial
penalties that can be levied against a mining company which is not in compliance with
the environmental regulations.
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4.1.6 Water Rights
The Law on Water Resources governs the management of water in Peru. Orihuela,
(2012) notes that the National Water Authority administers the grant of water rights,
and these rights are independent of either land or mining concession rights. Water
rights are granted for a specified length of time that takes into consideration the
volume of water required to be used. They can be renewed for a maximum period
equal to the period granted for mining activities as presented in the EIA. The party
granted water rights must consume no more than the amount of water permitted,
during the time it is authorised to do so, and is subject to fines or loss of the water
rights.
4.2 Project Ownership
Zincore uses an indirectly wholly-owned subsidiary, Exploraciones Collasuyo SAC, for

its Peruvian lead/zinc operations. Figure 4-1 shows the Peruvian holding entity
relationships to the Zincore parent company.
Figure 4-1: Holding Entity Relationships
Note: Figure courtesy Zincore, 2013; holdings percentages current as at December 31, 2012.
Project No.: 170848

Exploraciones Collasuyo S.A.C (Collasuyo) and Exploraciones Antacollo S.A.C.

(Antacollo) are both 100% indirectly-owned Zincore subsidiaries.
4.3 Mineral Tenure
The Project area comprises 75 contiguous mining concessions, which collectively have
an area of 58,532 ha (Figure 4-2, Table 4-2 and Table 4-3). A total of 59 of the
concessions are held in the name of Collasuyo. The five Gema concessions are held
by Minera del Suroeste S.A.C (Suroeste), and are situated to the west and northwest
of the Yanque deposit, and are under option to Collasuyo. The total area held by
Collasuyo is 49,132 ha. The remaining 11 concessions are held in the name of
Exploraciones Antacollo S.A.C. and cover an area of 9,400 ha.
The Accha deposit area is about 3,000 ha in extent, with the deposit covered by the
Accha 4 concession. The Yanque deposit area is about 1,600 ha in extent, and is
covered by the Jaguar 1 and Jaguar 2 concessions (refer to Figure 4-2).
Legal opinion provided to AMEC confirmed that the concessions were in good
standing as at 11 July 2013 and were on record with the appropriate public registry.
No overlaps with pre-existing third-party tenure rights were identified. The following
were noted in the opinion provided:
Validity fees were paid for the elapsed years from concession filing, with the exception
of 2013. Lack of payment of the 2013 fees does not cause concession cancellation,
as this would be considered the first year of default. Fees, however, must be paid
prior to 30 June 2014, or the concessions would be cancelled.
Production penalties are payable for concessions where the minimum production
levels specified in Peruvian law have not been achieved. For 11 of the Collasuyo
concessions, production penalties are not relevant, as the minimum grant term under
which production must occur has not yet been reached. For the remaining 53
Collasuyo concessions, production penalties were paid for the elapsed years from
concession filing, with the exception of 2013. For six of the Antacollo concessions,
production penalties are not relevant, as the minimum grant term under which
production must occur has not yet been reached. For the remaining Antacollo
concessions, production penalties were paid for the elapsed years from concession
filing, with the exception of 2013. Lack of payment of the 2013 fees does not cause
concession cancellation, as this would be considered the first year of default. Fees,
however, must be paid prior to 30 June 2014, or the concessions would be cancelled.
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Figure 4-2: Mineral Tenure Plan
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Table 4-2: Mineral Tenure Summary Table - Collasuyo

Concession Concession Area Registration
Area Name Name Number (Ha) Owner District Province Region Number
ACCHA 3 01-01005-94 1,000 Collasuyo Accha Paruro Cusco 20001880
Accha ACCHA 4 01-01006-94 1,000 Collasuyo Accha Paruro Cusco 20001881
ACCHA 5 01-01007-94 1,000 Collasuyo Accha Paruro Cusco 20001882
Puyani PUYANI 01-01100-94 300 Collasuyo Colquemarca Chumbivilcas Cusco 20002529
JAGUAR 1 01-01647-02 800 Collasuyo Colquemarca Chumbivilcas Cusco 11019176
Yanque
JAGUAR 2 01-01648-02 800 Collasuyo Colquemarca Chumbivilcas Cusco 11018884
GALIA 01-00897-03 200 Collasuyo Accha Paruro Cusco 11033460
GALIA 1 01-01721-08 200 Collasuyo Accha Paruro Cusco 10172108
DEYNA 01-00899-03 500 Collasuyo Capacmarca Chumbivilcas Cusco 11033450
YNES 01-00901-03 1,000 Collasuyo Capacmarca Chumbivilcas Cusco 11033461
Sombreros
MELISSA 1 01-00902-03 1,000 Collasuyo Capacmarca Chumbivilcas Cusco 11033470
GRETA 1 01-00900-03 500 Collasuyo Capacmarca Chumbivilcas Cusco 11033474
GAVIOTA 1 01-00898-03 700 Collasuyo Capacmarca Chumbivilcas Cusco 11033449
EL SUSTO 1 01-01467-03 200 Collasuyo Capacmarca Chumbivilcas Cusco 11033448
ALCATRAZ 1 01-02393-03 300 Collasuyo Colquemarca Chumbivilcas Cusco 11040304
Alcatraz ALCATRAZ 2 01-02394-03 930 Collasuyo Colquemarca Chumbivilcas Cusco 11040306
ALCATRAZ 3 01-02395-03 200 Collasuyo Colquemarca Chumbivilcas Cusco 11040307
GORRION 1 01-03184-03 600 Collasuyo Omacha Paruro Cusco 11040302
Gorrión GORRION 2 01-03940-06 1,000 Collasuyo Omacha Paruro Cusco 11064321
GORRION 3 01-03941-06 500 Collasuyo Omacha Paruro Cusco 11064292
URPI 1 01-03377-03 500 Collasuyo Capacmarca Chumbivilcas Cusco 11033431
Urpi URPI 2 01-01630-05 200 Collasuyo Capacmarca Chumbivilcas Cusco 11043441
URPI 3 01-02419-08 500 Collasuyo Capacmarca Chumbivilcas Cusco 11082216
ATENAS 1 01-03448-03 600 Collasuyo Omacha Paruro Cusco 11033434
ATENAS 2 01-03927-06 1,000 Collasuyo Accha Paruro Cusco 11063657
Atenas
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ATENAS 10 01-03935-06 1,000 Collasuyo Omacha Paruro Cusco 11063681
NADIA 1 01-03250-06 900 Collasuyo Haquira Cotabambas Apurimac 11063695
Nadia
NADIA 2 01-03251-06 1,000 Collasuyo Haquira Cotabambas Apurimac 11063688
SABA 1 01-03254-06 1,000 Collasuyo Mara Cotabambas Apurimac 11063685
SABA 3 01-03256-06 1,000 Collasuyo Capacmarca Chumbivilcas Cusco 11063724
SABA 4 01-03257-06 900 Collasuyo Capacmarca Chumbivilcas Cusco 11063722
Saba
SABA 7 01-03260-06 900 Collasuyo Haquira Cotabambas Apurimac 11063659
SABA 8 01-03261-06 1,000 Collasuyo Haquira Cotabambas Apurimac 11063662
SABA 9 01-03262-06 1,000 Collasuyo Colquemarca Chumbivilcas Cusco 11063661
SABA 10 01-02416-08 1,000 Collasuyo Colquemarca Chumbivilcas Cusco 11080894
SABA 11 01-02417-08 1,000 Collasuyo Capacmarca Chumbivilcas Cusco 11080893
LARISA 1 01-03263-06 1,000 Collasuyo Accha Paruro Cusco 11063700
LARISA 2 01-03264-06 1,000 Collasuyo Ccapi Paruro Cusco 11063717
LARISA 3 01-03265-06 800 Collasuyo Capacmarca Chumbivilcas Cusco 11063720
Larisa LARISA 4 01-03266-06 700 Collasuyo Capacmarca Chumbivilcas Cusco 11063729
Gema Option GEMA 1 01-00545-06 800 SurOeste Haquira Cotabambas Apurimac 11095831
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GEMA 2 01-00546-06 400 SurOeste Haquira Cotabambas Apurimac 11095832
GEMA 3 01-02381-08 900 SurOeste Haquira Cotabambas Apurimac 11095833
GEMA 7 01-02385-08 1,000 SurOeste Haquira Cotabambas Apurimac 11095834
GEMA 8 01-02386-08 1,000 SurOeste Haquira Cotabambas Apurimac 11095835
51,132 66
Table 4-3: Mineral Tenure Summary Table- Antacollo

Concession Concession Area
Area Name Name Number (Ha) Owner District Province Region Registration Number
NADIA 3 01-03252-06 1,000 Antacollo Colquemarca Chumbivilcas Cusco 11063687
Nadia NADIA 4 01-03253-06 1,000 Antacollo Colquemarca Chumbivilcas Cusco 11063686
DOLORES 1 01-02427-03 900 Antacollo 11040296

Dolores DOLORES 6 1000 Antacollo 11124548

01-05151-11
DOLORES 8 01-01785-12 1,000 Antacollo 11130594
9,400 11
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Mining legislation in Peru does not require location of concession boundaries on the
ground. The boundary limits are defined by UTM coordinates in the mineral
concession title filed on record in the registrar of Ingemmet and Sunarp.
4.4 Gema Claims Option Agreement
The Gema 1, Gema 2, Gema 3, Gema 7 and Gema 8 concessions, registered to

Suroeste are under option to Collasuyo. The original agreement was formalized by
public deed on 22 June 2010, and was amended on 28 August 2012. The option
agreement gives Collasuyo an eight-year term, expiring1 July 2019, to explore the
Gema concessions.
Collasuyo can acquire a 100% interest in the concessions by preparing a scoping

study on any mineral deposits discovered on the Gema concessions within four years,
a pre-feasibility study within six years, and a feasibility study within eight years
(Zincore, 2011).
As well, Zincore must make total investments of $850,000 in the concessions within
four years. Upon completing the earn-in, Zincore will grant Suroeste’s parent
company, Hochschild, a 1.5% net smelter return (NSR) royalty on the production of
base metals. In the event that the scoping study determines that precious metals
found on the property exceed 65% of the total value of the deposit, Hochschild will
have the right to exercise a one-time option to “back in” to the Project for a 60%
interest (at which point Zincore would vest a 40% interest), by paying Zincore three
times the cost of the expenditures incurred to produce the scoping study and assuming
the obligations to produce pre-feasibility and feasibility studies within the same periods
that had applied to Zincore. Should Hochschild decide not to exercise this option,
Zincore will vest a 60% interest following completion of the scoping study and continue
to fulfill the criteria for the 100% interest.
4.5 First Quantum Option Agreements
On May 8, 2012, Zincore entered into a strategic partnership with First Quantum
Minerals Ltd. (First Quantum). Under the terms of a Memorandum of Understanding
(MOU), a wholly-owned subsidiary of First Quantum made a strategic investment
Zincore whereby it purchased, by way of a private placement, 19,113,874 common
Zincore shares at a price $0.20 per share for gross proceeds totalling $3,822,775.
As well, First Quantum can earn up to an 80% interest in Zincore’s Dolores copper
porphyry project by funding the advancement of the project through exploration, and if
warranted, development and production. In order to earn its 80% interest, First
Quantum must fund the advancement of the project through exploration, and if
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warranted, development and production. First Quantum would acquire its interest in
the Dolores property by earning an equity interest in Polymex Resources Ltd.
(Polymex), a wholly-owned Zincore subsidiary.
On August 28, 2012, the parties entered into a definitive agreement (the Earn-In
Agreement) with respect to the earn-in. Details of the funding/earn-in structure are as
follows:
 First and Second Earn-Ins: First Quantum has committed to spend US$3.0 million
at Dolores by August 28, 2013 to earn an unvested 30% equity interest in Polymex.
The 30% interest will vest if First Quantum provides written notice (the Vesting Notice)
within 60 days of the first anniversary of the Earn-In Agreement Date that it will commit
to spend an additional US$5.0 million (the Second Earn-In) within 18 months of the
date of the Vesting Notice (the Vesting Notice Date). After the additional US $5.0
million is spent First Quantum will have earned a 50.1% interest in Polymex. If First
Quantum fails to meet its Second Earn-In commitment it will have to forfeit its 30%
interest in Polymex.
Zincore will be the operator until First Quantum has fulfilled the requirements of the
Second Earn-In with oversight from First Quantum by way of a technical committee.
 Third Earn-In: First Quantum can earn an additional 9.9% in Polymex by

producing a NI-43-101 compliant indicated resource estimate (and associated
technical report) of more than one million tonnes of contained copper at a 0.20%
cut-off grade within three years following the Vesting Notice Date.
 Fourth Earn-In: First Quantum will have the option to earn an additional 10% of
Polymex by providing within four years of the Vesting Notice Date studies in
sufficient detail that under industry customs and norms a fully informed
construction decision can be made.
 Fifth Earn-In: First Quantum can acquire an additional 10% interest in Polymex
provided that commercial production at Dolores commences within 96 months of
the Earn-In Agreement Date. First Quantum will be responsible for funding all costs
associated with construction of a mine and bringing the Dolores area to commercial
production including Zincore`s share of capital expenditures for construction.
Zincore will repay its portion of the construction cost from 70% of its portion of the
available cash flow from the project.
At the end of the completion of the fifth earn-in, Zincore would have a 20% interest in
Polymex which it could elect to convert to a 3% net smelter return royalty.
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As at August 8, 2013, First Quantum has contributed US$5.9 M toward their earn-in
commitments. As such, they have fulfilled their first earn-in expenditure commitment
of US$3.0 M and have until October 28, 2013 to provide Zincore written notice that
they will commit to spend an additional US$5.0 M within 18 months of the date of the
notice. The notice had not been received as of 8 August 2013, and therefore First
Quantum, at that date, did not hold any equity interest in Polymex.
As of August 8, 2013, First Quantum owns approximately 23.7% of the issued and
outstanding common shares of Zincore.
On 23 July 2013, Zincore and First Quantum concluded a second MOU to which will
allow First Quantum to undertake a regional copper exploration program over 55,000 ha
within the AZOD Project area. Mineral tenure that is subject to the agreement includes
Accha-5, Puyani, Galia and Galia 1, Deyna, Ynes, Melissa 1, Greta 1, Gaviota 1, El Susto
1, Alcatraz 1–3, Gorrion 1–3, Urpi 1–3, and Atenas 1–5.
Under the terms of this MOU, two phases are contemplated; an initial reconnaissance
phase and if warranted, a joint venture (JV) phase.
The reconnaissance phase will expire on 1 April 2015. Under the terms of the
reconnaissance phase, Zincore will provide First Quantum with access to all geological,
geophysical and general information on the concessions within the agreement area. First
Quantum’s exploration programs will use Zincore staff to explore any copper anomalies
identified. First Quantum is not subject to any minimum investments, except to fully fund
the exploration programs.
If First Quantum determines that there are areas for additional work, defined as “Copper
Target Areas”, then a Framework Agreement will be established for each area defined to
govern a JV. Each Framework Agreement will be subject to the laws of Peru and will allow
First Quantum, at its sole discretion, the right to earn up to an 80% interest in the Copper
Target JV by achieving specified objectives. The JV(s) will be structured as follows:
 First Earn-In: First Quantum can earn a 50.1% interest in a the Copper Target JV
by incurring at least US$4 million in exploration expenditures per Copper Target
Area within 30 months of First Quantum being granted a mining assignment for
such Copper Target Area (referred to as the effective date). Once First Quantum
has incurred an aggregate of US$4 million in exploration expenditures for a Copper
Target Area, its 50.1% interest in the Copper Target JV shall be earned (referred to
as the vesting date).
 Second Earn-In: First Quantum shall have the right to acquire an additional 9.9%
interest in the Copper Target JV, for an aggregate interest of 60%, by producing a
Canadian NI 43-101 compliant technical report with a minimum threshold of an
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Indicated Mineral Resource estimate of 1 Mt of contained copper, using a 0.20%

Cu cut-off grade within the relevant Copper Target Area, within 18 months of the
vesting date.
 Third Earn-In: First Quantum shall have the right to earn an additional 10%, for an
aggregate 70% interest in the Copper Target JV, by providing within 36 months of
the vesting date, studies in sufficient detail that under industry customs a fully
informed construction decision can be made.
 Fourth Earn-In: First Quantum shall have the right to acquire an additional 10%,
for an aggregate 80% in the Copper Target JV by commencing copper production
at the target within 96 months of the effective date. If commercial production does
not commence within the designated period, the parties’ interests in the Copper
Target JV shall remain at 70% for First Quantum and 30% for Zincore. First
Quantum will be responsible for funding all costs associated with construction of a
mine and bringing any Copper Target Area to commercial production including
Zincore`s share of capital expenditures for construction to reach commercial
production. Zincore’s 20% (or 30%, if applicable) portion of the construction costs
shall be repaid from 70% of the dividends that Zincore would otherwise be entitled
to receive on a pro rata basis from the Copper Target JV.
At any time, Zincore has the option to convert its shareholding interest in a Copper
Target JV into a 3% net smelter royalty payable on all minerals extracted and
marketed from the Copper Target Area.
4.6 Work Agreement, Collasuyo–Antacollo
Under a public deed dated 12 January 2011, Antacollo and Collasuyo executed a
mining assignment agreement under which Antacollo allowed Collasuyo to conduct
mining exploration and exploitation activities on the Dolores 1–4 concessions, for an
eight-year period. The agreement expires 30 December, 2018.
A 1.5% net smelter return (NSR) royalty is payable by Collasuyo to Antacollo on any
production from the concessions.
4.7 Dolores 2 Agreements with Asociación de Pequeños Mineros Artesanales

Rico Pfuyani
A mining exploitation agreement (contrato de explotación minera) was formalized

between Collasuyo and the “Asociación de Pequeños Mineros Artesanales Rico
Pfuyani” by public deed granted on 10 October 2010 by the Notary Public of Cusco,
Nestor Avendaño Garcia; whereby the “Asociación de Pequeños Mineros Artesanales
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Rico Pfuyani” was granted the right to perform mining activities on 0.8280 ha of the
“Dolores 2” Concession, for a five-year term.
A Joint Venture Agreement (contrato de riesgo compartido) has been recorded with
respect to the “Dolores 2” Concession. This agreement was formalized between the
so-called “Asociación de Pequeños Mineros Artesanales Rico Pfuyani” and Diego
Luciano Linares Puma, by public deed granted on 20 March 2012 by the Notary Public
of Cusco, Antonieta Ocampo Delahaza. As per this agreement, Diego Luciano Linares
Puma agreed, among other provisions, to fund the activities to be performed by the
“Asociación de Pequeños Mineros Artesanales Rico Pfuyani” under the mining
exploitation agreement, in exchange for a 60% share in the profits to be generated as
a result thereof.
Artisanal mining activities have been occurring under this agreement. Zincore advised
AMEC that the workings are very small-scale, underground excavations conducted
using a wheelbarrow and jackhammer. Two tunnels have been excavated, about 30 m
and 10 m in length, and approximately 2 x 3 m in diameter. Mined material is removed
from the excavated area for processing outside the Project area.
4.8 Surface Rights
Collasuyo does not currently own any surface rights within the planned Project areas.
The community of Parcco owns the surface rights covering the Accha deposit area,
and in April 2010 Collasuyo signed five-year agreements with Parcco and the
neighbouring community for temporary use of the surface lands in order to conduct its
exploration programs (refer to Section 4.9).
The community of Yanque owns the surface rights covering the Jaguar 1 and Jaguar 2
concessions of the Yanque project, and in July 2010 Collasuyo signed a five-year
access agreement with that community for temporary use of the surface lands to
enable Zincore to conduct its exploration programs (refer to Section 4.9).
Surface rights will have to be acquired through agreement or purchase to support any
future mining activity. Surface rights will also need to be acquired to support
construction and operation of any hydrometallurgical plant and for development of the
proposed power line and haul road routes.
4.9 Community Access Agreements
In 2010 Zincore executed an agreement with the Community of Parcco for approval to
conduct exploration activities on the Accha 3, Accha 5, Atenas 2, Galia, Galia 1 and
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Gaviota 1 concessions in exchange for monthly payments, establishment of a fund to

finance infrastructure and social welfare programs in the community and preference in
hiring community members to work on the Project. This agreement is under effect until
April 2015.
An agreement was also signed with the Community of Lacca Lacca, Yanque,
Parccobamba and Gran Chico granting Collasuyo a five-year term to conduct
exploration activities on the Alcatraz 1, Alcatraz 2, Alcatraz 3, Jaguar 1, Jaguar 2,
Nadia 3, Puyani, Saba 8, Saba 9, Saba 10 and Saba 11 concessions. Zincore agreed
to make a cash payment to the community for development projects located in the
micro-settlement for which the community is named, and to carry out educational,
agricultural, health and social programs in the community. This agreement is in effect
until July 2015.
4.10 Water Rights
Zincore currently holds water use authorizations by means of Administrative

Resolution No. 0149-2011-ANA/ALA ALTO APURIMAC-VELILLE, dated September
21, 2011. The LWA alto Apurimac-Velille granted Collasuyo an authorization for the
use of water from “Toma de Agua I”, “Toma de Agua”, and “Toma de Agua III” for the
purposes of development of mining studies. The annual volume granted was
41,227.47 m3 and for a term of two years counted as from the date of notification of the
Resolution. It is anticipated that this will expire in September 2013.
Prior to May 2013 Zincore maintained rights under Administrative Resolution No.
0149-2011-ANA/ALA ALTO APURIMAC-VELILLE, dated April 28, 2011. The LWA
alto Apurimac-Velille granted Collasuyo an authorization for the use of water from
“Quebrada Paccari”, and “Mantanial Quesmuropata” for the purposes of development
of mining studies. The annual volume granted was 92,836.80 m3 and ran for a term of
two years. This has since expired.
The current study envisages use of seawater in the hydrometallurgical facility. No

permitting studies have been undertaken, and would be required during future more
detailed work.
4.11 Royalties
4.11.1 Government Royalties
The royalty regime for Peru is summarized in Section 4.1.
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4.11.2 Third-Party Royalties
In 2006 the Puyani concession was purchased by Collasuyo from Compañía Minera
Argento S.R.L. (Argento). Under the terms of the purchase agreement, Argento
retains a 2% net smelter return (NSR) royalty on mineral production from the
concession. Collasuyo retains an NSR buy-back right for the Puyani concession
through a total payment of $1 M, which can be paid in the form of $500,000 for each
1% NSR, or $1 M for the total 2% NSR.
A 1.5% NSR royalty will be payable to Suroeste’s parent company, Hochschild, on any
production from the Gema concessions.
Production from the Dolores 1–4 concessions will require Collasuyo to pay a 1.5%
NSR to Antacollo.
4.12 Permits
Permitting considerations for the Project are discussed in Section 20.
4.13 Environment
Semi-detailed baseline studies have been carried in application for Category II

exploration permits at the Accha and Yanque Deposits. The conclusions of these
studies have been summarized in Section 20 of this Report.
4.14 Environmental Liabilities
The environmental status of the Project is discussed in Section 20.2 of this Report.
4.15 Social License
The social license considerations for the Project are discussed in Section 20 of this
Report.
4.16 Comment on Section 4
In the opinion of the QPs, the information discussed in this section supports the
declaration of Mineral Resources and Mineral Reserves, based on the following:
 Information supplied by legal experts supports the statements by Zincore that the
Project is wholly-owned by an indirectly-held Zincore subsidiary; five of the
concessions are held under option and the legal opinion supports that the option
agreement is valid
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 Information provided by legal tenure experts retained by Zincore supports the

statements that the mining tenure held is valid, and are considered sufficient to
support declaration of Mineral Resources and Mineral Reserves
 There are no current surface rights held by Zincore. Agreements have been
concluded with local communities to allow exploration access to selected
concessions; however, surface rights will have to be acquired through agreement
or purchase to support any future mining activity. Surface rights will also need to
be acquired to support construction and operation of any hydrometallurgical plant
and for development of the proposed power line and haul road routes
 Royalties are payable on a sliding-scale to the Peruvian government. Third-party
royalties are payable; however, the concessions subject to the royalty provisions
do not yet have identified Mineral Reserves
 Zincore holds the appropriate permits under local, provincial and federal laws to
allow exploration activity. Additional permits will be required in support of
development and operations (see Section 20)
 At the effective date of this Report, environmental liabilities are limited to
exploration-related activities such as the exploration camps, drill pads and access
roads. There may be minor surface contamination and liabilities from former small-
scale artisanal workings;
 Zincore advised AMEC that to the extent known, there are no other significant
factors and risks that may affect access, title, or the right or ability to perform work
on the property.
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5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES,

INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Accessibility
The Project is approximately 65 km south of Cusco. The Accha camp within the
Project area can be reached by road from Cusco, a distance of 115 km via the
Regional Highway and a private graded road (Figure 5-1).
Figure 5-1: Accha Area - Social Zone of Influence
Note: map north is to top of figure. Grid squares are approximately 10 km x 10 km. Red line is the proposed haul road
route, orange lines are existing roads and tracks.
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The Yanque camp and deposit can be reached by following the Regional Highway
another 15 km south of the Accha turn-off and turning west along a private access
road 20 km to the Yanque camp and deposit (Figure 5-2).
The proposed port facility at Ilo can be reached from the Project using the Regional
Highway, turning off at Imata at the junction with Highway 28 which leads to Arequipa.
From Arequipa, it is about 230 km using Highway 34 to Ilo. The total distance from the
Yanque camp to Arequipa is 420 km, and it is about 650 km in total from the camp to
the port at Ilo. Additional information on the location and access to the Ilo facility is
provided in Section 18.
The Project access primarily uses public-use (government or municipality) roads. A

section of the proposed road from the Yanque settlement to the planned Yanque open
pit will be constructed on private land. No studies have been completed to date on the
nature and type of private ownership for the proposed road route.
A discussion of road improvement requirements to support future operations, and

internal haul roads are included in Section 18.1.
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Figure 5-2: Yanque Area - Social Zone of Influence
Note: map north is to top of figure. Grid squares are approximately 10 km x 10 km. Red line is the proposed haul road route, orange lines are existing
roads and tracks.
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5.2 Climate
The Project area has a mild temperate climate with dry winters and warm summers.
Meteorological information for the AZOD area was sourced from Senamhi, General
Government Office of Statistics and Technology from the Paruro, Acomayo,
Tambobamba, Granja Kcayra, Ccatacca, Santo Tomas, and Yauri meteorological
stations.
In the Accha deposit area, the maximum monthly average temperature range is
between 15.9°C and 16.1°C from October to November. The minimum monthly
average temperature range is 11.4°C to 11.8°C from June to July. Historic
precipitation data indicate that the annual minimum precipitation is 662.7 mm and the
maximum annual precipitation is 980.7 mm at Accha. The minimum monthly average
precipitation occurs in May (1.76 mm) and the maximum monthly average precipitation
occurs in January (174.08 mm). The predominant wind direction is northeast.
In the Yanque deposit area, the monthly average maximum temperature ranges
between 21.34°C and 24.08°C with a maximum typically occurring in November. The
average minimum monthly temperature ranges from -2.2°C in June to 3.88°C in July.
Based on historic data, the annual minimum precipitation is 662.70 mm and the annual
maximum precipitation is 1,029.2 mm. The monthly minimum average precipitation
occurs on June with 1.14 mm and the maximum monthly average precipitation occurs
on January with 174.08 mm. The predominant wind direction is northeast.
It is expected that mining activities in the Yanque and Accha areas will be able to be
conducted on a year-round basis.
The Ilo area has a semi-warm desert climate. There is a significant thermal gradient
between the continent and adjacent ocean, which allow the wind flow freely and
accelerate to offshore surface. The temperatures ranges are from 21.6 to 28°C in
summer (December to March) and 14 to 16.9°C in winter (June to September). The
maximum temperature recorded was during the “El Niño” event of February 1998 at
35.7°C and the minimum recorded temperature of 10.4°C was caused by the influence
of “El Fenómeno de la Niña” in September 1999. “El Nino” can cause moderate to
strong intensity rainfall events, although these are uncommon. However, the presence
of fog, low or no precipitation, as well as sea breezes during the autumn and winter
seasons is common.
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5.3 Local Resources and Infrastructure
The two closest major centres to the Project are Arequipa and Cusco. The city of
Arequipa is a large, modern city with regularly scheduled flights connecting it to Lima.
Arequipa, to the south has a population of approximately 978,000 and is a well
established mining centre with a skilled labour force, and suppliers of equipment for
mining and mineral processing. Cusco has a reasonable regional airport and excellent
tourist infrastructure but has more limited mining infrastructure than Arequipa.
Local human resources can be found in the towns of Accha, and Colquemarca on or
near the property. Zincore currently relies on labourers from the local Communities of
Parcco, Lacca Lacca, Yanque, Parccobamba and Gran Chico to assist in exploration
programs and road maintenance; however, skilled labour currently is sourced from
Arequipa, Cusco and Lima.
For the development of the hydrometallurgical plant, skilled and unskilled labour may
be found in the city of Ilo, Region of Moquegua due to its proximity to Moquegua,
Arequipa and Tacna, cities with established higher education centres, technical
institutions and universities.
Infrastructure assumptions, including provision of power, water and communications,

and the proposed infrastructure layout for the Project are discussed in Section 18.
5.4 Physiography
The Accha deposit is located is on a high plain above the Velille River valley. The
deposit is located at an elevation of 4,300 m, and the area is characterized by barren
rocky ridges rising above broad, gently sloping valleys typical of the Altiplano of the
Peruvian Andes. At the edge of the Altiplano, deeply incised ravines run steeply down
to the main valleys below.
Figure 5-3 shows an illustrative view of the physiography of the planned Accha pit
area.
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Figure 5-3: Accha Site Landform
The Yanque deposit is located at moderate elevation on a gently rolling plain at an

elevation of approximately 3,500 m, above a steep slope down to the Rio Santo
Tomas valley.
Figure 5-4 illustrates the typical topography in the Yanque deposit area, and the area
where the proposed pyrometallurgical plant will be located.
Figure 5-4: Pyrometallurgical Plant Site Landform
Elevations for the haul road between Accha and Yanque vary from 3,500 m to 4,300
m.a.sl. The area traversed by the proposed haul road is characterized by outcrops of
sedimentary rock and quaternary deposits.
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The area proposed for the site of the hydrometallurgical facilities is typical of the
coastal region with a flat surface characterized with fine soil with slightly saline
cementation, calcium and scarce vegetation. Figure 5-5 shows the typical
physiographic setting of the area of the proposed refinery location.
Figure 5-5: Hydrometallurgical Plant Site Landform
5.5 Flora
Based on the preliminary baseline studies discussed in Section 20, vegetation in the
Accha area consists of subtropical lower montane dry rainforest, subtropical montane
humid rainforest and subtropical subalpine per humid wet forest. Vegetation in the
Yanque area consists of subtropical montane humid rainforest, subtropical lower
montane dry rainforest, subtropical subalpine per humid wet forest, and subtropical
alpine rain tundra.
5.6 Land Usage
The current land usage in the Accha and Yanque areas is primarily cattle grazing.
Some small-scale farming activity is also undertaken, with the principal crops varying
by elevation. Crops include corn, potatoes, beans, wheat and local cereal crops such
as “haba” and “quinua”. There are also areas of natural grassland.
In the opinion of the QPs:
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 There is sufficient suitable land available within the mineral tenure held by Zincore
for mine waste disposal, and installations such as the pyrometallurgical process
plant and related mine infrastructure. Although the terrain at Accha is rugged,
which can occasionally result in issues for selection of exploration drill pads, there
is sufficient suitable area identified in the deposit area to safely locate the
supporting mine infrastructure
 Additional ground will have to be acquired in support of the development of any
future hydrometallurgical plant at Ilo
 A review of the existing and planned power and water sources, manpower
availability, and transport options (see Section 18) indicate that there are
reasonable expectations that sufficient labour will be available to support
declaration of Mineral Resources, Mineral Reserves, and the proposed life-of-mine
(LOM) plan. Infrastructure requirements as outlined in the PFS are considered to
be sufficient to support the proposed LOM plan.
Project No.: 170848

6.0 HISTORY
There is evidence of small-scale historic mining activity in the area. At Yanque, small
pits were excavated to produce clays and other material used to glaze and colour
locally-produced ceramics. These artisanal mines are not currently active. No other
production has occurred in the Project area.
In 1994 prospecting by Suroeste, at the time, the Peruvian subsidiary of Southwestern

Resources Corp., identified potential for zinc mineralization in the vicinity of the Accha
Deposit.
Between 1995 and 1997, under option from Suroeste, Cominco built a road to the
Accha deposit and carried out prospecting, trenching and 900 m of diamond drilling on
what is now known as the Accha deposit under option from Suroeste.
From 1998 to 2001 Savage Resources Ltd. and later Pasminco Limited optioned the
property from Suroeste and completed 12,597 m of drilling, excavation of seven
trenches, auto magneto telluric (AMT), induced polarization (IP) and magnetometer
geophysical surveys and internal unpublished study work on the Accha deposit.
In 1995 and 1996 Rio Tinto Minera Peru (Rio Tinto) carried out prospecting and
1,819 m of drilling in 16 drill holes on the Yanque concessions. In 2000 Rio Tinto
relinquished the Yanque property holding, and Suroeste picked up the concessions,
adding them to their land holdings in the area.
In 2006 Suroeste transferred the then Project concessions to Collasuyo in exchange

for 32 million shares in Zincore. Between 2006 and 2008 Zincore completed an
exploration program including mapping and 15,400 m of drilling and metallurgical test
work. In 2008 Zincore commissioned Pincock, Allen and Holt to prepare a mineral
resource estimate for the Accha deposit (McMahon, 2008b). Later in 2008 a pre-
feasibility study was carried out for the Accha deposit that considered open pit and
underground mining at Accha and a combination of dense media separation and
conventional flotation to produce a zinc–lead oxide–carbonate–silicate concentrate
(McMahon et al., 2008). This study is no longer considered to be current.
In 2007 and 2008 Zincore drilled 45 diamond drill holes and excavated seven trenches
on the Yanque property. In 2008 Pincock, Allen & Holt published an independent
Mineral Resource estimate for the Yanque deposit, based on the first 21 of the 45 drill
holes drilled during the 2007 drill campaign (McMahon, 2008a).
Due to weakening metal prices and high capital and operating costs and metallurgical
issues, the metallurgical flow sheet considered in the 2008 Accha pre-feasibility study
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was abandoned and in 2010 work began to define a pyrometallurgical or conventional

zinc-oxide flow sheet that could treat mineralization from both the Accha and Yanque
deposits.
In late 2010 and early 2011, Zincore carried out an infill diamond drilling and
metallurgical test work program at Accha, and the Mineral Resource estimate was
updated.
In May 2010, AMEC constructed a Mineral Resource model for the Yanque deposit
based on a drill hole database including the historic Rio Tinto and 2007 Zincore drill
campaigns which were complete at that time.
An infill drilling program was carried out at Yanque from January to August 2011.
Mineral Resource estimates for both Yanque and Accha were updated in 2013 and
form the basis for the Mineral Reserve estimate and PFS presented in this report.
Project No.: 170848

7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
The Andes region of southern Peru is underlain by a thick sequence of clastic and
marine sediments that have been folded and thrust eastward in the Andean Orogeny.
The Project is located in the Andahuaylas–Yauri belt immediately south of the
Abancay deflection of the cordillera where thrust faulting oriented dominantly north–
south is deflected to strike northwest–southeast. At the deflection the normal
subduction of southern Peru and northern Chile changes to flatter subduction below
central and northern Peru.
The main orogenic events to influence the area are a Palaeozoic event from
Ordovician to Permian times, and the Andean Event from Triassic to the present
(Palacios et al, 1994):
 The Palaeozoic cycle began with clastic sedimentation from the Brazilian shield to
the east and the Arequipa massif to the west. Ordovician to Devonian
sedimentation was in a shallow marine environment that covered much of the
region. The beginning of volcanism in the Triassic was initiated by subduction of
the Pacific and Nazca plates below the South American continent and this marked
the beginning of the Andean orogenic event. The Andean Orogenic Event has
shaped the structural geology of the region and the property and consists of five
major phases dating from 80 Ma in the late Cretaceous.
 The Peruana Phase of deformation began at approximately 80 Ma in the Upper
Cretaceous. The event was dominantly compressive, forming broad northwest–
southeast verging folds and transversal northeast– southwest faults.
 The Inca Phase was a strongly compressive event beginning in Eocene times at
approximately 40 Ma. During the Inca Phase, the tight, isoclinal folding that is
characteristic of the Peruvian Andes was developed. Calc-alkaline and alkaline
back-arc volcanism was initiated during the Inca Phase by partial melting of
subducted oceanic crust at the South American trench.
 The Quechua I Phase is the first of three phases occurring in Miocene to Pliocene
times. Quechua I was active from 17–14 Ma and consisted of further compression,
uplift and volcanism including the Tacaza Group.
 The Quechua II Phase was active from 10–9 Ma in the upper Miocene and
consisted of further uplift of the Cordillera Occidental, with extensive thrust faulting
and cross faulting and volcanism forming the Senecca, Capillune and Vizcacha
Formations.
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 The Quechua III phase was active in Miocene to Pliocene times from 8–2 Ma and
also consisted of uplift and crustal thickening with thrust faulting, cross faulting and
volcanism.
The geology of the Andahuaylas–Yauri belt is dominated by the Andahuaylas–Yauri

batholith which is exposed for approximately 300 km between the towns of Yauri in the
southeast and Andahuaylas in the northwest, and Mesozoic to Early Cenozoic clastic
and marine sediment sequences (Figure 7-1 and Figure 7-2). The batholith ranges
from 25 km wide at the east end to 130 km wide near Abancay and is composed of
early mafic to intermediate intrusive rocks with cumulate textures, grading to
intermediate intrusive rocks with equigranular to porphyritic textures. The batholith
intrudes Precambrian to Palaeozoic basement rocks which are exposed to the
northeast.
The basement sequence culminates in Permian to Early Triassic age Mitu Group
volcaniclastic and clastic rocks. The basement is overlain by Mesozoic and Cenozoic
sediments deposited in the Eastern and Western Peruvian basins. The eastern basin
is made up of marine clastic and carbonate rocks. The western basin, exposed in
what is now the Western Cordillera or Cordillera Occidental where the Project is
located, is a marine transgressional sequence grading from continental deep-water
clastic sediments to limestone. The north eastern edge of the western basin includes
the Lagunillas and Yura Groups, consisting of middle to late Jurassic quartz arenites,
and the Mara and Ferrobamba Formations. The Yanque and Accha deposits occur
near the conformable to semi-conformable contact between the Mara and Ferrobamba
Formations (Figure 7-3).
Eocene and Oligocene stratigraphy is dominated by the sedimentary San Jerónimo

Group and the dominantly volcanic Anta Formation, which unconformably overlie the
Mesozoic and Cenozoic sediments. Thick sequences of Puno Group conglomerates
are found to the north of the property. Miocene and Pliocene volcanic and
sedimentary rocks overlie Oligocene sediments. A discontinuous veneer of
Pleistocene fluvio-glacial sediments and re-worked gravels overlie the region.
Major mineralization styles in the region include porphyry copper (+Mo+Au), iron-
copper skarn, and locally, sediment-hosted and carbonate replacement zinc-lead
mineralization.
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Figure 7-1: Regional Structural Geology of the Andahuaylas-Yauri Belt
Accha Deposit
Yanque Deposit
Note: Modified from Perelló et al. (2003). Map north is to the top of the figure.
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Figure 7-2: Regional Geology of the Andahuaylas-Yauri Belt
Accha Deposit
Yanque Deposit
Note: Modified from Perelló et al. (2003). Map north is to the top of the figure.
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Figure 7-3: Mesozoic-Cenozoic Stratigraphy of the Andahuaylas-Yauri Belt
Accha Deposit
Antilla
Yanque Deposit
Note: Modified from Perelló et al. (2003).
7.2 Project Geology
The Project is underlain by marine clastic sediments of the Soraya and Ferrobamba
Formations. Sediments are broadly folded around the west north and eastern sides of
a lobe of the Eocene to Early Oligocene Andahuaylas-Yauri Batholith (Figure 7-4).
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Figure 7-4: Regional Geology Plan
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Mineralization identified to date within the Project area includes:
 Smithsonite: (ZnCO3)
 Hydrozincite: (Zn5(CO3)2(OH)6)
 Hemimorphite: (Zn3Si2O7(OH)22H2O)
 Zincian Smectite: (Na0.3(Zn,Mg)3(Si, Al)4 OH2 nH2O)
 Chacophanite: (Zn,Fe2+,Mn2+)Mn4+3O7 3(H2O)
 Cerussite: (PbCO3)
 Willemite: (Zn2SiO4)
 Galena: (PbS)
 Hematite: (Fe2O3)
 Goethite: (FeO(OH))
7.3 Deposits
7.3.1 Accha
The following geological and mineralization descriptions are based on information from
Zincore staff, Stubens (2011), AMEC site visits and AMEC’s internal Project reviews.
Lithologies
Five main geological units have been recognized in the Accha deposit area, as shown
in Figure 7-5, and the inset plan included as Figure 7-6.
 Soraya Formation quartzite: Well bedded, laminated quartzite, with interbeds of

quartz arenite, pale green siltstone and mudstone, greywacke and carbonaceous
shale.
 Mara Formation siltstone: Red siltstone, fine sandstone and minor red
conglomerate with limestone, quartzite and siltstone clasts.
 Ferrobamba Formation limestone: Thin bedded to massive limestone with chert
nodules. Narrow intervals of fossiliferous and reef-facies limestone within the
formation host zinc mineralization at the Accha deposit. Near the top of this unit
stratabound layers of dolomite and ankerite alteration have been observed. The
top of this unit has not been mapped near Accha except where it is in
unconformable contact with Puno Group sediments.
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Figure 7-5: Geology Plan of the Accha Deposit
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Figure 7-6: Detail Inset Plan, Accha Deposit
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 Puno Group sediments: A thick deposit of massive red conglomerate

unconformably overly the Ferrobamba Formation. The Puno Group consists of
coarse heterolithic conglomerate with polymictic intrusive clasts, limestone and
quartzite. Matrix and interbeds of red mud-supported sandstone to breccia.
 Intrusions: A small unit of feldspar–hornblende porphyry has been mapped near
the Accha deposit. West of the deposit, feldspar (quartz) porphyry has been
mapped and may be part of a larger regional-scale intrusion situated further to the
west of the Accha deposit.
Structure
Near the Accha deposit, Mara and Ferrobamba Formation sediments have been
deformed by north–south shortening and form a series of anticlines and synclines with
axial planes striking east–southeast (100°) and with sub-vertical dips.
Mineralization occurs in a bed of reef-facies and fossiliferous limestone that has been
folded to occupy the north and south limb of an anticline. The anticline hosting the
Accha deposit is roughly cylindrical, slightly overturned and gently doubly-plunging to
the east and west. Mineralization is located at the nose of the fold and outcrops in an
elongated dome shape.
The east end and part of the hinge of the anticline hosting the Accha deposit have
been eroded; however, both limbs, especially the north limb, and the western
extension of the anticline have excellent potential to host additional mineralization.
Mineralization
Gossans rich in zinc carbonates, silicates and oxides are exposed at surface over an
area measuring about 300 m by 100 m and drilling shows that the main body of oxide
mineralization forms an east–west to west–northwest-striking mineralized panel
approximately 700 m long and 5 m to 20 m thick, dipping at 50º to 60º to the south.
Example cross-sections through the mineralization at Accha are included as Figure 7-7
and Figure 7-8.
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Figure 7-7: Example Cross-Section 186350, Accha
Note: The horizontal lines mark UTM elevations at 100 m intervals. Drill hole traces are colour coded by Zn grades in the legend
displayed. Drill holes are projected +/- 10 m from the section line. The mineralized Coral Zone is represented by the red polygon, and
is sub-parallel to the upper contact of the sedimentary Reef Complex package shown in the green polygon. The black line represents
extent of the Mineral Resources considered amenable to open pit mining methods, and the brown lines polylines represents
conceptual underground stope outlines.
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Figure 7-8: Example Cross-Section 186750, Accha
displayed. Drill holes are projected +/- 10 m from the section line. The mineralized Coral Zone is represented by the red polygon, and
is sub-parallel to the upper contact of the sedimentary Reef Complex package shown in the green polygon. The black line represents
extent of the Mineral Resources considered amenable to open pit mining methods, and the brown lines polylines represents
conceptual underground stope outlines.
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Mineralization consists of laminated, highly porous, brown to yellow–brown limonite

with white to translucent, banded smithsonite and clear crystalline hemimorphite filling
voids, and fractures from 1.0 mm to 1.5 m in diameter. Smithsonite is the dominant
zinc species and occurs as a replacement of the original host carbonate.
Hemimorphite and sauconite are also important zinc minerals. Hydrozincite has been
identified in weathered outcrops at surface. Sulphides are rare but galena with
associated anglesite is present in three shallow pits in the west–central part of the
deposit.
Five main types of mineralization have been identified, as summarised in Table 7-1.
Table 7-1: Mineralization Styles, Accha

Mineralization
Occurrence Mineralogy
Type
Pb Nonsulphides
Cerussite Grey-white fine grained cerussite, Pb jarosite, beudantite
cerussite with zinc-rich clay (a lead iron arsenate sulphate
mineralization hydroxide)
Zn Nonsulphides
Red compact Red, compact, fine-grained with smithsonite, goethite,
geodes and veins hemimorphite, Zn clay, quartz,
K-feldspar
Yellow-brown Yellow-brown, coloured, large smithsonite, Zn clay,
cavities and geodes hemimorphite
Zn clay Fine-grained, clay-rich with Mn Zn smectite, Fe and Mn oxides
concretions and hydroxides, hemimorphite
and smithsonite
Red laminated Dark red, laminated with detrital hemimorphite, quartz–goethite,
quartz and K-feldspar Zn clay, Mn oxides and
hydroxides and chalcophanite (a
zinc, iron, manganese
hydroxide)
The mineralization occurs as massive to stockwork mineralization hosted by a very

broken thin-bedded limestone and inter-bedded massive limestone (unit 3b). The
more massive mineralization is concentrated along the southern contact between the
laminated unit (3b) and the overlying massive limestone (3c) within an algal reef
complex. Stockworks and pods of iron oxide and zinc mineralization are also present
along the northern contact where trenching has identified high-grade surface
mineralization.
The principal control on mineralization at Accha is a fossilized algal reef. Within the
fossilized reef complex, the highest zinc and lead grades can be found. Lower grades
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are associated with the detrital reef material in the fore reef and back reef areas. The
other facies of the reef complex consist of aggregated and laminated limestone,
bituminous shale and have low-grade zinc and trace lead values. The reef complex is
sandwiched between massive limestone on the footwall and hanging wall.
Due to the intense oxidation and iron oxide development in surface outcrops at the
deposit, the primary mineral textures are difficult to decipher. Outcrops of the
mineralized sequence generally indicate one of three textural styles:
 Fluid over-pressuring
 Replacement mineralization
 Open-space mineralization.
Textures which indicate fluid pressure are paragenetically older and may not be
associated with the mineralization except in the preparation of the host rocks by
upgrading porosity–permeability. Both replacement and open-space filling textures are
associated with zinc mineralization.
Hydraulic breccias are ubiquitous, occurring both in the stratabound breccias and the
hanging wall/footwall sequence. These breccias consist of jigsaw-fit textures
cemented predominantly by calcite. Abundant stylolitic fractures within the micritic
hanging wall/footwall sequence are filled with calcite. Rhythmically-banded limestone
with bedding-parallel calcite veins described as “zebra rock” form a narrow zone a few
metres thick in the footwall at Accha. These are considered by Zincore staff to be
evidence of fluid pressure in basinal brines prior to mineralization.
7.3.2 Yanque
The Yanque deposit is located approximately 30 km to the south–southwest of the

Accha deposit, and is interpreted to lie at a slightly lower stratigraphic elevation than
Accha.
The following geological and mineralization descriptions are based on information from
Zincore staff, Stubens (2011), AMEC site visits and AMEC (2011).
Lithologies
Four main lithological units have been recognised in the area of the Yanque deposit:
 Mara Formation clastic sediments: At the base of the Yanque Deposit are well
banded quartzite, arenite and mudstone of the Mara Formation. Minor
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mineralization is found in fractures within clastic sediments at the contact with the
overlying sedimentary breccia
 Sedimentary breccia: Overlying the well bedded clastic sediments is a package of
reasonably continuous conglomerates with rounded clasts of quartzite, arenite and
mudstone and clast-supported breccias with angular to sub-angular clasts of
quartzite, arenite and mudstone. This package likely occurs at the top of the Mara
Formation
 Ferrobamba Formation limestone: Massive and laminated limestone of the
Ferrobamba Formation overlies parts of the deposit and regionally overlies the
Mara Formation in general
 Diorite: Medium grained, altered diorite of the Andahuaylas–Yauri Batholith
intrudes and overlies the mineralization to the east
 Tazaca Group Volcanics: At the southern end of the deposit andesite ash and tuff
deposits overly diorite and Ferrobamba Formation limestone.
A geology plan of the deposit area is included as Figure 7-9, and an inset plan as
Figure 7-10.
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Figure 7-9: Local Geology of the Yanque Deposit
Note: Figure courtesy Zincore, 2013
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Figure 7-10: Inset Plan, Yanque Deposit
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Structure
The Yanque deposit is interpreted to have formed along a north–south-striking fault

called the Valley Fault (refer to Figure 7-6). Based on mapping and drilling data, there
appears to have been little strike-slip or dip-slip displacement but the fault may have
had a role as a feeder along which mineralizing fluids were able to pass and access
the relatively porous inter-formational breccia where zinc–lead mineralization occurred.
A series of cross faults or broad open folding along a northeast-striking axis are
interpreted to cause the gently undulating form of the deposit but these faults have not
been mapped.
The mineralized zone has a length of approximately 1,250 m, a width of approximately

650 m and an average thickness of 100 m.
Mineralisation
Zinc and lead mineralization occur in stacked lenses or mantos within the sedimentary
breccia unit. Lenses outcrop along both sides of a small creek bed which is developed
along the trace of the Valley Fault. Thicknesses of mineralization and the number of
stacked lenses vary on either side of the north-striking, sub-vertical Valley Fault.
Mineralization forms a tabular stratabound blanket measuring approximately 1,200 m

long, 800 m wide and 100 m thick. In longitudinal section, the lenses have a broadly
open undulating form with axial planes spaced approximately 200 m apart.
Yanque is stratabound and hosted in micro-conglomerates of alluvial origin, containing

sandstone, quartz arenite, siltstone and magmatic/metamorphic basement clasts in a
matrix of marly carbonates (including hydrothermal dolomite), detrital quartz and
altered feldspar. These conglomerates represent the top of the Mara Formation
directly below the Ferrobamba Formation carbonate succession.
Breccias located near major fault zones may represent the main pathways for fluid
flow, as well as for subsequent weathering. Intense sericitization and dolomitization
resulting from hydrothermal circulation are associated with sulphide mineralization.
The metal concentration in the stratabound mineralized horizons is especially high
where the conglomerate lithology is buffered at its base by the more compact quartz
arenites and pelites. The latter, more impervious, lithologies may have hindered the
downward migration of the fluids, and enhanced subsequent precipitation of lead and
zinc.
The mineralized zone consists of smithsonite, hydrozincite, hemimorphite, cerussite

and galena. Smithsonite is the most important mineral and is commonly found in
compact white masses around breccia fragments. Hydrozincite seems to be restricted
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to boxwork weathered exposures at surface. Galena mineralization appears to

overprint both the hypogene zinc–lead mineralization and the supergene
mineralization.
Preliminary detailed mineralogical work indicates that the mineralized zone is

composed of weathered host rocks rich in kaolinite and other clays derived from
feldspars and micas, as well as goethite, hematite and Mn-(hydr) oxides which are
locally Pb-enriched. In the upper part of the deposit, the most important zinc- and
lead-bearing minerals are Zn-smectite and hemimorphite with up to 40% Zn while the
lowermost zone is dominated by cerussite and relict galena. Cerussite is diffused in
the whole rock, but can be more concentrated in veins replacing galena, or as late
cement between hydrothermal dolomite crystals. Cerussite can be anomalously
enriched in Sr which may originate from basement feldspars, or from evaporites
associated with the sedimentary host rocks. Occasionally, dolomite crystals reveal a
strong enrichment of a Zn-rich phase along their margins and in fractures. No
minrecordite, siderite or rhodocrosite have been found among the neo-formed
minerals. Unlike Accha, the non-sulphide ores at Yanque have a much lower amount
of calcium carbonate gangue.
In the mineralized zone, visible relicts of primary mineralization are hosted in the
matrix of conglomerates and locally in a crackle breccia, with the sulphides cementing
a network of thin veins. Galena and pyrite have been documented both in core logging
and through detailed mineralogical study, and are the only sulphide minerals identified
to date.
Cross-sections through the Yanque deposits are included as Figure 7-11 and Figure 7-
12.
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Figure 7-11: Example Cross-Section 8430175, Yanque
displayed. Drill holes are projected +/- 10 m from the section line. The conceptual pit outline constraining the Mineral Resource
estimate is shown in black.
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Figure 7-12: Example Cross-Section 8430450, Yanque
displayed. Drill holes are projected +/- 10 m from the section line. The conceptual pit outline constraining the Mineral Resource
estimate is shown in black.
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7.4 Prospects and Occurrences
A number of prospects and mineral occurrences have been identified in the Project
area as illustrated in Figure 7-13.
Preliminary exploration activities have been reported for the Titiminas West,
Azulcancha, Capayocc and Alcatraz areas (Stubens, 2011) but Zincore is not currently
exploring these areas. Active exploration targets are the Yanque East, Puyani, Gema
and Corrales occurrences (where zinc and lead mineralization has been identified.
The Dolores copper occurrence is approximately three kilometres east of the Yanque
deposit and has been exposed in road cuts along the access road to Yanque.
7.4.1 Yanque East
The Yanque East target is located 5 km east of the Yanque deposit and is an area of
sporadic oxidized gossanous outcrop currently defined over approximately 400 m by
200 m. Select rock chip sampling from oxidized zones of outcrop in the north and
central parts of the target returned anomalous values of both zinc and lead. In the
southern portion of the target an old adit was discovered on steeply-dipping altered
limestone that strikes in a north–south direction close to a contact with an intrusive
body.
The alteration of the limestone consists of both hydrothermal and crackle breccias as
well as limonite alteration that is similar to the alteration pattern of the Accha and
Yanque deposits. The mantos-style mineralization was sampled perpendicular to
strike across the adit entrance and via trenching beyond the adit. The continuous
16 m channel sample graded 9.7 % Zn, 8.4 % Pb and 41 g/t Ag. A grab sample from
the end of the 50-metre long adit returned high-grade zinc and lead values and
mineralization was visually identified along the length of the adit. A second sample
from surface in the same area returned trace zinc, but had a high lead grade.
The mineralized zone has been traced for a total of 80 m along strike to the north,
where it has been displaced by a fault. Soil and vegetation cover the zone to the
south. The limestone package strikes almost north–south and dips steeply to the east
towards a large intrusive. The altered and gossanous limestone unit has been traced
over approximately 400 m to date through trenching and detailed mapping. No
evidence of previous drilling has been found on this zone.
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Figure 7-13: Prospect Location Plan
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7.4.2 Puyani
The Puyani occurrence is located 7.5 km east of the Yanque deposit. A number of
mineralized zones have been identified at the Puyani occurrence. Mineralization is
generally confined to faults cross-cutting the sedimentary stratigraphy. A historic
channel sample along an old adit at Puyani reportedly returned high lead and zinc
grades.
7.4.3 Gema
The Gema occurrence is approximately 9 km to the northwest of Yanque. Gema is

hosted in the same sedimentary units of oxidized limestones as Yanque, with
mineralized gossans that outcrop sporadically. There is no evidence of previous
exploration other than small pits by artisanal miners. Several mineralized mantos have
been identified in three separate areas of concentration, along strike over a distance of
more than 1 km. The mantos average between 1 m and 4 m in width and contain
anomalous values of lead, zinc, silver and locally gold.
7.4.4 Corrales
The Corrales prospect is located 3.5 km southwest of the Accha deposit and is readily
accessible from the main access road. It is hosted in the same laminated limestone
unit as the Accha deposit and has returned significant zinc and lead values from
several trenches.
Mantos-style oxide zinc and lead mineralization has been traced by surface mapping
and trenching for a distance of 500 m, after which it appears to pinch out. The
mineralization strikes 070° and dips to the south at between 40° and 60°.
There are a number of old workings along the zone indicating artisanal mining most
likely for lead, and two short holes were drilled by previous operators. The drill holes
returned anomalous results and appear to have intersected a fault zone.
7.4.5 Capayocc
The Capayocc occurrence is 16 km southwest of the Accha deposit and consists of a

number of lenses of zinc oxide mineralization in Ferrobamba Formation limestone.
Artisanal workings have been noted and are thought to have been exploiting silver
mineralization. Zinc oxide mineralization is exposed in outcrop, and trenching and
drilling have defined a mineralized area of about 350 m by 100 m consisting of altered
limestone, gossans after quartz–magnetite–chalcopyrite skarn. Altered rocks host
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quartz sulphide vein zones with galena, sphalerite, and barite mineralization. Veins
display boxworks where primary sulphides have been weathered and eroded.
7.4.6 Yurac
The Yurac occurrence is located 22 km south west of the Accha deposit. Minor zinc
oxide mineralization was noted and is hosted in limestone intruded by small quartz–
feldspar and feldspar–hornblende porphyry dykes and stocks. Zinc oxide
mineralization was described as replacement-style in limestone along intrusive
contacts and fault or fracture controlled.
7.4.7 Dolores
The Dolores prospect is interpreted as a copper–molybdenum porphyry occurrence,

with mineralization hosted in a quartz diorite porphyry complex. Figure 7-14 is a
compilation map showing the prospect geology and locations of drill holes completed
to date. Based on mapping, geophysical surveys, and drill intercepts, the
mineralization appears to extend for at least 3.5 km north to south and 1.5 km east to
west. At least six porphyry phases are present. Zincore has interpreted one phase to
be pre-mineralization, three phases appear to be mineralized and two phases are
interpreted to be post-mineralization.
7.5 Comments on Section 7
In the QPs’ opinion, the geological understanding of the settings, lithologies, structural
and alteration controls on mineralization, and mineralization continuity and geometry in
the different deposits is sufficient to support estimation of Mineral Resources and
Mineral Reserves. The geological knowledge of the area is also considered
sufficiently acceptable to reliably inform mine planning. The mineralization style and
setting is well understood and can also support declaration of Mineral Resources and
Mineral Reserves.
Prospects identified within the Project area are at an earlier stage of exploration, and
the lithologies, structural, and alteration controls on mineralization, as well as the
mineralization continuity and geometry, are currently insufficiently understood to
support estimation of Mineral Resources.
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Figure 7-14: Dolores Prospect
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8.0 DEPOSIT TYPES
The Yanque and Accha deposits are considered to be examples of carbonate

replacement or Leadville type deposits that have undergone extensive alteration or
weathering. Type examples of such deposits were described from Northern Mexico by
Megaw et al. (1988).
The deposits are commonly developed on the continental margins of orogenic belts
and on the inner side of major arcs where carbonate rocks representing stable
platform depositional environments are widespread. The deposits are associated with
granodioritic to granitic magmatism. Host carbonate rocks can be limestone or
dolomite. The deposits are interpreted to form by a combination of magmatic–
hydrothermal processes associated with igneous intrusions and typically form at higher
temperatures than do sedimentary exhalative or Mississippi Valley-type replacement
deposits. Formation temperatures from 200° to 500° C (Megaw et al., 1988) are
characteristic, as are high chlorine concentrations.
The type of mineralization ranges from Cu and Zn–Pb exo-skarns through more distal
Pb-Zn skarns to massive sulphide bodies hosted by limestone and dolostone.
Deposits can be cross-cut by granite, quartz monzonite and other intermediate to
felsic, hypabyssal, porphyritic lithologies. In many districts, there is a continuous
transition from skarn ores to massive ore bodies beyond the skarn zones.
The principal controls on mineralization can be complex fold and fault structures,
simple fault-related structures, or concentric structural patterns related to intrusions.
These controlling structures generally acted as fluid conduits and loci.
Deposits can take the form of mantos, chimneys, pods and veins (Einaudi et al., 1981).
Morphology changes have been attributed to combinations of local variations in
stratigraphy, structural patterns, the distance from source of the
mineralizing/hydrothermal fluids, and the relative depths of intrusive emplacement
(Megaw et al., 1988).
The most common sulphides are galena and sphalerite. Lesser amounts of pyrite,
pyrrhotite, marcasite, chalcopyrite and arsenopyrite (Einaudi et al., 1981; Megaw et al.,
1988) can be present. The gangue is dominated by carbonates, fluorite, or quartz with
or without minor barite and anhydrite. Calc–silicates may be locally present (Megaw et
al., 1988).
The contacts between mineralization and unaltered carbonate wall rocks are sharp.
Where alteration has developed, it is typically variable in thickness and extent; the
most common alteration types include zones of disseminated manganese oxide
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mineralization, hydrothermal dolomitization and/or recrystallized carbonates (Megaw et

al., 1988).
Features of the Accha and Yanque deposits which support the carbonate replacement
deposit model include:
 Distal association of the mineralization with the Yauri batholith, and diorite intrusive
rocks and felsic dikes
 Hosted in zones of high permeability within the siliciclastic- carbonate stratigraphy.
The Accha deposit has formed in a coral reef complex; the Yanque deposit is
hosted within an inter-formational breccia near the contact of the Soraya Formation
with the overlying Ferrobamba Formation
 Probable association of local cross-cutting faults and mineralization
 Presence of galena and pyrite as sulphides.
The precise setting of the hypogene mineralization is likely different between Accha
and Yanque, however exceptionally high uplift rates during the Miocene to Pliocene
Quechua I to Quechua III events and the relatively high porosity of the hypogene
mineralization are thought to have contributed to the pervasiveness and depth of
weathering of both deposits. The overprint of the weathering has served to mask most
of the key genesis features at surface.
In the opinion of the QPs, the carbonate replacement model when considerations of
the effects of intense weathering are included is appropriate to support exploration
activities.
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9.0 EXPLORATION
9.1 Legacy Exploration Data
Work completed prior to Zincore’s interest in the Project is referred to as legacy data.
This work is summarized in Table 9-1.
The Accha deposit area was initially referred to in early reports as the Titiminas area,
after Cerro Titiminas, a prominent hill; this usage has since been discontinued in
favour of Accha for the deposit area and surrounds.
Geological mapping in the Accha area comprised deposit-scale mapping at 1:2,500

scale, a regional compilation geological map at 1:10,000 was generated from this
work. A total of 201 rock chip samples were taken during the mapping program. In
addition, soil sampling (4,643 samples) and stream sediment sampling (26 samples)
were completed (McMahon et al., 2009). Trenching was initially conducted in 1995
over gossanous outcrops, and these trenches were later re-opened and re-sampled.
A total of 1,355 trench samples were assayed from 1,073 sampled intervals (Steuben,
2011).
A controlled source audio magneto telluric (CSAMT) survey was completed by Zonge
Ingenieria y Geofisica (Chile) S.A. in 2009. Three traverses, or 5.35 line km were
undertaken, using a square transmitter loop. Despite high contact resistance being
encountered, a resolution of about 1 km was interpreted. Results of the survey
defined the then-known mineralization and outlined features interpreted to be
structures (Winter and Schmidt, 2006).
A 100 metre pole-dipole IP survey was undertaken in September 2009 by Val d’Or
Geofisica (Peru) S.A. on seven traverses totalling 17.4 line km. Resistivity and
chargeability data outlined the extent of the then-known mineralization, but the majority
of the chargeability anomalies were attributed to pyritic quartzite. The resistivity data
was interpreted to define the faulting and major thrusting in the area (Winter and
Schmidt, 2006).
In April 2010, Val d’Or completed a ground GPS/magnetometer survey, comprising

101 line km, at nominal 100 m line spacings and station spacings of 10 m. This survey
identified a small amplitude long wavelength magnetic low over the Accha deposit.
Intense magnetic anomalies were interpreted to correspond with outcropping or
shallowly-buried Puno Formation rocks (Winter and Schmidt, 2006).
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Table 9-1: Legacy Exploration Programs
Accha Operator Year Work Completed Comment
Surface sampling and mapping

All zones consist of smithsonite and
which identified five zinc-lead
Southwestern zinc silicate mineralization in
1994 occurrences, including the
Resources Corp. carbonates; these zones are part of
Titiminas, Camp, and Titiminas
the Accha deposit area
West prospects.
Constructed a road to the deposit
Established the continuity of the
area, and completed six core holes.
zinc-lead mineralization down dip
Cominco Ltd. 1995–1996 Trenching completed, but number of
and showed that there were several
trenches and metreages excavated
zones of zinc oxide mineralization
not available.
Drilling of 18 core drill holes and 36
reverse circulation drill holes
Savage Resources totalling 12,597 m. Cominco
Updated mineral resource estimate,
Ltd, and following trenches cleared out and sampled,
1998–2001 initial metallurgical tests and
acquisition of Savage, additional trenches excavated for a
engineering concept reviews
Pasminco Ltd total of seven trenches. CSAMT,
pole-dipole IP and ground
GPS/magnetometer surveys
Unknown, attributed Mapping at 1:2,500, geological

to the Cominco– compilation plans at 1:10,000; soil
1995–2001
Savage/Pasminco sampling (4,643) and stream
period sediment sampling (26)
Prospecting, geochemical rock and

soil sampling, stream sediment
Yanque Rio Tinto 1995–2000
sampling, geological mapping and
core drilling (1,320 m in 13 holes)
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At Yanque, Rio Tinto completed an exploration program that consisted of prospecting,

geochemical rock and soil sampling, stream sediment sampling, geological mapping
and diamond drilling.
9.2 Grids and Surveys
Zincore uses the UTM WGS 84 coordinate system for zone 18 as its data acquisition
and plotting coordinate system for the AZOD Project.
In 2006, Zincore commissioned Horizons South America SAC to prepare a high-

resolution topographic map of the Project area. This was based on a series of
1:20,000 scale photographs, verified by field surveying of control points. The final
product generated was a topographic base at 1 m interval precision in the Accha area,
and 5 m interval precision in the Yanque area.
For concessions outside the Accha and Yanque areas, an updated surface topography
was prepared by IDES Perú 2012. This work is based on a series of air photo
restitutions at 5 m contour intervals from 1:55,000 scale photographs.
9.3 Geological Mapping
During 2006, Zincore integrated all legacy geological, geophysical and geochemical
data to support local and regional geological interpretations and to aid exploration
vectoring.
Since 2007, Zincore has carried out detailed outcrop and trench mapping at 1:1,000
and 1:2,500 scales over the Accha and Yanque deposits. Mapping points are located
by hand-held GPS, rock type and structures are mapped, and “Zinc Zap” is used to
provide an indication of the presence and intensity of zinc mineralization.
Geological mapping at the Dolores prospect has been completed at 1:5000 scale over
the deposit area, with some infill mapping at 1:2,000 scale in areas of road cuts.
9.4 Geochemical Sampling
During initial reconnaissance prospecting of the Project area, Suroeste took 94 surface
chip samples along traverses measuring 1.0 to 2.0 in length. Samples were intended
to identify geochemical anomalies and results were reported for zinc and lead.
In the Dolores area, the geochemical sampling program has included collection of 555
soil samples, 746 rock chip samples, and 26 stream sediment samples for a total
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1,327 samples collected. Samples were taken as first-pass reconnaissance

exploration of porphyry copper–molybdenum target areas.
9.5 Geophysical Surveys
A set of geophysical surveys were carried out during 2011 by Val D'or Geofisica del
Peru SAC of Lima (VDG) in the Dolores area, and consisted of a deep reconnaissance
IP survey over 22 km2 with 500 m line-spacing (48 line-km). Magnetics and gamma
spectrometry were also completed within the same target area at 250 m line spacing
(92 line-km).
During 2012, the geophysical surveys carried out by New Sense Geophysics Ltd.
covered all concessions on Zincore's entire AZOD property package and consisted of
aerial geophysical studies comprising approximately 4,800 line kilometres at 200 m
spacings. The full scope of reconnaissance activities included an airborne
magnetometric and spectrometric survey, advanced spaceborne thermal emission and
reflection radiometer (ASTER) multispectral satellite image interpretation, digital
elevation model (DEM) structural interpretation, in conjunction with the geophysical
sampling discussed in Section 9.4 at Dolores.
Fathom Geophysics (Fathom) helped analyze and interpret the airborne geophysical
and ground data, as well as the ASTER images and structural model. These
interpretations are ongoing.
9.6 Pits and Trenches
Numerous historic pits and trenches can be found on the AZOD property. Pits have
been excavated by artisanal miners working small silver and polymetallic veins and
also zinc- and lead-rich clay for pottery.
Cominco excavated a number of trenches at Accha but these have been filled in and
the total number and length of these trenches is not known. Since the Cominco
exploration program, a total of 17 trenches totalling 1,159.2 m have been excavated at
Accha; seven were excavated by Savage, and the remaining 10 by Zincore.
Trenches were mapped and 289 samples were taken from the trenches. Samples
were taken as continuous chip samples at 2.0 m to 5.0 m lengths along the length of
the trenches. Trenches are located using a GPS and plotted using a starting point
location with an azimuth, dip and total length.
At Yanque nine trenches totalling 516 m were excavated by Zincore, mapped and 514
samples were taken. Samples were taken as continuous chip samples at 2.0 m to
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5.0 m lengths along the length of the trenches. Samples were analyzed by multi-
element inductively-coupled plasma (ICP). Trenches are located using a GPS and
plotted using a starting point location with an azimuth, dip and total length.
A summary of trenching campaigns at Yanque and Accha is provided in Table 9-2.
Table 9-2: Trench Summary Table

Operator Period Trenching Comments
Trenches (m)
Accha
Cominco 1995-1996 unknown Not used in Mineral Resource estimate
Savage 1998-1999 7 800 Used in 2013 geological model for Accha
Zincore 2007 7 273.7 Used in 2013 geological model for Accha
Zincore 2010 3 85.5 Used in 2013 geological model for Accha
Yanque
Used in 2013 geological model and Mineral Resource
Zincore 2007 9 516
estimate for Yanque
Trenching data were reviewed by AMEC in 2011. Historic trenches had been back-
filled where they posed a safety hazard but in general, as soil and overburden is thin
over both the Accha and Yanque deposits, many trenches were still visible. Trenches
are approximately 1 m wide and have overburden removed to expose bedrock. Chip
channel samples about 5 cm wide were taken over lengths of 0.5 m to 2.0 m long.
Trench data are used to construct the geological model at Accha, but do not inform
grade estimates. Trench data are used both to support the geological model and the
interpolation of grade at Yanque.
Trenching has also been conducted at the Dolores deposit, with three exploration
trenches for a total of 128 m were completed to test areas of altered quartz diorite
porphyry that cropped out on surface.
9.7 Petrology, Mineralogy, and Research Studies
A detailed petrographic and mineralogical study of the Accha Deposit was carried out
from 2005 to 2007 and was published in Boni et al. (2009). Microscopy and
quantitative XRD work was carried out on samples from four drill holes (AC-01, AC-02,
AC-03 and AC-04) spaced at 50 m to 100 m apart across the deposit.
A similar petrographic and mineralogical study by Dr. M. Boni is underway for the
Yanque deposit, with publication of the findings to follow
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9.8 Exploration Potential
Significant exploration potential is considered to remain at the Accha deposit. Zinc

oxide mineralization has been encountered in trenches on the north limb of the
antiform hosting the majority of the high-grade zinc mineralization at Accha. The high-
grade reef zone is also open at depth and is a major target for underground
exploration. There is also reasonable potential to discover additional zinc oxide
mineralization both from surface and underground westward along strike from the
deposit.
At Yanque, exploration potential for zinc–lead oxide mineralization exists along the
favourable conglomerate and breccia horizon to the south and to the east of the limits
of mineralization identified to date. Mineralization may also continue across the fault to
the north.
The Yanque East, Puyani, Gema and Corrales areas are also significant exploration
targets with potential to host near-surface zinc and lead oxide mineralization away
from the Yanque and Accha deposits.
Dolores remains prospective for porphyry and skarn-style copper–molybdenum

mineralization.
In the QPs’ opinion:
 The exploration programs completed to date are appropriate to the style of the
deposit and prospects;
 Additional exploration has a likelihood of generating further exploration successes
particularly down-dip of known zones and along strike from the known deposits.
There are a significant number of prospects and occurrences remaining to be drill
tested and fully evaluated.
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10.0 DRILLING
Drill campaigns have been carried out on the Project by Rio Tinto, Suroeste,
Pasminco, Savage and Zincore. The majority of drilling was focused on the Accha and
Yanque deposits; however, some exploration drilling was carried out at some of the
other occurrences within the Project area. Drilling is summarized in Table 10-1, and
represents the known drill holes in the drill databases. Holes in the Zincore campaigns
account for 81% of holes drilled at Accha and 89% of holes drilled at Yanque.
Table 10-1: Drilling on the AZOD Project

Reverse
Operator Period Circulation Diamond Drill Drill Type
Holes (m) Holes (m)
Accha
Cominco 1995–1996 6 1,031 HQ/NQ
Savage 1998–1999 26 5,560 10 2,089 HQ/NQ
Pasminco 1999–2000 10 1,785 8 3,159 HQ/NQ
Zincore 2006–2007 62 14,465 Bradley LF70/38 HQ/NQ
Zincore 2006–2007 4 600 Metallurgical test work
Zincore 2010 35 4,709 LF38 HQ/NQ
subtotal 125 26,053
Yanque
Rio Tinto 1996 16 1,769 Unknown drill type
Zincore 2007 45 6,528 LF38 HQ/NQ
Zincore 2011 128 16,353.3 LF38 HQ/NQ
subtotal 189 24,650.3
Azulcancha
Suroeste 2005 2 478 NTW Gopher
Capayocc
Suroeste 2005 10 650 NTW Gopher
Puyani
Savage 1998 2 500 Unknown
Dolores
Zincore 2011–2012 17 8,496.30
Total drilling in the Project area, including regional exploration, metallurgical and
geotechnical drilling totals 345 holes (60,827.60 m), of which 291 holes (51151.6 m)
has been completed by Zincore.
Figure 10-1 shows the drill and trench locations at Accha; Figure 10-2 shows the drill
locations at Yanque. Drill locations for the recent Dolores drill holes are included in
Figure 7-14.
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Figure 10-1: Drill Hole and Trench Locations at Accha
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Figure 10-2: Drill Collar and Trench Locations at Yanque
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10.1 Drill Methods
10.1.1 Legacy Programs
There is no information available to AMEC as to the names of the drill contractors

employed during the legacy drill programs, or as to the types of rigs employed.
Stubens (2011) reported that drilling methods during legacy programs consisted of
face-sampling RC, and HQ (63.3 mm core diameter), NQ (46.7 mm) and at times BQ
(36.5 mm) diamond core drilling.
The majority of the legacy drilling at Accha in the Project database is either NQ or HQ
in size.
Pre-Zincore holes drilled by Rio Tinto at Yanque were a combination of vertical and
inclined with inclined diamond drill core holes of HQ and NQ diameter. Inclined drill
holes were generally drilled along the exploration grid section lines oriented at
approximately 60°.
10.1.2 Zincore Programs
Drilling was conducted by Bradley MDH S.A.C (Bradley) as the drill contractor, using,
depending on the program, two skid-mounted LF-70 and one portable LD-250-1
diamond drill machines.
Between November 2006 and August 2007, Zincore drilled 14,465 m in 62 core drill
holes in and around the Accha deposit. Drill holes were drilled along section lines
oriented roughly north-south with down-hole inclinations of -44° to -89°. Drill holes
testing the north limb of the mineralized body were drilled at azimuths of approximately
180° to provide better core intersection angles.
In 2007 Zincore drilled a total of 45 exploration holes and two drill holes for
metallurgical sampling in and around the Yanque deposit for a total of 6,873 m. All drill
holes were HQ size core and following logging the core was transported to the Accha
camp for sampling and storage.
During 2010, a program of definition drilling, at 25 m intervals, was undertaken at

Accha. An additional 35 holes (AC-63 to AC-97), totalling 4,708 m, were drilled,
targeting the main high-grade algal reef unit. Holes were drilled to HQ diameter.
Beginning in December 2010 and ending in August 2011, Zincore carried out an infill
diamond core drilling program on the Yanque deposit. Drill holes were collared to fill in
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the drill coverage over the deposit on a grid pattern of nominally 50 m x 50 m. A total
of 83 drill holes and 9,326 m were drilled as part of the 2011 Yanque infill drill program.
For all Zincore programs, core boxes were identified with aluminum tags recording the
hole identification, box number and core interval. Core runs were marked with wooden
blocks placed in the box. Core boxes were closed and transported each day from the
drill site to the storage shed at the Yanque camp, or Accha camp, depending on which
was closer for the program being conducted. Original drill logs, including geological
observations and recovery information, are stored at the Zincore office in Lima.
During the Dolores campaigns, drill holes typically had dips ranging from -50 to -78º,
an average azimuth of 200º, and an average hole depth in the 17 completed drill holes
of about 500 m. Bradley was the drill contractor. Drill core is stored in the Larota
camp.
10.2 Geological Logging
No formal written drilling procedures exist for the Cominco, Savage and Pasminco
reverse circulation and core drilling programs; however, drill logs and reports from
these periods have been reviewed and an inspection and re-logging of drill core and
RC rejects have been carried out by Zincore. Zincore also re-logged the existing Rio
Tinto core.
Zincore geologists supervised Bradley Drilling during drilling and recovery

determinations. A number of logging codes were input into the Drill King dictionary
prior to the beginning of the drill programs. These codes were designed to reflect the
broad lithological units recognized in the geological mapping. Drill core was logged
using these logging codes for lithology units and RQD measurements were taken of
each drill run.
Core was photographed, and stored in wooden boxes at the Accha camp, or, initially,
at the Yanque camp prior to being transported to the master storage facility at Accha.
Separate logging codes were established for the Dolores drilling program, but the
same methodologies were used in logging. Core was also photographed.
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10.3 Recoveries
Recovery data for the legacy drill programs are not available.
Core recovery was determined by adjusting core to eliminate any space between drill
run marker blocks, measuring the resulting length and dividing this by the reported
length of the drill advance.
At Accha, drill core recovery for intervals having zinc grades of greater than 2%
averages 94.9% in drill holes drilled by Zincore. Drill core recovery for mineralized
intervals having the sum of zinc and lead grades of greater than 2% average 97.3%
from drill holes drilled by Zincore at Yanque.
10.4 Collar Surveys
No information is available on the original collar survey methods employed in the

legacy drill campaigns at either Accha or Yanque.
During 2011, Zincore undertook a re-survey of all drill platforms at Accha and Yanque,
using a Total Station instrument. The resurvey included all legacy drill platforms.
All drill hole collars at Yanque and Accha are marked with a concrete monument. Drill
holes are initially located using a hand-held GPS and are later surveyed by a
topographic survey team using differential GPS.
Dolores drill collars were picked up using differential GPS.
10.5 Downhole Surveys
No down-hole surveys were performed during the Accha legacy drill programs.
No down-hole surveys were taken during the Rio Tinto campaign at Yanque.
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AMEC reviewed legacy and Zincore drill twins for potential down-hole survey issues,
and this is discussed in Section 12.4.
Down-hole surveys have been recorded at 50 m down-hole intervals for drill holes
drilled by Zincore at Accha and Yanque. Down-hole surveys have primarily been
taken using a Flexit or Reflex Easyshot magnetic down-hole survey instrument. The
initial drill campaign commenced using a Sperry Sun instrument; however, as few
cavities were encountered in the 2007 drill program, the use of the Sperry Sun was
discontinued.
The Dolores drilling had down-hole surveys taken at 50 m down-hole intervals using
the Flexit instrument.
10.6 Geotechnical and Hydrological Drilling
A geotechnical drill program of a potential tailings disposal facility area at Accha was
carried out in 2007 and 2008. Five shallow drill holes were drilled in an area 2,200 m
southwest of the Accha Deposit and approximately 500 m west of the camp.
Additional geotechnical drilling was completed in the areas of the proposed. Accha and
Yanque pits, pyrometallurgical plant site, Accha and Yanque waste dumps, and slag
storage facility from August 2012 to December 2012. A total of 1,587 m of diamond
drilling was performed during this campaign. A total of 39 test pits were also dug in
strategic areas in order to obtain structural soil characterization of the proposed
infrastructure sites.
A total of eleven piezometers were installed at different depths throughout the Project
area. This provided a water availability indication for the amount of underground water
found at the area.
10.7 Metallurgical Drilling
The majority of test work has been performed on core drilled for exploration purposes.
In 2007 four HQ diameter metallurgical drill holes were drilled at Accha to generate
1,000 kg of sample as part of a 2008 study (Metallurgical-1, Metallurgical-2,
Metallurgical-3, and Metallurgical-4). These drill holes were drilled to the north on
section lines spaced 50 m to 100 m apart.
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10.8 Sample Length/True Thickness
Drill holes are designed to intersect the mineralization in as perpendicular a manner as

possible; reported mineralized intercepts are typically longer than the true thickness of
the mineralization.
A series of section and plan maps for each deposit are included in Section 7. These
maps include drill hole traces and an interpretation of major geologic contacts. These
figures show that drill orientations are generally appropriate for the mineralization style,
and have been drilled at orientations that are optimal for the orientation of
mineralization for the bulk of the deposit areas.
In the opinion of the QPs, the quantity and quality of the logging, geotechnical, collar
and down-hole survey data collected in the exploration and infill drill programs are
sufficient to support Mineral Resource and Mineral Reserve estimation as follows:
 Legacy Drilling
- The geological logging has been accepted for use in estimation because the
original geological logs are available and Zincore has verified the logging
through a re-logging program
- The collar locations have been accepted for use in estimation because the
collar locations of the majority of the drill holes have been re-surveyed by
Zincore personnel
- Down-hole surveys are not available for the legacy drilling during the drill
campaigns, however, because the holes are shallow, there is interpreted to be
limited deviation. By way of check, the small number of Zincore twin holes
drilled to confirm selected legacy holes in the centre of the deposits also do not
indicate significant down-hole deviations are likely.
- Recovery issues were noted as potentially existing in the more friable zinc
oxide-bearing units during the Savage drill campaign at Accha (see Section 11);
however, the volume of available data from the Zincore campaigns provides
reassurance on the recoverability using drill methods of material in this zone.
 Zincore Drilling at Accha and Yanque

- Core logging meets industry standards for exploration on polymetallic deposits;
- Collar surveys have been performed using industry-standard instrumentation;
- Down-hole surveys were performed using industry-standard instrumentation;
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- Drilling practices, logging, collar surveys and down-hole surveys have been
periodically reviewed by independent auditors (refer to Section 12);
- Recovery data from core drill programs are acceptable;
- Drilling is normally perpendicular to the strike of the mineralization. Depending
on the dip of the drill hole, and the dip of the mineralization, drill intercept widths
are typically greater than true widths;
- Drill orientations are generally appropriate for the mineralization style, and have
been drilled at orientations that are optimal for the orientation of mineralization
for the bulk of the deposit areas;
- Drill orientations are shown in the example cross-sections in Section 7, and can
be considered to appropriately test the mineralization;
- No factors were identified with the data collection from the drill programs that
could affect Mineral Resource or Mineral Reserve estimation.
AMEC did not review the results of the drill program at Dolores.
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11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 Sampling Methods
11.1.1 Legacy
All historic Accha core was half sawn and sampled at 0.2 m to 3.0 m lengths. RC
samples were riffle-split to three kilograms on one metre to three metre intervals from
the initial drill interval.
A review of the Cominco and Savage data for Accha did not identify any specific
descriptions of sampling methods and techniques for the drill core and RC samples
Due to the friable nature of the zinc oxide mineralization, there may have been
recovery and sampling problems in the Savage drilling programs.
There are no formal descriptions of sampling of drilling and trenching for the Yanque
deposit during the Rio Tinto campaigns.
11.1.2 Zincore
For the Zincore drill programs, once retrieved from the drill platforms at Accha or
Yanque, drill core boxes were checked to confirm the intervals marked for the drill runs
were in order. Any discrepancy was reported to the drill foremen and differences were
resolved with the drill foreman.
Boxes were marked with the drill hole number, and drilling interval and were then
transferred to the logging facility either the Accha or Yanque camp sites, depending on
the drill campaign.
Core logging was carried out by Zincore geologists and sampling intervals were
selected and marked using numbered paper sample tags and aluminum sample
interval markers into the boxes. Spaces were left in the sampling sequence for the
insertion of blanks and standards. A standard sample length of 1 m was used within
mineralized zones, and 2 m outside mineralized zones.
Core boxes were photographed and photos and the digital core logging database were
routinely sent to Lima and Vancouver for backup and review.
Field assistants cut the core in half using a circular diamond rock saw and returned the
boxes to the logging facility for sampling under supervision by a Project geologist.
Occasionally samples of friable oxidized core were split using a knife and spoon to
collect the soft material from the box. The Project geologist supervised sampling and
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sample bagging to ensure that samples were correctly identified in large storage bags
which were shipped to Lima using a private trucking company.
For the Dolores program, the first ten holes of the program were only sampled in areas
that were considered to be mineralized. The remaining seven core holes were
sampled on 2 m intervals.
11.2 Density Determinations
11.2.1 Legacy
Bulk density determinations were undertaken on 10 samples from drill hole SAC-07
between 315.95 m and 335.8 m depth using the water immersion method.
11.2.2 Zincore
In 2007, Zincore carried out bulk density determination programs on diamond drill core
from Accha. A total of 124 samples were collected from various drill holes and
measured by the Project geologist on site. A second density determination was also
carried out on 50 samples from the same set of holes by ALS in Lima. Both the on-site
and check determinations followed the paraffin wax-coated immersion density
determination method.
Zincore collected 503 density determinations of Yanque drill core from drill holes drilled
during the 2007 and 2011 campaigns. Density determinations were carried out at the
Accha exploration camp after logging cutting and sampling at the Yanque exploration
camp. Density determinations were by the paraffin-coated water immersion method
on 10–15 cm long core intervals, similar to that used for the Accha density
determinations.
11.3 Analytical and Test Laboratories
The Cominco assays were performed by the in-house Cominco laboratory. Laboratory
accreditations at the time are not known.
Savage and Pasminco appear, based on the analytical assay receipts, to have used
SGS del Peru S.A. and ALS Geolab S.A. Laboratory accreditations at the time are not
known.
Rio Tinto used Anamet Laboratories during their drill program at Yanque (McMahon,
2008a). Laboratory accreditations at the time are also not known.
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Zincore used ALS Lima for all Project assays from 2006 to 2008. The ALS Lima
facility has received ISO 9001:2008 and ISO 17025:2005 certification. In 2013, ALS
Lima was also used as a check laboratory.
From 2009 onwards, Zincore used Acme Peru as the primary laboratory. Acme’s Lima
Peru facility received ISO 9001:2000 registration in 2009.
SGS Peru was used in 2010 as a check laboratory. ALS and ACME have also
performed re-analyses of their original analytical samples as part of check assay
verification.
11.4.1 Legacy
McMahon (2008a) notes in relation to the legacy sample preparation and analysis
conducted at Accha:
“Cominco reports that the mapping, logging and sampling were carried out by Cominco
personnel and that the rock, geochemical and drill core analytical results were done by
ICP techniques. It is reported that the geochemical samples were processed at the
Cominco Peru lab with the analyses being done in Vancouver at Cominco’s in-house
laboratory.
Neither Savage nor Pasminco have commented on the analytical procedures of the
laboratories utilized for the various drill campaigns. A review of Assay Certificates and
Certificates of Analysis reveal that SGS del Peru S.A. and ALS Geolab S.A. were
utilized for analyses.
There is no reporting of the security procedures undertaken during the collection and
transport of the samples during the Cominco, Savage or Pasminco programs.”
At Yanque, McMahon (2008b) notes:
“In the RTZ reports describing their work in the Yanque Property up to 1996 it is noted
that Anamet laboratories was used; however, analytical procedures, sample
preparation or security measures were not reported. The reported analytical results
suggest that lead and zinc were determined by dissolution followed by an "ore grade"
method of analysis while other elements were determined at the geochemical level by
a multi-element analytical technique.”
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11.4.2 Zincore
Samples were placed in rice bags and sealed with numbered security tags on site and
then shipped via a privately contracted trucking company directly to the laboratory
facility. In order to ensure control of shipping, the laboratory was required to review
the state of the security tags on reception by signing a shipping manifest. The
laboratory was instructed to report any evidence of tampering with the rice bags or
security tags. There was no incident of tampering reported by either laboratory during
the drilling campaigns.
At ALS Lima, all samples for the resource drill programs were crushed to P70 -2 mm
then split and pulverized to P85 -75 µm. The samples were digested using a three-
acid digestion and analyzed by two packages (Table 11-1). Lead and zinc were
determined by atomic absorption (AA62) and if the results exceeded 30% they were
re-assayed by volumetric methods (VOL70). All samples were also analyzed by
inductively-coupled plasma mass-spectroscopy (ICP-MS) for 25 elements using a
three acid digestion for complete dissolution (ME_ICP61a). The ICP method provided
reliable total analyses for calcium, iron, magnesium, manganese as well as silver,
aluminum, arsenic, beryllium, bismuth, cadmium, cobalt, chromium, copper,
potassium, molybdenum, sodium, nickel, lead, antimony, strontium, titanium, vanadium
and zinc.
Table 11-1: Detection Limits, ALS

Detection Limits, ALS
ALS ME-ICP61 (33 elements four acid IPC-AES)

AA62 Ore grade Pb /Zn four acid AAS (0.001-30%)
VOL70 Zn -Pb (0.01-100%)
AU-AA23 Au 30 g
The ALS Lima laboratory analyzed samples in batches of 40. Each batch included at
least five samples that were internal duplicates or standards and 35 submitted
samples. In order to ensure that at least one blank and a standard were included in
each analytical batch, a blank was inserted by the laboratory every 10th sample and a
standard every 20th sample.
For the 2010 to 2011 drill programs, Zincore used the facilities of Acme Laboratories in
Lima to carry out analyses. All drill core samples were shipped in securely-sealed bags
via a private trucking company directly to the Acme Laboratories facility in Lima.
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All samples for the drill program were analyzed using two techniques: Zn and Pb
grades were determined by atomic absorption and if the results exceeded 10% they
were re-assayed by volumetric methods (Table 11-2). In addition, all samples were
assayed by ICP-emission spectroscopy (ES) for 37 elements.
Table 11-2: Detection Limits, Acme

Detection Limits, Acme
ACME 1E 4 Acid digestion ICP -ES

8TD 4 Acid digestion AAS (Zn & Pb (%) MDL 0.1
ALS and ACME were both used during the Dolores drill campaign. Analytical methods
are summarised in Table 11-3.
Table 11-3: Analytical Methods and Laboratories, Dolores Campaigns

Drill Hole IDs Methods
Laboratory Year
ICP Cu
DOL01 DOL10 ACME 1D-ES (AquaRegia) 8AR (AquaRegia) 2011
DOL11 DOL13 ACME 1EX -MS (4 Acid) 8TD (4 Acid) 2012
DOL14 DOL17 ALS MS61 (4 Acid) AA62 (4 Acid) 2012
11.5 Quality Assurance and Quality Control
No zinc oxide standards were available at the time of the Savage and initial Pasminco
work. McMahon et al. (2009) comment that:
“Pasminco recommended a re-assay check program in company with a zinc oxide

standard. Previously, Kvaerner noted that no holes were surveyed downhole and
recommended duplicate and replicate sampling and Pasminco acted on these
recommendations in its drill campaign”.
There was no information available to AMEC on the results of the Pasminco re-
analysis program.
There is no information available as to QAQC practices during the Rio Tinto drill
program at Yanque.
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11.5.2 Zincore
Blank samples were collected by Zincore staff and were a volcanic tuff from the Lorota
region (Accha) and a second volcanic tuff from the Yanque area.
During the 2006–2011 campaigns, standard reference materials (SRMs) samples were
inserted at a rate of one per 20 drill core samples, blanks have been inserted at a rate
of one per 16 core samples.
The SRMs used in the Accha and Yanque drill programs were generated on-site using
zinc oxide material excavated from existing trenches, and prepared and analysed at
ACME Laboratory and resulted in three SRMs which were considered to be
representative of low grade, medium grade and high grade zinc oxide mineralization.
Zincore submitted 170 pulp samples from the 2010 drill campaign to SGS Lima for
check analysis. Analytical methods used are summarized in Table 11-4.
Table 11-4: SGS Analytical Methods

SGS ICP40B 36 elements (Multi-acid Digest)
Zn Pb Zn Pb
% % % %
AAS41B AAS41B CON21B CON29G
Detection Limits 0.01 0.01 0.001 0.01
AA41B: Multi-acid Digest
CON21B: Volumetric
In 2012–2013, Zincore submitted an additional 332 check samples from the ALS (124
samples) and ACME (208 samples) analytical programs to ACME and ALS as check
samples. The check assays used the original analytical methods (Table 11-5).
Table 11-5: ACME and ALS Check Assay Analytical Methods

ALS ME-ICP61 (33 elements four acid IPC-AES)
AA62 Ore grade Pb /Zn four acid AAS (0.001-30%)
VOL70 Zn-Pb (0.01-100%)
AU-AA23 Au 30 g

ACME 1E 4 Acid digestion ICP -ES
8TD 4 Acid digestion AAS (Zn & Pb (%) MDL 0.1
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For the Dolores drill program, nine standards were used. Standards were sourced
from CDN Resource Laboratories Ltd of Canada, and represented low-grade, medium
grade and high grade copper and gold values. Two sources of blanks were used.
One came from the Yanque area, and was a volcanic tuff. The second consisted of
quartzose sandstones purchased from Minerals Supply & Services (Lima). Insertion
rates were one blank every 10 samples and a standard every 20th sample.
11.6 Databases
The Zincore database drilling has been built upon a Microsoft Access back-end data
store with programming in Visual Basic. The database itself is split into four separate
but interlinked tables, separating the geology and assay tables from the historic data
and the design database. This system was developed by Atticus & Associates for
Zincore in 2008.
The drill logs are recorded on paper logs which are later scanned. The drill logs are
entered into an Excel spreadsheet on a daily basis and these logs are imported into an
Access database. Data entry is verified by the Project geologist and again by Zincore
personnel in the Lima office. Erroneous data entry is also controlled by the use of
look-up tables.
The assay data are received from the laboratory as a *.csv file and imported directly to
the master Access database.
Collar surveys are digitally input into the database from the original survey. Down hole
surveys are manually typed in.
Data in the database are regularly backed up and stored on a Zincore server.
11.7 Sample Storage
All remaining legacy and Zincore drill core is stored at the Accha camp.
Zincore core and coarse crushed rejects and assay pulps, once returned from the
laboratory, are stored in permanent storage sheds at the Accha camp.
11.8 Sample Security
Sample security was not generally practiced at either Accha or Yanque during the
drilling programs, due to the remote nature of the sites. Sample security relied upon
the fact that the samples were always attended or stored in the on-site sample
dispatch facility.
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Chain-of-custody procedures consist of filling out sample submittal forms that are sent
to the laboratory with sample shipments to make certain that all samples are received
by the laboratory.
In the opinion of the QPs, the sampling methods are acceptable, meet industry-
standard practice, and are adequate for Mineral Resource and Mineral Reserve
estimation and mine planning purposes, based on the following:
 Legacy
- There is no information available on the sampling methods and QA/QC
employed for the legacy drill programs; however, sufficient programs of
reanalysis and twin drilling have been performed that the data can be accepted
for use in estimation (refer to Section 12); in addition, the majority of the core is
available for inspection and review.
 Zincore (Accha and Yanque)

- Drill sampling has been adequately spaced to first define, then infill, base metal
anomalies to produce prospect-scale and deposit-scale drill data
- Since inception of the Zincore drill campaigns, data have been collected
following industry-standard sampling protocols (see Section 12 for discussion of
third-party reviews)
- Sample collection and handling of core was undertaken in accordance with
industry standard practices, with procedures to limit potential sample losses and
sampling biases
- Sample intervals in core, comprising 1 m intervals, are considered to be
adequately representative of the true thicknesses of mineralization
- Sample preparation for samples that support Mineral Resource estimation has
followed a similar procedure since 2005. The preparation procedure is in line
with industry-standard methods for polymetallic deposits
- Exploration and infill core programs were analysed by independent laboratories
using industry-standard methods for silver, lead, and zinc analysis.
- Specific gravity determination procedures are consistent with industry-standard
procedures. While there are sufficient acceptable specific gravity
determinations to support the specific gravity values utilized in tonnage
interpolations, additional determinations to support feasibility-level studies are
recommended
- Typically, drill programs included insertion of blank and standard samples. The
QA/QC program results (see Section 12) do not indicate any problems with the
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analytical programs, therefore the analyses from the core drilling are suitable for
inclusion in Mineral Resource and Mineral Reserve estimation
- Sample security has relied upon the fact that the samples were always attended
or stored in the on-site sample preparation facility. Chain-of-custody
procedures consist of filling out sample submittal forms that are sent to the
laboratory with sample shipments to make certain that all samples are received
by the laboratory;
- Current sample storage procedures and storage areas are consistent with
industry standards.
 Prior to estimation, AMEC performed the following checks:

- Data that were collected were subject to validation, using in-built program
triggers that automatically checked data on upload to the database
- Verification was performed on all digitally-collected data on upload to the main
database, and included checks on surveys, collar co-ordinates, lithology data,
and assay data. The checks are appropriate, and consistent with industry
standards.
AMEC has not reviewed analytical or sampling data from the Dolores drill programs.
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12.0 DATA VERIFICATION
A number of iterations of data verification have been performed in support of technical

reports on the Project, as follows.
12.1 Winter and Schmidt (2006)
Winter and Schmidt (2006) note that:
“No oxide standard was available during the drilling of holes A_01 through to SAC_24.
As all drill rejects exist at site, Pasminco recommended that a small re-assay check
program with a zinc oxide standard be conducted to determine the reliability of the
results. Savage also did not undertake random duplicate or replicate check analyses.
Kvaerner also noted that no holes were surveyed downhole and recommended a
systematic duplicate and replicate sampling and independent analytical program.
These recommendations were acted upon by Pasminco in its 1999-2000 drill
campaign.”
A review was undertaken of three RC/core twins, completed to assess whether any
major biases existed between the RC and core data. Winter and Schmidt (2006)
found that the RC drilling did not appear to be smearing grades downhole, but RC data
showed higher zinc grades than did the core holes.
12.2 Pincock, Allen and Holt (2008)
Pincock, Allen and Holt (PAH) investigated the validity of the assay results from the
Cominco, Savage and Pasminco drilling programs at Accha. McMahon, 2008a states:
“Core from these programs were examined and compared against the corresponding
zinc assays in the drill hole database. Additionally, PAH compared zinc assays of
these holes against those of corresponding twin holes drilled by Zincore. No evidence
of contamination of the results or systematic error was revealed based on this review.”
PAH reviewed the available topographic, collar and downhole survey data, concluding
the methods used by Zincore were consistent with industry practice, and provided
reliable data. Sampling practices were reviewed, and also found to be acceptable.
A number of density determinations were found to be biased high due to the use of a
scale considered inappropriate for such estimates and were recommended to be
excluded from estimation support.
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Review of the database included verification core logging, to compare PAH logging to
that in the database in terms of lithologies and oxidation intensity. Comparisons
between the data indicated no significant discrepancies. More intense oxidation was
noted to coincide with higher zinc grades. Zinc assays from the original assay
certificates were compared to database values for those sample numbers, with no
significant database transcription errors noted.
Reported grades for selected Rio Tinto drill holes included in a previous technical
report were cross-checked against grades in the Yanque database, with no database
errors noted.
PAH reviewed the available topographic, collar and downhole survey data for the
Yanque deposit, and again found the Zincore methods to be consistent with industry
practices and to provide reliable data. Sampling practices were reviewed, and also
found to be acceptable.
Review of the database included verification core logging, to compare PAH logging to
that in the database in terms of lithologies, lead mineralization and oxidation intensity.
Comparisons between the data indicated no significant discrepancies. Zinc and lead
assays from the original assay certificates were compared to database values for
those sample numbers, with no significant errors noted.
12.3 Micon (2010)
Micon investigated the validity of the assay results from historic drilling programs at
Accha. Core from these programs was examined and compared against the
corresponding zinc assay in the drill hole database. Additionally, Micon compared zinc
assays of these holes against those of corresponding twin holes drilled by Zincore. In
Micon’s opinion, no evidence of contamination of the results or systematic error was
revealed based on this review (Steuben, 2011).
Topography, collar location and downhole survey data were reviewed, and found to be
acceptable to support estimation.
Micon exported the data from the Access database into spreadsheets for checking and
analysis. Prior to importing the drill hole data into Datamine to begin geological
modelling and resource estimation, the data were checked exhaustively for errors; a
number of errors were found, brought to the attention of Zincore personnel and
corrected. After importing the drill hole data into Datamine, the hole collars and
trenches were compared against the topographic surface and any discrepancies were
brought to the attention of Zincore and corrected.
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Micon reviewed the QA/QC submissions and results. Insertion rates of standard
reference materials and blanks were considered to be in line with industry practice.
Laboratory performance was noted to be significantly different between the 2007 and
2010 drill programs. During the first drill program, the SRM values returned were
noticeably more erratic, and contained a higher proportion of “failed” samples (outside
the three standard deviations threshold considered acceptable).
A review of the 170 pulp duplicates submitted to SGS Lima in 2010 indicated
acceptable correlations between original and duplicate lead and zinc assays between
the check and original laboratories.
12.4 AMEC
During visits to site between 3–5 May and 4–7 September 2011, AMEC reviewed
drilling, core logging and sampling procedures as well as the geological interpretations
of Zincore field geology staff based on surface mapping, trenches and diamond
drilling.
In addition to verification of procedures and interpretations, AMEC’s on-site verification

procedure consisted of:
 Review of logging, sampling and assay grades from drill holes AC-06, AC-13, AC-
22, AC-36, AC-38, AC-69 y AC-75 representing 6% of holes drilled at Accha.
 Review of logging, sampling and assay grades from drill holes YA-11, YA-12,
YA-17, YA-19, YA-38, YA-105, YA-77, YA72, YA-48 and YA-109 representing 7%
of holes drilled at Yanque
 Re-surveying of collar locations for 11 drill holes using a hand-held GPS
representing a verification of 9% of drill hole collar locations at Accha.
 Re-surveying of collar locations for 11 drill holes using a hand-held GPS
representing a verification of 8% of drill hole collar locations at Yanque
 Confirmatory samples of six mineralized intervals at Accha and four mineralized
intervals at Yanque
Checks performed on the data provided to AMEC included:
 Comparison of collar elevations to the digital topographic surface

 Consistency of drill hole names
 Review of assay intervals for overlaps
 Management of assay results below or above detection limits
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 Consistency of down hole surveys.
Errors in the database identified from this review were flagged to Zincore, and
corrected in the database prior to commencement of estimation.
Prior to initiating Mineral Resource estimation AMEC reviewed the Mineral Resource
database for obvious defects in down-hole and collar location data including:
 Comparison of collar elevations to the digital topographic surface at Accha: All

Accha drill holes, including legacy drill holes have been surveyed using a total
station system with sub-meter accuracy. AMEC checked the collar file by
comparing it to the surface topography file. No significant issues were identified;
all drill collars were located near the surface. The average vertical error for the
collar file is 0.5 m relative to the surface topography, with a maximum error of 2.1
m and a minimum error of -2.2 m. These errors are considered to be within the
precision of the topographic file, and the cut and fill necessary observed in the field
to establish a drill platform
 Comparison of collar elevations to the digital topographic surface at Yanque: All
Yanque drill holes, including legacy drill holes have been surveyed using a total
station system with sub-meter accuracy. AMEC checked the collar file by
comparing it to the surface topography file. No significant issues were identified;
all drill collars were located near the surface. The average vertical error for the
collar file is 0.29 m relative to the surface topography, with a maximum error of 2.9
m and a minimum error of -2.87 m. These errors are considered to be within the
precision of the topographic file, and the cut and fill necessary observed in the field
to establish a drill platform.
 Consistency of down hole surveys at Accha: Down-hole surveys of Zincore drill
campaigns were taken using a Flexit or Reflex Easyshot magnetic down-hole
survey instrument at 50 m intervals. There are no down-hole surveys for Cominco,
Savage or Pasminco drill campaigns. Down hole surveys were checked in cross
section and in longitudinal section. No irregular traces were noted. The average
depth of the Zincore drill holes are 190 m, with the longest hole to 500 m and the
deepest intersection in the Zincore campaign is in the DDH-AC-33 at 370 m depth.
The deepest mineralized drill intersection is in DDH-PA-40 at 560 m depth and is
the maximum down hole depth of mineralized intersection of Pasminco drill
campaign. Assuming a down-hole deviation of 2°/100m to 3°/100m, relatively high
for NQ and HQ diameter drill holes, applied in 50 m steps down-hole, the maximum
deviation of holes would be 2.6 to 3.9 m at 150 m depth. This is less than the
width of a model block and would not lead to significant locational uncertainty in
contacts or local grades within approximately 150 m of surface, but could lead to
greater uncertainty in deeper intersections.
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 Consistency of down hole surveys at Yanque: Down-hole surveys for the 2011
Zincore drill campaigns were taken using a Flexit or Reflex Easyshot magnetic
down-hole survey instrument at 50 m intervals. There are no down-hole surveys
for the Rio Tinto 1996 drill campaign. Down hole surveys were checked in cross
section and in longitudinal section. No irregular traces were noted. Drill holes are
short, averaging 122 m with the longest hole at 377 m and the deepest mineralized
drill intersection in DDH-YA-38 and DDH-YA-44 at 169 m depth and the maximum
down hole depth of mineralized intersection for the 1996 Rio Tinto drill campaign is
136 m. Assuming a down-hole deviation of 2°/100m to 3°/100m, relatively high for
NQ and HQ diameter drill holes, applied in 50 m steps down-hole, the maximum
deviation of holes would be 2.6 to 3.9 m at 150 m depth. This is less than the width
of a model block and would not lead to significant locational uncertainty in contacts
or local grades.
AMEC verified the continuity of the mineralized coral zone along the north flank of the
anticline at Accha by plotting mineralized trench samples with the mineralized drill hole
intersections along strike, and down dip on the north limb; however, the grades of the
trench samples could not be verified with nearby drill holes so the trench assays were
not used in estimation.
AMEC verified assays from samples taken from trenches T1 to T12 at Yanque by
comparing the trench grades to grades from nearby diamond drill holes. The zinc
grades of the trenches are higher than the average zinc grades throughout the deposit,
but high-grade trench assays (ranging from 20% Zn to over 35% Zn) are also
encountered nearby diamond drill holes. The high-grade intersections encountered in
trenches T1 and T10 are also encountered in diamond drill holes DDH-YA-02, DDH-
YA-05 and DDH-20 that are within 15 m of the trenches.
The process of data verification for the Project has been performed by external
consultant firms from 2006 to date, in support of technical reports and Mineral
Resource estimates. AMEC considers that a reasonable level of verification has been
completed, and that no material issues would have been left unidentified from the
programs undertaken.
The QPs, who rely upon this work, have reviewed the appropriate reports, and are of
the opinion that the data verification programs undertaken on the data collected from
the Project adequately support the geological interpretations, the analytical and
database quality, and therefore support the use of the data in Mineral Resource and
Mineral Reserve estimation, and in mine planning:
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 No significant sample biases were identified from the QA/QC programs undertaken
 Sample data collected adequately reflect deposit dimensions, true widths of
mineralization, and the style of the deposit
 No significant problems with the database, sampling protocols, flow sheets, check
analysis program, or data storage were noted during the independent data reviews
 AMEC verified all supporting data used in estimation prior to Mineral Resource and
Mineral Reserve estimation by running a software program check.
No verification or validation was performed on the Dolores data.
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13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
13.1 Historic Test Work
Extensive test work on both the Yanque and Accha deposits has been conducted over
the life of the AZOD Project. Initial process options considered included physical
separation and alkali leaching, both of which were discarded. Starting in 2010 a
reductive roasting test work program was initiated, the results of which form the
foundation of the 2012 and 2013 test work program which in turn forms the basis of the
PFS.
13.1.1 Comminution and Physical Separation Test Work
Initial test work conducted in 2008 investigated the possibility of upgrading the Accha
deposit via DMS and flotation. The metallurgical test work was conducted by Mintek in
South Africa under the supervision of Green Team International (GTI), a team of 3rd
party independent consultants contracted to Zincore. The test work flow sheet
consisted of crushing to -6 mm, DMS processing on the -6 +1 mm fraction, followed by
coarse and fine flotation to upgrade the zinc content to a saleable concentrate while
rejecting the calcium-based minerals. The test work indicated that samples with a
head grade of 7–10 % zinc could be upgraded to a concentrate grade of 15–26 % zinc,
with a 68–79% zinc recovery and 73% lead recovery. The final concentrate contained
9% lead and approximately 2–4 % calcium. Test work further showed that due to the
friable nature of the Accha deposit, approximately 40% of the material reported to fines
(-1 mm) when crushed to -6 mm. This resulted in high zinc losses to slimes in flotation
and high flotation reagent consumptions. Based on weakening metal prices and the
results of the 2008 study, which indicated relatively high zinc losses, physical
separation test work was discontinued.
The test work at Mintek also included comminution test work. In addition, crusher and
milling design parameters were generated.
13.1.2 Leaching
During 2010, Mintek conducted a preliminary evaluation on the recovery of zinc

through alkali leaching using Accha and Yanque drill core samples. This generated
recoveries of approximately 30% and was consequently not considered a viable
option.
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13.1.3 Reductive Roasting
In 2010 preliminary bench-scale reductive roasting followed by pilot scale

pyrometallurgical testing was conducted on drill core samples from both the Accha and
Yanque deposits at Mintek and at Cementos Pacasmayo in Peru. The 2010 Mintek
bench-scale test work indicated that >95% zinc and >90% lead recovery was possible,
producing a high quality fume with low contaminant concentrations. Further
calcination of the fume resulted in a significant reduction in impurity levels. Yanque
mineralization, however, melted in the tests conducted at temperatures above 1,050 C.
At this temperature, 75% zinc and 20% lead recovery was noted for Yanque at a four-
hour residence time.
The main aim of the 2010 pilot test work was to demonstrate the production of a high-
grade Waelz fume and determine the process conditions that optimize zinc-lead
recovery. This work was conducted in a pilot Waelz kiln furnace facility at Cementos
Pacasmayo, under the supervision of Hatch-Peru and Metallicon Process Consulting
(Metallicon), an independent consulting firm contracted to Zincore. Sample
preparation for the pilot plant test work was conducted by SGS Laboratories in Lima,
Peru. Two sets of tests were conducted on the samples from each deposit consisting
of parameter test work to determine the effect of various parameters on the recoveries
and grade of the fume, and a continuous test program where the optimum test
conditions identified in the parameter test work was used to determine the variability in
the recovery and grade of zinc and lead in the fume.
The pilot plant test results for Accha yielded a classical grade recovery curve and
indicated that a high zinc recovery of about 95% can be expected at a fume grade of
about 60% zinc. Lead recovery exceeded 99% in most tests in the continuous runs.
The Yanque results from both the parameter and continuous tests were hampered by
melting of the ore at higher temperatures – similar to that observed in the 2010 Mintek
bench-scale test work. Increased residence times also led to melting of Yanque
material, with a subsequent reduction in overall zinc and lead yields. Yanque also had
a higher anthracite consumption, when compared to the Accha ore. Due to the melting
of the ore with a subsequent reduction in recovery, the Yanque test work did not
produce a classical grade recovery relationship. The test at optimum conditions
yielded a zinc recovery of 91%. Melting of the charge during the continuous test
program yielded an average zinc recovery of 78% with a fume grade of 51% zinc.
Despite the relatively low Yanque zinc recovery achieved in the pilot plant, lead
recovery was consistently higher at about 91–98 %.
Following the Pacasmayo pilot plant test work, bench-scale additive test work was
undertaken at Mintek, South Africa in early 2011. This test work revealed that the
melting point of the Yanque ore could be increased to approximately 1200°C by the
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addition of 10% dolomitic material to the feed. No detailed analysis on the quality of
dolomite was done at the time; however, subsequent results have indicated that the
dolomite quality is a critical factor, with the magnesium and calcium content of the
combined kiln feed appearing to have the greatest effect on the overall result.
Results also indicated that blending the Accha and Yanque ores prior to treatment did
not prevent melting in the absence of an additive. A 20% dolomite addition was
required to prevent sintering at 1100°C in the mixed ores, and this was subsequently
discarded as a viable process option. Opportunities to explore further avenues of
additive test work exist, however it is noted that finding additives to raise the melting
point of an ore is more challenging than finding one to lower the melting point.
Based on the 2010 and 2011 test work results, Metallicon concluded that Yanque and
Accha should be processed separately due to their different temperature profiles and
reaction kinetics. This has formed the basis of the separate pyrometallurgical
processing streams used in the 2013 PFS.
13.1.4 Dissolution and Refining of Zn from Waelz Product
Preliminary, bench-scale, scoping test work was conducted at Mintek in 2011 on the
Pacasmayo pilot plant fume, with and without a subsequent calcination step, to
characterize the leach digestion and extraction of zinc and lead, and impurity
deportment from the pilot plant fume. This test work (Stage 1) was conducted
concurrently with the pyrometallurgical additive test work discussed above. The
scoping hydrometallurgical test work indicated that calcining the fume removed >96%
of the chloride and resulted in the formation of zinc ferrites which required more
aggressive and expensive leaching conditions than the uncalcined fume. Halide levels
post calcination remained high enough to require the investigation of a
hydrometallurgical dehalogenation step. The uncalcined fume showed neutral leach
efficiencies in excess of 98%, with the residues containing between 30% and 50% lead
in the form of a saleable lead sulphate (PbSO4). Overall, the fume was found to be
amenable to conventional zinc leaching and the solution to subsequent refining.
Based on the results of the Mintek scoping hydrometallurgical test work, three process
routes were considered for 2012 Stage 2 of the test work campaign:
 Classical zinc cementation

 Ion exchange
 Solvent extraction.
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13.2 Test Work Supporting the 2013 PFS
During the course of 2012, pyrometallurgical and hydrometallurgical test work was
undertaken to generate design criteria for the 2013 PFS. The pyrometallurgical test
work was conducted in two stages at the Instytut Metali Niezelasnych (IMN), in
Gliwice, Poland. The first stage consisted of parameter test work in September 2012
to confirm previous results obtained regarding the influence of temperature, dolomite
and reducing agent addition on melting point and zinc extraction of the Yanque ore.
This was followed by bulk test work on approximately 6 t of Yanque ore in early
December 2012. At the time of the test work, the Yanque ore body was divided into
two zones by the Zincore geologists – Yanque l with a high zinc and low lead content
from the planned early production period and Yanque ll with a low zinc and high lead
content from the proposed later production years. This terminology for the Yanque ore
body has subsequently been discontinued on the recommendation of the Zincore
geologists.
Hydrometallurgical test work was undertaken at Mintek on a sample of Yanque fume

from the 2010 Pacasmayo pilot plant test work. The aim of this hydrometallurgical test
work was to evaluate various process options for the recovery of zinc from the Yanque
uncalcined fume. The Yanque Waelz fume was selected over the Accha Waelz fume
as the higher level of deleterious elements in the Yanque fume was considered to be
the worst case scenario.
13.3 Pyrometallurgical Test Work
13.3.1 Phase 1
Approximately 132 kg of Yanque ll material (drill core) was crushed and blended by
SGS in Peru prior to delivery to IMN. Sub-samples were generated for softening test
work, size analysis and mineralogy. The remaining material was then split before
being blended with the required amounts of dolomite, anthracite and bituminous coal
for the additive test work in the laboratory rotary furnace. The Bunte-Baum-Reerink
method was used to determine the softening and melting point of five samples, with
varying dolomite levels. The Bunte-Baum-Reerink method consist of subjecting a
20 mm diameter pellet with a height of 20 mm to a constant pressure of 250 G and
heating it at a constant rate, while measuring the height of the pellet. The temperature
at which the pellet height measures 93% of the initial height is known as the softening
temperature while the melting point is registered at 45 % of the initial pellet height. A
total of 13 tests were conducted in the laboratory rotary furnace with varying test
conditions. The conditions that were tested were temperature, dolomite and reducing
agent addition and feed condition. A CO2 atmosphere was maintained for all tests to
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reduce the oxygen potential in the reaction zone except one test (test 7) which used
air.
13.3.2 Phase 1 Results
Mineralogical analysis at IMN showed that the most abundant minerals in Yanque ll
are dolomite and quartz, followed by cerussite, calcite and potassium carbonate.
Scanning electron microscope (SEM) images showed that the distribution of zinc in
Yanque ll is uniform and is found in complex compounds of zinc, iron and aluminum
oxides. A zinc content of 3.59% and a lead content of 7.33% were noted for the
Yanque ll material.
Characterization of the material via Bunte-Baum-Reerink tests showed that a minimum

addition of 10% dolomite is required to raise the melting point of the ore, and that the
temperature of the kiln should not exceed 1100°C, as shown in Table 13-1. As
expected from the 2011 Mintek additive test work, Test 4 (Yanque +15% dolomite)
produced the best results; however, the increase in benefit from 10% dolomite to 15%
dolomite is not substantial and might not justify the extra expense unless significant
differences are noted in zinc extraction.
Table 13-1: Bunte-Baum-Reerink Test Results

Temperature (°C)
Test
Condition Softening Start Softening Point,
Number Melting Point, Tt
Temperature, Tp Tm
1 Yanque ll 1025 1064 1092
2 Yanque ll + 5% Dolomite 1018 1061 1097
5 Slag 1119 1137 1155
Source: Metallicon, 2012
Laboratory rotary furnace results showed that Yanque ll has a higher lead (7.33%)
content than zinc (3.59%), which results in a fume with approximately twice as much
lead as zinc. Test work showed that an anthracite addition of 25 % with a dolomite
addition of 10% or an anthracite addition of 33% with a dolomite addition of 5%, both
at 1100°C produced the best overall results both for zinc and lead recovery. The
recovery of zinc for these tests was 88.51% and 89.36% respectively, while the lead
recovery was >97% for both.
At temperatures above 1150°C, melting of the samples was observed, with a

subsequent reduction in recovery of both lead and zinc. A fume grade of 15.50% zinc
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and 69.60% lead can be expected when using an anthracite addition of 25% with a
dolomite addition of 10% as shown by the Phase 1 test work results.
Charge form (pelletized or not) had little effect on the zinc and lead yield. However, in
industrial applications this sometimes has an effect and was consequently re-tested in
Phase 2 of the test work.
Before Phase 1 test work was conducted, a recovery relationship between zinc content
and anthracite addition was developed by Metallicon and Zincore, to predict the
recoveries at various anthracite addition ratios as anthracite is one of the highest cost
drivers of the project. Following Phase 1 test work, this relationship was altered to
include the effect of lead content on the anthracite requirements (Figure 13-1).
Figure 13-1: Updated Anthracite-Recovery Relationship for Accha and Yanque
Figure 13-1 indicates that a distinct relationship between the recovery of zinc and the
ratio of anthracite to zinc and lead in the ore for the AZOD deposits. The exponential
relationship was developed and the constants solved for using the Solver add-in
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provided by Microsoft Excel. Carbon activity is estimated at 0.85 for both

relationships. The subsequent relationship is shown below:
Accha:
Yanque:
Phase 2 of the test work conducted at IMN in December 2012 consisted of bulk tests
using a 100 kg/hr pilot Waelz kiln to confirm the results of Phase 1 and all previous test
work on both Yanque I and Yanque II ore, and to generate sufficient fume for further
hydrometallurgical test work at Mintek.
A total of 2,928 kg of Yanque I and 2,887 kg of Yanque ll material was selected and
dispatched by Zincore representatives to IMN. The Bunte-Baum-Reerink method was
used to determine the softening and melting point of three mixed Yanque l and ll
samples, with varying dolomite levels. The material was blended with the required
amounts of dolomite, anthracite and/or bituminous coal for the bulk test work in the
pilot plant Waelz kiln. The test programme for Phase 2 is shown in Table 13-2 and the
pilot Waelz kiln installation in Figure 13-2.
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Table 13-2: Conditions for Pilot Waelz Kiln

Bituminous Granulated Kiln
Yanque I Yanque II Anthracite Dolomite (% Charge
Test No IMN Test no Reverts (kg) Coal (% of charge rotational
ore (kg) ore (kg) (% of ore) of ore) mass (kg)
ore) (Yes/No) speed (rpm)
1 Y1G.1.1 286 - - 25% 15% - Yes 400 0.3
2 Y1G.1.2 286 - - 25% 15% - Yes 400 0.45
3 Y1G.1.3 454 - - 25% 15% - Yes 636 0.15
4 Y1G.2.1 278 - - 20% 15% - Yes 375 0.3
5 Y1G.3.1 272 - - 15% 15% - Yes 354 0.3
6 Y1G.4.1 272 - - 25% 10% - Yes 367 0.3
7 Y1N.1.1 286 - - 25% 15% - No 400 0.3
8 Y1N.1.2 286 - - 25% 15% - No 400 0.45
9 Y1N.1.3 268 - - 25% 15% - No 375 0.15
10 Y1N.2.1 240 - - - 15% 20% No 324 0.3
11 Y2G.1.1 - 286 - 25% 15% - Yes 400 0.3
12 Y2G.1.2 - 286 - 25% 15% - Yes 400 0.45
13 Y2G.1.3 - 476 - 25% 15% - Yes 666 0.15
14 Y2G.2.1 - 281 - 20% 15% - Yes 379 0.3
15 Y2G.3.1 - 288 - 15% 15% - Yes 374 0.3
16 Y2G.4.1 - 277 - 25% 10% - Yes 374 0.3
17 Y2N.1.1 - 214 - 25% 15% - No 300 0.3
18 Y2N.1.2 - 169 - 25% 15% - No 237 0.45
19 Y2N.2.1 - 243 - - 15% 20% No 328 0.3
20 YZ.1 - - 75 20% - - No 90 0.3
21 YZ.2 - - 15 20% - - No 18 0.3
TOTAL: 2928 2520 90 - - - - 7600* -
*Totals differ due to rounding
Project No.: 170848

Figure 13-2: Pilot Waelz Kiln
Water 22 16,17 18 6 7 9

23 1 12 24 2
21
10
19 20
11
3
8
25
14 15
13
4 5
..gk..
1. Rotary furnace 7. Bag house I & II 13. Thermocouple PtRh- Pt 19. Resistance thermometer
2. Feeder 8. Fans 14. Thermocouple PtRh- Pt 20. Negative pressure measurement
3. Burner 9. Stack 15. Thermocouple PtRh- Pt 21. Negative pressure measurement
4. Tank for furnace wastes 10. Gas measuring orifice 16. Negative pressure measurement 22. Water nozzles
5. Tank for recycled dust 11. Air measuring orifice 17. Thermocouple NiCr - Ni 23. Burner chamber
6. Water cooling system 12. Airs fan for burner 18. Thermocouple NiCr - Ni 24. Dust chamber
25. Gas probe
Source: Metallicon, 2013a, IMN, 2013
Project No.: 170848

13.3.3 Phase 2 Results
Phase 2 showed a large variation in feed grades for both Yanque I and II, with an
average grade of 8.41% zinc and 1.63% lead, and 3.90% zinc and 3.92% lead
respectively. The Yanque I ore zinc feed grade ranged from 3.77% to 17.7%, while
the Yanque II ranged from 1.85% to 6.13% zinc.
Mineralogical analysis showed that the most abundant minerals in both Yanque zones
are dolomite and quartz. However, these samples showed a higher portion of quartz
and lower content of dolomite when compared to those analysed in Phase 1.
Characterization of the Phase 2 material via Bunte-Baum-Reerink tests showed a

much lower melting point (approximately 30°C lower) when compared to Phase 1.
These results are presented in Table 13-3 and 13-4. This lower melting point could be
caused by the higher silicon and aluminum contents, and resulted in a subsequent
reduction in recovery of lead and zinc. The lower melting point was not significantly
raised by the addition of dolomite as expected from previous test work results, as the
dolomite appeared not to react with the gangue phases in the ores. The results show
that the melting point across both Yanque zones is inconsistent, and the previously-
determined maximum kiln temperature of 1,100°C may possibly be too high in a
number of instances, even with a dolomite addition of up to 15%.
Table 13-3: Phase 2 Bunte-Baum-Reerink Test Results

Temperature (°C)
Test
Condition Softening Start Softening Point,
Number Melting Point, Tt
Temperature, Tp Tm
1 Mixed Yanque Ore 1016 1046 1083

2 Mixed Yanque Ore + 10% Dolomite 1028 1058 1092
3 Mixed Yanque Ore + 15% Dolomite 1021 1052 1091
Table 13-4: Comparison of Phase 1 and 2 Results

Temperature (°C) Average
Difference in
Test Number Condition Softening Start Softening Point,
Melting Point, Tt Temperature
Temperature, Tp Tm
(°C)
Phase 1: Test 3 Yanque II + 10% Dolomite 1045 1083 1118
22.7
Phase 2: Test 2 Mixed Yanque Ore + 10% Dolomite 1028 1058 1092
Phase 1: Test 4 Yanque II + 15% Dolomite 1048 1097 1128
36.3
Phase 2: Test 3 Mixed Yanque Ore + 15% Dolomite 1021 1052 1091
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The fine particle size distribution (PSD) of the feed material (65% passing 500 µm)
made the preparation of the pellets challenging and caused significant dust generation
upon charging the kiln, specifically for the un-granulated material tests, which
contaminated the resulting fume and has potentially skewed some results, resulting in
lower zinc grades than expected.
The apparent reduction in the melting point of the Yanque ore in Phase 2 compared to
previous tests using dolomite can be attributed to a significant difference in the ratio
between the various elements in the dolomite as shown in Table 13-5. Sinclair (2005)
notes that Waelz kiln performance can be indicated by the ratio of (CaO + MgO)/(SiO2
+ FeO) in the charge and these ratios are summarised below:
 0.1 – 0.2: The process works optimally

 >1.3: process works well
 0.6 – 0.7: process works poorly
Table 13-5: Comparison of Phase 1 and 2 Dolomite

Content, wt %
Element Dolomite - Dolomite -
Phase 1 Phase 2
Pb 0.14% 0.14%
Zn 0.27% 0.43%
Cd <0.01%
Si 0.80% 2.40%
Al 0.36% 0.61%
Ca 20.00% 24.10%
Mg 11.50% 6.32%
Fe 1.08% 1.40%
C 14.00% 10.80%
S 0.05% 0.16%
K 0.07% 0.33%
Cl <0.01% 0.07%
P 0.01% 0.01%
Mn 0.11% 0.12%
Ti <0.01%
Cu 0.01%
Source: Metallicon, 2012, 2013
Oxide analysis was not conducted on the dolomite or final kiln charge. Assuming that
the magnesium, calcium, iron and silica occur in the oxide form is not strictly correct. It
is recommended that this ratio be determined prior to any future test work.
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The dolomite used in both Phases was commercially obtained. However,

consideration of the above ratio should be a criterion in sourcing all further dolomite.
The observation made in previous test work regarding the unsuccessful raising of the
ore melting point by blending Accha and Yanque ore is explained by the above.
Tables 13-6 and 13-7 show the analysis of the fume and the overall test results. As
expected, the quality of the fume produced in the granulated tests was better than that
produced with un-granulated charge. A higher CO2 was noted in the fume of the un-
granulated charge, indicating that higher anthracite combustion took place in these
tests, resulting in lower yields. Tests using bituminous coal produced poor results due
to the fact that ignition of the charge took place immediately upon entering the kiln.
Recoveries of up to 89% were achieved for both zinc and lead in Phase 2, which was
lower than expected. The yield calculations are not a true reflection of the performance
of the process due to the contamination of the slag with melted ore and the
contamination of the fume with fine dust. The highest zinc and lead yields were
achieved for the tests with the higher rotational speeds. This can be ascribed to a
number of factors, particularly a reduction in residence time of the material in the high
temperature zone of the furnace.
Table 13-6: Chemical Analysis of the Pilot Waelz Kiln Fume

Element (%)
Test
IMN Test No
No Zn Pb Cd K F Cl S C O Na Mg Al Si P Ca Ti Mn Fe Cu As
1 Y1G.1.1 39.7 13.4 0.35 3.08 0.90 5.60 1.74 0.64 24.07 <0.01 0.27 0.63 1.66 0.01 0.79 0.04 0.23 1.78 0.3 <0.01
2 Y1G.1.2 35.2 19.1 0.50 1.52 0.63 2.28 1.29 0.80 23.40 1.58 0.27 0.68 1.76 0.01 0.89 0.07 0.18 1.33 0.15 0.14
3 Y1G.1.3 45.8 18.5 0.60 1.94 1.17 4.21 1.56 0.54 24.21 <0.01 0.29 0.67 1.59 0.01 0.75 <0.01 0.14 0.96 0.21 <0.01
4 Y1G.2.1 42.7 23.1 0.58 1.16 0.69 2.11 1.20 0.67 22.72 1.08 0.21 0.79 1.68 0.01 0.78 0.05 0.09 0.73 0.07 <0.01
5 Y1G.3.1 40.4 20.6 0.64 1.66 0.91 2.61 1.25 1.11 26.93 <0.01 0.34 1.18 2.60 0.02 1.51 0.06 0.15 1.21 0.09 0.15
6 Y1G.4.1 37.0 21.5 0.59 1.64 0.90 2.58 1.36 0.97 23.83 <0.01 0.62 1.61 3.93 0.02 1.75 0.09 0.16 1.27 0.11 0.14
7 Y1N.1.1 22.5 30.9 0.52 1.36 0.55 1.29 2.53 1.56 28.20 <0.01 1.37 2.48 6.11 0.02 3.07 0.11 0.25 1.71 0.02 0.11
8 Y1N.1.2 19.9 18.9 0.44 2.34 0.48 0.81 1.74 2.22 32.31 <0.01 1.56 3.66 9.22 0.05 3.90 0.19 0.36 2.54 0.02 <0.01
9 Y1N.1.3 16.4 17.3 0.33 2.76 0.57 0.77 1.59 2.09 32.71 <0.01 1.66 4.80 11.20 0.06 3.95 0.22 0.38 2.84 0.02 <0.01
10 Y1N.2.1 14.5 13.3 0.37 3.98 0.40 0.87 0.88 1.38 32.15 <0.01 2.40 5.80 13.93 0.05 5.06 0.29 0.52 3.43 0.03 0.1
11 Y2G.1.1 15.4 29.9 0.31 2.40 0.60 1.18 1.63 0.96 31.30 <0.01 1.04 4.06 9.68 0.05 2.55 0.23 0.27 2.25 0.03 0.11
12 Y2G.1.2 22.0 35.9 0.30 1.96 0.69 1.68 2.01 0.83 27.13 <0.01 0.66 2.63 6.00 0.03 1.89 0.14 0.17 1.43 0.04 0.17
13 Y2G.1.3 21.6 38.6 0.33 1.41 0.85 1.84 2.45 0.78 26.00 <0.01 0.55 2.04 4.84 0.02 1.74 0.10 0.14 1.19 0.04 0.25
14 Y2G.2.1 20.8 29.3 0.45 1.98 0.79 1.45 2.01 0.92 31.28 <0.01 1.08 3.14 7.52 0.03 2.61 0.17 0.31 1.99 0.06 0.11
15 Y2G.3.1 22.0 45.3 0.45 1.04 0.69 1.49 2.54 0.61 26.65 <0.01 0.48 1.77 3.84 0.02 1.53 0.12 0.11 0.88 0.04 0.19
16 Y2G.4.1 19.9 41.9 0.40 1.03 0.73 1.33 2.41 0.62 28.35 <0.01 0.50 1.49 3.18 0.01 1.39 0.10 0.09 0.80 0.03 0.14
17 Y2N.1.1 22.0 25.3 0.29 2.11 0.58 0.99 1.99 1.32 30.01 <0.01 1.38 3.96 8.74 0.04 2.95 0.19 0.23 1.88 0.02 0.13
18 Y2N.1.2 19.3 34.1 0.27 1.85 0.60 1.18 2.49 1.05 29.12 <0.01 1.09 3.11 6.94 0.04 2.67 0.16 0.18 1.62 0.02 0.17
19 Y2N.2.1 14.5 19.2 0.33 3.93 0.61 1.19 1.24 0.87 34.20 <0.01 2.06 2.44 8.22 0.06 3.37 <0.01 0.11 0.66 <0.01 <0.01
20 YZ.1 16.7 21.1 0.31 2.66 0.63 1.67 2.84 1.11 33.57 <0.01 1.32 3.47 8.46 0.04 3.54 0.17 0.37 2.34 0.17 <0.01
21 Y.Ch.1* 10.4 13.5 0.28 4.15 1.25 1.02 2.06 1.36 35.18 <0.01 1.77 5.45 13.92 0.05 4.39 0.34 0.45 3.63 0.05 <0.01
22 Y.Ch.2* 9.8 16.2 0.29 3.41 1.07 0.72 2.55 2.03 37.14 <0.01 1.93 4.50 11.45 0.06 4.56 0.24 0.37 3.49 0.15 0.07
Project No.: 170848

Table 13-7: Pilot Waelz Kiln Test Results

Bituminous Granulated Kiln
Anthracite Dolomite (% Zn Yield Pb Yield
Test No IMN Test no Coal (% of charge rotational
(% of ore) of ore) (%) (%)
ore) (Yes/No) speed (rpm)
1 Y1G.1.1 25% 15% - Yes 0.3 32.62% 69.16%
2 Y1G.1.2 25% 15% - Yes 0.45 11.30% 57.55%
3 Y1G.1.3 25% 15% - Yes 0.15 14.94% 76.66%
4 Y1G.2.1 20% 15% - Yes 0.3 34.87% -30.49%
5 Y1G.3.1 15% 15% - Yes 0.3 20.44% 54.45%
6 Y1G.4.1 25% 10% - Yes 0.3 73.20% 75.12%
7 Y1N.1.1 25% 15% - No 0.3 76.69% 58.03%
8 Y1N.1.2 25% 15% - No 0.45 76.51% 80.31%
9 Y1N.1.3 25% 15% - No 0.15 70.46% 86.35%
10 Y1N.2.1 - 15% 20% No 0.3 43.70% 73.22%
11 Y2G.1.1 25% 15% - Yes 0.3 85.49% 50.60%
12 Y2G.1.2 25% 15% - Yes 0.45 75.80% 22.98%
13 Y2G.1.3 25% 15% - Yes 0.15 89.05% 13.83%
14 Y2G.2.1 20% 15% - Yes 0.3 58.40% 50.72%
15 Y2G.3.1 15% 15% - Yes 0.3 56.85% 23.39%
16 Y2G.4.1 25% 10% - Yes 0.3 85.69% 45.51%
17 Y2N.1.1 25% 15% - No 0.3 48.08% 81.05%
18 Y2N.1.2 25% 15% - No 0.45 82.49% 88.88%
19 Y2N.2.1 - 15% 20% No 0.3 -36.95% 73.23%
Limited reaction between the dolomite and Yanque ore (from both zones) was noted
throughout the tests. This influenced the melting point of the material and
subsequently influenced the overall zinc and lead yields, which were lower than
expected. Also, the large portion of dust generated upon charging the kiln, specifically
with the un-granulated material, contaminated the fume generated and has resulted in
potentially suspicious results.
The yield of the fume is calculated using a variation on the two-product formula as
shown below:
Where:
YZn = yield of zinc (or lead)
Project No.: 170848

DZn = zinc (silicon / lead) content in fume
FZn = zinc (silicon / lead) content in the feed
SZn = = zinc (silicon / lead) content in the slag
However, due to the melting of the charge and the carry-over of the dust when
charging the furnace—especially with the un-granulated material—contamination of
the fume and slag has led to suspicious results, when using the above formula as can
be seen in Table 13-7.
The test work proved to be valuable in that operational considerations not apparent in
the bench scale work were highlighted:
 Dolomite may not be the preferred additive and an additive high in CaO may be
preferred. The overall balance of quartz, CaO, FeO and MgO must be considered
when making up the charge;
 The ore must not be milled too fine as this will result in contamination of the fume
and may also increase the chance of melting;
 The oxygen potential in the furnace needs to be reduced and this may require the
monitoring of the anthracite addition;
 The speed of rotation in the kiln is very important and the residence time in the high
temperature zone of the kiln must be considered.
Clinker tests were conducted on approximately 40 kg of Accha and Yanque fume

remaining from the 2010 Cementos Pacasmayo pilot plant test work as part of the
Phase 2 IMN test work. These fume samples were roasted in a furnace at 850°C for
four hours in an air atmosphere in an attempt to remove the halides – specifically
chlorides from the fume. Roasting the fumes showed a significant reduction in the
chloride content, especially of the Yanque I fume, as well as carbon oxidation.
Fluorine, cadmium and lead levels in the calcined fume remain almost unchanged.
13.3.4 Hydrometallurgical Test Work
Hydrometallurgical test work was carried out by Mintek in South Africa. A 54.3 kg
sample of Yanque fume generated during the 2010 test work at Pacasmayo, Peru was
sent to Mintek by the Zincore for use in the tests. A composite sample was generated
and then split on a rotary splitter into samples for analysis, mineralogy and bench-
scale test work.
Project No.: 170848

A hydrometallurgical dehalogenation step followed by a neutral leach, using spent

electrolyte, preceded the purification investigation. Three bench-scale process routes
were considered in Stage 2 of the Mintek test work: conventional purification process
via zinc cementation; ion exchange (IX) for solution purification; and solvent extraction
(SX) for impurity rejection to produce an advance electrolyte of sufficient quality to
produce special high-grade (SHG) zinc cathodes in the electrowinning circuit as shown
in Figure 13-3.
Figure 13-3: Hydrometallurgical Test Work Flow Sheets
Source: Mintek, 2013, Metallicon, 2013b. No electrowinning was conducted as part of

this test work. Simulations were carried out as described in 13.2.14 in order to provide
the basis for the process design. This test work will be required as part of the next
phase. Modelling of the chosen flow sheet using the SysCAD® simulation package to
explore recycle configurations and predict metal deportment, recoveries and reagent
consumptions based on the bench-scale laboratory results was carried out at the
conclusion of the test work to support the process design criteria development.
Sinclair (2005) and others have shown that a sodium carbonate (Na2CO3) wash is
effective at removing a large portion of both the chloride and fluoride ions from the
Project No.: 170848

Waelz kiln fume, with minimal zinc losses. Various parameters were tested, which
included varying the stoichiometric addition ratios and temperature, as well as reagent
type. Specific attention was paid to impurity deportment and potential zinc losses.
Neutral leach test work was conducted using a synthetic spent electrolyte solution, and
based on these test results, a synthetic pregnant leach solution (PLS) was prepared
for the purification test work.
Bench-scale laboratory test work using the cold-hot purification method to investigate
the removal of copper, nickel, cobalt and cadmium via cementation was conducted at
varying test conditions. A modified reagent addition procedure was also investigated.
The possibility of using ion exchange for the removal of deleterious elements from the
PLS was investigated using three different resins. These resin and the targeted
impurities for removal are:
 Copper, cobalt and nickel removal

- Dowex M4195
- Dowex HPPA
 Cadmium removal
- MRT SuperLig177®
- Solvent extraction test work for impurity rejection was conducted on the
synthetic PLS at a pH of 4.31 as the aqueous phase. The organic phase
consisted of 40% v/v DEHPA in a suitable diluent (SSX 210).
13.3.5 Fume Samples
Table 13-8 shows the analysis of the Yanque fume sample used in the 2012 Mintek
test work. The fume contains 55.50% zinc and 15.10% lead. Chloride and fluoride
levels are both below 0.5%.
Table 13-8: Chemical Composition of the Yanque Fume Sample

Element (%)
Sample
Mg Al Si Ca Mn Fe Co Ni Cu Zn Pb S Ti V Cr Cl F
Yanque Fume (Stage 2) 0.07 1.06 1.63 0.21 <0.05 0.70 <0.05 <0.05 <0.05 55.50 15.10 2.04 0.05 <0.05 <0.05 0.43 0.49
Source: Metallicon, Mintek, 2013
Project No.: 170848

13.3.6 Mineralogical Analysis
Mineralogy via qualitative X-ray diffraction (XRD) and SEM analysis on the “as-
received” Yanque fume sample showed that it consisted predominantly of ZnO. A
number of carbon particles were observed in the feed sample, indicating carry-over or
incomplete reaction of the additives in the Waelz kiln. Additional phases present in the
fume observed during SEM analysis include quartz, a calcium fluoride-bearing phase
and a lead zinc-containing silicate phase. A PSD of the “as received” Yanque fume
showed 80% (by volume) passing 26 µm.
13.3.7 Halide Leaching
Halide leaching indicated that the optimal conditions for chloride and fluoride removal
is at a 10% pulp density with 5X stoichiometric sodium carbonate (Na2CO3) addition.
Extraction efficiencies of 99.2% and 80.6% are expected for chloride and fluoride
respectively at these conditions. However, halide levels in the pregnant leach solution
(PLS) remain in excess of those permitted for electrowinning; indicating that halide
removal via both calcination and leaching are required. Allowable limits of chloride
and fluoride in the advance electrolyte are 10 mg/L and 2 mg/L respectively, as
chloride can be oxidised at the anode in the electrowinning circuit to form chlorine gas
if present in high enough concentrations. This is a principal cause of anode corrosion
and is a severe health hazard. Excess fluoride causes sticking of the zinc deposit to
the cathode sheet, which causes challenges when stripping the cathodes.
The concentration profiles of the halides in solution shown in Figure 13-4 indicate that
a residence time of approximately 2 hours is required for halide leaching at Test 7
conditions (10 % pulp density with 5X stoichiometric Na2CO3 addition).
Project No.: 170848

Figure 13-4: Concentration Profiles of the Halides in Solution
Mineralogical analysis of the halide leach residue showed that the lower than
anticipated fluoride removal is attributed to calcium fluoride (CaF2) in the fume, which
has limited solubility in sodium carbonate solution. With a calcination step included in
the pyrometallurgical flow sheet prior to halide leaching, this should no longer present
an issue.
13.3.8 Neutral Leaching
Samples of the bulk halide leach residue were also leached using synthetic spent
electrolyte at 55°C and various test parameters. The synthetic spent electrolyte
targeted a composition of 140 g/L sulphuric acid (H2SO4) and 40 g/L zinc.
Test 3 (pH 5.0) showed a lower extraction of zinc as insufficient sulphuric acid was
added to ensure total dissolution, and the test was subsequently repeated (Figure 13-
5.
Project No.: 170848

Figure 13-5: Neutral Leach Kinetics
Zinc extraction efficiencies of 98% at pH 4.0 and 55°C with a 59% mass loss were
achieved in the neutral leach. The neutral leach residues contained approximately
30% lead in the form of a potentially saleable lead sulphate (PbSO4). A residence time
of two hours is sufficient for the neutral leach stage
13.3.9 Purification Test Work
Based on the results of the neutral leach tests using synthetic spent electrolyte, the
composition of the pregnant leach solution (PLS) under optimised conditions was used
to prepare a synthetic PLS for the purification test work.
13.3.10 Zinc Cementation
The first cementation stage (cold) was conducted at 55°C in the presence of zinc dust
for the removal of mainly copper and cadmium from solution. The second stage was
conducted at 90°C in the presence of zinc dust, using copper sulphate (CuSO4) and
antimony (Sb2O3) as activators, for the removal of mainly cobalt and nickel. A
polishing third stage, conducted at 80°C using zinc dust, was tested to remove any
remaining impurities. The first and second stages were tested with and without a
modified reagent addition procedure.
The modified reagent addition procedure consisted of adding the zinc dust in 4 equal
portions in the first 40 minutes of each stage. In the hot stage, the copper sulphate
was dissolved in a small amount of deionised water and the resulting solution added
over the first 20 minutes of the test. Antimony was added dry at the start of the hot
Project No.: 170848

stage. In the unmodified reagent addition tests, all reagents were added to the
reactors at the beginning of each stage.
Stage 1 found that Cu, Cd and Ni concentrations in the PLS decreased at all pH
values tested. The lowest concentration of Cu (0.60 mg/L) in the final PLS was
achieved at pH 4.0 (Test 6), which also achieved the second lowest Cd concentration
at 5.12 mg/L. Cobalt was only partially removed in the cold stage, which was expected
as the cold cementation does not specifically target Co removal. Results using the
modified (continuous) reagent addition procedure were superior to those using the un-
modified procedure.
In Stage 2, the cementation of Co resulted in concentrations as low as 4 mg/l at pH

4.0, while also removing the Ni to below 2 mg/l. Further removal of Cu and Cd took
place. The lowest impurity concentrations were recorded for Test 6 (pH 4.0), for which
the product liquor contained 0.6 mg/l Cu, 3.06 mg/l Cd, 1.98 mg/l Ni and 3.72 mg/l Co.
Results using the modified (continuous) reagent addition procedure were superior to
those using the un-modified procedure.
Kinetic slurry samples were taken over the course of each test and indicate that a
processing time of approximately 60 minutes is sufficient for Stages 1 and 2.
Zinc cementation test work indicated that a modified reagent addition procedure is
required at pH 4.0 for both the cold and hot stages for maximum impurity removal.
Impurity removal efficiencies of 94% for nickel, 85% for cobalt, 97% for copper and
98% for cadmium are anticipated for two stages. It is noted though, that none of the
final impurities in the PLS after the hot stage meet the criteria for electrowinning,
indicating that a further cementation stage is required.
Stage 3 was conducted on the product liquor from Stage 2. The polishing stage
resulted in the cementation of Cu, Cd and Ni to concentrations as low as 0.05 mg/L
Cu, <0.01 mg/L Cd and 0.04 mg/L Ni, which met the specifications for electrowinning.
Test 10 (using the same conditions as Test 6, i.e. pH 4.0 and modified reagent
addition procedure) was used to generate bulk precipitates for Zn dissolution tests.
Test 10 did not include a polishing stage (Stage 3).
Zinc dissolution test work on the cold-stage precipitate showed that the highest zinc re-
dissolution was achieved at pH 2.5 with minimal impurity dissolution. The hot stage
precipitate showed that cadmium dissolved significantly at pH levels below 2.5.
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13.3.11 Ion Exchange (IX) and Solvent Extraction
The possibility of using ion exchange for the removal of deleterious elements (cobalt,
cadmium, copper and nickel) from the PLS was investigated using three different
resins. Based on these results, IX was discounted as a viable process option and no
further test work was conducted.
Solvent extraction (SX) test work for impurity rejection was conducted on the synthetic
PLS at a pH of 4.31 as the aqueous phase. Laboratory batch solvent extraction test
work showed that it could be used for impurity rejection prior to the electrowinning
circuit, however it would not be the most cost effective process route as the organic
phase has a limited capacity, indicating that a potential circuit would be very large.
Solvent extraction was therefore discounted as a viable process option.
13.3.12 Residue Stability Tests
Residue stability tests using two different methods were conducted on the neutral
leach residue from Test 2 (pH = 4.5), these being:
 Toxic Characteristic Leaching Procedure (TCLP) using the EPA test method
 Mintek four-step sequential extraction
The results from the TCLP test indicate that all elements, with the exception of Cd, are
compliant with the water quality standards as specified by the World Health
Organisation (WHO). The Cd was analysed at 0.09 mg/L and the maximum level
allowed by the WHO is 0.003 mg/L.
While this test work was carried out the project assumption is that Lead Sulphate will be
sold as a marketable product.
13.3.13 SysCAD Modelling
Based on results obtained in the test work conducted, the leach-cementation-

electrowinning flow sheet was selected for the production of SHG zinc from Waelz kiln
fume as shown in Figure 13-6. The SysCAD® simulation package was used to
generate a mass balance for this chosen flow sheet and supported the overall process
design criteria. The modelling of the chosen flow sheet was conducted by the team at
Mintek.
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Figure 13-6: Flow Sheet used for SysCAD® Simulation
Source: Mintek, 2013
The SysCAD® simulation package uses speciation and chemistry from test work data,
as well as chemical and mineralogical assays to predict metal deportments, recoveries
and reagent consumptions. However, due to a lack of some experimental data some
assumptions had to be made. These are:
 Parameters relating to solid-liquid (S/L) separation. These include

- Wash ratios, filter cake / thickener underflow solids contents, wash efficiencies,
equipment type and performance
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 Speciation of minor or trace elements in the feed

 Philosophy regarding the treatment of bleed and waste streams in the circuit
Four scenarios were simulated (Table 13-9). In the base case the zinc tenor in the
neutral leach PLS was controlled at 100 g/L, while in Scenario 2 it was controlled at
120 g/L. Both Scenarios 1 and 2 had a zinc dust addition in the cementation circuit of
5 g/L per stage. Scenario 3 was modelled using a zinc dust addition in the
cementation circuit of 2.5 g/L per stage, while maintaining a zinc tenor in the neutral
leach PLS at 120 g/L. Scenario 4 was as per Scenario 3 but included a third
cementation (polishing) stage, as this was the anticipated final flow sheet. Scenario 4
also used lime for neutralisation as opposed to sodium carbonate.
Simulation 4 was conducted assuming a feed rate of 14 t/hr of dry Waelz kiln fume.
Table 13-9: Comparison of the Reagent Consumptions for all Scenarios

Scenario 1 Scenario 2 Scenario 3 Scenario 4
kg kg kg kg kg kg kg kg
Reagent consumptions reagent / reagent / reagent / reagent / reagent / reagent / reagent / reagent /
t/hr t/hr t/hr t/hr
ton dry kg Zn in ton dry kg Zn in ton dry kg Zn in ton dry kg Zn in
feed feed feed feed feed feed feed feed
Reagents
Na2CO3 (dry basis) 4.20 168 0.30 5.14 206 0.36 5.07 203 0.36 1.09 78 0.14
H2SO4 (98%) 3.17 0.13 0.22 4.06 0.16 0.29 4.00 0.16 0.28 0.94 67.17 0.12
Lime (dry basis) 0.35 24.78 0.04
Sb2O3 2.3E-04 0.01 1.6E-05 1.7E-04 0.01 1.2E-05 1.6E-04 0.01 1.1E-05 8.8E-05 0.01 1.1E-05
CuSO4 0.01 0.55 9.8E-04 0.01 0.40 7.0E-04 0.01 0.39 6.9E-04 0.01 0.38 6.7E-04
Zn dust to cementation 2.22 88.76 0.16 1.63 65.04 0.11 0.80 32.08 0.06 0.66 47.02 0.08
Zn recycle of plated, % 14% - - 11% - - 5.5% - - 8.0% - -
Zn SE bleed fraction, % 5.47% - - 8.66% - - 9.15% - - 1.71% - -
Deportment to cathode production
Zn 95.3% 95.5% 96.4% 95.5%
Cd 0.46% 0.43% 0.51% 0.005%
Cu 0.00% 0.00% 0.00% 0.00%
Ni 0.09% 0.09% 0.09% 0.05%
Co 5.72% 4.80% 6.25% 3.35%
Scenarios 1, 2 and 4 have an overall zinc recovery of ~95 % to cathode produced for
sale, while Scenario 3 predicts an overall zinc yield of 96.4 %. The fresh water
required by the circuit ranges between 67 m3/hr and 71 m3/hr. Na2CO3 consumption
ranges from 168 to 206 kg/t of dry feed, depending on the scenario chosen. The
portion of Zn recycled to dust varies from 5.5–14 % of cathode production.
The waste water discharge from the circuit is predicted to contain between 2.71 and
2.91 g/L of dissolved NaF and between 2.50 and 2.68 g/L of NaCl. The concentration
of Na2SO4 in this stream varies between 76.6 g/L and 89.08 g/L.
In all simulations, the lead content of the neutral leach residue varies between 50 and
52%. This is almost double the test work results, which showed a Pb content of ~30%.
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Using the test work results in the simulation, the predicted electrolyte composition for
chloride and fluoride exceeds the target specifications in all scenarios. This is mainly
due to entrained carry-over from the halide leach solid/liquid separation which is based
on assumptions and estimates. The assumptions regarding wash ratios in the
solid/liquid separation stages will be investigated and confirmed in future test work.
It is also noted that Fe accumulates in the flow sheet according to the above
simulations (but not according to actual test work results), resulting in the
concentration of Fe of the advance electrolyte above the limit of 5 mg/L. This indicates
that an iron removal step or a larger bleed stream will need to be investigated in the
next phase of the project and included in the process design.
Additional manganese will be required for anode protection as the manganese

concentration in the advance electrolyte is only 0.5 g/L.
Scenario 1 requires a larger volumetric flow rate than do Scenarios 2, 3 or 4. This

affects the size of reactors required and consequently, project economics. While
Scenario 3 had the highest overall zinc recovery at 96.4%, it is recommended that
Scenario 4 with a zinc recovery of 95.6% be implemented as the concentration of
deleterious elements in the advance electrolyte meets the required specifications
except for Cl, F, and Fe.
13.3.14 Comminution Test Work 2012
Comminution test work samples were selected based on the mining banks/phases
defined during earlier Project studies.
Selected core samples corresponded to new, or twin holes from the selected areas
such that the proposed test work would complement previous comminution studies.
Test work was carried out between November and December 2012 by Plenge
Laboratories. A total of 15 samples were generated, six from Accha and nine from
Yanque.
The Abrasion Index range for Accha material was from 0.0008 gr with a P80 of 7,649
µm to 0.0012 gr with a P80 of 6,350 µm. The Abrasion Index obtained on Yanque
samples ranged from 0.0020 gr with a P80 of 6,696 µm to 0.0034 gr with a P80 10,313
µm. The Crusher Work Index varied from 3.87 to 4.46 kW-h/tc for the Accha samples
and 4.69 to 7.42 kW-h/tc for the Yanque samples. Unconfined compressive strength
(UCS) values varied from 736.5 psi to 801.7 psi for the Accha samples, and from
1,426.8 to 2,452.6 psi for the Yanque samples.
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13.4 Mass Balance and Recovery Estimates
As discussed in Sections 15 to 22, a Base Case investigated processing of fume to

produce a special high grade (SHG) zinc ingot and lead sulphate by-product. An
alternate scenario, the Fume Case, investigated selling the zinc-lead fume to third-
party refineries.
An overall recovery summary and a detailed annual metallurgical process production

mass balance plan for the Base Case are provided in Table 13-10 and Table 13-11.
Table 13-10: Process Recovery Summary – Base Case

Area Unit Zn Pb
Ore feed % 100.0 100.0
Slag Kiln % 7.9 2.4
Fume % 92.1 97.6
Alkaline & Neutral Leach (Residue Pb) % 2.0 97.6
Purification Residue % 2.2 0.0
Overall Recovery % 87.9 97.6
Note: Numbers are rounded
Table 13-11: Accha and Yanque Product and Metal Balance Summary – Base Case
Area Unit Zn Pb
Ore feed % 100 100
Slag Kiln % 7.9 2.4
Fume % 92.1 97.6
Alkaline & Neutral Leach (Residue Pb) % 2 97.6
Purification Residue % 2 0
Process recovery summary, and Accha and Yanque production and metal balance for
the Fume Case are shown in Table 13-12 and Table 13-13.
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Table 13-12: Process Recovery Summary – Fume Case

Refined & By-
Fume product
ROM Fume Zn Pb Zn+Pb Oxides Zn Pb Zn Pb
(kt) (kt) (%) (%) (%) (%) (kt) (kt) (kt) (kt)
Accha TOTAL 2,234 293 65.05 7.41 72.46 89.04 190 22 182 22
Metal Distribution 100% 100% 93.8 97.0 89.7 97.0
Yanque FINAL PIT 8,338 748 40.32 28.27 68.59 80.70 302 211 288 211
TOTAL * ROM 10,571 1,041 47.28 22.40 69.68 83.04 492 233 470 233
* Total may not sum due to rounding
Table 13-13: Accha and Yanque Product and Metal Balance Summary – Fume Case
Area Unit Zn Pb
Ore feed % 100.0 100.0

Slag Kiln % 8.0 2.3
Fume % 92.0 97.7
Alkaline Leaching % 100.0 100.0

13.5 Geometallurgical Considerations
13.5.1 Pyrometallurgical Samples - 2012
In 2012 representative samples of oxide ore from Accha and Yanque were selected
and shipped by Zincore to IMN in Poland for bench scale and pilot scale testing
program. Samples were selected based on the preliminary mine plan at the time.
The following metallurgical composition of the Accha and Yanque mineral that will be
sent to the processing plant was determined using the current mine plan. The Base
Case mine plan is presented in Table 13-14. The Fume Case mine plan has a similar
distribution.
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Table 13-14: Mine Plan Grades for Metallurgical Samples

Fume - Final product
ROM Fume Zn Pb Zn+Pb Oxides Zn Pb
(kt) (kt) (%) (%) (%) (%) (kt) (kt)
Accha TOTAL 1,823 259 67.42 7.59 75.01 92.19 175 20
Metal Distribution 100% 100% 93.8 97.0
Yanque FINAL PIT 9,711 834 37.78 32.50 70.27 82.09 315 271
TOTAL * ROM 11,533 1,093 44.80 26.60 71.39 84.48 490 291
* Total may not sum due to rounding
The proposed Yanque production schedule is characterised by a declining average

grade of zinc and an increasing grade of lead over the life of the mine. Zinc grades
decline from 6.01% Zn to approximately 3.8% Zn where they remain during the mid
point in the mine life prior falling 1.7% in the final production year. Lead production
trends in the opposite direction, rising from a low of 1.06% Pb to 3.5% in Year 4, and a
final year of production lead grade reaching 4.2%.
As this behaviour had been predicted in preliminary mine plans, two geometallurgical
types were categorized for Yanque, one being a high-zinc, low-lead content ore
(Yanque 1), and the second being a low-grade zinc but high-grade lead ore
(Yanque II). Based on this definition the Zincore geology department selected
representative core samples for Yanque I and II.
Grades of zinc and lead in the Accha mine plan do not demonstrate these trends.
Average zinc grades from Accha will increase over the life of the mine from 7.7% Zn to
11.3% Zn, while lead also follows a similar trend increasing from 0.98% Pb to 1.3% Pb
over the life of the mine.
Samples for what was defined as Yanque I was based on 1,351 mineral samples with
an average grade of 4.9% zinc and 1% lead. Yanque II was based on 1,241 mineral
samples with an average grade of 2.6% zinc and 4.7% lead. Sample selection from
Accha was based on 1,099 samples at an average grade of 10% for zinc and 1% for
lead.
During test work at the IMN laboratory, metallurgical testing focused on Yanque II
mineralisation. Test work carried out by Metallicon during 2010 had demonstrated that
the higher lead and potassium content found within Yanque II would prove to be more
difficult to process as this proved to be a cause of lower fusion point in the Waelz
process.
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13.5.2 Hydrometallurgical Samples
Samples were sourced with the aid of the geological team and 2.5 t of sample were
collected from four sources in the Accha deposit. A breakdown of the sample sources
by grade is shown in Table 13-15.
Table 13-15: Accha Metallurgical Sample Sources

Ore Zinc % Lead %
1 5.21 2.10
2 11.80 1.90
3 9.49 1.76
4 20.60 3.87
Source Metallicon, 2010
13.6.1 Pyrometallurgical Test Work
The recovery of zinc for the Phase 1 pyrometallurgical tests at IMN were 88.51% and
89.36% respectively for each test, while the lead recovery was >97% for both tests.
Pilot plant test work yielded a classical grade recovery curve and indicated that zinc
recovery of about 95% can be expected at a fume grade of about 60% zinc. Lead
recovery is expected to exceed 97%. In the PEA a relationship for anthracite to Zinc
was established. This was updated in the PFS to incorporate lead. Utilizing this
relationship, the preferred operating point and recoveries were selected resulting in an
assumed recovery for zinc of 91.99% and lead of 97.65%.
The Yanque ore melted in a number of tests in Phase 1 and 2 conducted at IMN, with
a subsequent reduction in recovery of lead and zinc to the fume. The differences in
melting temperatures for the Yanque ore determined by the 2011 Mintek additive test
work, and both IMN phases, indicates significant variability across the Yanque ore
body. Phase 2 of the IMN test work showed that the lower than expected melting point
of the ore was not significantly raised by the addition of dolomite as expected from
Phase 1 test work results, as the dolomite appeared not to react with the gangue
phases in the ores. Results indicated that the overall balance of quartz, CaO, FeO
and MgO must be considered when making up the kiln charge and particular attention
must be paid to this ratio when sourcing the dolomite. Phase 1 test work showed that
an anthracite addition of 25% with a dolomite addition of 10% at 1100°C produced the
best overall results both for zinc and lead recovery. The recovery of zinc was 88.51%
while the lead recovery was >97%. A fume grade of 15.50% zinc and 69.60% lead
can be expected when using these test conditions. Phase 2, however, showed
recoveries of up to 85% and 89% for zinc and lead respectively, which was lower than
expected.
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Additional Bunte-Baum-Reerink test work based on more detailed geological zoning of

Yanque is recommended as is further additive testing, to determine if an additive other
than dolomite may produce better results.
13.6.2 Hydrometallurgical Test Work
recovery of zinc to the PLS in excess of 98%.
Hydrometallurgical purification of the PLS via zinc cementation would be an

acceptable processing route for the Waelz kiln fume, and would produce an advance
electrolyte to the electrowinning circuit for the production of SHG zinc meeting the
required specifications.
The main conclusions from the Mintek test work are:
 Mineralogy has shown that the fume consists predominantly of ZnO, which occurs
as fine grains commonly below 2 µm in diameter
 Particle size distribution of the sample revealed the d50 of the sample was
approximately 10 µm by volume
 Chloride and fluoride removal from the fume via sodium carbonate leaching
indicated the following:
 Optimum conditions for chloride and fluoride removal are 10% pulp density with
5X stoichiometric Na2CO3 addition
 Extraction efficiencies of 99.2% and 80.6% are expected for chloride and
fluoride respectively at these conditions
 Halide levels remain in excess of those allowed, indicating that halide removal
via calcination and leaching might be required
 Mineralogy showed that CaF2 is found in the residue sample. This CaF2 has
limited solubility in Na2CO3 explaining the poorer than expected extraction
results obtained
 A residence time of two hours is sufficient for sodium carbonate leaching
The neutral leach tests revealed:
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 A mass loss of 59% and a zinc extraction of 98% were achieved for the test
conducted at pH 4.0 at 55°C
 A neutral leach residence time of two hours is sufficient
Cementation test work showed:
 The lowest concentration of impurities in the advance electrolyte was obtained at

pH 4.0 for both cold and hot stages, using a modified reagent addition procedure.
This indicates that a continuous process could yield results that exceed those
obtained in the batch bench-scale test work
 Zinc dissolution test work on the cold-stage precipitate showed that the highest
zinc re-dissolution was achieved at pH 2.5 with minimal impurity dissolution. The
hot stage precipitate showed minimal copper dissolution across all pH values
tested, while cadmium dissolved significantly at pH levels below 2.5.
The IX test work revealed:
 Potential for cadmium, copper and nickel impurity removal from the advance zinc
electrolyte, but none for cobalt removal
 No single resin is capable of removing all impurities (cadmium, copper, cobalt and
nickel) to required levels
 Also, based on the time and costs involved with running the full breakthrough tests,
IX was discounted as a viable process solution and no further test work conducted
Laboratory batch solvent extraction test work showed:
 That the loading of impurities such as cadmium, copper, cobalt, arsenic and nickel
on the loaded organic phase after three batch contacts was negligible (<2 mg/L)
and consequently solvent extraction could be used for impurity rejection prior to the
electrowinning circuit
 SX would probably not be the most cost effective process route as the SX organic
phase has a limited capacity
 SysCAD® simulation revealed the following:
- Scenario 4 is the recommended flow sheet and includes the following:
 Third cementation stage
 120 g/L Zn in the PLS
 2.5 g/L Zn dust addition in the cementation stages
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o The advance electrolyte predicted by Scenario 4 meets the criteria with

respect to the deleterious elements with the exception of Fe, Cl and F
o Fe accumulates in the flow sheet according to the above simulations,
resulting in the concentration of Fe of the advance electrolyte above the
limit of 5 mg/L. This indicates that an iron removal step or a larger
bleed stream will need to be investigated in the next phase of the
project and included in the current process flow sheet.
Test work indicates that the Base Case and Fume Case process flow sheets are viable
options for recovering zinc and lead from the Accha and Yanque deposits.
The effect of the remaining deleterious elements in the advance electrolyte to the
electrowinning circuit are summarised below, together with the recommended /
appropriate test work required.
 Halides (Cl and F): Chloride can be oxidised at the anode in the electrowinning
circuit to form chlorine gas if present in high enough concentrations. This is a
principal cause of anode corrosion and is a severe health hazard. Excess fluoride
causes sticking of the zinc deposit to the cathode sheet, which causes challenges
when stripping the cathodes. Further optimisation of the halide leach is required,
together with further investigation of fume calcination.
 Iron: The action of iron in the electrolyte is to be consecutively oxidised to ferric
iron at the anode and then reduced to ferrous iron at the cathode. This provides an
alternative set of electrode reactions reducing the current available for zinc
deposition and hence reducing current efficiency for zinc electrode position. The
loss of current efficiency may be of the order of 3% at 10 mg/L. An iron removal
step will need to be tested as part of a continuous pilot plant or bulk sample
processing.
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14.0 MINERAL RESOURCE ESTIMATES
14.1 Basis of Estimates
In May and June 2013 AMEC updated the Accha Mineral Resource model. The Accha
2013 model consists of a geological model with wireframes solids for the three zones
and a block model consisting of 5 m x 5 m x 5 m blocks. The geological model was
constructed from a database consisting of 127 drill holes, and 10 trenches (Table 14-
1).
Table 14-1: Sampling Campaigns Used in the Construction of the Accha 2013 Model
Drill
Campaign Holes Total Length (m)
Savage 1998-1999 10 2,089
Pasminco 1999-2000 16 4,943
Zincore 2006-2007 62 14,465
Zincore 2006-2007 4 735
Zincore 2010 35 4,709
Total 127 26,941
The updated Mineral Resource model for the Yanque deposit was constructed in July
2013. The Yanque3b resource model consists of a regularized block model with a
selective mining unit (SMU) block size of 5 m x 5 m x 5 m. The geological model was
constructed from a database consisting of nine trenches, 144 core holes (Table 14-2).
Table 14-2: Sampling Campaigns Used in the Construction of the Yanque 3b Model
Campaign Units Total Length (m)
Rio Tinto 1996 DDH 16 1,768.95
Zincore 2007 Trench 9 581.60
Zincore 2011 DDH 128 16,353.85
Total 153 18,704.40
Resource models were constructed in the MineSight 3D ® mine modelling software

package using proprietary and public domain geostatistical packages. The
commercial Sage 2001 variography package was used to calculate and model
experimental correlograms, and the Stanford Geostatistical Risk Evaluation (SGEMS)
package and public domain (GSLIB) and internal, AMEC plug-ins were used for EDA
and model validation.
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14.2 Geological Models
14.2.1 Accha Geological Model
The 2013 Accha geological model consists of wireframe solids for three major
lithological units:
 Coral Zone
 The larger Reef Complex Zone which encloses the Coral zone
 Laminated Limestone, flanking the Reef Complex zone.
Material outside the three wireframes was assumed to be massive limestone, an un-
mineralized rock type.
The lithology model was constructed on cross sections and longitudinal sections at
25 m spacing from drill hole intersections with assaying and core logging data as well
as mapping data from surface trenches. Contacts were adjusted to reflect the surface
geology map pattern. The model was then sliced on 10 m plans and polygons were
adjusted to match the three-dimensional position of the drill hole intersections.
The geology model consists of a series of folded coral bodies within a large east–
southeast-trending anticline. The folds are cylindrical and slightly open with the fold
hinge plunging 20–30° to the east. The surface geology projection is shown in Figure
14-1 and illustrates the trace of the anticlinal fold hinge. Figure 14-2 is a cross-section
through the deposit that shows the folded coral zone.
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Figure 14-1: Plan View of Surface Geology, Geological Model and Drill Collar Locations
Reef Complex
Laminated Limestone
Note: The yellow line marks the axial trace of an anticline in the footwall sediments. The black points mark drill holes drilled in the Accha Project. The black grid marks north-
south and east-west UTM lines spaced 100 m apart.
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Figure 14-2: Cross Section of Lithology and Mineralization Models with Drill Hole Traces
Note: The horizontal lines mark UTM elevations at 50 m intervals. Drill hole traces are colour coded by Zn grades with blue intervals less than 1% Zn and red intervals greater than 1%
Zn. Drill holes are projected +/- 10 m from the section line. The Mineralized Coral Zone is represented by the red polygon, and is sub-parallel to the upper contact of the sedimentary
Reef Complex package shown in the green polygon.
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14.2.2 Yanque Geological Model
The geological model used in the estimation of the Yanque 3b model consists of
wireframe solids for major lithological units (Breccia, Diorite and Sediments) and a
mineralization model consisting of a grade shell marking the limits of the mineralized
mantos, mainly within the Breccia unit, but in relatively limited, cases cutting into the
overlying diorite or footwall sediments. The grade shell was constructed at the
nominal 1% Zn+Pb threshold. After detailed surface mapping and core logging from
the infill-drilling campaign, the Valley fault, modelled as part of the earlier PEA model
for the Yanque deposit was not included in the current interpretation.
The lithology and mineralization model were constructed on cross sections and
longitudinal sections at 50 m spacing from drill hole intersections at the assaying and
core logging support. Contacts were adjusted to reflect the surface geology map
pattern. The mineralization model was then sliced on 25 m sections and polygons
were adjusted to match the three-dimensional position of the drill hole intersections.
The lithology model (Figure 14-3) consists of a footwall sedimentary package exposed
along the western limits of the deposit and on the westward facing slope of the Rio
Santo Tomas river valley below. Diamond drilling indicates that the upper contact of
the sedimentary package has a north north-west strike and gentle 20° to 30° eastward
dip. A broad, open syncline with axis oriented north north-west underlies the thickest
part of the mineralized body and runs parallel to and 150 m to the east of the surface
contact of the sedimentary package with overlying inter-formational breccia. The
overlying diorite unit outcrops on the eastern half of the property and covers the inter-
formational breccia unit. Drilling indicates that the footwall contact of the diorite dips
20° to 30° to the east, parallel to the upper contact of the sedimentary package.
The interpretation of the mineralization model, constraining zinc-lead mineralization,

was guided by the position of the upper and lower contacts of the interformational
breccia unit, and for the most part occurs within this unit. Five stacked, tabular lenses
were interpreted (Figure 14-4).
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Figure 14-3: Plan View of Surface Geology, Geological Model and Drill Collar Locations
Note: The red dashed line marks the east north-east dipping footwall contact of the breccia unit. The
yellow line marks the axial trace of a syncline in the footwall sediments and breccia unit. Black diamonds
mark drill holes drilled to April, 2011. Red circles mark drill holes drilled between April and September
2011. Topographic contours are marked in grey dashed lines at 25 m intervals. The black grid marks
north-south and east-west UTM lines spaced 200 m apart.
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Figure 14-4: Cross Section of Lithology and Mineralization Models with Drill Hole Traces
Section 8,430,400 mN
Note: The horizontal lines mark UTM elevations at 50 m intervals. Drill hole traces are colour coded by Zn+Pb grades with blue intervals less than 1%
Zn+Pb and red intervals greater than 1% Zn+Pb. Drill holes are projected +/- 25 m from the section line. Mineralized lenses, marked with unfilled blue
and green polygons, are sub-parallel to the upper contact of the sedimentary package which is marked by the green dotted polygon at the bottom of the
section. The inter-formational breccia unit occurs between the green dotted sedimentary unit and the orange hatched polygon at the upper right
marking the overlying diorite unit.
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14.3 Compositing
Sampling lengths range from 0.1 m to 7 m at Accha with 30% of assays having lengths
of 1.0 m and 23% of assays having lengths of 2.0 m. Approximately 2% of assays
have lengths of 3.0 m and remaining assays are of variable lengths. A composite
length of 2.5 m was chosen for data standardization. This length is a compromise
between the dominant sampling lengths and as a multiple of the 5 m block height.
Composites were calculated in a down-hole direction for intervals having zinc and lead
assay grades breaking composite intervals at mineralized zone contacts. Contacts
shorter than 1.25 m in length were added to the previous composite interval.
Approximately 9% of the composite file consists of composites with lengths of less
than 1.25 m. To avoid issues with irregular data support, these short composites were
not used in estimation.
Sampling lengths at Yanque range from 0.3 m to 13 m with 49% of assays having
lengths of 1.0 m and 38% of assays having lengths of 2.0 m. Approximately 2% of
assays have lengths of 2.5 m and 3.0 m and remaining assays are of variable lengths.
A composite length of 2.5 m was chosen for data standardization. This length is a
compromise between the dominant sampling lengths and as a multiple of the 5 m
block height. Composites were calculated in a down-hole direction for intervals having
zinc and lead assay grades breaking composite intervals at mineralized zone contacts.
Contacts shorter than 1.25 m in length were added to the previous composite interval.
Approximately 10% of the composite file consists of composites with lengths of less
than 1.25 m as the total length of assayed material in the composite intervals was less
than 1.25 m. To avoid issues with irregular data support, these short composites were
not used in estimation. The 501 composites with lengths less than 1.25 m have an
average grade of 0.68% Zn+Pb which is about 10% lower than the average grade of
all composites and no significant bias is expected due to the omission of this data
during estimation.
14.4 Relative Elevation
Composite grades for lead and zinc are observed to follow the upper contact of the
footwall sedimentary package, in cross section and longitudinal section views of
Yanque deposit. Elevation to this contact was used as the third dimension was used
to control interpolation, in addition to easting and northing in order to model this
important control on grades. Relative elevation, positive above and negative below,
was assigned to blocks and composites prior to undertaking variography and
estimation.
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14.5 Exploratory Data Analysis
Exploratory data analysis consisting of construction of box plots, histograms and log-
cumulative frequency plots was carried out to understand the univariate statistics of
lead and zinc at Accha, and lead, zinc, silver and sulphur at Yanque.
Within the Accha deposit, zinc grades are elevated in the Coral and Reef Complex
units and relatively low in the limestone unit. Within Coral Zone, the median zinc
grade is approximately 4.1% and the mean zinc grade is 7.1%. The coefficient of
variation (CV) of composites within the Coral Zone is 1.1 which is relatively low and
can be modelled successfully using linear estimation methods such as ordinary kriging
(OK). Lead grades are low in the Coral, Reef and Limestone units. Median lead
grades in the mineralized Coral Zone are 0.2% and mean grades are 0.9% Pb. The
CV of composites within the mineralized zone is 2.4, which is relatively high, requiring
outlier restriction to manage the over-projection of the high grade composites at the
high-grade end of the distribution.
Histograms of zinc grades in the Coral Zone show a log normal distribution with a flat
log-cumulative frequency curve to over 20% Zn. The cumulative frequency curve
disaggregates somewhat at approximately 35% Zn. Histograms of lead grades in the
mineralized zone are similar to zinc grades but an order of magnitude lower and less
skewed, the cumulative frequency curve of lead grades disaggregates at
approximately 9% Pb.
Within the Yanque deposit, zinc grades are elevated in the Diorite and Breccia units
and relatively low in the footwall sediment unit. Within the grade shell, the median zinc
grade is approximately 1% and the mean zinc grade is 2.4%. The CV of composites
within the grade shell is 1.54 which is relatively high for distributions to be modelled
using linear estimation methods such as OK. Lead grades are relatively low in Dacite
and Breccia and slightly higher in the footwall sedimentary unit. Median lead grades in
the mineralized zone are 0.84% and mean grades are 1.92% Pb. The CV of
composites within the mineralized zone is 1.61, which is also relatively high. Silver
grades are low in all lithology units and within the mineralized zone. The footwall
sediments and mineralized zone have mean silver grades from 1 g/t to 3 g/t. The
maximum silver grades in the footwall sediments and mineralized zone locally exceed
100 g/t resulting in a CV for these zones. Sulphur grades are low in the Diorite,
Breccia and mineralized Zone with a large proportion of composites at or below
detection limits of 0.1% S and mean grades less than 0.2% S. In the footwall
sedimentary unit sulphur grades are moderate and disseminated and even semi
massive pyrite is common and the mean sulphur grade reaches 1.12% S.
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Histograms of zinc grades in the mineralized zone show a log normal distribution with
a flat log-cumulative frequency curve to over 20% Zn. The cumulative frequency curve
disaggregates somewhat at approximately 28% Zn. Histograms of lead grades in the
mineralized zone are smoother, and cumulative frequency plots show a slight
concave-upward profile as a result of the slightly lower variance variation lead grades
compared to zinc grades. There is a slight bump in the cumulative frequency plot of
lead grades at about 12% Pb, but the curve remains intact until over 20% Pb.
14.6 Variography
Experimental correlograms were constructed and modelled for use in estimation.
Correlograms were calculated for each of the Accha domains (Coral, Reef Complex
and Limestone). The majority of composites are in the south flank of the Coral and
Reef Zones so correlograms were modelled using these composites, then rotated to
reflect the continuity of the north limb. The continuity of grades in the Coral Zone are
moderately to strongly anisotropic with the direction of best continuity of both grade
and geology parallel to the long axis of the deposit, and the orientation of the shortest
continuity vertical or perpendicular to the footwall Reef Complex contact. Experimental
correlograms are well structured for both zinc and lead with nugget effect (C0) of 20%
and 40% of total variance and a well defined spherical structure. The correlogram is
anisotropic, with similar ranges in the horizontal plane and at the direction with the
shortest range of continuity vertical or parallel to the contact of the footwall Limestone
unit. The structure has a range of 70 m in the horizontal plan and approximately 30 m
in the direction of shortest continuity.
Experimental correlograms with unit sill variance were calculated for Yanque for zinc,
lead, silver and sulphur. Correlograms were calculated using a relative elevation or z-
coordinate set to the vertical distance from the footwall Quartzite contact to preserve
the continuity of grade trends parallel to this surface. The continuity of grades at
Yanque are moderately to strongly anisotropic with the direction of best continuity of
both grade and geology parallel to the long axis of the deposit, and the orientation of
the shortest continuity vertical or perpendicular to the footwall Quartzite contact.
Experimental correlograms are well structured for both zinc and lead with C0 of
between 25% and 33% of total variance and two well defined spherical structures.
The correlograms are anisotropic, with roughly similar ranges in the horizontal plane
and the direction with the shortest range of continuity vertical or parallel to the contact
of the footwall Quartzite unit. The first structure accounts for about half of total
variance and has a range of 50 m to 60 m in the horizontal plan and approximately 15
m in the direction of shortest continuity. The second structure comprises the
remaining 10% to 25% of variance and has a range of 180 to 200 m in the plane of
longest range continuity and of 55 m to 90 m. Experimental correlograms for both zinc
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and lead show weak zonal anisotropy with the unit sill correlogram model sills slightly
greater than one in the vertical direction. Experimental correlograms are poorly
structured for sulphur and silver. Down hole correlograms for these variables indicate
relatively low nugget effects (0.12 to 0.25) but the correlogram for silver indicates
relatively short range and that of sulphur has an erratic profile. The poor structures of
the silver and sulphur correlograms are interpreted to be the result of their low overall
grades and poor continuity.
14.7 Density
The average density of the three modeled domains at Accha, and of determinations of
the outside wireframe shapes are listed in Table 14-3. The average densities do not
vary more than 3% from the global average density which is well within the precision of
the density determination method.
Table 14-3: Density Determinations by Estimation Domains, Accha
Domain n Average Density (g/cm3)
Coral Zone 76 2.51

Reef Complex 70 2.51
Laminated
21 2.57
Limestone
Exterior 11 2.64
The Yanque database consists of 915 wax-sealed water immersion density

determinations. A total of 46 determinations are taken from exploration drill holes
located 1.5 km south of the south end of the deposit and were excluded from the
analysis of density data. The dataset has a minimum value of 0.9 g/cm3 and a
maximum value of 4.49 g/cm3. High porosity results in density values of less than
1.0 g/cm3 in several samples from the breccia, diorite and mineralized zones, while
lead-rich mineralization in other samples results in densities of greater than 3.5 g/cm3.
Samples from the breccia, diorite and the mineralized zone have similar bulk densities.
Interquartile ranges are 2.19 to 2.56 g/cm3 and mean values range from 2.35 to
2.41 g/cm3 for these units. The sandstone unit is characterized by lower porosity and
higher sulphide content and has a mean density of 2.63 g/cm3 which is slightly higher
than the other units.
14.8 Block Models
The Accha 2013 resource model consists of a regularized block model with a selective
mining unit (SMU) size of 5 m x 5 m x 5 m. The SMU size was chosen as a result of
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mine design work carried out in the AZOD PEA and provides a bench height and block
area that are suitable for long range planning and operation of an open pit mine and
underground with a conceptual 500 to 2,000 t/d throughput rate.
The main Accha block model variables are zinc and lead. The block model has fields
for final estimated grades for both variables for each domain, the percentage of each
block within the domain and distances, numbers of composites and drill-holes and
kriging pass number and kriging variances for each of the main variables. Nearest-
neighbour (NN) grades are also assigned for model validation. The block model also
contains fields for lithology type, density, mineralization domain and proportion of block
below topography and within the mineralization model.
The 2013 Yanque model consists of a regularized block model with a SMU size of 5 m
x 5 m x 5 m. The SMU block size was chosen as a result of mine design work carried
out in the AZOD PEA and provides a bench height and block area that are suitable for
long range planning and operation of an open pit mine with a conceptual 2,000 to
5,000 t/d throughput rate.
The main Yanque block model variables are zinc, lead, silver and sulphur. The block
model has fields for final estimated grades, grades for portions of blocks inside
mineralized zones, grades for portions of blocks outside zones and distances,
numbers of composites and drill holes and kriging pass number and kriging variances
for each of the main variables. Grades and other variables are provided for capped
and un-capped grades for validation. Nearest-neighbour grades are also assigned for
model validation. The block model also contains fields for lithology type, density
mineralization domain and proportion of block below topography and within the
mineralization model.
14.8.1 Interpolation Accha
The Accha 2013 resource model was estimated using two passes of outlier restricted
OK. The runs were executed separately for the south flank and for the north flank of
the anticline. A third set of runs was carried out using nearest neighbour grade
assignment for validation of the kriged grades.
Search ellipsoids were rotated clockwise about the vertical axis (z-axis) so that the
major axis (y-axis) is oriented along azimuth 060°for the right flank and -060° for the
left flank of the anticline, parallel to the direction of best continuity of grades and
geology in the deposit. The minor axis (x-axis) is oriented at 10° and the vertical axis
(z-axis) is vertical.
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The major and minor axis lengths of the first pass search ellipsoid are 50 m for Coral
Zone, Reef Complex Zone and for the Limestone Zone. The length of the minor axis
of the first pass model is 20 m for the Coral Zone, Reef Complex Zone and for the
Limestone Zone. The first pass search ellipsoid is intended to allow for estimation of
the majority of blocks in the portion of the model drilled on 25 m sections.
The second pass search ellipsoid major and vertical axis lengths go to 150 m for the
Coral Zone, 200 m for the Reef Complex and 250 for the Limestone, preserving the
anisotropy ratio of the first pass search ellipsoid, but allowing estimation of blocks
drilled at 50 m and greater drill spacing.
Composite selection for the first pass requires a minimum of four composites from two
different drill holes to a maximum of three composites from four holes to estimate a
block grade inside the mineralized zone. A relatively low number of composites were
used to estimate grades to reduce smoothing caused by the conditional bias of
ordinary kriging and to attain the desired grade tonnage distribution.
To limit the impact of very high grade composites at the top end of the cumulative
grade distributions, outlier cut-off grade thresholds were selected based on the point at
which the log-cumulative frequency plots of grades in the mineralized zones
disaggregated from a log-normal distribution. The outlier cut-off was applied allowing
composites over the threshold grade to participate in estimation of block grades to a
maximum distance of 50 m for Coral and 25 m for Reef Complex and enter in
estimation at the threshold grade at distances of greater than 50 m and 25 m.
Correlogram model parameters were entered in terms of nugget effect (C0), and
cumulative variance to the first structure (C1); the structure was entered as spherical.
The nearest neighbour model was estimated in a single pass to a maximum range of
500 m for each variable using the nearest 2.5 m composite.
A nearest neighbour model was run for blocks and portions of blocks inside the grade
shell, and for blocks and portions of blocks outside the grade shell.
14.8.2 Yanque
The Yanque3b resource model was estimated using two passes of outlier restricted
OK for zinc, lead, silver and sulphur grades. A second set of runs was executed to
estimate unrestricted grades and a third set of runs was carried out using NN grade
assignment for validation of the restricted grades.
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Search ellipsoids were rotated clockwise about the vertical axis (z-axis) so that the
major axis (y-axis) is oriented along azimuth 045°, parallel to the direction of best
continuity of grades and geology in the deposit. The minor axis (x-axis) is oriented at
135° and the vertical axis (z-axis) is vertical. The major and minor axis lengths of the
first pass search ellipsoid are 60 m and 40 m respectively and are roughly equivalent
to the range of continuity of the first structure (AY1) of the correlogram models in the
horizontal plane.
The length of the minor axis of the first pass model is 15 m which is similar to the
range of continuity of the first structure of the correlogram model in the vertical
direction. The first pass search ellipsoid is intended to allow for estimation of the
majority of blocks in the portion of the model drilled on 50 m sections.
The second pass search ellipsoid major and vertical axis lengths go to 300 m and
100 m preserving the anisotropy ratio of the first pass search ellipsoid, but allowing
estimation of blocks drilled at 100 m and greater drill spacing.
Composite selection for the first pass requires a minimum of five composites from
three different drill holes or trenches to a maximum of six composites from three holes
to estimate a block grade inside the mineralized zone. A relatively low number of
composites were used to estimate grades to reduce smoothing caused by the
conditional bias of ordinary kriging and to attain the desired grade tonnage distribution.
Outside the mineralized zone conditional bias is less of an issue a maximum of eight
composites are used to estimate block grades. In the second pass the minimum
number of composites is reduced to three from two different drill holes or trenches to
allow more isolated blocks and blocks at the edge of the estimation domains to be
estimated.
To limit the impact of very high grade composites at the top end of the cumulative
grade distributions, outlier restriction grade thresholds were selected based on the
point at which the log-cumulative frequency plots of grades in the mineralized zones
disaggregated from a log-normal distribution. These grades are between the 98th and
99th percentile of composites for zinc and lead. The outlier restriction was applied
allowing composites over the threshold grade to participate in estimation of block
grades to a maximum distance of 25 m and enter in estimation at the threshold grade
at distances of greater than 25 m.
Correlogram model parameters were entered in terms of C0, C1, and cumulative
variance to the second structure (C2). Both structures were entered as spherical and
the orientations of the major, minor and vertical axes were parallel for both structures.
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Un-restricted model runs were run with the same parameters as the main grade runs
but without the grade and distance threshold of the restricted runs. The NN model was
estimated in a single pass to a maximum range of 300 m for each variable using the
nearest two 2.5 m composites to provide a better match to the 5 m block model and
allow a larger proportion of composites to be used in grade assignment.
Outlier restricted, un-restricted and NN models were run for blocks and portions of
blocks inside the grade shell, and for blocks and portions of blocks outside the grade
shell. Separate runs were carried out for Breccia, Diorite, Quartzite and the grade
inside the mineralized zone. The inside and outside grades were then combined
weighting by density and the volume proportion of the block inside the mineralized
zone wireframe.
14.9 Validation
Model validation for each model consisted of
 Visual review of plans and sections of colour coded block and composite grades
 Review of global bias using tables, histograms and box plots comparing statistics
for Zn and Pb
 Validation of local grade trends on swath plots for Zn and Pb
 Validation of the grade-tonnage distribution of the final model using theoretical
Herco grade tonnage curves for Zn and Pb
No instances of significant bias were noted.
14.10 Mineral Resource Classification
Assignment of Mineral Resource confidence category classification is based on an

assessment of:
 Continuity of geological controls on mineralization

 Continuity of grades
 Data quality
 Data configuration and data spacing
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Mineral Resources at Accha have been classified as Measured, Indicated and Inferred
based on the following criteria:
 Measured Mineral Resources are within the coral zone, defined by surface
trenches and the 25 m drill pattern and estimated from composites within 15 m of
the block. The 15 m pattern allows for the estimation of zinc grades with a relative
error of less than 10% for quarterly production periods
 Indicated Mineral Resources are within the Coral and Reef Complex zones of the
deposit drilled on a nominally 25 m drill pattern. The 25 m pattern allows for
estimation of zinc and lead grades with an estimation error of ±15% at the 90th
confidence limit. The limits of the mineralized zone are well defined by the 25 m
drill hole spacing and in some cases, such as along the northern flank of the
deposit, by detailed outcrop mapping.
 Inferred Mineral Resources are supported by wider-spaced drilling and are
generally at depth and not supported by geological mapping. Estimation errors are
expected to be relatively high and confidence in the continuity and location of the
limits of the mineralized zone is poor.
Mineral Resources at Yanque have been classified as Indicated and Inferred based on
the following criteria:
 Indicated Mineral Resources are within the part of the deposit drilled on a
nominally 50 m drill pattern and estimated using data from surface trenches and
diamond drill holes. The 50 m pattern allows for estimation of zinc and lead grades
with an estimation error of ±15% at the 90th confidence limit. The limits of the
mineralized zone are well defined by the 50 m drill hole spacing and in some
cases, such as along the western flank of the deposit, by detailed outcrop
mapping.
 Inferred Mineral Resources are supported by wider-spaced drilling and are
generally at depth and not supported by geological mapping. Estimation errors are
expected to be relatively high and confidence in the continuity and location of the
limits of the mineralized zone is poor.
14.11 Reasonable Prospects for Economic Extraction
AMEC undertook a conceptual analysis to assess reasonable prospects for economic

extraction for declaration of Mineral Resources. Open pit mining methods assume a
conventional truck and shovel operation. Underground mining methods considered
are conventional, mechanized mining methods that have a reasonable safety factor.
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The assumptions for Accha are as summarized in Table 14-4. Both open pit and
underground operations are envisaged.
Table 14-4: Reasonable Prospects Assumptions, Accha

Open Pit Underground Units
Zinc Price 1.28 1.28 $/lb
Lead Price 1.05 1.05 $/lb
Zinc Price Net of Refining, Selling Costs 1.14 1.14 $/lb
Lead Price Net of Refining, Selling Costs 0.70 0.70 $/lb
Zinc Recovery 0.869 0.869
Lead Recovery 0.977 0.977
ZnEq 0.69 0.69 *Pb + Zn
Mining Cost 2.09 34.92 $/t
Processing and G&A 48.15 48.15 $/t
Slope Angle 33 °
Break Even Cut-off Grade 2.29 3.79 % ZnEq
Marginal Cut-off Grade 2.20 2.20 % ZnEq
The majority of the mineralization at Accha was considered to be amenable to open pit
mining methods and was constrained within a conceptual Lerchs–Grossmann open pit
shell that was constructed assuming a zinc price of US$1.28/lb, a lead price of
US$1.05/lb, selling costs of US$0.14/lb for zinc and US$0.25/lb for lead, metallurgical
recovery of 86.9% for zinc and 97.7% for lead, a mining cost of US$2.09/t and
transportation, processing and general and administrative costs of US$48.15/t.
Mineralization at Accha considered amenable to underground mining methods was

constrained within conceptual stope outlines defined at a break-even cut off grade of
3.79% ZnEq, and included material above a cut off grade of 2.20% ZnEq, below the
resource pit shell, if this material was within the conceptual stope design. The
estimate assumes a zinc price of US$1.28/lb, a lead price of US$1.05/lb, selling costs
of US$0.14/lb for zinc and US$0.25/lb for lead, metallurgical recovery of 86.9% for zinc
and 97.7% for lead, a mining cost of US$34.92/t and transportation, processing and
general and administrative costs of US$48.15/t.
In each case, the zinc equivalent (ZnEq) value was calculated by applying the
differential of metallurgical recoveries and metal prices net of selling costs to zinc and
lead grades as follows:
 ZNEQ =(Lead Recovery / Zinc Recovery) x (Lead Price Net of Refining, Selling
Costs) / (Zinc Price Net of Refining, Selling Costs)
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A schematic showing the relationship of the mineralization considered amenable to

open pit methods and that amenable to underground mining methods is given as
Figure 14-5.
Figure 14-5: Cross Section through Accha Mineral Open Pit and Underground Mineral
Resources (showing the relationship of the mineralization considered
amenable to open pit methods and that amenable to underground mining
methods)
Note: Grid lines mark 100 m elevations. Blocks are colour coded by zinc equivalent grade (ZnEq). Blocks above 2.2%
ZnEq are shown. The blue line marks the base of the conceptual pit shell used to constrain Mineral Resources and the
black outlines mark the conceptual stope limits.
The assumptions used at Yanque are summarized in Table 14-5, and envisage open
pit operations only. Metallurgical recoveries used in the resource estimate were
preliminary; subsequent to finalization of the estimate, the zinc recovery used in the
financial analysis was revised upward to 89.58%, based on a rationalization of the test
work results.
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Table 14-5: Reasonable Prospects Assumptions, Yanque

Parameter Value Unit
Zinc Price 1.28 $/lb
Lead Price 1.05 $/lb
Zinc Price Net of Refining, Selling Costs 1.14 $/lb
Lead Price Net of Refining, Selling Costs 0.70 $/lb
Zinc Recovery 0.869
Lead Recovery 0.977
ZnEq 0.69 *Pb + Zn
Mining Cost 1.89 US$/t
Processing and G&A 36.66 US$/t
Overall Slope Angle 40 °
The majority of the mineralization at Yanque was considered to be amenable to open

pit mining methods and was constrained within a conceptual Lerchs–Grossmann open
pit shell that was constructed assuming a zinc price of US$1.28/lb, a lead price of
US$1.05/lb, selling costs of US$0.14/lb for zinc and US$0.25/lb for lead, metallurgical
recoveries of 86.9% for zinc and 97.7% for lead, a mining cost of US$1.89/t and
transportation, processing and general and administrative costs of US$36.66/t. Zinc
equivalent was calculated by applying the differential of metallurgical recoveries and
metal prices net of selling costs to zinc and lead grades.
14.12 Mineral Resource Statements
The Mineral Resource estimates and geological models were prepared by Christopher
Wright, P.Geo. of AMEC, and reviewed by Stella Searston, RM SME of AMEC, who is
the Qualified Person as defined under NI 43-101 for the estimate. Mineral Resources
have an effective date of 5 July, 2013. Mineral Resources are reported inclusive of
Mineral Reserves. AMEC cautions that Mineral Resources that are not Mineral
Mineral Resource estimates for the Accha deposit are included as Table 14-6 and
Mineral Resource estimates for Yanque in Table 14-7, with the base case highlighted.
Sensitivities of the estimates to changes in zinc equivalent grades are included in the
tables for comparison.
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Table 14-6: Accha Mineral Resource Estimate Showing Sensitivity of the Estimate to
Cut-off Grades (Base Case is highlighted)
Tonnage ZnEq Zn Pb
(kt) (%) (%) (%)
Measured 2.20 2,119 8.75 8.11 0.93 408.8 378.9 43.4
3.00 1,983 9.17 8.49 0.97 400.7 371.4 42.6
4.00 1,751 9.91 9.18 1.06 382.6 354.4 40.9
5.00 1,527 10.71 9.91 1.16 360.4 333.5 38.9
Indicated 2.20 4,494 6.03 5.55 0.71 597.4 549.9 70.3
3.00 3,700 6.77 6.23 0.79 552.5 507.9 64.6
4.00 2,916 7.66 7.04 0.89 492.2 452.8 57.1
5.00 2,286 8.53 7.85 0.98 429.9 395.8 49.4
M&I 2.20 6,613 6.90 6.37 0.78 1,006.0 928.7 113.7
3.00 5,683 7.61 7.02 0.86 953.2 879.3 107.2
4.00 4,667 8.50 7.85 0.95 874.8 807.2 98.0
5.00 3,813 9.40 8.68 1.05 790.3 729.4 88.3
Inferred 2.20 197 4.95 4.60 0.51 21.5 20.0 2.2
3.00 151 5.66 5.25 0.60 18.8 17.5 2.0
4.00 124 6.13 5.69 0.64 16.8 15.6 1.7
5.00 89 6.77 6.29 0.69 13.3 12.3 1.4
Mineral Resources Amenable to Underground Mining Methods

Tonnage ZnEq Zn Pb
(kt) (%) (%) (%)
Measured 3.79 17 5.73 4.58 1.66 2.1 1.7 0.6
4.00 17 5.74 4.60 1.66 2.2 1.7 0.6
5.00 12 6.24 5.06 1.72 1.7 1.3 0.5
Indicated 3.79 920 6.24 5.58 0.95 126.5 113.3 19.2
4.00 840 6.46 5.79 0.98 119.6 107.1 18.1
5.00 554 7.49 6.72 1.12 91.4 82.0 13.6
M&I 3.79 937 6.23 5.57 0.96 128.6 115.0 19.8
4.00 857 6.45 5.76 0.99 121.8 108.9 18.7
5.00 566 7.46 6.68 1.13 93.1 83.4 14.1
Inferred 3.79 553 5.63 5.07 0.81 68.6 61.8 9.9
4.00 514 5.76 5.19 0.82 65.3 58.8 9.3
5.00 277 6.95 6.34 0.90 42.5 38.7 5.5
Mineral Resources have an effective date of 5 July 2013. The Mineral Resource estimates and geological models
(1) were prepared by Christopher Wright, P.Geo. of AMEC and reviewed by Stella Searston, RM SME of AMEC who
is the Qualified Person as defined under NI 43-101 for the estimate.
Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves
(2)
do not have demonstrated economic viability.
Project No.: 170848

The estimate uses Ordinary Kriging as the interpolation method in a percent block model with a block size of
(3) 5x5x5 m. Density utilized in the mineral resource estimates was 2.51 t/m3 for mineralization and 2.57 t/m3 for
waste.
Mineral Resources are estimated using a conceptual Lerchs-Grossmann pit shell and conceptual stope outlines
that assumed a US$1.28 lb zinc price, a US$1.05/lb lead price, marketing treatment, and refining costs of
(4) US$0.201/lb for zinc and US$0.289/lb for lead, metallurgical recovery of 86.9% for zinc and 97.7% for lead, a
mining cost of US$2.09/t for open pit and of US$34.92/t for underground mining, and processing, general and
administrative costs of US$48.15/t.
(5) Overall slope angle for the Accha open pit is 33°.
Mineral Resources are reported above a marginal cut-off grade of 2.20% ZnEq. for the open pit estimate.
Underground Mineral Resources are reported above a cut-off grade of 2.20% ZnEq, below the resource pit shell
(6) and within conceptual stope outlines defined at a break-even cut-off grade of 3.79% ZnEq. Zinc equivalent (ZnEq)
was calculated by applying the differential of metallurgical recoveries and metal prices net of selling costs to zinc
and lead grades.
Contained zinc and contained lead represent estimated metal contained in the ground and have not been
(7)
The metal prices used for the Mineral Resources estimates are based on a combination of AMEC's internal
guidelines (based on long-term consensus prices) and those sourced from Wood Mackenzie and the World Bank.
(8)
It is industry practice to apply higher long-term metal prices used for Mineral Resources than that used for Mineral
Reserves.
Rounding as required by reporting guidelines may result in apparent summation differences between tonnes,
(9)
grade and contained metal content.
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Table 14-7: Yanque Mineral Resource Estimate Showing Sensitivity of the Estimate to
Cut-off Grades (Base Case is highlighted)
Tonnage ZnEq Zn Pb
(kt) (%) (%) (%)
Indicated 1.67 26,491 3.87 2.37 2.18 2,261.5 1,385.3 1,270.0
2.00 23,242 4.16 2.55 2.33 2,129.9 1,306.7 1,193.1
4.00 8,701 6.34 4.05 3.32 1,216.0 777.4 635.7
Inferred 1.67 1,169 2.91 2.17 1.09 75.1 55.8 28.0
2.00 1,081 3.00 2.24 1.11 71.5 53.3 26.3
4.00 20 5.21 3.32 2.75 2.3 1.5 1.2
Mineral Resources have an effective date of 5 July 2013. The Mineral Resource estimates and geological models
(1) were prepared by Christopher Wright, P.Geo. of AMEC and reviewed by Stella Searston, RM SME of AMEC who
is the Qualified Person as defined under NI 43-101 for the estimate.
Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves
(2)
do not have demonstrated economic viability.
The estimate used Ordinary Kriging as the interpolation method in a percent block model with a block size of
(3) 5x5x5 m. The density utilized in the mineral resource estimates was 2.37 t/m3 for mineralized material and 2.49
3
t/m for waste.
Mineral Resources are confined within a conceptual Lerchs-Grossmann pit shell and are estimated using a
US$1.28/lb zinc price, a US$1.05/lb lead price, overall pit slope angles of 40º, metallurgical recovery of 86.9% for
zinc and 97.7% for lead, a mining cost of US$1.89/t, zinc premium of 5%, lead payability of 94.1%, marketing,
(4)
treatment and refining costs of US$0.201/lb for zinc and US$0.289/lb for lead, and processing, general and
administrative costs of US$36.66/t. Zinc equivalent (ZnEq) was calculated by applying the differential of
metallurgical recoveries and metal prices net of selling costs to zinc and lead grades.
Contained zinc and contained lead represent estimated metal contained in the ground and have not been
(5)
The metal prices used for the Mineral Resources estimates are based on a combination of AMEC's internal
guidelines (based on long-term consensus prices) and those sourced from Wood Mackenzie and the World Bank.
(6)
It is industry practice to apply higher long-term metal prices used for Mineral Resources than that used for Mineral
Reserves.
Rounding as required by reporting guidelines may result in apparent summation differences between tonnes,
(7)
grade and contained metal content.
14.13 Factors That May Affect the Estimates
Risk factors that could potentially affect the Mineral Resources estimates include:
 Assumptions used to generate the conceptual data for consideration of reasonable

prospects of economic extraction including:
- Long-term commodity price assumptions
- Long-term exchange rate assumptions
- Assumed mining methods and variations in the floor elevation between open pit
and underground mining operations
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- Changes in local interpretations of mineralization geometry and continuity of

mineralization zones
- Geotechnical and hydrogeological assumptions
- Operating and capital cost assumptions
- Metal recovery assumptions
- Concentrate grade and smelting/refining terms.
 Issues related to mineral processing that could challenge the reasonable prospects
for economic extraction include reliable supply of coal for use in the Waelz kiln
process, production of high quality fume, and hydrometallurgical issues related to
the production of zinc ingot.
 The estimated tonnage of mineralization to be mined from underground may vary
as infill drilling from underground provides more detailed information about
geomechanical characteristics, thickness and continuity of grade in this portion of
the deposit.
 Delays or other issues in reaching agreements with local communities
 Changes in land tenure requirements or in the permitting requirements
 Estimates of insitu bulk density are presently based on samples taken from core
drilling. Determination of density based on larger-scale excavations or production
may reveal densities that are different than those currently estimated for the
deposit.
The QPs consider that the Mineral Resources for the Project, which have been
estimated using core-drill data, have been performed to industry best practices (CIM,
2003), and conform to the requirements of CIM Definition Standards, 2010.
Project No.: 170848

15.0 MINERAL RESERVE ESTIMATES
Mineral Reserves were developed assuming two scenarios for the production of final
saleable products. A Base Case investigated further processing of fume to produce a
special high grade (SHG) zinc ingot and lead sulphate, by-product. An alternate
scenario, the Fume Case, investigated selling the zinc-lead fume to third-party
refineries. Mineral Reserves discussed for the Fume Case are an alternative to the
Base Case and are not additive to those of the Base Case.
15.1 Key Assumptions / Basis of Estimate
Mineral Reserves have been estimated from the geological resource block model
developed for the Yanque and Accha deposits during the PFS. All zones in the
geological model are considered for conversion from Mineral Resource to Mineral
Reserve as the models are updated. A mine plan was developed to extract the
Measured and Indicated Resources of the AZOD Project, dilution and recovery
assumptions were applied and cut-off grades were calculated using costs developed
for the study and long-term consensus metal price valuations
Mineral Resources were converted to Mineral Reserves under the following criteria:
 Only Measured and Indicated Mineral Resources are considered;

 The Mineral Resources are part of a mining plan;
 Dilution and recovery is included in the Mineral Reserve estimate;
 The mine plan passes an economic test
Each of these requirements was addressed in estimating the Mineral Reserves for the
AZOD Project.
Open pit and underground Mineral Reserves were estimated independently based
upon criteria specific to the applicable mining method.
15.2 Mineral Reserve Estimation, Open Pits
Mineral Reserve estimates are based on a mining schedule for the Base Case and
alternate Fume Case and consider an average crusher throughput of 1,340 kt/a and
1,349 kt/a respectively. Approximately 435 kt/a will be produced from the proposed
Accha mine including underground production, while 915 kt/a will be produced from
the planned Yanque Mine.
Project No.: 170848

The mine schedules used in the PFS are based on the Measured and Indicated
Mineral Resources contained within Yanque and Accha open pits created using the
Lerchs-Grossman algorithm. Prices utilized were US$1.03 /lb zinc and US$0.95 /lb for
lead.
The mine designs, pit optimization and production schedule for the Accha and Yanque
open pits were completed using the Minesight®, Whittle® and Surpac®/MineSched®,
software packages.
15.2.1 SMU Size
The block size in both block models is 5 x 5 x 5 m (L x W x H) which is sufficiently

large to account for mining dilution and ore loss.
15.2.2 Ore/Waste Determination
Ore and waste determination was based on the estimation of a net economic benefit
that considers metal prices, recoveries, operating costs, and selling costs (Table 15-1).
Table 15-1: Net Economic Benefit Calculation Methodology

Deposit Net Economic Benefit Function
Base and
Fume Case
NEB = Tb × MB%×{ZnG × Rzn × [(Pzn×PRzn) - SRCzn] + PbG × Rpb × [(Ppb × PYpb) - STCpb]} - {Tb × MB% ×
Accha
(PC + ∆MC + G&A)}
For ZnG ≥ 2%:

NEB = Tb × MB% × {ZnG × Rzn × [(Pzn × PRYzn) - SRCzn] + PbG × Rpb × [(Ppb × PYpb) - SRCpb]} - {Tb ×
Yanque MB% × (PC + ∆MC + G&A)}
For ZnG < 2%:
NEB = Tb × MB% × {PbG × Rpb × [(Ppb × PYpb) - SRCpb]} - {Tb × MB% × (PC + ∆MC + G&A)}
Details NEB = Net Economic Benefit PRYzn = Zinc Premium (Base Case) or Zinc Payable
Tb = Tonnage Block (Fume Case)
MB% = Mineralized Block Percent PYpb = Lead Payable
ZnG = Zinc Grade SRCzn = Zinc Selling and Refining Cost
PbG = Lead Grade SRCpb = Lead Selling and Refining Cost
Rzn = Zinc Recovery STCzn = Zinc Selling and Treatment Cost
Rpb = Lead Recovery STCpb = Lead Selling and Treatment Cost
Pzn = Zinc Price PC = Processing Cost
Ppb = Lead Price G&A = General and Administration Cost

∆MC = Ore Mining Cost Contribution
Project No.: 170848

In addition, AMEC carried out a trade-off study for the Yanque deposit, to assess
whether low-grade material could be mined. The results indicated that blocks which
had a zinc grade lower than 2% should not be sent to the plant.
15.2.3 Dilution Considerations
As hard boundaries were applied in the block models between lithological contacts,
and there is sufficient contrast between ore and waste to allow for selective mining
methods, dilution factors were applied to the block model to simulate the expected
mining dilution. By applying a percentage model within the parent 5 x 5 x 5 m blocks
where the selective mining method will not recover ore fractions less than 20% or
where there is a percentage of <20% ore, the block was assigned a waste flag. In
addition, all material classified in the block model as Inferred was flagged as waste.
Blocks that did not meet the net economic benefit criteria were also classified as
waste. To ensure that the block boundary effect was appropriately considered, a
software routine using the “Dilutionator” program was used to simulate block boundary
dilution.
15.2.4 Surface Topography
The original or current surface topography, for both areas consist of air photo
restitutions at 5 m contour intervals from 1:20,000 scale photographs. The resulting
contours have an overall accuracy of ±5 m.
15.2.5 Bulk Density
The densities of the Accha deposit and Yanque based on lithology and mineralized
zones are summarized in Table 15-1. The densities used in the Mineral Reserve
estimates for sedimentary material are slightly more conservative than those assumed
in the Mineral Resource estimate.
Table 15-2: Bulk Density for Accha and Yanque deposits

Accha Deposit Yanque Deposit
3
Coral = 2.51 t/m Mineralized Breccia = 2.38 t/m3
Reef = 2.51 t/m3 Mineralized Diorite = 2.38 t/m3
3
Sedimentary = 2.70 t/m Mineralized Sedimentary = 2.39 t/m3
Non- Mineralized Breccia = 2.36 t/m3
Non- Mineralized Diorite = 2.40 t/m3
Non- Mineralized Sedimentary = 2.39 t/m3
Project No.: 170848

15.2.6 Overall Slope Angles
The overall slope angle for Yanque open pit was estimated from inter-ramp slope
angle and considered the number of ramps required for the final wall heights. Figure
15-1 shows the overall slope angles used for Yanque. Slopes in Zones 1 through 4
correspond to 33.2º, 31.8º, 36.2º and 27.8º.
Figure 15-1: Overall Slope Angle Zones for Yanque Pit
The overall slope angle for Accha open pit was determined by elevation, regarding to
inter-ramps height or ramps, the values used are shown in Table 15-3.
Table 15-3: Overall Slope Angle for Accha Pit

Bench Dip Direction (°) Overall Slope Angle (°)
Above 4230 33.1
4205 to 4230 29.1
Below to 4205 26.2
Additional details of the slope designs for the proposed open pits are included in
Section 16.2.
15.3 Mining Cost
The mine operating costs used for pit optimization were derived based on preliminary
work and AMEC experience. Contract mining is assumed, and an incremental cost
Project No.: 170848

was applied of 70% over the Owner reference cost estimates of US$1.81/t for Accha
and US$1.75/t for Yanque. This increment includes allocations in the contract mining
cost estimate for overhead, equipment capital expenditure, and sustaining costs that
contract mining firms normally incur. These considerations lead to apply a contractor
average waste mining cost of US$3.55/t for Accha and US$3.21/t for Yanque. The ore
mining cost include the long hauling distance from Accha pit to plant, with a value of
US$18.22/t of ore in Accha and US$2.04/t of ore in Yanque.
Mine dilution and incremental costs for depth were also applied. No discounting was
applied to the pit optimization to account for time value of money. Geotechnical
parameters applied during pit optimization were estimated by AMEC (refer to Section
16.3).
Cut-off grade determination and initial pit optimizations considered process operating
throughput rates of 1,487 kt/a for the Base Case and 1,627 kt/a processed for the
Fume Case (Table 15-4). These were aligned with final process design criteria to
arrive at the final pit design. The ore haulage cost of about 62 km and 1 km for Accha
and Yanque respectively between the mine to the primary crusher are also included in
this cost estimate.
Table 15-4: Mining Criteria for the Accha and Yanque Pit Optimization for Base and
Fume
Criteria Accha Yanque Unit Comments
Average Waste Mining Cost
Contractor 3.553 3.212 US$/t
Sustaining Mining Cost 0.044 0.083 US$/t
Reference Mining Cost
Used, 70%+ Owner Option
Contractor 3.077 2.973 US$/t Cost
Underground Mining Cost 45.0 - US$/t
Mining Cost Adjustment Factor
Above Reference Bench 0.015 US$/t Reference Bench:
Accha 4305 m,
Below Reference Bench 0.030 US$/t
Yanque 3530 m
Mining Cost Ore – Mining
∆ Mining Cost Cost Waste
Contractor 18.216 2.040 US$/t ore
15.3.1 G&A, Refining and Selling Cost
A cost of US$6.5 M/a or US$4.95/t was utilized for general and administrative
expenses (G&A) for both deposits. The process G&A is included in the process
operating cost. The refining and selling cost criteria and percentage payable
Project No.: 170848

assumption used for pit optimization for the Base Case and Fume Case are presented
in Table 15-5 and in Table 15-6.
Table 15-5: Metallurgical Criteria for Accha and Yanque Pit Optimization for Base
Case
Criteria Accha and Yanque Comments
Refining Cost
Zn Total 0.181 US$/lb
General (Manpower Plant) 0.021 US$/lb
Leaching & Purification 0.047 US$/lb
Electrolytic 0.107 US$/lb
Melting & Casting 0.006 US$/lb
Pb Total 0.269 US$/lb

Based on 284 US$/t concentrate;
Treatment Charge 0.253 US$/lb
Concentrate Grade = 51% Pb
Leaching & Purification 0.016 US$/lb
Selling Cost
Zn 0.02 US$/lb
Pb 0.02 US$/lb
Percentage Payable
Zn 105 %
Pb 94.1 %
Table 15-6: Metallurgical Criteria for Accha and Yanque Pit Optimization for Fume
Case
Criteria Accha and Yanque Comments
Dehalogenation
Zn Total 0.27 US$/lb
General (Manpower Plant) 0.005 US$/lb
Leaching Alkaline 0.022 US$/lb
Treatment Charge 0.243 US$/lb Based on US$ 385.9/t conc (49% Zn, 22.8% Pb)
Pb Total 0.254 US$/lb

Leaching Alkaline 0.008 US$/lb Based on US$ 385.9/t conc (49% Zn, 22.8% Pb)
Treatment Charge 0.246 US$/lb
Selling Cost
Zn 0.02 US$/lb
Pb 0.02 US$/lb
Percentage Payable
Zn 79.4 %
Pb 89.0 %
Project No.: 170848

15.3.2 Metal Prices
AMEC metal prices for zinc and lead were utilized for the Mineral Reserves and were
$1.03/lb for zinc and $0.95/lb for lead. The use of these more conservative prices than
the prices that support the economic analysis results in increasing cut-off grades and
improving net present value (NPV) and internal rate of return (IRR) through selective
mining.
15.3.3 Referential Cut-off Grade
The open pit Mineral Reserve estimates were reported using a net economic benefit
analysis and include consideration of dilution. To allow direct comparisons between
the Mineral Resource estimates and those of the Mineral Reserves, a set of referential
cut-off grades were back-calculated; however, these referential cut-off grades are not
used in the Mineral Reserve estimates. The referential cut-off grades are provided in
Table 15-7.
Table 15-7: Open Pit Cut-off Grade Estimation

Base Case Fume Case
Parameter Unit Accha Yanque Accha Yanque
MC (US$/t mined) 3.5 3.2 3.5 3.2
PC + ∆MC + G&A (US$/t ore) 60.59 37.50 60.12 36.80
Rzn (%) 89.6 86.9 93.8 91.0
Rpb (%) 97.0 97.7 97.0 97.7
SRCzn / STCzn (US$/lb Zn) 0.201 0.201 0.290 0.290
SRCpb / STCpb (US$/lb Pb) 0.289 0.289 0.274 0.274
Pzn (US$/lb Zn) 1.03 1.03 1.03 1.03
Ppb (US$/lb Pb) 0.95 0.95 0.95 0.95
PRzn / PYzn (%) 5 5 79.4 79.4
PRpb / PYpb (%) 94.1 94.1 89.0 89.0
Marginal Cut-off Grade Zn
(%) 3.5 2.2 5.5 3.5
(COG Zn)
Breakeven Cut-off Grade Zn
(%) 3.7 2.4 5.8 3.8
(BE COG Zn)
Notes:
MC = Average Mining Cost
PC = Average Processing Cost
G&A = General and Administration Cost
∆MC = Ore Mining Cost Contribution
Rzn = Zinc Recovery
Rpb = Lead Recovery
Pzn = Zinc Price (AMEC´s Price at July, 2013)
Ppb = Lead Price (AMEC´s Price at July, 2013)
PRzn = Zinc Premium
PYzn = Zinc Payable
Project No.: 170848

PYpb = Lead Payable

SRCzn = Zinc Selling and Refining Cost
SRCpb = Lead Selling and Refining Cost
STCzn = Zinc Selling and Treatment Cost
STCpb = Lead Selling and Treatment Cost
COG Zn = Marginal Zinc Cut-off Grade (does not include Mining Costs)
BE COG Zn = Break Even Zinc Cut-off Grade (includes Mining Costs)
15.4 Mineral Reserves for Underground Mining
The mine design for the Accha underground was completed in Surpac® software,
which is used to interrogate the mining blocks, and then subsequently used to estimate
grade and tonnage for each iteration of the mine design. The designed 3D stope
shapes are based upon the Mineral Resource model. Mine sequencing using the
generated stopes is then undertaken in MineSched where an optimized schedule is
generated.
15.4.1 Cut-off Estimation
The pre-feasibility study considers two scenarios for calculation of the cut-off grade for
the underground Mineral Reserves. The average mine costs applied for the Base
Case are US65.02$/t and for the Fume Case are US67.15$/t. A production rate of 500
t/d was assumed for both the Base Case and the Fume Case.
The following equation was used to estimate the zinc cut-off grade.
 Zn Cut-off Grade = (Costs Mine + Costs Plant + Costs (G&A) ) / ( (Zn Price- Costs
Smelting and Refining- Costs Selling.) ) x %Rec. x Contained Payable x 2204.623)
The parameters used to estimate the mining costs are shown in Tables 15-8 and 15-9.
Table 15-8: Cut-off Grade Base Case Estimate

Description Value Unit
Ore Density 2.51 t/m3
Waste Density 2.57 t/m3
Costs Mine 59.28 US$/t mineral
Costs Plant 30.57 US$/t mineral
G&A 5.46 US$/t mineral
Costs Smelting and Refining Zn 0.181 US$/lb
Costs Smelting and Refining Pb 0.269 US$/lb
Costs Selling Zn 0.02 US$/lb
Costs Selling Pb 0.02 US$/lb
% Rec Zn 89.6 %
% Rec Pb 97.0 %
Contained Payable Zn 105.0 %
Contained Payable Pb 94.1 %
Zn Price 0.97 US$/lb
Project No.: 170848

Pb Price 0.89 US$/lb
Table 15-9: Cut-off Grade Fume Case Estimate

Description Value Unit
Ore Density 2.51 t/m3
Waste Density 2.57 t/m3
Costs Mine 59.60 US$/t mineral
Costs Plant 32.58 US$/t mineral
G&A 6.55 US$/t mineral
Costs Selling Zn 0.02 US$/lb
Costs Selling Pb 0.02 US$/lb
% Rec Zn 93.80 %
% Rec Pb 97.00 %
Contained Payable Zn 79.40 %
Contained Payable Pb 89.00 %
Zn Price 0.97 US$/lb
Pb Price 0.89 US$/lb
Costs Sale Zn 0.243 US$/lb
Three mineralized zones exceed the corresponding cut-off grades for the underground
mine. The largest is the downdip extension below the Accha open pit and is termed Z-
1, the second is to the east (Z-3) and the final is towards the west of the open pit (Z-2,
see Figure 15-2).
Figure 15-2: Longitudinal Section of Accha Underground Mineral Zones
Z-2 Z-1
Z-3
Project No.: 170848

15.4.2 Modifying Factors
The stope shapes include any waste material that is included within the as internal
dilution and this material is calculated in the overall tonnes and grade of the stope.
The modifying factors of recovery and external dilution have been applied to the
contained Mineral Resource and waste in the stope shapes.
The assumptions of recovery and dilution used for the cut and fill mining method used
in this study are:
 Mining recovery = 95%

 Dilution = 10%
External dilution is assumed to be zero grade material. Sources of dilution may

include ingress of surrounding country rock into the muckpile through overbreak during
blasting and through geotechnical factors such as jointing and faulting. Additional
dilution may be caused by backfill ingress into the mining stope from adjacent mined-
out stopes.
Recovery is based on an assumption of 5% percent ore loss during mining caused by

ore body geometry, ingress of material into the backfill sill and limitations of the mining
equipment.
These modifying factors are based upon industry experience with cut and fill mining
LOM plans and tabulation of Mineral Resources and Mineral Reserves are completed
using MineSched planning software. This software allows for comprehensive three-
dimensional design and interface between all development, production and backfilling
activities in each zone of the mine.
A standard mine design procedure is followed, whereby the mine design is developed
from the ore body outward, to create a mine plan, as follows:
 Evaluate the block model to determine an appropriate mining method in each area;
 Determine stoping criteria, such as stope dimensions, and level spacing, based on
the mining method selected, geological and geotechnical criteria and shape of the
ore body;
 Design supporting infrastructure such as footwall development, cross cuts, level
accesses, internal ramps, and ventilation infrastructure;
 Design appropriate ore body access from surface
Project No.: 170848

 Develop schedule based on development, construction and stoping sequencing
15.5 Mineral Reserves Statement
Mineral Reserves are based on the material classified as Measured and Indicated
Mineral Resources with dilution and recovery factors applied.
and Mineral Reserves and the 2003 CIM Estimation of Mineral Resource and Mineral
Reserve Best Practice Guidelines.
The optimized pit shell used to constrain the Mineral Resources to meet reasonable
prospects of economic extraction used more optimistic assumptions on metal price
and costs. Final pit definition for the Mineral Reserve estimates optimized net present
value (NPV) and internal rates of return (IRR) resulting in a change to the interface
between the open pit and underground mine. As a result, a portion of the Accha
underground Proven and Probable Mineral Reserves were converted from the Accha
open pit portion of the Measured and Indicated Mineral Resources.
Mineral Reserve estimates for both the Base Case and the Fume Case have an
effective date of 11 July 2013. The Mineral Reserves estimates assuming open pit
mining methods were prepared by Sergio Muñoz, Senior Mining Eng., RM Comisión
Minera (Chile) of AMEC, and by William Bagnell, P.Eng. of AMEC for the estimates
assuming underground mining methods.
Mineral Reserves are reported for the Base Case in Table 15-10 and for the Fume
Case in Table 15-11. Mineral Reserves discussed for the Fume Case are an
alternative and are not additive to the Mineral Reserves of the Base Case.
Mineral Reserves that can be mined by open pit methods were reported using a net
economic benefit function that considered metal prices, recoveries, operating costs,
and selling costs. To allow comparison with the Mineral Resources, a referential zinc
cut-off grade was back-calculated after the estimate was completed, and is included in
the table footnotes. Mineral Reserves to be mined by underground methods use a
zinc cut-off grade.
Project No.: 170848

Table 15-10: Mineral Reserves Statement assuming Base Case

Category
(kt) (%) (%) (Mlb) (Mlb)
Accha Open Pit
Proven 754 8.43 0.73 140.2 12.2
Probable 468 7.39 0.59 76.3 6.1
Proven & Probable 1,223 8.03 0.68 216.5 18.3
Accha Underground
Proven 307 11.79 1.70 79.8 11.5
Probable 704 9.74 1.25 151.3 19.4
Proven & Probable 1,011 10.36 1.39 231.1 30.9
Yanque Open Pit
Proven 0 0.00 0.00 0.0 0.0
Probable 8,338 3.97 2.60 730.5 477.1
Proven & Probable 8,338 3.97 2.60 730.5 477.1
Proven 1,061 9.40 1.01 219.9 23.7
Probable 9,510 4.57 2.40 958.0 502.5
10,571 5.05 2.26 1,177.9 526.2
Proven & Probable
Minera (Chile) of AMEC, and by William Bagnell, P.Eng. of AMEC for the estimates assuming
underground mining methods.
lead price, and an economic function that includes an average processing, G&A, and ore haulage costs of
US$60.59/t in Accha and US$37.50/t in Yanque and, marketing, treatment and refining costs of
US$0.201/lb for zinc and US$0.289/lb for lead, a zinc premium of 5%, a lead payability of 94.1%, and
metallurgical recoveries for zinc of 89.6% in Accha and 86.9% in Yanque, and lead recoveries of 97% in
Accha and 97.7% in Yanque. Open pit mine designs assumed average inter-ramp pit slope angles of 37°
and 46° for Accha and Yanque respectively.
(3) The open pit referential cut-off grades for Accha are 3.5% Zn and for Yanque are 2.2% Zn. The cut-off
grade for underground is 6.0% Zn
(4) The projected life-of-mine strip ratio for the Accha pit is 3.32 and for the Yanque pit is 1.36
(5) The material in the crown pillar corresponds to 76.2 kt grading 11.33% Zn and 1.31% Pb that is classified
(which are based on long-term consensus prices)
Project No.: 170848

Table 15-11: Mineral Reserves Statement assuming Fume Case

Category
(kt) (%) (%) (Mlb) (Mlb)
Accha Open Pit
Proven 651 9.26 0.80 132.9 11.4
Probable 388 8.26 0.66 70.7 5.6
Proven & Probable 1,039 8.88 0.74 203.5 17.1
Accha Underground
Proven 237 13.78 1.97 71.9 10.3
Probable 547 11.17 1.43 134.6 17.2
Proven & Probable 783 11.96 1.59 206.5 27.5
Yanque Open Pit
Proven 0 0.00 0.00 0.0 0.0
Probable 9,711 3.57 2.86 763.3 611.5
Proven & Probable 9,711 3.57 2.86 763.3 611.5
TOTAL – Accha &
Yanque
Proven 888 10.46 1.11 204.8 21.7
Probable 10,646 4.13 2.70 968.5 634.4
11,533 4.61 2.58 1,173.3 656.1
Proven & Probable
Minera (Chile) of AMEC by William Bagnell P.Eng. of AMEC (for the estimates assuming underground
mining methods
lead price, and an economic function that include an average processing, G&A ore haulage of US$60.12/t
in Accha and US$36.80/t in Yanque, marketing, treatment and refining cost of US$0.290/lb for zinc and
US$0.190/lb for lead, zinc payability of 79.4%, lead playability of 89%, and metallurgical recoveries for
zinc of 91% in Yanque and 93.8% in Accha, and lead recoveries of 97.7% in Yanque and 97% in Accha.
A percent model was used with a blocks size of 5x5x5 m. Open pit mine designs assumed average inter-
ramp pit slope angles of 37° and 46° for Accha and Yanque respectively
(3) The life-of-mine strip ratio for the Accha pit is 4.08 and for the Yanque pit is 1.36
(4) The Fume Case open pit referential cut-off grades for Accha are 5.5% Zn, and for Yanque are 2.9% Zn.
The cut-off grade for Accha underground is 8.6% Zn
(5) The material in the crown pillar corresponds to 64.9 kt grading 12.47% Zn and 1.31% Pb that is classified
(6) Fume Case Mineral Reserves are not additive to the Base Case estimate
(based on long-term consensus prices)
tonnes, grade and contained metal content
Project No.: 170848

15.6 Factors that may Affect the Mineral Reserve Estimates
Factors that may affect the Mineral Reserve estimates include:
 Metal price assumptions

 Mining and metallurgical recovery assumptions
 Assumptions relating to geotechnical and hydrogeological parameters used in mine
design
 Assumptions that go into defining the net economic benefit and zinc cut-off grade
criteria used to constrain Mineral Reserves
 Appropriate dilution control being able to be maintained
 Variations to the expected revenue through the use of short-term marketing or
sales contracts;
 Variations to the permitting, operating or social license regime assumptions.
In the opinion of the QPs, Mineral Reserves for the Project, which have been
estimated using core drill data and trench data, appropriately consider modifying
factors, have been estimated using industry best practices, and conform to the
requirements of CIM (2010).

and Mineral Reserves and the 2003 CIM Estimation of Mineral Resource and Mineral
Reserve Best Practice Guidelines.
Project No.: 170848

16.0 MINING METHODS
Calendar years discussed in this Section are for illustrative purposes only as a
production decision has not been made by Zincore’s board, and permitting in support
of operations has not been granted.
16.1 Open Pit Optimization
16.1.1 Pit Optimization
As part of pit optimization analysis, non-economic marginally mineralized material was

excluded from the pit, which improved the strip ratio. Pit optimization was carried out
using the Lerchs–Grossmann algorithm, and pit designs were constructed using the
mining, processing, general and administration, refining, treatment and marketing
costs (refer to Section 15).
Two methodologies were utilized at Yanque: “Skin Analysis”, which is an iterative

modeling process (skin analysis) and “Marginal Analysis Expansion”. At Accha, only
the “Skin Analysis” method was used. The evaluations identify the best-case pit
economics, while identifying mineralization within the pit shell that will add no Project
value, or may have deleterious elemental concentrations that make the overall block
uneconomic. Nested pits were generated by varying the selling price of metals from
low prices to higher long-term prices. After generating the nested pit the marginal
economic value of each increment of pit (mineral and whole rock) was calculated by
scaling operational costs, and mine capital costs. Plant feed capacity and associated
costs were considered as fixed for this analysis.
16.1.2 Final Pit Designs
Final pit designs for Yanque resulted in a revenue factor (RF) of 0.56 and a
corresponding price of US$0.82/lb zinc and US$0.66/lb lead for the Base case. For
the Fume Case an RF = 0.68 at corresponding prices of US$1.03/lb zinc and
US$0.80/lb lead was used. Each resulting pit was reviewed, and the final pit was
selected based on assessment of strip ratio, contained waste, and the amount of
included Inferred Mineral Resources that had to be set to waste.
A similar iterative process was performed for Accha; however, in this case, an
underground value of US$45/t was selected to establish the most economic floor
elevation between blocks to be extracted via open pit methods versus underground
mining methods. Pit designs for Accha have an RF = 0.50, with a corresponding zinc
price of US$0.74/lb and a lead price of US$0.59/lb for the Base case. The Fume Case
Project No.: 170848

has an RF of 0.68, with a corresponding zinc price of US.$1.03/lb and a lead price of
US$0.90/lb.
Pit Sensitivity Analysis
To confirm the final pit shell selection, a sensitivity analysis was completed by varying
by ±10% and ±20% for processing costs, metal prices and recoveries, and by ±5
degrees for pit slope angles. The sensitivity analysis shows that the project is highly
sensitive to metal prices and recoveries. The Accha pit is highly sensitive to pit slope
angles. The Yanque pit is highly sensitive to processing costs. The waste materials of
the final pits are highly sensitive to moderately sensitive to mining costs. For both
deposits with a 10% reduction in zinc and lead prices, the mineralized material
decreases approximately 20% for the Base Case pit and 25% for the Fume Case pit.
Conversely, with a 10% increase in metal prices, the mineralized material increases by
approximately 10% for Accha and by over 25% for Yanque.
16.2 Pit Slope and Geotechnical Designs
Pit slope design parameters for the Accha and Yanque pits are based upon the PFS
geomechanical study that was undertaken by AMEC in 2012. This program included
field and laboratory investigations to provide data upon which to formulate the slope
designs for both Accha and Yanque, which included: geotechnical logging of core,
geotechnical core holes, Installation of piezometers, laboratory testing, test pits,
excavations, geological modeling, and review of existing information.
Accha Slope Angle
Pit slope stability at the Accha open pit is expected to be controlled by structural
features (i.e. joints) at the bench-scale level and rock mass strength at the inter-ramp
and overall-slope scale levels. Kinematic analysis methods were applied to bench face
and inter-ramp design. Limit-equilibrium analysis methods were applied to inter-ramp
and overall pit design.
The geomechanic recommendations for Accha final open pit design were adjusted
while maintaining the integrity of the recommendations to facilitate compatibility with
the software. Slope angle recommendations were optimized for the starter pit in Accha
contributing to a reduction in pre strip on the assumption that these slopes would not
remain beyond first phase. Initial pit slopes varied bench width and batter angle in
order to achieve an inter ramp angle of 45º for the starter phase.
The final slope figures are included in Table 16-1.
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Table 16-1: Pit Slope Consideration for Accha Pit

Bench Dip Bench Bench Stack
BFA1 Benching IRA2
Direction Width Height
(º) (º) (m) (m) (º)
Slope Angle Recommendation
0 to 130 50 Triple 7.3 15 37
130 to 240 55 Double 6.3 10 37
240 to 340 77 Single 5.4 5 37
340 to 360 50 Triple 7.3 15 37
Slope Used on Design
UP from 4295
0 to 130 50 Triple 7.3 15 37
130 to 240 Not Applicable
240 to 340 Not Applicable
340 to 360 50 Triple 7.3 15 37
Down from 4295
0 to 130 50 Single 2.4 5 37
130 to 240 55 Single 3.15 5 37
240 to 340 77 Single 5.4 5 37
340 to 360 50 Single 2.4 5 37
1. BFA: Bench batter angle
2. IRA: Inter-ramp angle measured from toe to toe
3. Where two adjacent design sectors have different recommended slope angles, the transition should
occur completely within the design sector with the steepest recommended slope
Yanque Slope Angle
The Yanque open pit will be excavated mainly within the sedimentary breccia
lithological unit, down to the contact with the underlying clastic sediments. Since this
contact is generally gently sloping, the ultimate overall pit slopes will also be moderate.
Slope stability on the inter-ramp and overall pit slope scale will therefore not be an
issue. The geomechanical recommendations for Yanque open pit design are
summarized in the Table 16-12.
Table 16-2: Pit Slope Considerations for Yanque Pit

Bench Dip BFA1 Benching Bench Width Bench Stack Height IRA 2
Direction (°) (m) (m) (°)
All 65 Triple 7.5 15 46
Notes: (1) BFA: Bench batter angle (2) IRA: Inter-ramp angle measured from toe to toe.
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16.3 Open Pit Designs
16.3.1 Design Criteria
Pit designs assume a number of pit phases for each proposed open pit mine. In each
case, the starter pits, intermediate pit phases and final pits were smoothed to include
ramp accesses, berms, minimum mining widths and other operative criteria.
The haul roads are designed to accommodate 30 t and 35 t haul trucks with a
maximum gradient of 10% and an overall width of 14 m, although, access into the final
pit bottom will be gained via a section of single-lane road of 10 m width.
General pit design criteria for Accha and Yanque are shown in Table 16-3.
Table 16-3: Pit Design Criteria

Design Criteria Accha and Yanque
Bench Height 5m
Minimum Mining Width 25 m
Ramp Width 14 m
Ramp Slope 10%
Inter-ramp Slope Angle and Batter Angle °
Inter-ramp High 150 m
16.3.2 Final Pit Design
The pit designs were completed using Minesight® software. Due to the similar final pit
shells, only one smoothed final pit was designed at Accha (Figure 16-1). For Yanque,
smoothed pits were created for both the Base Case and the Fume Case (Figures 16-2
and 16-3 respectively). Due to slight differences in the centre of the pits, the final
Fume Case pit is slightly larger than that of the Base Case. The final pits and phases
have at least two exit ramps and a ramp width optimization on the lowermost benches,
such that ramp widths change from 14 m to 10 m.
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Figure 16-1: Accha Smoothed Final Pit for Base and Fume Case
Figure 16-2: Yanque Smoothed Final Pit for Base Case
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Figure 16-3: Yanque Smoothed Final Pit for Fume Case
16.3.3 Phase Selection and Design
16.3.4 Accha
The proposed Accha open pit mine will have two pit phases, Phase 1 (starter pit), and
Phase 2 (final pit). Figure 16-4 shows the nested pit shells selected as guide for the
starter pit and final pit for the Base Case and Fume Case while Figures 16-5 and 16-6
presents the Phase 1 (starter pit) and Phase 2 (final pit) respectively.
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Figure 16-4: Pit Shells for Phase Selection at Accha
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Figure 16-5: Accha Phase 1 (Starter Pit) – Base and Fume Case
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Figure 16-6: Accha Phase 2 (Ultimate Pit) – Base and Fume Case
16.3.5 Yanque
For the Yanque mine, incremental nested pit shells were used as a guide for the
design of the smoothed starter pit and intermediate pit shells. The Base Case nested
pit shells are presented in Figure 16-7 and for the Fume Case the nested shells are
shown in Figure 16-8. For the Yanque deposit, there will be a total of five phases,
Phase 1 (starter pit), Phase 2, Phase 3 and Phase 4 (intermediate pits), and Phase 5
(ultimate pit). Pit phases for the Base Case are shown in Figure 16-9 and the phases
for the Fume Case in Figure 16-10.
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Figure 16-7: Pit Shell for Phase Selection for the Yanque Deposit – Base Case
Figure 16-8: Pit Shell for Phase Selection for the Yanque Deposit – Fume Case
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Figure 16-9: Yanque Pit Phases – Base Case
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Figure 16-10: Yanque Pit Phases – Fume Case
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16.4 Underground Mining Accha Project
16.4.1 Mine Geotechnical Design
Whereas the work for the open pit was supported by a number of geotechnical
boreholes, the study for the underground mine had to rely on the extrapolated data
from the open pit study and the information obtained from earlier studies, geological
boreholes and a short field visit. Hence, due to the lack of relevant geotechnical data,
an assumption has been made that the rock mass properties for the underground mine
will be similar to those of the surface mining operations. Therefore, the rock mass
properties and associated designs for the underground mine are provisional and
preliminary, and are subject to change once appropriate data is obtained. No
hydrogeological information had been obtained for the underground. Thus, the
underlying assumption that the underground mine will be dry, no matter how
reasonable in view of the lithology, still requires proof.
The Accha mine site consists of an anticlinal structure plunging 20° to 30° to the east,
with both flanks dipping 60° to 70° to the north and south. The core of the anticline is
composed of laminated limestone and reef/coral limestone, while its upper part
consists of massive limestone. The ore body is primarily hosted by the laminated
limestone unit. Overburden is virtually inexistent; where it exists, however, it is
composed of glacial till. A sinistral strike-slip fault is presumed to cross the site.
Based on borehole evidence, a systematic water table will be absent for the open pit.
A similar assumption is made for the underground mine. This assumption is supported
by visual observations made during the site visit. The validity of this assumption will
be tested when the adit toward the underground mine is being driven.
The statistical summaries for rock strength, RQD, joint spacing, and condition of joints,
grouped by rock types, are presented in Table 16-4.
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Table 16-4: RMR Statistical Summary

Average
Unconfined Average Average Groundwater
Average Joint Joint condition RMR 76 note 3
Compressive
´Rock Unit Rock Spacing Condition (rating) note
(mm) (rating) 2
Strength (Mpa) Standard
RQD Average
Ls50 Deviation
Massive
83 (7) 44 (8) 300 (10) (12) (10) 47 12
Limestone
Laminated
19 (2) 34 (8) 300 (10) (6) (10) 35 11
Limestone
Note 1: Corresponding RMR’76 rates shown between square brackets indicate the individual point in the
RMR system.
Note 2: Groundwater Condition rating 10 corresponds to: Completely dry (Bieniawski, 1976).
Note 3: For definition of RMR’76 see Section 4.1.
Table 16-5 summarizes the expected geotechnical support requirements for the
various underground openings.
Table 16-5: Geotechnical Numerical Modelling Assumptions

Access Haulage Service Ore body Ore body
Description
Drive drive ramp Crosscuts Drive
Dimensions
Width (m) 5 5 4 4 6
Height (m) 4 4 4 4 4
Support
20 mm x 2.4 m fcr threadbar x x x
46 mm x 2.1 split set - plated x
46 mm x 2.4 m split set - plated x x
Bolt spacing (m) 1.4 1.4 1.4 1 1
Bolts per ring 7 7 6 8 6
16.4.2 Underground Mining Method Selection
Mineralization and host rock conditions must be taken into consideration during
selection of the most appropriate underground mining method. These conditions
include:
 Safety
 Geology of the mineralized deposit
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 Morphology of the mineralization

 Resource continuity, geometry, and grade distribution
 Geotechnical conditions with preliminary characterization
 Productive capacity
 Capital and operating costs.
The mining method selected must be technically and economically viable.
Geotechnical conditions are among the major factors to be considered for selecting the
most appropriate mining method. Table 16-6 summarizes typical mining methods
related to a variety of ore geometries and ground conditions.
Table 16-6: Mining Methods in Relation to Ground Conditions

Strength
Mining Type of Dip Strength Mineral Ground
of
Method Deposit of Walls Boundary Support
Mineral
Block or Panel Weak /
Massive Steep Weak Regular Caving
Caving Strong
Room and
Tabular, Bedded < 30 Strong Strong Regular Natural
Pillar
Steep, FW
Sublevel
Massive exceed angle of Strong Strong Regular Natural
Stoping
repose
Sublevel Wide Vein/ Large Weak /
> 70 Weak Regular Caving
Caving Mineralization Strong
Cut and Fill Artificial
Wide to Medium Vein Medium/Steep Strong Strong Irregular
Stoping Required
Vertical Crater
Massive Steep Strong Strong Regular Natural
Retreat
Longwall Thin seam-type Flat/Medium/Stee Artificial
Strong Strong Regular
Mining Mineralization p Required
Steep, exceeds
Shrinkage Artificial
Narrow Vein the angle of Strong Strong Regular
Stoping Required
repose
Square Set High Grade Vein Weak / Weak / Regular Artificial
Medium/Steep
Stoping Deposits Strong Strong /Irregular Required
AMEC has evaluated several alternatives to the mining of underground stopes at

Accha. Taking into account the expected poor rock quality accompanied by an
intermediate angle of the mineralized bodies and continuity of the mineralization,
AMEC has defined for the purposes of the AZOD PFS that underground mining will be
carried out using breasting on single cuts which was selected because it is more
appropriate than open stoping or caving methods given the overall geometry and
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continuity of the ore body. This method is the most appropriate mining method to
allow for stabilization of the rock mass and adequate dilution control.
Underground Mineral Resources have been defined above a 5.64% Zn cut-off grade
taking into account mining, treatment and selling costs.
16.5 Underground Mine Design
16.5.1 Underground Mine Design Assumptions and Design Criteria
The following is a summary of the general assumptions and design criteria used for
underground mine design in this study:
 No pillars are required in cut and fill stopes except for a crown pillar between the
Accha open pit and underground stopes
 Mineralization and waste specific gravity are 2.51 t/m3 and 2.57 t/m3, respectively.
 Main access drive gradient + 1.5%
 Main access drive dimensions are 5.5 m wide by 4.0 m high
 Service ramp gradient + 15%
 Service ramp dimensions 4.0 m width by 4.0 m high
 Stope access drive length of 65 m required in order to develop five cuts per level
maintaining an access drive gradient within ± 15%.
 Stope access dimensions are 4.0 m high by 4.0 m wide on the main levels.
 Stope dimensions in breasting are 6.0 m wide by 4.0 high
 Standard ground support consisting of bolting on a 1.5 m square pattern
 Work schedule – 360 days per year, 10.5 hour shifts, two shifts per day, and a 14-
on-seven-days-off shift roster.
 Backfill of the stopes is made up of cemented waste rock.
16.5.2 Underground Mine Design
The mine underground development plan for Base Case and Fume Case includes all
capital and operating development to support underground operations including:
 Main access drive

 By pass
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 Service ramp
 Minor cross cuts
 Main ventilation shaft
 Ore passes
 Backfill raises/waste passes
 Waste rock management
 Mine water management.
During operation, the back of the accesses will need to be slashed as the stopes are
mined out and this will generate 46,480 m3 of waste in the Base Case, and, 41,600 m3
of waste in the Fume Case
The underground access portal will be located north of the Z-1 zone at an elevation of
4,075 masl. From that point, a 521 m adit drift has been designed with a +1.5%
gradient to reach a haulage drive at 4,085 masl, which is the elevation of the lowest
part of the Z-1 zone. The main haulage drive will be the main level of extraction, water
drainage, access and entry of fresh air to the mine.
Key mine development area components are described in the following sub-sections.
Main Access Drive
The underground access drive will have a 5.5 m x 4.0 m (width x height) cross section
and has been designed with a gradient of + 1.5%. The access drive is 521 m long and
directed towards the bottom of the Z1 mineralized zone. From the access drive,
haulage drives will be driven to the east and west. Ore passes will connect the main
haulage drives to loading hydraulic hoppers at the bottom of ore passes for the eastern
and western underground mining areas. This main access drive will also serve as the
primary access to the mine and the main drainage level. The main access drive is
shown in Figure 16-11 as the cyan-coloured development.
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Figure 16-11: Main Entry Access and Principal Ramp Layout
Service Ramps
The service ramps will connect the levels and the mining areas and enable stope
access for mobile equipment, mine services and workers. The ramps will have a 4.0m
x 4.0 m cross section and have been designed with a gradient of + 15%. The service
ramp is shown in red on Figure 16-12.
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Figure 16-12: Service Ramps (Isometric View)
Minor Cross Cuts
Minor cross cuts will have a 4.0 m x 4.0 m cross section and will be located in the
main haulage level and will have a +0.5%gradient. They will be used for operational
purposes such as vehicle passing, safety and loading bays, temporary magazines, and
substations.
Main Ventilation Shaft
The mine will have a 2.0 m diameter main intake ventilation shaft which will provide
fresh air through a 165,000 cfm fan. This raise shaft will be connected to other mine
haulage levels and service ramps. Figure 16-13 shows a sketch of the mine
ventilation raise.
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Figure 16-13: Main Ventilation Shaft
Ore Passes
The main ore passes are to be located to minimize the haulage distances of the load-
haul-dump (LHD) units from the stope to the ore pass. All ore passes discharge to the
main extraction level. Ore passes are 2.0 m x 2.0 m in cross section and will be driven
using standard Alimak equipment or by conventional raising methods. Hydraulic
hoppers will be installed at the bottom of ore passes on the main extraction level.
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Backfill Raise/Waste Passes
Backfill raises will be driven from surface in the hanging wall and will be located at the
center of each mineralized zone. These raises will have a 2.0 m x 2.0 m cross section.
Backfill raises will feed sized waste from surface to finger raises on levels requiring
backfill. Backfill will then be hauled by LHDs in order to backfill mined out stopes.
Backfill raises are shown in purple in Figure 16-14.
Figure 16-14: Backfill Raise
Waste Rock Management
The mine will generate approximately 107,000 m3 of waste during the course of the
mine life. The Base Case and the Fume Case will produce 107,966 m3 and
105,107 m3 of waste, respectively, as can be seen in Table 16-7.
Table 16-7: Waste Rock Management

2,016 2,017
Description Year 0 Year 1 Total
Base Case 60,866 47,100 107,966
Fume Case 65,541 39,566 105,107
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Waste material generated from the development headings will be hauled to surface to
a waste dump located near the backfill pass. Waste will then be returned to the mine
as backfill as operations progress. The total backfill requirement for the mine is
approximately 394,000 m3 for the Base Case and 305,000 m3 for the Fume Case, while
the total amount of waste produced from mine development is equivalent to about
108,000 m3 and 105,000 km3 for the Base and Fume Cases, respectively. The waste
generated during development will provide backfill needs for the first two years of
production. After two years an additional 285,000 m3 of waste for the Base Case and
200,000 m3 of waste for the Fume Case will be provided from the open pit waste rock
dumps. The waste rock balance over the life of the planned underground mine is
shown in Table 16-8.
Table 16-8: Waste Rock Management (units in m3)

2,016 2,017 2,018 2,019 2,020 2,021 2,022
Description Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total
Base Case
Backfill stopes 58,188 91,155 84,281 71,956 58,253 29,658 393,490
Base Case 60,866 47,100 107,966
Fume Case
Backfill stopes 65,051 88,759 69,851 41,671 39,489 304,822
Fume Case 65,541 39,566 105,107
When selecting the waste dump location near the collar of the fill raise, the following
aspects were considered:
 Environmental impact (including social aspects)

 Design elements (including physical constraints, stability, safety)
 Capital cost
 Operating costs.
Based on the present mine plan, a 50,000 m3 capacity waste dump would be required.
After evaluating several alternatives the waste dump was located near Waste Pass 02.
The waste rock produced by the Accha operations is assumed not to be acid-
generating because of its composition: limestones, coral and reef. Results of
preliminary static acid rock drainage (ARD) testing conducted in November and
December 2012 (AMEC 2013) show values between neutral and very slightly alkaline,
ranging in pH between 7.63 and 8.37. Additional testing will be required to confirm
ARD potential of the waste rock at later study stages.
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Mine Infrastructure Facilities
AMEC has considered underground mine facilities in the proposed design in order to
increase the overall efficiencies and productivities during underground operations. The
main facilities included are described in the following subsections.
Powder Magazine
The powder magazine will be located in the main extraction level, specifically in the
XC-490S drift, and it will have sufficient capacity to store the explosives required for
one day of production.
Lunch Room
The lunch room will be located in the XC-490 drift in an area that has optimum
ventilation. This facility will provide a safe, clean and comfortable place for workers to
have lunch and at the same time will minimize “unproductive” or “dead time” caused by
personnel going to surface to have lunch. In emergencies it can also act as a refuge.
The dimensions of the lunch room will be 10 m x 4.5 m x 3 m.
Power Supply
Two underground substations are planned in order to prevent power losses. The first
substation will be located in the main extraction level and the second one in the by-
pass that connects Ramp 1 with Ramp 4. The dimension of each substation will be 6
m x 5 m x 8 m.
Compressed Air
Compressed air will be required in the underground mine and will be provided by two
900 cfm compressors that will be installed on surface in a 10 m x 12 m x 3 m facility.
Receiver tanks will need to be installed every 1,000 m to prevent pressure loss.
16.5.3 Stope Design
Stope Access
Stope accesses will have a 4.0 m x 4.0 m cross section to facilitate movement of drill
rigs and LHD equipment operation. Stope length will vary to a maximum of 65 m in
areas where it is possible to take five cuts per stope (Figure 16-15 and Figure 16-16).
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Figure 16-15: Cross Section of Typical Stope Access
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Figure 16-16: Cross Section of Typical Cut & Fill Stope Access
Maximum and minimum gradients are set at ±15%. The accesses will go directly from
the ramp to the central part of the stopes. A 5 m horizontal segment has been
designed at the start of the access (close to the ramp) and at the end where it
connects to the stope. These accesses will also enable the LHDs to haul ore to the
ore pass and to transport waste material from the nearby development as backfill into
the stope.
Underground Development Planning
Stoping and Backfill
Stoping will start at bottom of the mineralized zones and ascend through the mine. All
stopes have been designed at a maximum length of 50 m and each stope cut will have
maximum dimension of 6 m wide and 4 m high. The stopes will be backfilled with
waste and mixture of slag and 5% Portland cement.
Each stope block will be from 10 to 50 m long, up to 6 m wide and 20 m high. The
minimum mining width is about 3.5 m. Stope access crosscuts (4.0 m x 4.0 m), are
65 m long in areas where it is possible to take five cuts per stope, see Figure 16-10.
The gradients of the crosscuts are ±15%.
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The stoping sequence begins once the crosscut / decline from the principal ramp is
driven completely across the ore zone. A stope development drift will be driven in ore
along the hanging wall side of the mineralized zone, from 10 to 50 m to east or west on
each side of the stope access crosscut.
Stopes will be drilled with two-boom electro-hydraulic jumbos. LHDs with 4.5 m3
buckets will be used for mucking and will tram the ore to the ore passes. Each face in
a 6 m wide stope will be drilled with 4.3 m long drill steel and the effective advance per
round will be about 3.3 m. Each round will produce approximately 200 t of broken
mineralization or waste. To maintain plant feed from Accha, approximately three
producing stopes will be necessary at the start of underground production which will
ramp-up to eight stopes after the end of the open pit mine life.
Once the stope drift has been completed, the empty space will be backfilled with waste
and a slag/cement mixture to within 0.5 m of the back of the of the stope sill drift. In
cases where the mineralized zone is wider than 6 m, a second cut will be mined
beside the backfilled first cut for the full length of the stope. This same sequence will
be followed until the full width of the mineralized material is mined out the length of the
stope.
Once the initial lift in a stope is completed, the back of the access crosscut decline will
be slashed down. As the back of the crosscut is slashed down, the bottom is filled in
with the waste from the slashing, maintaining the access drift size at 4 m x 4 m. Any
excess waste from the slash is mucked and moved to another stope and placed as
backfill, or may be dumped to ore passes and hauled to a surface waste dump.
Ventilation of the stopes will be with vane axial fans. The main fresh air source will be
the main haulage decline which will be total airflow of about 165,000 cfm. Once the
main ventilation exhaust raise is completed and the exhaust fans installed on surface,
four auxiliary fans will be required inside the mine.
The mobile equipment fleet will be maintained and serviced in maintenance facilities
located on the surface. The lubrication and fuelling service will be done by mobile
equipment and a small underground workshop will be excavated for preventive
maintenance and minor repairs.
Ground Support
Due to the poor quality of rock indicated by the current geotechnical information,
systematic support with 2.4 m bolts in a square pattern of 1.4 m by 1.5 m and with
steel screen will be installed in operating development headings. Stope development
ground support will consist with 2.4 bolts in a square pattern of 1.0 m by 1.2 m, with a
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layer of shotcrete of 2” and welded wire mesh in all development heading and stope.
The estimated cost of support in operation is US$3.31/t over the life of mine. Principal
ground support requirements are outlined in Table 16-9.
Table 16-9: Ground Support Design

Ore
Access Haulage Service Ore body
Description body
drive drive ramp crosscuts
drive
Dimensions
Width (m) 5.00 5.00 4.00 4.00 6.00
Height (m) 4.00 4.00 4.00 4.00 4.00
Support
20 mm x 2.4 m fcr threadbar x x x
46 mm x 2.1 split set - plated x
46 mm x 2.4 m split set -
x x
plated
bolt spacing (m) 1.40 1.40 1.40 1.00 1.00
bolts per ring 7.00 7.00 6.00 8.00 6.00
ring spacing (m) 1.50 1.50 1.20 1.20 1.20
Backfilling
Waste from the stope development will be used as stope fill where possible with
additional backfill to be supplied from the backfill raises or waste passes previously
described. Where the mining width does not exceed 6 m and subsequent cuts are not
required, un-cemented waste will be used as backfill.
In areas that exceed the 6 m mining width a layer of paste fill will be applied on top and
alongside the waste fill. Paste fill will consist of a mix of ground slag from the
pyrometallurgical plant, approximately 5% cement and water and will be delivered to
production levels by a paste fill borehole. The paste fill will stabilize the waste fill and
minimize backfill dilution with the adjacent filling cut.
In the Z-1 area which will also operate from a middle production level, a backfill pillar
made from paste containing 15% cement will be used to form a stable pillar of 20 m
where subsequently stopes will be mined from below. The mix of backfill systems will
allow a relatively high degree of mining recovery and minimize the need to leave
mineralized pillars.
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Maintenance and Storage Facilities
Provision is made for a centrally-located maintenance and storage facility. The

explosives magazines must comply with Peruvian regulations and standards for safety,
security, size, storage time, services, humidity, capacity and signage.
Communications
The main communication system is a mine telephone network, which is accessible to

all personnel and located adjacent to each working area.
Electrical and Power Distribution
Provisions are included for electrical power distribution; however, we recommend

performing a detailed analysis of the power supply and distribution requirements once
the development and production plans have been established.
Pre-Production and Ongoing Development Schedule
AMEC used the MineSched® scheduling software to assist with development

schedule.
The underground development program for the Base Case will take approximately 23
months and will consist of 3,878 m of development to be completed prior to the
commencement of underground production. A total of 2,655 m of development will be
driven after the start of underground production.
The underground development program for the Fume Case will take approximately 23
months and will consist of 4,135 m of development to be completed prior to the
commencement of underground production. A total of 2,264 m of development will be
driven after the commencement of underground production.
The pre-production development plan includes excavation and construction of the

following:
 Main Access Drive at 4,085 masl

 Service Ramp will be driven in the footwall from 4,085 to 4,240 masl
 The first stope access cut from the service ramp at 20 m vertical intervals
 One ore pass will be driven in the footwall of each zone from 4,085 masl
 One waste pass/backfill raise will be driven in the hanging wall of each zone
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 Main ventilation shaft will be driven raises 4,080 masl to surface between Z-1 and
Z-2, and from 4,220 masl, to surface.
Pre-production development is listed in Table 16-10 and 16-11 for the Base Case and
Fume Case respectively.
Table 16-10: Underground Mine Total Development (Base Case)

Dimension
Width High
Description Unit Quantity (m) (m)
Main Access Drive at 4080 level m 512 5.00 4.50
Mine Haulage Drive 4080 level m 385 5.00 4.50
Haulage Drive Ore Pass Access 4080 Level m 45 5.00 4.00
By Pass m 1,283 4.00 4.00
Service Ramp m 2,323 4.00 4.00
Minor Cross Cuts (Access to cross cuts) m 374 5.00 4.50
Ancillary development (magazine, substation, dining room) m 47 5.00 4.50
Backfill/Waste Passes m 636 2.00 2.00
Ore Pass m 668 2.00 2.00
Main ventilation shaft m 258 2 m diameter
Total m 6,533
Table 16-11: Underground Mine Total Development (Fume Case)

Dimension
Width High
Description Unit Quantity (m) (m)
Main Access Drive at 4080 level m 512 5.00 4.50
Mine Haulage Drive 4080 level m 379 5.00 4.50
Haulage Drive Ore Pass Access 4080 Level m 46 5.00 4.00
By Pass m 1,201 4.00 4.00
Service Ramp m 2,323 4.00 4.00
Minor Cross Cuts (Access to cross cuts) m 341 5.00 4.50
Ancillary development (magazine, substation, dining room) m 47 5.00 4.50
Backfill/Waste Passes m 636 2.00 2.00
Ore Pass m 657 2.00 2.00
Main ventilation shaft m 258 2 m diameter
Total m 6,533
The mine pre-production period is estimated to be two years and the schedule for
Base and Fume cases is shown in Tables 16-12 and 16-13. Figures 16-17, 16-18 and
16-19 show the proposed mine development sequence.
Project No.: 170848

Table 16-12: Underground Pre-production and Ongoing Schedule (Base Case)

Month
Pre Production Development Ongoing Development
Description 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Main Access Drive at 4080 level 140 130 149 93
Mine Haulage Drive 4080 level 45 114 94 132
Haulage Drive Ore Pass Access 4080
29 7 7 3
Level
By Pass 219 88 66 35 123 7 52 153 141 87 54 16 55 56 52 78
Service Ramp 17 53 61 87 88 104 232 149 200 165 71 105 153 221 203 140 95 56 52 71
Minor Cross Cuts (Access to cross
12 12 12 10 46 31 36 18 13 34 20 27 18 18 25 23 4 14
cuts)
Ancillary development (magazine, substation,
16 31
dining room)
Backfill/Waste Passes 1 34 37 32 35 36 34 42 55 85 120 117 8
Ore Pass 36 42 68 64 60 65 70 72 68 63 50 10
Main ventilation shaft 137 121
Grand Total 140 159 192 225 506 490 516 267 363 384 268 369 270 200 278 440 444 284 181 172 117 118 149
Project No.: 170848

Table 16-13: Underground Pre-production and Ongoing Schedule (Fume Case)

Month
Pre Production Development Ongoing Development
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Main Access Drive at 4080 level 140 130 149 93
Mine Haulage Drive 4080 level 45 114 94 126
Haulage Drive Ore Pass Access 4080
33 3 5 2 3
Level
By Pass 117 84 107 100 22 165 118 45 70 82 86 77 82 48
Service Ramp 27 75 128 109 120 200 211 225 119 103 144 233 202 103 82 65 43 38 55 40
Minor Cross Cuts (Access to cross
15 54 19 32 39 29 8 16 35 10 23 39 4 18
cuts)
Ancillary development (magazine,
16 31
substation, dining room)
Backfill/Waste Passes 6 33 31 36 35 41 42 43 67 89 108 104
Ore Pass 11 56 79 65 59 71 70 67 63 65 41 9
Main ventilation shaft 113 135 10
Grand Total 140 173 209 181 439 628 441 365 444 349 359 408 364 297 364 345 103 153 151 129 133 137 88
Project No.: 170848

Figure 16-17: Underground Pre-production and Ongoing Schedule (Plan View)
Project No.: 170848

Figure 16-18: Underground Pre-production and Ongoing Schedule (Cross Section View)
Project No.: 170848

Figure 16-19: Underground Pre-production and Ongoing Schedule (Isometric View)
Project No.: 170848

16.6 Production Planning
The mining operation begins with the pre-stripping stage at Accha. The following year,
the Yanque open pit operations are scheduled to begin as the mine here does not
require any pre-stripping. Plant feed is expected to be initiated in the second year of
mining operations, and in the third year underground operations will begin in Accha.
While the underground and open pit operations in Accha are mined simultaneously a
50 m safety zone including a 20 m crown pillar will be required. The safety zone and
the crown pillar will be mined at the end of the open pit operation.
The underground operation is scheduled to coincide with the completion of open pit
operations.
16.6.1 Open Pit Production Planning
AMEC used MineSched® scheduling software to assist with production planning for
the Base Case and Fume Case production plans. The production schedule was
developed with the following assumptions:
 Waelz kiln production starts in year 2017. Average ore feed is 1,250 t/d from
Accha (open pit and underground mines) and 2,650 t/d from Yanque Base Case
and 1,100 t/d from Accha (open pit and underground mines) and 2,750 t/d from
Yanque Fume Case.
 Bench advance is limited to 10 benches per year per phase and 5 m in height, to
insure the mining sequence is operationally viable
 For the first bench of the ultimate pit at Accha, the blasted material will be pushed
by dozer and loaded by excavator to the haul trucks
 The benches from elevation 4325 to 4295 will utilize an internal ramp of 25 m to
access. Upon completion of the benches, the ramps will be mined by backward
method. While those benches are mined the maximum bench advance will be
seven
 The open pit mine plan assumes that the basic bench height will be 5 m. However,
if geotechnical considerations allow, the benches may be double or triple in height.
Open Pit Schedule for Base Case
For the Accha operation, open pit blasting procedures will need to minimize vibration,
as open pit and underground operations will be carried out simultaneously. Ore from
the Accha mine will be hauled to Yanque using 30-35 t trucks. Waste will be hauled to
Project No.: 170848

waste rock disposal facilities that will be located 60 km from the Accha pit, and 2 km
from the Yanque pit.
The mine schedule for the Base Case considered a maximum mining capacity of 1.5
Mt/a for Accha and 3.0 Mt/a for Yanque, with a global open pit mining ramp-up of 14%
of capacity during the first year, 68% during the second year, and a third year at 100%
capacity. This ramp-up covers the learning curve on the operators and the natural
streamlining of operations at the beginning of a greenfields project. A pre-production
stripping campaign is required for the Accha deposit resulting in a one year pre-strip
period prior to steady-state ore delivery to the crusher. The average mine capacity will
be approximately 3.1 Mt/a (considering both open pit mines) with an average ore
delivery of approximately 1,195 kt/a to the primary crusher. The open pit mine life is
seven years for Accha (including one year of pre-stripping) and approximately eight
years for Yanque with approximately two months of production in the ninth year. Table
16-14 and Table 16-15 show the annual Base Case production schedules for Accha
and Yanque open pit; Figure 16-20 and Figure 16-21 show the mine material
movements for the Base Case for each deposit.
Table 16-14: Accha Open Pit Mine Production Schedule for Base Case
Rock Mined Accha OP To Plant from Accha
Period Date Total Waste Ore Zn Grade Pb Grade Zn Metal Pb Metal Stripping
(yr) (kt) (kt) (kt) (%) (%) (klb) (klb) Ratio
PP 2015 505 505 0 0 0
P1 2016 1,460 1,232 228 7.65 0.98 38,396 4,901 5.42
P2 2017 1,318 1,162 156 7.95 0.54 27,364 1,873 7.44
P3 2018 967 720 247 6.91 1.03 37,653 5,620 2.91
P4 2019 370 104 265 7.93 0.61 46,370 3,556 0.39
P5 2020 489 222 267 8.92 0.33 52,511 1,937 0.83
P6 2021 168 109 59 10.84 0.28 14,152 369 1.84
Total 5,278 4,055 1,223 8.03 0.68 216,445 18,256 3.32
Note: Apparent summation errors are due to rounding.
Table 16-15: Yanque Open Pit Mine Production Schedule for Base Case
Rock Mined Yanque To Plant from Yanque
PP 2015 0 0 0 0 0 0 0
P1 2016 944 176 768 6.28 1.11 106,411 18,774 0.23
P2 2017 2,301 1,369 932 5.65 2.06 116,044 42,279 1.47
P3 2018 2,448 1,507 941 4.43 2.76 91,879 57,295 1.60
P4 2019 3,008 2,065 944 3.45 3.54 71,771 73,575 2.19
P5 2020 3,076 2,130 946 4.24 2.44 88,422 50,990 2.25
Project No.: 170848

P6 2021 3,434 2,233 1,201 3.29 2.69 87,047 71,158 1.86

P7 2022 2,500 1,059 1,441 3.35 2.72 106,409 86,428 0.74
P8 2023 3,343 1,898 1,445 2.11 3.08 67,351 98,185 1.31
P9 2024 1,903 809 1,094 1.16 4.68 27,926 112,822 0.74
Total 22,957 13,230 9,711 3.57 2.86 763,260 611,505 1.36
Figure 16-20: Accha Open Pit Mine Material Movement for Base Case
Accha Open Pit Mine Plan - Base Case

1,600 12.0
1,400
10.0
Zn & Pb Grades (%)

1,200
8.0
Material (kt)
1,000
800 6.0
600
4.0
400
2.0
200
0 0.0
PP P1 P2 P3 P4 P5 P6
Ore Accha Waste Accha Zn Grade Pb Grade
Project No.: 170848

Figure 16-21: Yanque Open Pit Mine Material Movement for Base Case
Yanque Open Pit Mine Plan - Base Case

3500 7.0
3000 6.0
Zn & Pb Grades (%)

2500 5.0
Material (kt)
2000 4.0
1500 3.0
Pillar
1000 2.0
500 1.0
0 0.0
PP P1 P2 P3 P4 P5 P6 P7 P8 P9
Ore Yanque waste Yanque Zn Grade Pb Grade
Open Pit Schedule for the Fume Case
For the Fume Case following the pre-production period, the mines are planned to
deliver 1,349 kt/a of mineral to the primary crusher. The open pit mine life is five years
for Accha (six years including the pre-strip period) and nine years for Yanque.
Table 16-16 and Table 16-17 show the annual Fume Case production schedules for
Accha and Yanque; Figures 16-22 and Figure 16-23 show the mine material
movements for the Fume Case.
The mine schedule of the Fume Case considered a maximum mining capacities of
1.5 Mt/a for Accha and 3.4 Mt/a for Yanque, with a global open pit mining ramp-up of
14% of capacity during the first year, 69% during the second year, and a third year at
100% capacity. This ramp-up covers the learning curve on the operators and the
natural streamlining of operations at the beginning of a greenfields project. A pre-
production stripping campaign is required Accha deposit resulting in one year pre-strip
period prior to steady state ore delivery to the crusher. The average mine capacity will
be approximately 3.3 Mt/a (considering both open pit mines) with an average ore
delivery of approximately 1,237 kt/a to the primary crusher. The open pit mine life is
six years for Accha (including one year of pre-stripping) and nine years for Yanque.
Project No.: 170848

Table 16-16: Accha Open Pit Mine Production Schedule for Fume Case
Rock Mined Accha OP To Plant from Accha
PP 2015 505 505 0 0 0
P1 2016 1,495 1,268 228 8.27 1.00 41,463 4,997 5.57
P2 2017 1,283 1,179 104 9.12 0.55 20,911 1,260 11.33
P3 2018 1,075 827 247 7.60 1.03 41,461 5,593 3.35
P4 2019 497 208 289 9.58 0.63 61,015 3,989 0.72
P5 2020 423 251 172 10.23 0.32 38,690 1,222 1.46
Total 5,278 4,238 1,039 8.88 0.74 203,541 17,060 4.08
Table 16-17: Yanque Open Pit Mine Production Schedule for Fume Case
Rock Mined Yanque To Plant from Yanque
PP 2015 0 0 0 0 0 0 0
P1 2016 944 176 768 6.28 1.11 106,411 18,774 0.23
P2 2017 2,301 1,369 932 5.65 2.06 116,044 42,279 1.47
P3 2018 2,448 1,507 941 4.43 2.76 91,879 57,295 1.60
P4 2019 3,008 2,065 944 3.45 3.54 71,771 73,575 2.19
P5 2020 3,076 2,130 946 4.24 2.44 88,422 50,990 2.25
P6 2021 3,434 2,233 1,201 3.29 2.69 87,047 71,158 1.86
P7 2022 2,500 1,059 1,441 3.35 2.72 106,409 86,428 0.74
P8 2023 3,343 1,898 1,445 2.11 3.08 67,351 98,185 1.31
P9 2024 1,903 809 1,094 1.16 4.68 27,926 112,822 0.74
Total 22,957 13,230 9,711 3.57 2.86 763,260 611,505 1.36
Project No.: 170848

Figure 16-22: Accha Open Pit Mine Material Movement for Fume Case
Accha Open Pit Mine Plan - Fume Case

1,600 12.0
1,400
10.0
Zn & Pb Grades (%)

1,200
8.0
Material (kt)
1,000
800 6.0
600
4.0
400
2.0
200
0 0.0
PP P1 P2 P3 P4 P5
Ore Accha Waste Accha Zn Grade Pb Grade
Figure 16-23: Yanque Open Pit Mine Material Movement for Fume Case
Yanque Open Pit Mine Plan - Fume Case

4,000 7.0
3,500 6.0
Zn and Pb Grades (%)

3,000
5.0
Material (kt)
2,500
4.0
2,000
3.0
1,500
2.0
1,000
500 1.0
0 0.0
PP P1 P2 P3 P4 P5 P6 P7 P8 P9
Ore Yanque waste Yanque Zn Grade Pb Grade
Project No.: 170848

16.6.2 Underground Production Planning
The projected start of production is January, 2017. Ramp-up will take six months in
which, an average of 250 t/d will be mined. Following this period, production will reach
its full capacity at an average of 500 t/d.
The Base Case foresees a total production of 1.011 Mt with 10.37% Zn and 1.39% Pb
over a mine life of six years. The Fume Case anticipates total production of 0.783 Mt
with 11.95% Zn and 1.6% Pb over a mine life of five years. Mine production is shown
in Figures 16-24 and 16-25 and in Tables 16-18 and 16-19.
Figure 16-24: Underground Mining Schedule Base Case
Underground Mine Production-Hydromet Case
0.25 12.0
0.20
11.0
Zn diluted grade (%)

Ton Mined (Mt)
0.15
10.0
0.10
9.0
0.05
0.00 8.0
Stope Stope Stope Stope Stope Pillar
Yr 2017 Yr 2018 Yr 2019 Yr 2020 Yr 2021 Yr 2022
Ore (kt) 149.54 234.27 216.60 184.93 149.71 76.22
Zn (%) 11.23 9.65 9.87 10.25 10.99 11.33
Ore (kt) Zn (%)
Project No.: 170848

Figure 16-25: Underground Mining Schedule Base Case
Underground Mine Production-Fume Case

0.25 15.0
14.0
13.0
Zn diluted grade (%)

0.20 12.0
11.0
Ton Mined (Mt)
10.0
0.15 9.0
8.0
7.0
0.10 6.0
5.0
4.0
0.05 3.0
2.0
1.0
0.00 0.0
Yr 2017 Yr 2018 Yr 2019 Yr 2020 Yr 2021
Ore (kt) 167.18 228.11 179.52 107.10 101.48
Zn (%) 13.07 11.16 10.68 13.73 12.26
Ore (kt) Zn (%)
Project No.: 170848

Table 16-18: Underground Pre Production Development Schedule (Base Case)

Month
Pre Production Development
Description 1 2 3 4 5 6 7 8 9 10 11 12 Total
Main Access Drive at 4080 level 140 130 149 93 512
Mine Haulage Drive 4080 level 45 114 94 132 385
Haulage Drive Ore Pass Access 4080 Level 29 7 7 3 46
By Pass 219 88 66 35 123 7 52 590
Service Ramp 17 53 61 87 88 104 232 149 200 990
Minor Cross Cuts (Access to cross cuts) 12 12 12 10 46 31 36 18 13 190
Ancillary development (magazine, sub station, dining room) 16 31 47
Backfill/Waste Passes 1 34 37 32 35 36 34 42 251
Ore Pass 36 42 68 64 60 65 70 72 68 63 609
Main ventilation shaft 137 121 258
Grand Total 140 159 192 225 506 490 516 267 363 384 268 369 3,879
Table 16-19: Underground Pre Production Development Schedule (Fume Case)

Month
Pre Production Development
Description 1 2 3 4 5 6 7 8 9 10 11 12 Total
Main Access Drive at 4080 level 140 130 149 93 512
Mine Haulage Drive 4080 level 45 114 94 126 379
Haulage Drive Ore Pass Access 4080 Level 33 3 5 2 3 46
By Pass 117 84 107 100 22 165 594
Service Ramp 27 75 128 109 120 200 211 225 119 1,215
Minor Cross Cuts (Access to cross cuts) 15 54 19 32 39 29 8 16 211
Ancillary development (magazine, sub station, dining room) 16 31 47
Backfill/Waste Passes 6 33 31 36 35 41 42 43 267
Ore Pass 11 56 79 65 59 71 70 67 63 65 606
Main ventilation shaft 113 135 10 258
Grand Total 140 173 209 181 439 628 441 365 444 349 359 408 4,135
Project No.: 170848

For the Base and Fume Cases, AMEC has considered a 60% recovery of the crown
pillar. Pillar recovery will take place at the end of the mine life in years 2021 and 2022.
The production plan is based on a highly mechanized operation consisting of diesel

powered trackless equipment for development and production. Equipment has been
selected based on estimated mine cycles and productivity calculations in order to
reach production targets. Mine production scheduling was performed using Minesched
software.
In terms of sequencing, Z-1 zone will be mined starting in January 2017. Production
will continue in Z-1 until its reserves are depleted in 2021 (crown pillar). The second
zone to start production will be Z3 in the second half of 2017. Zone Z3 reserves will be
mined out in less than a year (9 months). Zone Z2 will start production in the last
quarter of 2017 and will continue until first quarter of 2021.
16.6.3 Open Pit and Underground Production Planning
Table 16-20 and Figure 16-26 show the Accha and Yanque Base Case mine schedule
including the open pit and underground mines and Figure 16-27 shows the plant feed
projections for the Base Case. Table 16-21 and Figure 16-28 show the Accha and
Yanque Fume Case mine schedule including the open pit and underground mines and
Figure 16-29 shows the plant feed projections for the Fume Case.
Table 16-20: Accha and Yanque Mine Plan (Open Pit and Underground) Base Case
Rock Mined
Accha and Yanque To Plant from Accha and Yanque
Period Date Total Waste Ore Zn Grade Pb Grade Zn Metal Pb Metal
(yr) (kt) (kt) (kt) (%) (%) (klb) (klb)
PP 2015 505 505 0 0 0 0 0
P1 2016 2,523 1,528 996 6.38 1.04 140,119 22,776
P2 2017 3,793 2,614 1,180 6.63 1.64 172,316 42,542
P3 2018 3,648 2,287 1,360 5.74 1.88 172,209 56,295
P4 2019 3,138 1,722 1,416 5.50 2.69 171,709 83,965
P5 2020 3,554 2,180 1,374 5.65 2.04 171,059 61,781
P6 2021 3,275 2,106 1,169 5.06 2.13 130,565 54,856
P7 2022 2,164 728 1,435 4.01 2.81 127,028 88,829
P8 2023 2,851 1,406 1,445 2.69 3.05 85,572 97,077
P9 2024 523 327 196 1.72 4.23 7,449 18,257
Total 25,975 15,404 10,571 5.05 2.26 1,178,027 526,378
Project No.: 170848

Figure 16-26: Accha and Yanque Mine Plan (Open Pit and Underground) Base Case
Total Mine Plan - Base Case

4000 7.0
3500 6.0
Zn & Pb Grades (%)

3000
5.0
Material (kt)
2500
4.0
2000
3.0
1500
2.0
1000
500 1.0
0 0.0
PP P1 P2 P3 P4 P5 P6 P7 P8 P9
(kt) Waste Zn Grade Pb Grade
Figure 16-27: Crusher Feed Schedule for the Base Case
Feed To Plant - Base Case

1600 7.0
1400 6.0
Zn & Pb Grades (%)

1200
5.0
Material (kt)
1000
4.0
800
3.0
600
2.0
400
200 1.0
0 0.0
PP P1 P2 P3 P4 P5 P6 P7 P8 P9
Ore Accha Ore Yanque % Zn Grade % Pb Grade
Project No.: 170848

Table 16-21: Accha and Yanque Mine Plan (Open Pit and Underground) Fume Case
Rock Mined
Accha and Yanque To Plant from Accha and Yanque
Period Date Total Waste Ore Zn Grade Pb Grade Zn Metal Pb Metal
(yr) (kt) (kt) (kt) (%) (%) (klb) (klb)
PP 2015 505 505 0 0 0 0 0
P1 2016 2,439 1,444 996 6.74 1.08 147,875 23,771
P2 2017 3,750 2,548 1,203 6.98 1.76 185,144 46,585
P3 2018 3,751 2,334 1,416 6.07 2.30 189,468 71,845
P4 2019 3,685 2,273 1,412 5.62 2.78 175,044 86,561
P5 2020 3,606 2,381 1,225 5.91 2.05 159,529 55,259
P6 2021 3,535 2,233 1,302 3.99 2.60 114,482 74,691
P7 2022 2,500 1,059 1,441 3.35 2.72 106,409 86,428
P8 2023 3,343 1,898 1,445 2.11 3.08 67,351 98,185
P9 2024 1,903 809 1,094 1.16 4.68 27,926 112,822
Total 29,018 17,485 11,533 4.61 2.58 1,173,228 656,147
Figure 16-28: Accha and Yanque Mine Plan (Open Pit and Underground) Fume Case
Total Mine Plan - Fume Case

4000 8.0
3500 7.0
Zn & Pb Grades (%)

3000 6.0
Material (kt)
2500 5.0
2000 4.0
1500 3.0
1000 2.0
500 1.0
0 0.0
0 996 1,036 1,188 1,232 1,118 1,201 1,441 1,445 1,056
(kt) Waste Zn Grade Pb Grade
Project No.: 170848

Figure 16-29: Crusher Feed Schedule for the Fume Case
Feed To Plant - Fume Case

1600 8.0
1400 7.0
Zn & Pb Grades (%)

1200 6.0
Material (kt)
1000 5.0
800 4.0
600 3.0
400 2.0
200 1.0
0 0.0
PP P1 P2 P3 P4 P5 P6 P7 P8 P9
Ore Accha Ore Yanque % Zn Grade % Pb Grade
16.7 Waste Rock Storage Facilities
Information on the waste rock storage facilities is included in Section 18.2.
16.8 Mine Equipment Selection
The planned Accha and Yanque mine fleets are designed as a conventional diesel-
powered fleets with the capacity to mine approximately 3.1 Mt/a for the Base Case
considering a peak of 3.6 Mt; and 3.3 Mt/a considering a peak of 3.6 Mt for the Fume
Case. In both options, the fleet will be operating on 5 m benches until the pit base is
reached. The average operating elevation for the open pits is 4,300 masl for Accha
and 3,500 masl for Yanque.
Equipment requirements were estimated considering the plant feed, the pit geometry
and AMEC’s experience in similar-size projects at that elevation in South America.
Equipment sizing and numbers were based on appropriate operational factors and
assume an operating schedule of 360 days per year, with two shifts of 12 hours per
day, seven days a week. Equipment manufacturers noted are for estimation purposes
and are not final. Five calendar days have been allocated as non-work because of
either weather conditions and/or official holidays.
Project No.: 170848

16.9 Drilling and Blasting
Based on rock strength characterization and supporting test work performed for Accha
and Yanque deposits, AMEC estimated a powder factor (PF) ranging from 0.19 kg/t to
0.32, depending on the rock type. The average PF for Accha is near 0.25 kg/t and
0.22 kg/t for Yanque. The proposed blast hole diameter is 3.5” and the equipment
(CAT MD5050) has an average penetration rate of 35 m/hr for both ore and waste.
Drill spacing pattern designs will vary from 3.7 to 2.8 m.
For pre-strip mining, only one drill will be required, and for the peak production years,
one drill will be required for each deposit.
The hydrogeological evaluation determined that mining activities are expected to

encounter groundwater in Yanque from depths shallower than 3500 masl; the deepest
level expected in Yanque is 3490 for the Hydro Case and 3485 for the Fume Case
implying three benches under groundwater. Both Accha and Yanque will experience a
rainy season. Based on this information the drill and blast evaluation makes no
distinction in the explosive type when operating under wet conditions. The explosive
type for wet and dry conditions is assumed to be distributed in the ratio of 65% of
emulsion and 35% of ANFO.
One blasting truck and one light vehicle are considered to support blasting activities for
both mines.
16.10 Loading
At Accha, the primary production loading fleet for ore and waste will consist of one
CAT 349 3.2 m3 excavator. Due to the low utilization rates of the excavator for ore
loading because of the four-hour cycle time for the loaded trucks to reach the primary
crusher and return to the pit, the primary role will be for upload of waste material.
At Yanque, the loading fleet will consist of one CAT 349 3.2 m3 excavator that will be
dedicated to ore material and one CAT 980 4.5 m3 front-end loader (FEL) for waste.
Excavator assignments may vary when the FEL is not available or the waste loading
requirement increases.
16.11 Haulage
Haulage requirement estimates are based on annual haulage profiles assuming two
exits from the pit in the Accha mine, (at the 4,325 m and 4,295 m elevation), and three
exits at the Yanque mine corresponding to the major pit phases (Phase 1 = 3,565
masl, Phase 2 = 3,575 masl, and Phase 4 and Phase 5 = 3,580 masl). It is assumed
Project No.: 170848

that broken ore will be delivered to either the crusher pad at the plant which is 60 km
from Accha and 1.5 km from the Yanque deposit, or to the WRFs. The haulage fleet
for the Accha ore will consist of 30 t road trucks. The trucks assigned to the waste
material are assumed to have a 35 t capacity. The pre-stripping stage will require one
truck and will reach nine in 2017. Truck requirements will increase to 11 units in 2019
for the Base Case and in 2018 for the Fume Case.
16.11.1 Operations Support
Support equipment will be needed at both Accha and Yanque until the Accha
operations are completed; after which only one mine fleet will be required. The
projected support equipment is shown in Table 16-22.
Table 16-22: Support Equipment

Support Equipment Detail Number Price Each (US$)
Dozer CAT D8 (237 kw) 237 kw 2 680,000
Wheel Dozer CAT 814 (179 kw) 179 kw 1 678,000
Moto Grader CAT 140K (144 kw) 144 kw 2 283,000
WaterTruck Volvo (15,000 l) 15,000 l 2 175,000
16.12 Auxiliary Equipment
To support mine maintenance and mine operation activities, a fleet of auxiliary

equipment is required (Table 16-23).
Table 16-23: Auxiliary Equipment

Equipment Number Cost Each (US$)
Pickup 11 32,000
Light Plant 7 12,000
Blasting Truck 1 100,000
Boom Truck 1 126,000
Low Bed Truck 1 166,000
Drum Roller 1 100,000
Welding Truck 2 100,000
Fuel Truck 1 100,000
Crew Bus 2 150,000
Project No.: 170848

16.13 Mine Dewatering
It is expected that the Yanque pit will require dewatering when the pit elevation
reaches the phreatic standing water level at 3,500 masl. The current mine plan will
see this level reached in the base of Phase 1 and Phase 5. Table 16-24 summarizes
the expected pumping requirements. Pumps are assumed to be supplied as rentals by
a contractor.
Table 16-24: Pit Dewatering Operating Years and Installed Pumps

PP1 YR1 YR2 YR3 YR4 YR5 YR6 YR7 YR8 YR9
Base Case
Pumping Stations 1 2 2
Fume
Pumping Stations 2 2 2
16.14 Manpower
Accha and Yanque will operate seven days a week, 24 hours a day with four crews
rotating to fill the mine roster of 12 hours per shift. Manpower rises to 231 mine
employees (Base Case) and 237 employees (Fume Case) in Year 3.
16.15 Primary Consumables
Primary consumables for mine operations include diesel fuel, ANFO, and tires. For the
Base Case, the mine fleet’s diesel requirement peaks at 2.95 M L/a. ANFO and
emulsion consumption average 768 t/a, and truck tire consumption reaches an
average of 127 truck tires consumed per year in the maximum production years. For
the Fume Case, the mine fleet’s diesel requirement peaks at 3.1 M L/a. ANFO and
emulsion consumption average 750 t/a, and the truck tire consumption reaches an
average of 124 tires consumed per year in the maximum production years.
16.16 Ore Control
Ore control will be undertaken using a FEL. The Geology Department will be
responsible for ore control, with one geologist and two sampling technicians providing
24 hour coverage for each deposit.
Blast holes will be sampled using industry-standard methods. Some uncontrolled

dilution due to heave may occur at Accha, since the ore and waste contacts may be
difficult to distinguish. Heave is expected to be less of an issue at Yanque.
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In general, ore polygons for a typical 5 m bench will consist of contiguous areas and
will have minimum dimensions equal to the SMU. Mineralization and waste shapes
will be uploaded to GPS instruments on the loading and support equipment. The use
of the GPS system will reduce the operator's reliance on the traditional survey staked
control, but will not eliminate the need for survey-staked control.
 The mining methods used are appropriate to the deposit styles. Conventional
open pit mining is planned at Accha and Yanque. The Accha underground
operation will use cut-and-fill methods
 Open pit mine production will average 3,090 t/d of ore for the Base Case and
3,200 t/d of ore for the Fume Case, with the use of 30 t capacity trucks.
Underground production is expected to average 520 t/d of ore for the Base Case
and 475 t/d for the Fume Case over the life of the operation
 Ore from the Accha mine will be hauled to Yanque using 30 t highway trucks.
Waste will be hauled to waste rock disposal facilities that will be located 1.4 km
from the Accha pit and 1.9 km from the Yanque pit using 35 t trucks
 The open pit mine life is seven years for Accha (including one year of pre-stripping)
and nine years for Yanque in the Base Case. The open pit mine life is five years
for Accha (six years including the pre-strip period) and nine years for Yanque
 The underground Base Case foresees a total production of 1.011 Mt with 10.37%
Zn and 1.39% Pb over a mine life of six years. The Fume Case anticipates total
production of 0.783 Mt with 11.95% Zn and 1.6% Pb over a mine life of five years
 The predicted mine life is achievable based on the projected annual production
rate and the Mineral Reserves estimated
 The underground and open pits are assumed to be mined at the same time. While
the underground and open pit operations in Accha are mined simultaneously, a
50 m safety zone including a 20 m crown pillar will be required. The safety zone
and the crown pillar will be mined at the end of the open pit operation
 The equipment and infrastructure requirements required for the proposed life-of-
mine operations are acceptable given the mine plan.
Additional work is required in order to validate these assumptions in the next work
phase.
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17.0 RECOVERY METHODS
17.1 Base Case Process Flow Sheet
The basis of the processing concept for the Base Case used in the PFS is shown in
the simplified process flow sheet in Figure 17-1.
Figure 17-1: Simplified Proposed Process Flow Sheet for the AZOD Project
CRUSHING AND MIXING & WAELZ COOLING AND
CLASSIFICATION PELLETIZATION PROCESS STORAGE OF
FUME
Effluent for disposal
FUME
PLS TRANSPORT TO
Neutralization & REFINERY (Coast)
Zn Precipitation &
Zn Re-Leach
Spent Electrolyte
Bleed ZN POWDER FUME

Spent (Air Atomization) DISCHARGE &
STORAGE
ELECTROWINNING PURIFICATION NEUTRAL ALKALINE

(Zn slabs) (THREE STAGES) LEACHING LEACHING
(Dehalogenation)
Pb residue
(By-product)
Zn slabs RE-
(Main product) PROCESSING Gypsum for disposal
RESIDUE
PURIFICATION
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17.2 Process Design Criteria
The Base Case design incorporates both pyrometallurgical and hydrometallurgical

processes. The pyrometallurgical process design criteria incorporates the basic
process design that was established by Metallicon in the 2010 and 2011 test work
programs, with Phase 1 and 2 pyrometallurgical test work and updated basic process
design by Metallicon in 2013, as discussed in Section 13.0. Basic sizing of equipment
was carried out by Thyssenn Krupp under agreement with Zincore, and was finalized
by AMEC.
The downstream hydrometallurgical process design criteria have been established

based on Metallicon’s test work from 2013 and Mintek simulations. Experience gained
by AMEC and Metallicon in similar conventional zinc refineries processing zinc
sulphate solutions also contributed to the designs. Additional information from, and/or
recommendations by vendors of selected equipment were also considered.
A summary of the major process design criteria for the Base Case is provided in Table
17-1.
Table 17-1: Major Process Design Criteria Summary – Base Case

Criteria Units Value
Pyrometallurgy
Annual throughput - ore t/a 1,376,384
Annual operating days days 350
Daily throughput - ore t/d 3,932
Crushing Circuit availability per annum % 95
Fine ore storage capacity days 1
Size fine ore P100 mm 3
Kiln Rotary Quantity 3
Kiln Size, Length / Inner Diam. m 95 / 5
Kiln availability % 98
Gas Cooling / Bag house Lines 3
Anthracite Ratio, Accha / Yanque kg Anthracite / kg Zn content 2.7 / 2.3
Temperature °C 1,050
Binder (Zn Sulphate) No
Residence time h 5
Fume production t/d 363
Fume Quality, Blend: (Zn+Pb) % 69.7
Fume Quality, Blend: (ZnO+PbO) % 83
Recovery in fume, Zn & Pb % 92.1 / 97.6
Slag production t/d 2,190
Hydrometallurgy
Availability refinery % 97
Dehalogenation-Feed rate t/h 18
Dehalogenation, pH pH -10.5
Dehalog. Residence time h 2.9
Neutral leach, Feed rate t/h 18
3
N. Leach, Flow spent electrolyte m /h 62
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N. Leach, Residence time h 2
N. Leach, Recovery: Zn / Pb % 98/ 100
3
Cold Purification, flowrate m /h 55-70
Cold Purif., Residence time h 3-3.5
Cold Purif., Temperature °C 55
3
Hot purification, flowrate m /h 57-70
Hot Purif., Residence time h 1-1.6
Hot Purif., Temperature °C 90
3
Polishing Purification, flowrate m /h 57-70
Polishing Residence time h 4-4.8
Polishing Temperature °C 80
Electrolysis, cells Quantity 80
2
Cathodic current density A/m 534
Ratio: Solution spent / solution pure : 15
Energy efficiency in cells % 91.5
Power consumption, cells KWh/t-cat. 3,200
Average Slab zinc production t/a –57,327
Average Lead Residue production (by-product) t/a 55,743
Overall zinc recovery % 87.8
Overall lead recovery % 97.6
As reported in Section 13, the recovery of zinc for the Phase 1 pyrometallurgical tests
at IMN were 88.51% and 89.36% respectively, while the lead recovery was >97%.
Pilot plant test work which yielded a classical grade recovery curve and indicated that
zinc recovery of about 95% can be expected at a fume grade of about 60% zinc
while Lead recovery is expected to exceed 97%. In the PEA a relationship for
anthracite to zinc was established; this was updated in the PFS to incorporate lead
and was utilized to establish pyrometalurgical mass balance for both the Base Case
and Fume Case. Due to the differing mineralogy between Yanque and Accha
separate recoveries were established for both mines. Results of these recoveries are
presented in Table 17-2.
Table 17-2: Process Recovery Assumptions

Recovery Accha Yanque
Final Zn Recovery - Base Case (%) 89.6 86.9 Final = Fume*Hydro*Other
Hydrometallurgical Stage (%) 98 98
Fume Stage (%) 93.8 91
Other Stages 97.4 97.4
Final Zn Recovery - Fume Case 93.8 91
Final Pb Recovery - Base and Fume (%) 97 97.7
Note: “Other stages” refers to steps such as electrolytic, melting and casting. Numbers are rounded.
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17.3 Process Control Philosophy
The level of automation in the plants is expected to be in line with industry standards.
Process control for the pyrometallurgical and hydrometallurgy plants will be based on a
programmable logic control (PLC). The control system will allow for monitoring of all
process stages, including motor controls, interlocks, switches and light indicators as
well as all analog process control, process indicators and analog control devices.
The control console screens will provide monitoring and alert/alarm information to
operators located in central control rooms. The consoles will also allow operations
staff to see graphical representations of the in-plant process and process data, so that
process set points can be changed as required, and motors switched on and off as.
17.4 Process Description
pyrometallurgical plant for the reductive roasting of Yanque and Accha Zn-Pb
The conceptual level flow sheet includes the following process steps:
Pyrometallurgy:
 Crushing to a particle size of 100% of -3 mm

 Pelletization of ore mixed with anthracite coal (Accha ore)
 Pelletization of ore mixed with anthracite coal and Dolomite (Yanque ore)
 Waelz Rotary Kiln Process, cooling and fume capture in a baghouse
Hydrometallurgy:
 Fume dehalogenated by a hydrometallurgical process.

 Neutral and acid leaching of dehalogenated oxide fume.
 Cold and hot purification of the impure solution of zinc sulphate solution.
 Electrowinning of the pure zinc sulphate solution in a tank house and stripping to
obtain zinc cathodes
 Melting and casting of zinc sheets to obtain refined zinc slabs
 Dewatering and dispatch (or in-pond storage) of lead sulphate residue
by-product.
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17.5 Delivery and Crushing of Ore
Accha and Yanque run-of-mine (ROM) material will be delivered by 30 t trucks to the
primary crusher that will be located at the pyrometallurgical plant to be constructed 2
km from the proposed Yanque pit. The ROM feed will be campaign-crushed to P80 -3
mm and stored in separate fines bins of 2,300 m3 and 900 m3 capacity for Yanque and
Accha respectively. The crushing plant will process 3,683 t/d at an average
throughput rate of 232 t/h, providing 67% availability per day.
ROM material will either be discharged into a 270 t dump hopper (five truck capacity),
or to a drying storage area. The hopper will be equipped with a protection grizzly with
a 300 mm opening to restrict the entrance of oversize material to the primary crusher.
The dump hopper will be discharged by an apron feeder feeding a jaw with a 20 mm
discharge opening after passing through a grizzly. The primary crusher discharge will
be conveyed to a double-deck banana screen. The screen oversize material >11 mm
will pass through the secondary cone crusher before dropping on the tertiary feed
conveyor.
The fine mineralized material < 3 mm passing through the screen and the material
passing through the secondary crushing will be conveyed to a vibrating double-deck
screen feeding the tertiary crusher.
The vibrating double deck screen receiving material from secondary crushing will
discharge oversize to a tertiary vertical impact crusher (Barmac B9100SE). The
tertiary crusher discharge will recycle back to the tertiary feed vibrating screen. The -
3 mm fine undersize material from the vibrating double deck screen will be conveyed
by bucket elevator and conveyor to the fine material storage silos. Separate storage
silos will be provided for Yanque and Accha fine material.
17.6 Waelz Process (Rotary Kiln)
Crushed fine feed will be fed to the pyrometallurgical plant at total feed rate of 176 t/h;
based on three separate kiln lines. The two dedicated lines for Yanque will process
102 t/h and the Accha line will be processing 74 t/h.
Anthracite coal that will range in size from 3.5–6.5 mm will be delivered to the plant,
stockpiled and then conveyed to hopper silos of 300 m3 and 700 m3 capacity.
The Accha fine material will be blended with anthracite coal by means of a helical
mixer before entering the rotary kilns, while the Yanque fine material will be blended
with coal and dolomite by means of two helical mixers before entering the rotary kiln.
Each mixer discharge will be directed to a pelletizer (diameter: 7.6 m). A zinc
Project No.: 170848

sulphate solution will be used as a binding agent. The pellet discharge will be blended
with coarse anthracite coal and conveyed to the feed opening of each rotary kiln.
Each kiln will have a 4.6 m effective internal diameter and will be 95 m in length and
will operate at a temperature of about 1,050°C.
Anthracite is a key cost input to the process, and serves as the reducing agent to
generate zinc and lead in the vapour phase. Combustion of the anthracite will also
provide a significant component of the heat required by the kiln. The ratios of
anthracite to the zinc + lead content in the mineralization will be 2.7 and 2.3 for Accha
and Yanque feed, respectively. Pilot tests showed that Yanque material will require
the addition of 10% dolomite to the feed to improve the eutectic properties of the slag
minerals and avoid their partial fusion. This will also help improve zinc recovery and
reduce anthracite consumption when the material is processed at a temperature of
1,050°C. The rotary kilns will also consume oil to maintain the proper temperatures
profile. It is estimated that between 7.5–9 t of Bunker-C oil will be consumed per day.
The processes which will occur inside the rotary kiln are: mineral drying, reduction of
oxides, carbonates, and silicates, then vaporization of metals such as zinc, lead,
cadmium together with halogens such as chlorine and fluorine, and finally oxidation of
metal vapours to oxide fume in the flow of air which will be supplied.
The gas stream, which will exit the rotary kilns, will consist mainly of zinc and lead
oxide fume. These will be carried to powder drop-out chambers which will be located
on the discharge of the kiln, and then transported to a primary gas coolers coated with
refractory brick to restrict the gas cooling and the temperature of the walls.
A screw conveyor will collect the hot fume and will convey it to a fume storage hopper.
It is estimated that 10–15% of the fume produced will be recovered in this stage. Hot
gas from each kiln will be cooled by a gas cooler, reducing the outgoing fume
temperature to a maximum of 200°C. The fume will then be sent to its corresponding
bag house for final fume recovery.
The fume, generated by the three rotary kilns, will normally remain segregated during
the cooling, collection and storage stages. It will be possible however to direct Accha
and Yanque off-gas fumes into the same collection systems provided to segregate the
two fume products. Yanque fume production will generally be about twice that of
Accha and as such blending will reduce the effective throughput of the plant. The
fume collection system sizing during design should consider an appropriate design
factor to implement this capability depending on the plant turn down that can be
accepted.
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Slag formation will take place in the last third of the rotary kiln process. The iron and
iron oxide will react with CaO, SiO2 and Al2O3 to form iron, calcium and aluminum
silicates, along with a small portion of zinc, lead, silver and arsenic forming inter-
metallic compounds with the slag. These materials have a high melting point and will
exit the kiln furnace at an average temperature of 850°C.
The three rotary kiln furnaces will produce on average 93 t/h of slag. The furnace slag
will also contain some un-reacted coarse anthracite. The process to recover un-
reacted anthracite coal proved to be uneconomical, therefore the process assumes
that the slag will be cooled in a slag sump and then a screw conveyor will be used to
transport the slag into a slag pile. This material will subsequently be transported to the
slag storage facility.
17.7 Fume Transportation to Refinery
Fume production will be stored in two silos of 700 m3 and 900 m3 capacity. From
there, it will be discharged to hopper trucks of 30 t capacity for transportation. The
truck will transport fume from the pyrometallurgical facilities to the coastal refinery
facilities with will be located close to the port of Ilo, 710 km from the mine site. Trucks
will back-haul coal to the pyrometallurgical facility.
17.8 Fume Dehalogenation
Fume transported to the coastal refinery will be discharged from the truck to a
1,500 m3 underground silo. The silo will be discharged by a screw feeder into a rotary
valve airlock and pipeline. Fume will be stored into a 700 m3 silo before entering the
dehalogenation process.
Fume produced by the Waelz process will have a high chlorine and fluorine content
which must be removed. Dehalogenation will be achieved using an alkaline wash
stage at 50°C prior to processing the fume by acid leach digestion.
The alkaline wash will be done at 10°C by the addition of sodium carbonate to three
170 m3 process tanks heated by direct steam injection. The processed pulp will be
discharged to a 16 m diameter thickener. The thickener overflow solution with most of
the halide ions will be directed to a 80 m3 holding tank before being sent to an
industrial water treatment plant, while the dehalogenated fume slurry underflow will be
dewatered and washed on a belt filter. The filter discharge cake (16.1 t/h) will be
reslurried and pumped to a neutral leach stage.
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17.9 Neutral and Acid Leaching Fume
The current design calls for four 90 m3 neutral leach reactor tanks in series. Spent
electrolyte with a free acidity of about 165 g/L from the tank house will be used as
leach solution. Zinc oxide will dissolve forming a soluble zinc sulphate; lead oxide will
be converted to an insoluble lead sulphate residue.
Neutral leaching will be a continuous process with a reaction time of two hours. Each
tank will be constructed with lined FRP/PP tanks equipped with a mechanical agitator.
A process average temperature of 55°C is achieved by direct injection of steam to
each tank. Zinc oxides and other impurity elements in the dehalogenated fume will be
dissolved continuously in the four tanks. During the neutral leaching reaction the pH of
the solution will increase from 0.5 in the first tank to 4.0 in the last tank.
According to the chemical analysis of the pilot tests, the fume will contain iron with
grades between 0.3% and 0.7%. Some of this iron will dissolve during neutral
leaching, and it will be necessary to add an oxidant such as pyrolusite (MnO2), to
convert ferrous sulphate to ferric sulphate, and then hydrolyze the ferric iron to iron
hydroxide - Fe(OH)3. This will occur at a pH >2.6. The iron hydroxide precipitated will
also allow the absorption of other impurities such as arsenic and antimony. The
pyrolusite used should have a minimum grade of 70% MnO2. Zinc extraction in neutral
leaching is estimated to be >99.5% and lead deportment to the leach residue will be
about 97%.
The discharge pulp from the fourth neutral leach tank will flow to a 16 m diameter
thickener. The overflow from this thickener will be an impure zinc sulphate solution
with a content of 125 g/L of zinc and ≤0.5 mg/L of iron. This solution will be sent to
cold purification. The underflow from neutral thickener will be fed to a belt filter of 20
t/h filter capacity. The neutral leach residue will mainly be lead sulphate with a minor
zinc content.
Once a pH of 4 is reached, the pulp will be discharged to a 80 m3 head tank. It will

then be pumped to two filter presses of 420 m2 filtering area each. During filtration a
lead residue will be obtained with an average Pb content of about 51% and moisture of
10-15%.
The leaching process, residue production, as well as the purification and gypsum
residues, will cause a loss of sulphate in the refinery. This loss of sulphate will be
replaced with the addition of fresh sulphuric acid. It is estimated that the addition of
sulphuric acid will be 12 t/d. A 350 m3 tank will store sulphuric acid (98.5%).
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17.10 Cold and Hot Purification of Zinc Sulphate Solutions
The impure zinc sulphate solution produced in the neutral leach stage will be pumped
to the purification plant, and stored in a 50 m3 holding tank. The first purification stage
(cold purification) will consist of three tanks 90 m3 in series. Each tank will be
constructed of lined fibreglass reinforced plastic/polyethylene piping (FRP/PP)
equipped with a mechanical agitator and forced draft extraction to remove vapours and
gases (H2) that are formed inside.
The impure zinc sulphate solution will contain impurities such as cadmium, arsenic and
antimony and will be treated by a cementation with zinc dust to remove the impurities.
The zinc dust will be added as slurry. Cold purification will be conducted at 55°C for
3–3.5 hours. The final solution will have cadmium, arsenic and antimony grades less
than 0.5, 0.02, and 0.015 mg/L respectively. The cold purified solution will be pumped
to two filter presses of 100 m2 filter area.
Test work indicated that dehalogenated fumes have levels of cobalt and nickel that will
also report to the impure zinc sulphate solution. A hot purification stage will be
included to remove these impurities. Filtered solution from cold purification will be
directed to a head tank and pumped to two spiral heat exchangers. The temperature
will be increased from 55 to 90°C. The heated solution will feed a hot purification step
consisting of two 90 m3 mechanical agitation tanks arranged in series. The tanks will
be constructed of lined FRP/PP equipped with mechanical agitators and forced draft
extraction will be provided to remove vapours and gases that are formed inside.
Zinc dust will be added as the precipitating agent to the first and second hot
purification process tanks as well antimony trioxide. After 1–1.6 hours, a final pure
solution will be obtained with concentrations of <0.1 mg/L cobalt and nickel.
The solution from the hot purification step will be pumped to two filter presses of 75 m2
capacity. Each filter will operate alternately to allow continuous discharge of a Co-Ni
residue.
The Co-Ni residue will consist of 45 to 55% Zn, 0.07% of cobalt and 0.3% nickel, and
will be disposed of in lined waste storage ponds on site.
Filtered solution from the hot purification filters will be directed to four 90 m3 tanks in
series for the polishing purification stage. Zinc powder will also be added to this phase
as the precipitating agent to the first two tanks at a rate of 2.3 g/L of pure solution. The
tanks will be constructed of lined FRP/PP equipped with mechanical agitators. The
tanks’ temperature will be 80°C. The polishing purification solution will be pumped to
two filter presses of 75 m3 capacity.
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The filtered and purified zinc sulphate solution will be stored in an 80 m3 tank. The
solution will contain about 123 g/L of zinc sulphate at 75°C. From the storage tank it
will be pumped to two cooling towers with a counter flow cooling system of forced air to
reduce the temperature to 40°C. The cooling tower discharge will be directed to a
gypsum thickener. The gypsum thickener overflow will be sent to five 120 m3 pure
solution storage tanks adjacent to the electrowinning tank house, and the thickener
underflow will be pumped to an 800 m3 waste storage pond.
The cold purification residue will still contain relatively important economic quantities of
recoverable zinc. In order to minimize refinery zinc losses and maintain recovery at
90%, the cold purification residue will be re-leached in spent electrolyte to recover
these zinc values. Leaching will be done at ambient temperatures on a batch basis, in
three 50 m3 lined FRP/PP tanks, equipped with a mechanical agitator and forced air
extraction to remove vapours. Re-leaching will be done for about three hours. The
objective is to re-dissolve zinc but not other impurities such as cadmium the
concentration of which in solution should not exceed 1 g/L. The leached slurry will be
dewatered in two filter presses (75 m2 each). The zinc sulphate filtrate solution
containing about 80-100 g/L Zn will be recycled to the neutral leach stage and the filter
residue will be discharged and stored in a waste pond on site.
17.11 Electrowinning
The electrowinning plant will operate with an availability of 97%, 365 days/year, which
will consist of 1,517 h/a peak hours and 6,980 h/a non-peak hours.
Purified high-grade zinc sulphate solution will be pumped from a storage tank and
mixed with cooled spent electrolyte at a ratio of about 1:15. The electrowinning plant
will consist of 80 polymer concrete electrolytic cells (L: 5.5 m, W: 1.35 m, H: 2.62 m)
with protective vinyl liners. The cells will be arranged in two blocks of 40 cells in
series. Each cell will have 56 cathodes and 57 anodes. The aluminum cathodes will
have an effective deposition area of 3.6 m2 (L: 1.96 m, W: 1.03 m) manufactured in
aluminum. The anodes will be manufactured from an alloy of lead with 0.5% of silver
(L: 1.939 m, W: 0.973 m).
The electrowinning cells will require two 18 MW rectifiers, capable of producing

amperage of 33,000 amperes in off-peak hours and 108,000 amperes during in-peak
hours. It is estimated that cathode current density in the cathodes during off-peak
times will be 540 A/m2. Cell stripping will be done daily alternating on each cell block
every 48 hours. Two automatic stripping machines will be provided. The estimated
stripping time is 5 h/d.
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The cell voltage will be about 3.4 for new anodes and will increase to 4.0 volts as the
anodes age. The assumption is that two cells will be cleaned up every day
(114 anodes) and the cleaning time will be about 1.6 hours.
The electrowinning of zinc sulphate solution is an exothermic process. This increases

the cell temperature from 30 to 36°C and the electrolyte must be cooled before
returning to the cells. Five forced air cooling towers will be provided.
Zinc electrowinning requires additives to maintain good current efficiency, improve

electrolyte conductivity, and manage impurities to achieve a Special High Grade
refined zinc grade. Additives include: bone glue, sodium silicate (at the rate of 234
kg/d), and barium hydroxide (128 kg/d). An electrowinning current efficiency in the
electrolysis of 91.5% and power consumption of 1,500 kW/t Zn cathode is assumed for
operating expenditure.
About 1,300 t/a (2.5%) of the cathode produced in the electrowinning plant will be sent
to a zinc powder production plant for use in solution purification. A 180 kW induction
furnace will melt zinc plates. The melted zinc will be atomized, collected in a cooling
chamber and classified into two sizes (75 µm and 200 µm) for use in the hot
purification and cold purification process stages respectively.
17.12 Zinc Melting and Casting
Cathodes will be loaded to a 800 kW electric induction furnace with a melting capacity
of 15 t/h at 510°C. Ammonium chloride (0.5−0.7 kg/t Zn) will be added to the melt
charge. Melted zinc will be pumped from the induction furnace to an ingot casting
wheel by a graphite pump. The casting wheel will operate continuously and produce
ingots of 25 kg each. The moulding line will operate at 510°C at a production capacity
of 8 t/h. The refined zinc quality will be Special High Grade (SHG) 99.99%.
17.13 Process Development – Fume Case
The process developed for the Fume Case is fundamentally the same as the Base
Case (Figure 17-2) except for two differences:
 The hydrometallurgical metal production restriction is removed. The production

limit was based on maximum production capacity of the kilns.
 Dehalogenation (alkaline leach) will be done at the pyrometallurgical plant
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Figure 17-2: Simplified Proposed Process Flow Sheet for the AZOD Project – Fume
Case
CRUSHING AND MIXING & WAELZ COOLING AND

CLASSIFICATION PELLETIZATION PROCESS STORAGE OF
FUME
FUME
TRANSPORT
TO REFINERY
(Coast)
FUME FILTRATION & ALKALINE FUME

DEHALOGENATED TRANSPORT LEACHING DISCHARGE &
FOR SALE FOR SALE (Dehalogenation STORAGE
)
In the case of the Base Case pyrometallurgical plant, water consumption is

300,000 m3/year. In the Fume Case, dehalogenation will be carried out at the the
pyrometallurgical plant. This will require an additional 56,940 m3/year of make up
water over that required by the Base Case. With current water availability information
(section 18), there is sufficient water in the AZOD area to meet this extra demand.
Fume will be transported directly to the port at Ilo/Matarani for export.
A summary of the major process design criteria is provided in Table 17-3.
Table 17-3: Major Process Design Criteria Summary – Fume Case

Pyrometallurgy
Annual throughput - ore t/a 1,445,308
Annual operating days days 350
Daily throughput - ore t/d 4,129
Crushing Circuit availability per annum % 95
Fine ore storage capacity days 1
Size fine ore P100 mm 3
Kiln Rotary Quantity 3
Kiln Size, Length / Inner Diam. m 95 / 5
Kiln availability % 98
Gas Cooling / Bag house Lines 3
Anthracite Ratio, Accha / Yanque kg Anthracite / kg Zn content 2.7 / 2.3
Temperature °C 1,050
Binder (Zn Sulphate) No
Residence time h 5
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Fume production t/d 393
Fume Quality, Blend: (Zn+Pb) % 71.4
Fume Quality, Blend: (ZnO+PbO) % 84.5
Recovery in fume, Zn & Pb % 91.8 / 97.6
Slag production t/d 2,073
Dehalogenation-Feed rate t/h 18
Dehalogenation, pH pH -10.5
Dehalog. Residence time h 2.9
Average Fume production t/a 55,526
Average Lead Residue production (by-product) t/a 32,965
Overall zinc recovery % 92
Overall lead recovery % 97.6
17.14 Process Consumables
17.14.1 Process Water Requirement
Water requirements for mine operation, the pyrometallurgical plant, the mine camp and
the mine offices have been estimated at 300,000 m3/a. Water requirements for the
hydrometallurgical plant (fresh and potable water) has been estimated at
686,000 m3/a. Water supply details are discussed in Section 18.
17.14.2 Process Power Requirement
The average annual power consumption for the pyrometallurgical plant is estimated at
39 MW/a while the power consumption at the hydrometallurgical plant is estimated at
208 MW/a. The high power consumption for the hydrometallurgical plant is mainly to
supply the electrolytic process.
17.14.3 Pyrometallurgical Anthracite Consumption
Anthracite consumption for the Base Case is estimated to be 227,842 t/a, which is
slightly higher than that of the Fume Case, which is 225,825 t/a.
The anthracite consumption estimates in the PFS are based on an anthracite/zinc ratio
in the kiln feed of 2.7 and 2.3 for Accha and Yanque respectively, and have been
determined by test work. Subsequent bench-scale pyrometallurgical additive test work
suggested that the addition of 10% dolomite to the Yanque material could reduce the
anthracite ratio by improving the kiln charge qualities.
In the AZOD PFS the supply of anthracite (80%-85% carbon) is based on data
received from Materias Primas Andinas S.A.C (Andinas), an established Peruvian non-
metallic mineral distributor.
Project No.: 170848

Anthracite consumption costs are presented in Section 21.4.3.2.
17.14.4 NaC03 – Base Case and Fume Case
An average consumption of 9,885 t/a of sodium carbonate for the Base and Fume
Cases respectively will be needed for the dehalogenation process.
17.14.5 Dolomite – Base Case and Fume Case
Dolomite requirements average 101,677 t/a and 110,142 t/a for the Base and Fume
Case respectively. Only ore from the Yanque pit will need to be blended with dolomite
(10% feed) as an additive.
Dolomite consumption costs are presented in section 21.4.3.4
17.14.6 Sulphuric Acid – Base Case
Sulphuric acid consumption was determined from the mass balance and Metallicon
model. A gross acid fume digestion consumption of about 8,525 t/a is required for the
entire process. However, most of this consumption will be regenerated in the
electrowinning plant and consequently there will only be a net make-up acid
requirement for losses primarily associated with the production and sale of by-product
lead sulphate, as well as other much more minor volumes of purification residues
disposed of in residue storage ponds at the refinery site. The net acid consumption is
estimated to be about 67 kg/t fume.
Sulphuric acid consumption ratios and costs are detailed in section 21.4.14.
In the opinion of the QPs, test work indicates that the Base Case and Fume Case
process flow sheets are viable options for recovering zinc and lead from the Accha and
Yanque deposits. The conceptual-level process design discussed in Section 17
adequately defines the Project flow sheets, process equipment, operation, and water,
power and anthracite consumption for use in the AZOD PFS and support the Mineral
Reserve estimates.
Project No.: 170848

18.0 PROJECT INFRASTRUCTURE
18.1 Proposed Mine Access
The main access road to the Project area is a graded, gravel, government-maintained
regional highway. The condition of this road is excellent, and it is currently being
further upgraded to support development of the third-party owned Las Bambas Project.
The road has an average width of 11.5 m.
Of the 60 km haul distance from Accha and Yanque, 30 km of the proposed haul road
will use the government-maintained public-access road. The remaining 30 km, which
runs through private land, will require upgrade and widening. About 20 km of this
remainder is currently maintained by Zincore and the Parcco Community. The road is
flat and currently about 5 m in width. The remaining 10 km consists of a single lane,
dirt road, which winds round the side of the mountain until it reaches the Yanque
deposit. This road will require upgrading to a 12 m width to meet haul road standards
for mine roads with high traffic requirements.
At this stage of Project development, no detailed studies have been undertaken to

determine the nature and type of surface land ownership in the areas proposed for the
road corridors.
It is envisaged that the haul road will be the principal means of transport of personnel,
supplies, reagents and other consumables to each planned mine site, and will be used
on a daily basis to transport ore from the Accha mine to the pyrometallurgical plant at
Yanque.
Figure 18-1 shows the sections of the AZOD area access road.
The proposed location for the hydrometallurgical plant near the coastal city of Ilo can
be reached using the Inter-Oceanic Highway that links all of the major coastal cities in
Peru. Figure 18-2 shows the location of the proposed refinery with respect to the
highway, city of Ilo, and the Ilo Port.
Project No.: 170848

Figure 18-1: AZOD Area Main Access
Note: map north is to top of plan. Grid squares are approximately 10 km x 10 km
Project No.: 170848

Figure 18-2: Hydrometallurgical Plant Access
Note: Grid squares are 5 km x 5 km.
Project No.: 170848

18.2 Waste Rock Storage Facilities
The Accha open pit will generate 4.1 Mt of waste material under the Base Case and
4.2 Mt of waste under the Fume Case. Approximately 285 km3 and 200 km3 will be
used as fill material for the underground mine in both the Base Case and Fume Case
respectively, swell volume in Accha is 1.8 Mm3 and 2.0 Mm3 for Base Case and Fume
Case respectively. Limestone rock will form 79% of the waste material in the Base
Case and 76% for the Fume Case. The remaining waste will consist of reef and Coral
Zone rock types. All of this material will be dumped on the Accha WRD, with a
maximum staking rate of 3,500 t/d. The underground mine at Accha is projected to
generate 190 kt of waste; 70 kt will be used as underground backfill and 120 kt will be
deposited in the Accha WRD.
The Yanque open pit will generate 11.3 Mt of waste material for the Base Case and
13.2 Mt of waste for the Fume Case, corresponding to a swell volume of 5.9 Mm3 and
6.9 Mm3, respectively. The breccia rock type will form 60% of the waste material in the
Base Case and 65% for the Fume Case. Dioritic material will account for 36% and
30%, respectively, and the remnant waste will correspond to sediment rock type. All of
this material will be dumped on the Yanque waste deposit, with a maximum staking
rate of 6,200 t/d.
For the PFS, AMEC completed a field investigation to help support preparation
geotechnical design criteria for the WRFs at Accha and Yanque sites. This included
geotechnical logging of exploration drill core, geotechnical core holes, installation of
piezometers, laboratory testing, test pits, excavations, geological modeling, and review
of existing information.
The proposed Accha waste dump is located southwest of the planned Accha pit
(Figure 18-3). Foundation soils in this area consist of glacier deposits about 10 m
deep, which is underlain by geotechnically “bad” to “good” quality siltstone of to the
depth extent of the geotechnical exploration at 30 m.
Project No.: 170848

Figure 18-3: Proposed Accha WRD Location
2
Note: Scale = 200 x 100 m grid
The Yanque waste dump will have a designed capacity to store 41.4 Mt of waste for a
total volume of 18.3 Mm3 and the location is shown in Figure 18-4. Foundation soils in
this area also consist of glacier deposits that are about 1.5 m deep, which are
underlain by volcanic tuff to depths of 3.5 to 7 m, and which in turn are underlain by
“poor” to “good” quality sandstone or siltstone to the depth extent of geotechnical
exploration at 30 m.
Figure 18-4: Yanque Waste Dump Location Options
2
Note: Scale = 200 x 100 m grid
Project No.: 170848

A structural and stability study was carried out, and the design parameters are shown
in Table 18-1.
Table 18-1: Waste Dumps Design Parameters

Parameters Unit Value Comments
Swell (%) 30
Average Swell Density (t/m3) 1.95 – 1.92 Accha – Yanque, respectively
Lift Height (m) 10
Maximum Dump Height (m) 150
Face Angle 1.5H:1V ~ 33.7°
Overall Slope Angle 2.5H:1V ~ 21.8°
Berm Width (m) 10
The minimum safety factors required to meet the static and pseudo-static conditions
were 1.3, and 1.0, respectively. These were based on recommendations contained in
MEM (1998) and BC MWRPRC (1991). Stability analyses were conducted by the
Spencer method, which satisfies the condition of equilibrium for both force and
moment. The piezometric surfaces in the analyses, when defined, were based on the
observed field records and conservative assumptions. A seismic coefficient value of
0.18 was used in the pseudo-static analysis, which is half of the peak ground
acceleration. The peak ground acceleration was obtained from local published maps
for a 10% probability of exceedance in a 50-year return period (Gamarra and Aguilar,
2009). Based on the proposed design configurations, the minimum factors of safety
for static and pseudo-static conditions were 1.9 and 1.2, respectively.
18.2.1 Slag Storage Facility Design Criteria
Slag waste coming from the pyrometallurgical plant is proposed to be deposited in the
vicinity of the plant within the Yanque area. The design criteria for the geometric
configuration of the slag storage facility are listed in Table 18-2.
Table 18-2: Design Criteria for Slag Storage Facility

Description Unit Criteria
3
Slag Unit Weight t/m 1.5
Global Slope V:H 1:2.8
Inter-ramp Slope V:H 1:1.8
Bench Height m 10.0
Bench Width m 10.0
Capacity TM 4.7
Volume Mm3 3.1
Project No.: 170848

Similar to the waste dump analyses, the minimum safety factors required to meet the
static and pseudo-static conditions were 1.3, and 1.0, respectively. The stability
analyses were also conducted by the Spencer method. Based on the proposed design
configuration, the minimum factors of safety for static and pseudo-static conditions
were 1.7 and 1.0, respectively.
18.3 Borrow Materials
Potential aggregate borrow sources were identified for the project. A literature review
of maps from INGEMMET (Geological, Mining, and Metallurgical Institute of Peru),
together with a geotechnical field surface reconnaissance of the area were the sources
of information to define the potential borrow locations. Six potential borrow areas
consisting of quartzite and limestone materials were identified within the proposed
road alignment.
18.4 Water Management
The mine plan is based on development of two mine sites, which are located in
different basins that have different geologic and geomorphologic regimes. Water
management strategies that are specific for each mine site were developed.
Based on information gathered from the subsurface exploration program in the vicinity
of the Yanque site, it is estimated that sufficient water from groundwater sources will
be available for all Project needs from the Yanque site. Pit dewatering will also be
required and is described in Section 16. Dewatering systems will supply water for the
processing plant and the camp requirements. It is anticipated that water softeners will
be required but overall quality will meet the plant water requirements with appropriate
treatment.
Based on the geochemical testing program, it is anticipated that contact water from the
Accha and Yanque pits and their respective waste dumps will be in the alkaline range.
It is expected that cadmium, lead and zinc in the case of Yanque will require treatment
due to potential concentrations greater than the local maximum permissible levels
(LMP). In the case of the slag storage facility, arsenic showed a potential to be
mobilized in concentrations greater than LMPs. These exceedance have been
assumed to be manageable with a combination of simple pond treatment system and a
mix with project water sources prior to discharging into the Santo Tomás River.
18.4.1 Water Balance
The water balance was developed on a monthly basis for the proposed mining
operations considering an average dry year and an average wet year. The inflows and
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outflows of the mining components and main facilities were quantified, and the
availability of water supply for the process plant and other facilities were identified.
The integrated water balance consisted of a deterministic approximation approach

implemented using spreadsheets and was developed for each of the Yanque and
Accha areas. The deterministic model included the water circulation process for each
component. Subsequently, the inflows and outflows from these units were integrated
in a global system. The average wet and dry climate scenarios were obtained
combining stochastic and deterministic methods from two meteorological stations
location close to the project. A 48-year data base (1964–2011) was used in this
calculation. The water balance was evaluated for the most critical scenario, in this
case, the last year of mining operations.
Table 18-3 summarizes the water balance considerations.
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Table 18-3: AZOD Area – Water Consumption

Average year
Description Units
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
INFLOWS
Pump water from the
m3 123,206 111,283 123,206 119,232 123,206 119,232 123,206 123,206 119,232 123,206 119,232 123,206
boreholes
3
m 123,206 111,283 123,206 119,232 123,206 119,232 123,206 123,206 119,232 123,206 119,232 123,206
Total Inflows
L/s 46 46 46 46 46 46 46 46 46 46 46 46
OUTFLOWS
Pyro Plant (process water) m3 80,352 72,576 80,352 77,760 80,352 77,760 80,352 80,352 77,760 80,352 77,760 80,352
Mechanical m3 2,232 2,016 2,232 2,160 2,232 2,160 2,232 2,232 2,160 2,232 2,160 2,232
Pit Yanque labours m3 402 363 402 389 402 389 402 402 389 402 389 402
Backwater m3 8,928 8,064 8,928 8,640 8,928 8,640 8,928 8,928 8,640 8,928 8,640 8,928
Pyro Plant (human
m3 227 205 227 220 227 220 227 227 220 227 220 227
consumption)
3
Camp m 2558 2310 2558 2475 2558 2475 2558 2558 2475 2558 2475 2558
Accha Requirements m3 268 242 268 259 268 259 268 268 259 268 259 268
3
m 94,966 85,776 94,966 91,903 94,966 91,903 94,966 94,966 91,903 94,966 91,903 94,966
Total Outflows
L/s 35 35 35 35 35 35 35 35 35 35 35 35
3
NETFLOW = INFLOW - m 28,240 25,507 28,240 27,329 28,240 27,329 28,240 28,240 27,329 28,240 27,329 28,240
OUTFLOW L/s 11 11 11 11 11 11 11 11 11 11 11 11
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Yanque Site
The Yanque area hosts the proposed process plant and camp site, as well as the
Yanque open pit, WRD and the slag storage facility. Based on the available
information on hydrogeology, piezometers and/or surveys in the Yanque area, a
minimum of four vertical water wells were calculated for the supply of water for the
processing plant, camp, and associated facilities. These wells would contribute to the
dewatering of the Yanque pit.
Results from groundwater samples obtained from the observation wells installed
around the proposed Yanque pit, indicate the water is moderately hard, and as such
water softening is required prior to use in the process plant and for human
consumption. The water balance for the Yanque site is included as Figure 18-5.
The Yanque pit is situated on the drainage divide of four micro basins, and is expected
to have minimal run-off. Pit dewatering is expected to control any infiltration inflows.
Some evaporation will be expected from the lowest floor of the pit.
The contact water produced by runoff from the WRD will be diverted to a
sedimentation pond. The WRD is not expected to contribute significant volumes except
for direct rainfall, since diversion channels will be used to collect the non-contact water
produced by its drainage area.
Water that encounters the slag storage facility would be diverted to a sedimentation
pond, and any non-contact water upstream of the facility would be diverted round the
facility to natural watercourses.
The planned sedimentation pond will capture water coming from the process plant,
contact water from the pit, WRD, and slag storage facility, and, to a lesser extent,
direct precipitation. Losses include evaporation. Water coming out of the
sedimentation pond will be diverted to natural watercourses. A discussion of potential
treatment requirements that may be required prior to any such discharge is included in
Section 18.4.2.
Project No.: 170848

Figure 18-5: Flow Chart for Yanque Mining Unit
Project No.: 170848

Accha Site
There are two key facilities initially planned at Accha, the open pit and the WRD. In
the third year of operations, the underground mine will also be operational.
Limited hydrogeological information at the elevations of the proposed underground

mine is available. The assumption for the PFS is that it will be a relatively dry
underground operation and that water needs can be satisfied from surface water
sources and from dewatering of the Yanque pit. This assumption will require
subsurface exploration to fully understand the hydrogeological conditions in the area of
the proposed underground mine.
The water balance for the Accha site is included as Figure 18-6.
An average monthly consumption for the Accha site has been calculated at 268 m3
This requirement will be supplied by truck from the Yanque site.
The Accha pit falls within two microbasins and an interbasin. Runoff is expected to be
minimal and would be diverted to a downstream natural watercourse. No pumping is
planned, as based on the limited current information the water level will be below the
potential bottom level of the pit.
The WRD site is located within a microbasin. Contact water produced by run-off inside
this area will be diverted to a sedimentation pond. Non-contact water will be collected
through a series of diversion channels and diverted to natural watercourses.
Project No.: 170848

Figure 18-6: Flow Chart for Accha Mining Unit
The planned sedimentation pond will collect contact water accumulated in the pit
sump, capturing precipitation that falls directly into the pit and wall run-off. The
sedimentation pond will also collect contact water from the WRD. Precipitation falling
directly on the sedimentation pond will also contribute to the total incoming water.
Outflows include evaporation. The discharge from the sedimentation pond will be
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diverted to a natural watercourse. A discussion of potential treatment requirements

that may be required prior to any such discharge is included in Section 18.4.2.
18.4.2 Geochemistry and Water Quality
AMEC determined the preliminary geochemical characteristics of the mining waste

generated during the development of the pits (waste material) as well as the mineral
processing (slags). These materials will be exposed to the environment generating
contact waters that will be used in the process plant and will be flushed during the high
rainfall season into Santo Tomas River, with prior treatment if needed.
Based on the geochemical results and water balance data, a preliminary mass balance
was developed to identify constituents that may not meet maximum allowable limits
(LMP) and environmental quality standards (ECA). ECA measurement is performed
directly at the receiving bodies, while the LMP measurements are taken at emission
and discharge points. Both measures are indicators that help the local Ministry
establish environmental policies (ECA) and provide corrective actions (LMP).
The preliminary mass balance focused on the Yanque area, given that majority of the
infrastructure, including the proposed processing plant, camp, slag storage facility,
Yanque pit and WRD, and associated mine infrastructure would be located here, and
would potentially result in higher discharges and concentrations to surface water
bodies.
The results of the mass balance indicated that water from the WRDs could be
discharged to a sedimentation pond and eventually to the environment without
exceeding maximum allowable limits. Water coming from the slag storage facility, the
processing plant and the pit could potentially fail to meet either LMPs or ECAs for
barium, arsenic, cadmium, manganese, lead and zinc, if discharged without prior
treatment to one of the local creeks. However, it is anticipated that by the simple
addition of lime treatment to the sedimentation pond elements such as Cd, Pb, and Zn
could drop to meet the local discharge standards Further water characterization and
bench scale test work is required to determine if barium can be treated. Barium
concentrations may require a different and more advanced treatment. With the
proposed treatment there is a risk that the total suspended solids may overflow into the
local creeks which may cause exceedance for some ECA parameters.
18.5 AZOD Area Infrastructure
Location plans of the key infrastructure were included as Figure 5-1 and Figure 5-2.
Project No.: 170848

The operations and campsite that is planned to be located at the Yanque site is sized
for 356 personnel. The campsite area will be 4,000 m2 and will include male/female
workers dormitories, staff dormitories, management dormitories, administrative offices,
a medical centre, laundry area, change house, dining room/kitchen, recreational area,
potable/waste water treatment plants, an electrical generator and the mine access
gate.
Minimal facilities are planned for the Accha mine site. The 2,027 m2 facility will include
a medical centre, dining room/kitchen, mine warehouse and offices, and a main
access control gate.
18.5.1 Truck Shop Facility
The truck shop building planned for Yanque includes a storage area, five bays for
heavy vehicle maintenance, a wash bay, a light vehicle work with three bays, a
welding area, a tire repair area, offices for mining /warehouse personnel, and a mine
storage area.
18.5.2 Pyrometallurgical Plant
Infrastructure planned for the pyrometallurgical plant area includes an emergency

response building, medical centre, operations offices, dining room, warehouse/change
house, mechanical/electrical workshops, and an access control gate and truck scale
area.
18.6 Hydrometallurgical Plant Infrastructure
No camp is considered for the proposed refinery because of its proximity to the city of
Ilo. The proposed plant infrastructure includes offices, a medical centre, change
house, laboratory, dining room/kitchen, warehouse and a mechanical and electrical
workshop.
18.7 Electrical Power Supply
18.7.1 AZOD Area Power Supply
An annual power consumption of 39,700 MW has been estimated.
A 60 kV overhead line, approximately 73 km long, will be constructed to connect to the

existing 138 kV, 60 Hz, eastern national grid at Quencoro, where a complete and
dedicated 138/60 kV transformer and expansion bay at the current Quencoro
substation will be installed. Power transmission at 60 kV will consist of the following:
Project No.: 170848

 138/60 kV expansion bay at Quencoro Substation

 60kV transmission line approximately 73 km long,
 A transformer substation located at the pyrometallurgical plant site.
This power supply scheme will provide power to the mines, pyrometallurgical plant,
camps, and other site users from a three-phase 15 MVA transformer. This transformer
will supply power to the main 13.8 kV switchgear where power will be distributed to the
ore storage/pelletization, Pyrometallurgical plant, Fume Dispatch and reagents
handling areas; in addition to the crushing plant, camp, truckshop and overhead line to
the Accha site.
The proposed 60 km overhead 23 kV line to the Accha site will follow the haul road for
the best part of the route, however it will divert paths where possible in order to avoid
route fluctuations.
No studies on the transmission power line right of way requirements have been
performed. This will be done during the next phase of the project.
18.7.2 Hydrometallurgy Plant Power Supply
The hydrometallurgical plant will require the construction of a 220 kV overhead line,
approximately 0.5 km long, which will connect to the existing 220 kV, 60 Hz,
thermoelectrical power plant operated by EnerSur that is located next to the proposed
site for the hydrometallurgical plant. A complete and dedicated 220 kV expansion bay
at the current Ilo 2 substation will be installed. Power transmission at 220 kV will
consist of:
 A 220 kV expansion bay at the Ilo 2 Substation

 A 220 kV transmission line approximately 0.5 km long
 A transformer substation located at the hydrometallurgical plant.
This power supply scheme will provide power to the hydrometallurgical plant and
associated infrastructure from a three phase 220/13.8 kV 40 MVA transformer. An
annual power consumption of 208,158 MWh has been anticipated during operations.
18.8 Communications
The overhead power supply line will be installed with optical fibres (OPGW) from the
feeder substation.
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All communications and related services will be supported by a communications

infrastructure on an optical fibber network (backbone) over the main areas. This will be
accomplished using ring and star topologies which will integrate the plants, workshops,
mine operations and ancillary infrastructure.
The communication networks between areas will have to meet the needs of the
following areas: process control systems, access control, VoIP, Zincore’s Corporate
network, closed-circuit television (CCTV), radio network system, fire detection, security
(SCADA) system, Internet access, wireless communication and global position system
instrumentation requirements.
Remote location, such as offices in Lima, will be integrated into the communication
system by Microwave or satellite infrastructure according to the technical and
economic study to be performed during the next phase of the project.
18.9 Fuel
Diesel fuel for mining operations will be stored in two 700 m3 tanks located adjacent to
the truckshop and mining facilities. General fuel consumption ratios, as well as fuel
requirements for the pyrometallurgical process are discussed in section 21 of this
Report.
18.10 Water Supply
Fresh water for accommodation camp, mine and pyrometallurgical plant consumption
will be supplied from bore holes that will be situated around the Yanque pit. A single
pipeline will be required to transport freshwater, by gravity, to the main camp. Water
will be deposited into a 1,200 m3 tank, from where part of it will be treated in the
potable water plant with a design capacity of 52.5 m3/day and then pumped into a
120 m3 holding tank. The remaining fresh water will be used for process and it will be
pumped into a 1,000 m3 tank located at the pyrometallurgical plant.
Treated water will be used in the camp, services, laboratories, and eyewash/safety
showers at the pyrometallurgical plant.
Untreated water will be used for process water, fire protection system, dust
suppression, and truck washing stations.
Saline water will be supplied from an intake to a salt water pool located in the middle of
the hydrometallurgical plant platform. Water from this pool will be pumped to a
desalinization plant with a design capacity to treat 900 m3/day. Treated water will be
Project No.: 170848

pumped to different sections of the hydrometallurgical plant or sent to the potable

water plant that is designed to treat 12 m3/day.
18.11 Solid Waste Management
Three solid waste disposal alternatives were evaluated. Disposal of solid waste in situ,
through the construction and implementation of a landfill, disposal of all solid waste off
site through a contract with a solid waste management company (SWMC) and a mixed
scenario where the collection and commercialization of waste was handled through a
SWCC and the disposal of the non-marketable solid waste was carried out in situ,
through a landfill. The mixed scenario was selected as Project base case. It is
recommended that in future studies, a composting system be evaluated to treat
organic wastes from the camp site.
The infrastructure as proposed in this section is considered by the QPs to be

appropriate to support the envisaged PFS mine plan.
The access/haul road and transmission line route require further study in the next
phase of the Project. The haul road represents a significant capital expenditure and
the logistics of carrying out an upgrade while executing construction needs to be
further evaluated. A more detailed assessment of the shipping envelope at each
phase of the road upgrade should also be conducted.
Project No.: 170848

19.0 MARKET STUDIES
19.1 Metal Pricing
19.1.1 Forecast Metal Pricing
During the development of the study a number of authorities in the metals market
including Wood Mackenzie carried out reviews of the saleability of the potential Project
products. Included in these reviews were discussions with smelters and potential
purchasers of the products.
The Base Case has two principal products:
 Special High Grade (SHG) Zinc

 Lead Sulphate (PbSO4 ).
The Fume Case has one principal product:
 Zinc and Lead Oxide (Fume).
The Project demonstrates a high sensitivity to fluctuations in zinc and lead pricing.
This sensitivity is presented and discussed in Section 22. During the establishment of
the pricing for the Project, forecast pricing was obtained from a number of reputable
sources. While there is agreement amongst these sources that prices for these metals
will increase in the mid to long term, differences do exist between the price forecasts..
In order to establish a not overly-optimistic pricing model that takes into account
potential pricing volatility, project sensitivities to pricing fluctuations and the variances
in long-range pricing forecasts between reputable sources, an average price based on
Wood Mackenzie and World Bank Prices was established. A summary of the average
prices for zinc and lead respectively are presented in Figure 19-1 and Figure 19-2 from
Wood Mackenzie, World Bank, and an average calculated for the project using both
the World Bank and Wood Mackenzie prices. In each case, the average between the
World Bank and the Wood Mackenzie forecasts in Figure 19-1 and Figure 19-2 were
used for the financial model.
Project No.: 170848

Figure 19-1: Zinc Pricing Forecasts
Zinc Prices
1.8
1.7
1.6
1.5
Zinc
(US$/lb)1.4
1.3
1.2
1.1
1
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
YEAR
Zinc (World Bank) Zinc (Wood Mackenzie) Average Prices for Use
Figure 19-2: Lead Pricing Forecasts
Lead Prices
1.2
1.15
1.1
Pb
(US$/lb)
1.05
0.95
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
YEAR
Lead (World Bank) Lead (Wood Mac) Average Prices for Use
Note: Sources: World Bank (2013), Wood Mackenzie (2013); Wood Mackenzie pricing uses real 2012 dollars.
Project No.: 170848

19.1.2 Zinc Ingot
It has been assumed for the study that the zinc SHG ingots would be loaded in
containers and sold in Peru. These costs are included in the economic model and are
further discussed in Section 22. A zinc ingot premium was included at US$0.08/lb of
zinc to reflect increasing contract premiums in 2013, over those in 2012.
19.2 Product Specifications and Market Analysis
19.2.1 Lead Sulphate (PbS04)
Product Specification and Market
While lead sulphate residues are traded, overall the market is small and there are wide
variations in the quality, ranging from 15–20% Pb to 35–45% Pb. There are also wide
fluctuations in respect of contained elements such as Ag, S, Fe, Zn, SiO2, Cu, and
Al2O3 grades.
Zincore commissioned an independent review of lead sulphate specifications, the

results of which are presented in Table 19-1.
Table 19-1: Lead Sulphate Product Specification

Element Specification
Zn (%) 5.38761570
Mn (%) 0.01277650
Fe (%) 2.29593160
Co (%) 0.00001300
Ni (%) 0.00000000
Cu (%) 0.00000000
Cd (%) 0.00288840
Ca (%) 0.49694190
Mg (%) 0.28298120
Al (%) 3.41906240
Si (%) 5.29655300
Na (%) 0.00000000
Pb (%) 50.67703510
S (%) 3.15389870
F (%) 0.45440680
CL (%) 0.00000000
Project No.: 170848

C (%) 1.49044749
H2O (%) 10-15
Note: This table represents AMEC/Metallicon figures from the preliminary testwork that were supplied to third party
analysts for determination of marketing pursposes. It is representative of the anticipated Fume product.
In discussion with third parties and industry market specialists, deleterious elements
which could draw penalties were noted in to be likely to be contained in the lead
sulphate product, based on metallurgical pilot plant test work analyses. These include:
 F
 SiO2
 Hg
 Fe
 MgO
 Al.
Lead concentrates do not generally contain fluorine and therefore there are no
currently-established standard penalty terms. Penalty terms would likely follow those
established for Zn concentrate as follows:
 For fluorine levels above 300 ppm pay $2.0 for each 100 ppm increment of
contained fluorine.
Penalties for fluorine have not been included in financial analysis.
As the product has no silver content, it may be attractive to Chinese smelters as well
as secondary lead smelters. Chinese smelters incur a non-recoverable 17% value-
added tax (VAT) on imports and a negative arbitrage on quoted silver, making low
silver concentrates attractive in China. However, outside of China, only 16% of lead
concentrates contain no payable silver. Zincore would compete directly against these
concentrates. At Zincore’s direction, AMEC has assumed that customers for the lead
sulphate product would come from China, and has included shipping costs as such in
the financial model.
One Peruvian refiner was contacted to find out if there would be interest locally. In
response it was confirmed that in the future the purchase of lead sulphate could be of
interest but that the current plant configuration did not allow for the lead sulphate to be
easily incorporated as feed.
Project No.: 170848

Payability
Among the market professionals commissioned by Zincore, there was agreement that
the Project lead sulphate product would attract standard commercial terms for a bulk
lead concentrate. As stated by Wood Mackenzie a payability of 95% with minimum
deduction (MD) three units for payability at 95% can be expected.
Treatment Charges
Treatment charges for lead would also be based on standard lead concentrate
treatment charges. Wood Mackenzie forecast treatment charges on which the Project
treatment charges were established are presented in Table 19-2. An average
treatment charge of $284/t was used for financial analysis for lead sulphate.
Table 19-2: Lead Sulphate Treatment Charges

Year 2017 2018 2019 2020 2021 2022 2023 2024 2025
High ($/t) 291 285 319 304 309 305 310 306 310
Low ($/t) 251 245 279 264 269 265 270 266 270
Note: Data courtesy Wood Mackenzie 2013.
19.2.2 Zinc and Lead Fume Pricing
Product Specifications and Potential and Markets
The Project fume product would be a zinc and lead oxide product which would be
generated in the Waelz kiln located at the mine site. In the Base Case this product is
shipped to the port at Ilo where it is further refined into a zinc ingot or lead sulphate for
sale. The Fume Case is an alternate case that is based on the sale of the fume.
The likely product market is within China. China has specific limits on the following
elements: arsenic, cadmium and mercury in bulk concentrates. Specialists and
potential purchasers who reviewed the product specification were in agreement that
the fume production could be sold under bulk concentrate terms. Table 19-5 provides
the specifications likely from fume production from the Project.
The bulk concentrate market is small and contracts are agreed on an individual basis
over a wide variety of qualities. Consequently, as opposed to zinc concentrates, it is
more difficult to define a ‘benchmark’ contract value. It is now usual for bulk contract
terms to be agreed at the same level as the ‘benchmark’ zinc concentrate contract plus
a premium or discount ($15/t over the last five years for certain qualities of bulk
concentrate).
Project No.: 170848

Table 19-3: Fume Product Composition

Accha + Yanque Accha Yanque
Fume Dry-Solids %(m/m)
Zn (%) 48.96920 65.50429 42.14855
Pb 22.79390 6.49171 29.51844
Mn (%) 0.03746 0.03746 0.03746
Fe (%) 0.67331 0.67331 0.67331
Co (%) 0.00008 0.00008 0.00008
Ni (%) 0.00008 0.00008 0.00008
Cu (%) 0.00015 0.00015 0.00015
Cd (%) 0.08470 0.08470 0.08470
Ca (%) 0.15615 0.15615 0.15615
Mg (%) 0.12157 0.12157 0.12157
Al (%) 1.01391 1.01391 1.01391
Si (%) 1.57036 1.57036 1.57036
K (%) 0.51953 0.51953 0.51953
O (%) 22.10938 22.10938 22.10938
F (%) 0.09537 0.09537 0.09537
CL (%) 0.00345 0.00345 0.00345
H2O (%) - Fume wet 15.00000 15.00000 15.00000
In discussion with third parties and specialists deleterious elements which could draw
penalties were noted in the Fume Case. These include:
 As above 0.05%: pay $1.50 for each increment of 0.1% As

 Sb above 0.05%: pay $1.50 for each increment of 0.1% Sb
 Bi above 0.05%: pay $1.50 for each increment of 0.1% Bi
 SiO2 above 2.5%: pay $2.00 for each increment of 1% SiO2
 Mn above 3%: pay $3.00 for each increment of 1% Mn
 Hg above 50 ppm: pay $5.00 for each increment of 10 ppm Hg
 Cu above 3%: pay $1.00 for each increment of 0.1% Cu.
For fluorine, penalty terms would likely follow those discussed for zinc concentrate.
 Fluorine above 300 ppm: pay $2.00 for each increment of 100 ppm F.
However, at this PFS level of Project assessment, no penalties were included in the
financial model.
Project No.: 170848

There are two process routes envisaged for the Project for zinc production from
concentrates, hydrometallurgical and pyrometallurgical. The hydrometallurgical or
electrolytic process will utilize roasting, leaching and electrowinning steps. The project
Base Case includes the leaching and electrowinning process steps in the refining
process. The pyrometallurgical route encompasses blast furnace (Imperial Smelting
Furnace; ISF), electrothermic and vertical retort smelting.
ISF smelters are distinguished from electrolytic/electrothermic smelters in that they are
able to process bulk concentrates, i.e. low-grade zinc concentrates with elevated lead
grades, which is how Zincore Fume Case product would be classified.
In 2002, there were 13 operational ISF smelters, after closures there are currently
eight operating smelters today with one of these scheduled to close in 2014. Seven
ISF smelters are located in South East Asia, as follows, and one is in Eastern Europe:
 China - Shaoguan (Lingnan)

 China - Baiyin
 China - Baoji Dongling
 China - Huludao
 India - Chanderiya
 Japan - Hachinohe
 Japan - Harima
 Poland - Miasteczko Slaskie.
Payability
The two key economic elements of the standard bulk concentrate contract are
payability and treatment charge (TC). Standard payment terms for Bulk Concentrate
are as follows:
 Zinc: 80% of the zinc content will be paid, subject to a 7% minimum deduction
 Lead: 95% of the lead content will be paid, subject to a 3% minimum deduction.
Treatment Charges
Forecast treatment charges for a bulk concentrate were based on Wood Mackenzie
prices and are presented in Table 19-6.
Project No.: 170848

Table 19-4: Wood Mackenzie Bulk Concentrate (Fume) Treatment Charges

2017 2018 2019 2020 2021 2022 2023 2024 2025
Fume TCs $/T (High) 421 393 362 321 304 301 298 303 300
Fume TCs $/T (Low) 391 363 332 291 274 271 268 273 270
Note: Figure courtesy Wood Mackenzie, 2013.
Low and high estimates by year were provided by Wood Mackenzie for use in financial
modelling. Due to the uncertainty associated with the sale of fume, an average of the
high estimate for treatment charges ($334/t) was used for financial analysis. The
treatment charge is higher than would be expected for a standard zinc sulphide
concentrate and the financial model treatment charges reflect that.
19.3 Contracts
The assumed level of payabilities for lead sulphate concentrate and zinc-– oxide
concentrate (fume) used in the PFS were derived from a market study conducted by
Wood Mackenzie and commissioned by Zincore; however, no buyers have been
directly approached by Zincore to confirm the assumed levels of payability nor do any
contracts exist for sale of the products.
The QPs have reviewed the information supplied by Zincore’s third-party marketing
and price forecasting experts, and based on these data, have concluded that:
 The average of World Bank and Wood Mackenzie pricing is acceptable for use in
the financial model. Wood Mackenzie holds the view that there is likely to be a
short-term increase in zinc pricing between 2016 and 2020, such an increase
would significantly enhance Project economics
 No formal market entry studies have been conducted. Wood Mackenzie
completed a review of the likely markets for Project product, using product
specifications sourced from test work on Project samples; this review indicated that
there are potential buyers for the zinc ingots, lead sulphate and fume production.
The assumed level of payabilities for lead sulphate concentrate and zinc- lead
oxide concentrate (Fume) used in the PFS were derived from market studies
conducted by Wood Mackenzie and commissioned by Zincore, however, no buyers
have been directly approached by Zincore to confirm the assumed levels of
payability. Lead sulphate concentrate and zinc-lead oxide concentrate (fume) are
not conventional products, and global markets for this material are small
 Reviews of the likely product makeup, based on the metallurgical test work,
suggests additional penalties could be incurred. This was not confirmed with any
Project No.: 170848

potential buyers, and there is currently no provision in the financial model for
contaminant penalties.
There are currently no contracts in place to market any future Project production.
Project No.: 170848

20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR

COMMUNITY IMPACT
20.1 Baseline Studies
20.1.1 Physical Baseline
The Accha deposit is located in the Velille River watershed which belongs to the
Apurimac River watershed, part of the Atlantic Ocean basin. The Velille River has
registered a monthly flow of 2,016 L/s during the dry season and 11,000 L/s during the
wet season. Results of the water quality monitoring indicate that water quality
generally meets the Peruvian national water quality standards. The only exception is
instances of iron in the Quebrada Señor de Mayo-Arroyo.
The Yanque deposit is located in the Santo Tomás River sub-watershed, which is
located in the Apurimac River watershed which is part of the Atlantic Ocean basin.
AMEC performed a monitoring campaign for surface water streams in this area during
February 2013, which included sampling of two potential receptor water bodies for
effluent discharges: the Santo Tomas River and the informally named Quebrada Sin
Nombre.
Water quality in the Santo Tomas River meets the Peruvian national water quality
standards for all the parameters analysed. The water shows a neutral to slightly
alkaline pH, aerobic conditions with values of dissolved oxygen greater than 6 mg/L
and no exceedances of inorganic constituents (anions, cyanide), metals (such as Al,
As, Ba, Cd, Cu, Fe, Mn, Pb or Zn) or organic parameters (such as oils and greases,
phenols, detergents and chemical and biological oxygen demand).
Average flows in Santo Tomas River vary from 7 m3/s to 103 m3/s with annual average
of 43.5 m3/s; these values are approximate for the Project elevation and are based on
values reported in the SENAMHI study “Caracterización de la oferta hídrica superficial
–Cuencas Pampas, Apurimac y Urubamba” of 2010.
The Suyto Occo stream, a tributary of the Santo Tomás River has registered a monthly
flow of 0.16 L/s during the dry season. Results of the water quality monitoring indicate
that water quality generally meets the Peruvian national water quality standards.
Exceptions include instances of high iron, magnesium, pH, nitrites and low
concentrations of dissolute oxygen in streams.
The air quality results for the Accha and Yanque areas meet the Peruvian
environmental regulations for particles on the order of ~10 µm or less (PM10), SO2,
CO and NO2 concentrations.
Project No.: 170848

For the Accha district, noise levels recorded in the town of Titiminas were below
regulatory standards. No noise monitoring has been performed at Yanque.
20.1.2 Surface and Groundwater Quality
AMEC collected surface and groundwater samples provided baseline information

during two field campaigns. One was conducted in November 2012 and focused on
surface water (springs), whereas the second campaign was conducted during
December 2012, and focused on groundwater.
Surface and groundwater samples in the Accha area were all in the alkaline range
showing pHs ranging from 7.6 to 8.4. Water temperatures ranged from 9.7 to 17.5ºC.
Dissolved oxygen concentrations ranged from low to moderately high (2.8 to 7.4
mg/L). Sulphates were predominantly below the maximum permissible levels, except
for those water samples that were related to hydrothermal or deep aquifer sources
Surface waters range from moderately to very hard, whereas groundwater in Accha
was in general very hard.
Waters in the Yanque area ranged from slightly acidic to alkaline ranges (5.5–8.4).
Water temperatures ranged from 12.1 to 20.9°C. Dissolved oxygen concentrations
ranged from moderate to moderately high (5.0 to 7.4 mg/L). Sulphates also were
predominantly below the maximum permissible levels. Surface waters range from soft
to moderately hard, whereas groundwater ranged from soft to very hard.
20.1.3 Biological Baseline
Sixty-three plant species, grouped in 23 families, were identified in the Accha district.
The Azorella compacta and Polylepis species are categorized as near-threatened and
the Chuquiraga spinosa and Cantua buxifolia are categorized as vulnerable species
according to the Peruvian legislation.
A total of 59 plant species were identified in the Yanque area, grouped in four families.
The Cantua buxifolia and Chuquiraga spinosa species of flora are considered as near-
threatened and the Kageneckia lanceolata and Buddleja incana species are
endangered.
In the Accha district, 13 species of mammals and two species of reptiles were
identified. None of these species have vulnerable status listings. Twenty species of
birds, grouped in 16 families were observed. Five of these species are classified
under the CITES Annex II (species that are not necessarily now threatened with
extinction but that may become so): Buteo polyosoma, Geranoaetus melanoleucus,
Phalcoboenus megalopterus, Falco sparverius and Bubo virginianus.
Project No.: 170848

Twelve species of mammals have been identified in the Yanque area, Hippocamelus
antisensis is the only specie with the status of vulnerable. Twenty-five species of
birds, grouped in 15 families were identified in the area. Seven species of birds are
classified Under Annex II of CITES: Buteo polyosoma, Geranoaetus melanoleucus,
Phalcoboenus megalopterus, Falco sparverius, Bubo virginianus, Aratinga wagleri and
Bolborhynchus orbygnesius.
20.1.4 Socioeconomic Baseline
The Accha deposit is situated within the Paruro province, in Accha district whereas the
Yanque deposit is located within the Chumbivilcas province, in the Colquemarca
district. Both districts fall politically and administratively within the Cuzco region.
The planned Accha open pit and WRD fall within lands held by the Parcco Community.
The Yanque pit and associated infrastructure are within lands held by the Lacca
Lacca–Yanque–Parccobamba–(Gran Chico) Community. Refer to Figure 5-1 and
figure 5-2 for the locations of these communities.
20.1.5 Accha District
The Accha district has a population of 3,853 representing 12% of the total province
population. More than half of the population consists of males, and 40% of the
population are under 14 years of age. Migration is evident since the percentage of
population decreases as they population ages, with many migrating to Cusco or
Arequipa in search of job opportunities. The majority of the population learned
Quechua as their mother longue (91.2%).
Accha has 17 education centers, distributed between nursery, primary and secondary
levels. Nonetheless, the majority of the population (48%) has primary education as the
highest education level, while 23% of the population do not have any formal education.
The Accha district only has one MINSA Health Center, which belongs to the Paruro
Micro Red.
The main activities in the Accha district are agriculture and cattle raising (62%),
followed by hotels and restaurants (5.5%), public administration (5.2%), teaching
(2.6%) and other activities such as construction, mining, commerce, and
transportation. The main crops grown are corn, potatoes, beans, wheat, and ‘haba’.
20.1.6 Parrco Community
At the time the Parrco Community was recognized in 1972, it consisted of 229 families
who held an area of 7,439 ha situated between 3,500 and 4,500 masl. Parrco village
Project No.: 170848

is located on the right bank of the Parrco River, and hosts a school and community
offices. The current population is estimated at 260 inhabitants.
20.1.7 Colquemarca District
The Colquemarca district has a population of 8,656 inhabitants representing 11% of

the total population of the province. More than half the population is male, and 41% of
the population is under 14 years of age. As in the Accha district, migration is evident
in the 15-25 age groups.
Colquemarca has 29 education centers, distributed between nursery, primary and

secondary levels. The majority of the population (50%) has primary education as the
highest educational level, while 22% of the population does not have any formal
education.
The Colquemarca district has three MINSA Health Centers, one located in the district
capital, one in the Charamuray community and one in the Yanque community.
The main activities in the Calquemarca district are agriculture and cattle raising (76%),
followed by construction (5%), manufacturing industries (4%), and teaching (3.3%).
The main crops grown are corn, potatoes, wheat, ‘haba’, ‘olluco’, and ‘quinua’.
20.1.8 Lacca Lacca–Yanque–Parccobamba–(Gran Chico) Rural Community
When legally recognized, the rural community consisting of the Lacca-Lacca, Yanque,
Parcobamba (Gran Chico) villages consisted of 188 families holding 7,053 ha. The
Yanque village is situated at 3618 masl, and hosts schools, a health centre, and
community offices. The village population is about 357.
20.1.9 Considerations of Social and Community Impacts
Zincore has successfully negotiated community agreements that allowed the company
to carry out exploration activities at the Accha and Yanque deposits (see Section 4.9).
The Cusco Region and Chumbivilcas and Paruro districts, where the Project site is
located, already host operating large and medium mining projects and similar-size
projects under development. A review of conflict issues that have occurred in the
districts indicate that there is no radical opposition to mining per se. Opposition to
project development or operations has primarily been motivated by breach of
agreements, requests for additional expenditures for local development, environmental
pollution and refusal to allow artisanal mining presences in the region.
Project No.: 170848

It is expected that negotiations with the local communities will be on a timescale that is
appropriate to each community and to the infrastructure development contemplated in
the community holdings.
There is an expectation that some hamlets and isolated farmsteads may need to be
relocated to avoid mining impacts on the inhabitants. Such areas may include housing
or farming located within the expected blast zones of the open pits, or along the
proposed road and power line traverses. No formal identification of the number of
households that would be affected has been undertaken, and no surveys of the areas
of land that may be required have been completed. Resettlement will require
appropriate negotiation with affected parties and is likely to include some form of
compensation payments for land usage.
20.2 Current Environmental Liabilities
During applications for the Category II exploration permits for the Accha and Yanque
deposits, a survey was performed on the Accha 3, Accha 4, Jaguar 1 and Jaguar 2
concessions to evaluate whether major environmental liabilities were present. No
major such liabilities were noted (Coaquira (2011a) and Benavides (2011)).
Current environmental liabilities associated with the exploration programs consist of

the exploration camps, drill pads and drill pad access roads, and general project
access routes through private lands.
There is an expectation that there may be some minor environmental contamination

associated with the historic artisanal workings that have exploited surface
outcroppings for pottery.
Artisanal workings on the Dolores 2 concession are active, and there is an expectation
that there will be some environmental liabilities with the workings, including access
routes, temporary storage pads for material mined, the small tunnel excavations, and
storage areas for mining supplies such as for the jackleg drill.
In support of the Category II exploration permits for the Accha and Yanque deposits,
archaeological surveys were performed over the areas intended to have drill pad
construction. No archaeological remains were noted in these surveys (Colquira
(2011b) and Benavides (2011).
A full archaeological survey to encompass the areas planned as infrastructure sites

and along the road and power line traverses will need to be conducted. The Yanque
area has a colonial church which will need to be evaluated to assess any Project
impact on the cultural heritage.
Project No.: 170848

20.3 Closure Plan
Mining equipment will be removed and salvaged. Roads will be regraded to match the
original topography. Former foundations and infrastructure which is not needed for
post-mining land use will be demolished and either transported to old pits as backfill or
removed from the mining site. Pond liners will be removed and ponds backfilled and
revegetated.
Yanque open pit walls will be graded to slopes that meet static and pseudo-static
stable conditions. Water diversion channels will direct surface runoff away from the pit
and dewatering will cease to allow for the groundwater table to recover. Thus, water
will fill the pit and will contribute to the reestablishment of local groundwater conditions.
Based on the current geochemical information, the exposed rock will not be acid
generating. It is anticipated that some trace elements will leach under alkaline
conditions. Therefore, provisions for a passive water treatment on-site have been
considered.
Accha open pit walls will also be graded to stable conditions and surface water
managed for closure conditions. The Accha underground mine will be backfilled with
paste to increase stability during mining and closure activities. A concrete plug will be
built at the portal entrance and at vertical galleries to increase stability, prevent
hazardous conditions and mitigate surface water infiltration and seepage.
Closure of the waste dumps and slag deposit will include construction of a vegetative
soil cover system, implementation of water management controls, and re-vegetation of
disturbed areas. Waste deposits surfaces will be graded to meet long-term slope
stability conditions and promote drainage to areas designated by the closure surface
water management plan. A final cover system will be constructed over these deposits.
Hazardous waste will be removed from the site to a special waste receiving facility.
Water drainage courses will be formed for closure conditions and seepage from the
waste deposits will be monitored and treated if necessary to meet Peruvian water
quality standards.
Production, dewatering and monitoring wells will be properly abandoned to prevent

groundwater contamination. Post-closure monitoring of the revegetation and physical
and chemical stability of the site will also be conducted.
Provisional closure costs of US$10 M and a salvage value of US$5 M have been
estimated for the project. These estimates are based on benchmarking against similar
projects.
Project No.: 170848

20.4 Permitting
20.4.1 Exploration
Exploration and drill programs conducted to date at Yanque and Accha have been
performed under the relevant local and national permits (Benavides, 2011). No drilling
has occurred at either Accha or Yanque since September 2011.
Drilling on the Dolores prospect was initially conducted under a Category I permit, and
10 holes were drilled from 10 approved. A Category II permit was subsequently
granted, and seven holes have been drilled from the 335 drill holes that were approved
for the Dolores sector.
20.4.2 Development
Additional permits will be required for Project development. Key permits identified at
this stage of Project development that could impact either development or construction
timetables are included in Table 20-1.
Table 20-1: Licences and Permits Required for Development and Construction
Scope Regulatory Entity
I. General Environmental Legislation

Political Constitution of Peru, 1993 (Constitución Política del Perú de Several Government
1993) authorities
National Environmental Policy (D.S. No. 012-2009-MINAM) (Política
MINAM and other authorities
Nacional del Ambiente [D. S. No. 012-2009-MINAM])
General Environmental Law (Law No. 28611) as amended (Ley General
Several authorities
del Ambiente)
Basic Law for the Sustainable Utilisation of Natural Resources (Law No.
26821) (Ley Orgánica para el Aprovechamiento Sostenible de los Several authorities
Recursos Naturales).
Frame Law of the National Environmental Management System (Ley
Marco del Sistema Nacional de Gestión Ambiental) (Law No. 28245), as MINAM
amended and Regulation (D.S. No. 008-2005-PCM)
Law of the National System of Environmental Impact Assessment (Ley del
Sistema Nacional de Evaluación de Impacto Ambiental ) (Law No. 27446), MINAM and other authorities
as amended and Regulation (D.S. No. 019-2009-NINAM)
Law of the National System of Environmental Assessment and
Supervision (Ley del Sistema Nacional de Evaluación y Fiscalización
Ambiental)(Law No. 29325) and Supreme Decree No. 001-2010-MINAM
OEFA and several authorities
through which the commencement of the transfer process of supervision,
auditing and sanctions responsibilities in environmental matters from
OSINERGMIN to OEFA is approved.
Project No.: 170848


Cases in which the approval of the Environmental Impact Studies and
Environmental Adaptation and Management Programmes (Estudios de
Impacto Ambiental y Programas de Adecuación y Manejo Ambiental)
MINAG
require the technical opinion from INRENA (D.S. No. 056-97-PCM
modified by D. S. No. 061-97-PCM and in accordance with D. S. No. 031-
2008-AG)
Title XIII of the Criminal Code, Environmental Crimes (Título XIII del
Attorney General Office /
Código Penal, Delitos Ambientales) (Legislative Decree No. 635, as
Judiciary
amended by Law No. 29263)
Law demanding development and submission of contingency plans (Ley
que establece la obligación de elaborar y presentar planes de Several authorities
contingencia) (Law No. 28551)
II. Environmental Regulation, Mining Subsector
Consolidated Text of the General Mining Law (Texto Único Ordenado de
MINEM
la Ley General de Minería) (D. S. No. 014-92-EM), as amended
Regulation for Environmental Protection in Mining-Metal Activities
(Reglamento para la Protección Ambiental en la Actividad Minero – MINEM
Metalúrgica) (D.S. No. 016-93-EM) as amended
Mine Closure Legislation (Ley de Cierre de Minas) (Law No. 28090) and
regulations(D.S. No. 033-2005-EM amended by Supreme Decree No. MINEM
035-2006-EM and No. 045-2006-EM
III. Other Aspects Specifically Regulated in the Environmental Legislation Applicable to the Project
Citizenship Participation
Consolidated Text of Law No. 27806, Law of Transparency and Access to
Public Information (Texto Único Ordenado de la Ley No. 27806, Ley de
Several authorities
Transparencia y Acceso a la Información Pública) (D. S. No. 043-2003-
PCM), Regulation Supreme Decree No. 072-2003-PCM as amended
General Environmental Law (Ley General del Ambiente) (Law No. 28611) Several authorities
Regulation on Transparency, Access to Environmental Public Information
and Participation and Citizenship Consultation in Environmental Issues
(Reglamento sobre Transparencia, Acceso a la Información Pública Several authorities
Ambiental y Participación y Consulta Ciudadana en Asuntos Ambientales)
(D.S. No. 002-2009-MINAM)
Regulation on Citizens Participation in the Mining Subsector (Reglamento
de Participación Ciudadana en el Subsector Minero) (D. S. No. 028-2008- MINEM
EM)
Previous commitment to develop mining activities (D. S. No 042-2003-EM
MINEM
and amendment D. S. No. 052-2010-EM)
Standards regulating the Citizenship Participation Process in the Mining
Subsector (Normas que regulan el Proceso de Participación Ciudadana MINEM
en el Subsector Minero) (R.M. No. 304-2008-MEM/DM)
Law of Right to Previous Consultation to Indigenous and Native Peoples
(Ley del Derecho a la Consulta Previa a los Pueblos Indígenas u Ministry of Culture
Originarios), as acknowledged by Agreement 169 of the International
Labour Organisation (Law No. 29785) and regulation (D.S. No. 001-2012-
Project No.: 170848


MC)
Water Resources
Water Resources Law (Ley de Recursos Hídricos) (Law No. 29338) and
Regulation of the Law No. 29338, Law of Water Resources (Ley de ANA
Recursos Hídricos) (D.S. No. 001-2010-AG)
Environmental Quality Standards for Water (Estándares de Calidad
Ambiental para Agua) (D.S. No. 002-2008-MINAM) and Provisions for the
implementation of Environmental Quality Standards for Water [Spanish MINAM
acronym: ECA] (Disposiciones para la implementación de los Estándares
de Calidad Ambiental (ECA) para Agua ) (D.S. No. 023-2009-MINAM)
Approval of Maximum Allowed Limits for the Discharge of Liquid Waste in
MINEM - MINAM
Mining-Metal Activities are approved (D.S. No. 010-2010-MINAM)
Approval of Maximum Allowed Limits for Effluents from Domestic or
Municipal Waste Water Treatment Plants (D.S. No. 003-2010-MINAM) MINAM
Approval of Classification of Surface and Seaside Bodies of Water (R.J.

No. 202-2010-ANA) ANA
Approval of Proceedings Regulation for Granting Water Use Rights (R.J.

No. 579-2010-ANA) ANA
Declaration of national interest : water quality protection in natural sources

MINAG
and associated assets (D.S. No. 007-2010-AG)
Sets forth and regulates the process for the issuing of opinion by the
National Water Authority in the evaluation processes of environmental ANA
impact studies related to water resources (R.J. No. 106-2011-ANA)
Air and Noise
Air Environmental Quality Standard Regulation (D.S. No. 074-2001-PCM) MINAM
Maximum allowed levels of composed elements present in gaseous
MINEM
emissions coming from metal-mining units (R.M. No. 315-96-EM/VMM)
Air Quality Standards (Estándares de Calidad Ambiental para Aire ) (D.S.
MINAM
No. 003-2008-MINAM)
Noise Quality Standards Regulations (Reglamento de Estándares de
MINAM
Calidad Ambiental para Ruido ) (D. S. No. 085-2003-PCM)
Flora, Fauna and Biological Diversity
Forest and Wild Fauna Law (Ley Forestal y de Fauna Silvestre) (Law No. MINAG/Regional Government
27308), Regulation (D.S. No. 014-2001-AG) as amended Administration
Law concerning the conservation and sustainable utilisation of biological
diversity (Ley sobre la conservación y aprovechamiento sostenible de la
MINAM and other authorities
diversidad biológica) (Law No. 26839), Regulation (D. S. No. 068-2001-
PCM) as amended
Approves the classification of threatened wild fauna species and prohibits
hunting, catching, possession, transport or exportation for business MINAG
purposes (D.S. No. 034-2004-AG)
Approves the classification of threatened wild flora species (D. S. MINAG
Project No.: 170848


No. 043-2006-AG)
Protected Natural Areas
Law of Protected Natural Areas (Ley de Áreas Naturales Protegidas) (Law
SERNANP
No. 26834), Regulation (D. S. No. 038-2001-PCM) as amended
Access to Lands
Law of private investment in the development of economic activities in the
lands of the national territory lands and lands of peasant and native
communities (Ley de inversión privada en el desarrollo de las actividades
económicas en las tierras del territorio nacional y de comunidades Executive Power
campesinas y nativas) (Law No. 26505, legislation re-established by Law
No. 29376 and regulation (D.S. No. 011-97-AG, re-established by Law No.
29376).
Regulation of Land Classification according to its Capacity of High Use
(Reglamento de Clasificación de Tierras por su Capacidad de Uso Mayor) MINAG
(Supreme Decree no. 017-2009-AG)
Solid Waste and Transportation of Hazardous Material and Residues
General Solid Residues Law (Ley General de Residuos Sólidos) (Law No.
Several authorities
27314), Regulation (D. S. No. 057-2004-PCM) as amended
Law regulating transportation by land of hazardous materials and residues
(Ley que regula el transporte terrestre de materiales y residuos
Several authorities
peligrosos) (Law No. 28256), Regulation (D. S. No. 021-2008-MTC) as
amended
Radioactive Material
Law of Regulation of the Use of Ionising Radiation Sources (Ley de
Regulación del uso de fuentes de radiación ionizante) (Law No. 28028) MINEM
and its Regulation (D. S. N° 039-2008-EM)
Approval Resolution of Radiology Security Requirements in Industrial
Radiography (Resolución de Aprobación de los Requisitos de Seguridad
IPEN
Radiológica en Radiografía Industrial) (Presidential Resolution 147-09-
IPEN/PRES) as amended (Presidential Resolution 234-10-IPEN/PRES)
Concentrate Storage
Legislative decree regulating environmental mining of mineral concentrate
MINEM
storage deposits (D.L. 1048)
Environmental Liabilities
Law regulating Environmental Liabilities in mining activities (Ley que
regula los Pasivos Ambientales de la actividad minera) (Law No. 28271),
MINEM
Regulation (Supreme Decree No. 059-2005-EM) as amended (Legislative
Decree No. 1042 and regulation Supreme Decree No. 003-2009-EM)
Hydrocarbon Consumption
Regulation for the trading of liquid fuels and other hydrocarbon derivatives
(Reglamento para la Comercialización de Combustibles Líquidos y otros
productos derivados de los Hidrocarburos) (D.S. No. 045-2001-EM),
OSINERGMIN / MINEM
Security Regulation for Hydrocarbon Storage (Reglamento de Seguridad
para el Almacenamiento de Hidrocarburos) (D. S. No. 052-93-EM) as
amended
Project No.: 170848


Controlled Chemical Supplies
Law of Control of Audited Chemical Inputs and Products (Ley de control
de insumos químicos y productos fiscalizados) (Law No. 28305) and PCM/ PRODUCE
Regulation (D.S. No. 053-2005-PCM)
Occupational Health and Safety
General Health Law (Ley General de Salud) (Law No. 26842) as amended Several authorities
Occupational and Safety Health Law (Ley de Seguridad y Salud en el
MTPE
Trabajo) (Law No. 29783) and Regulation (D.S. No. 005-2012-TR)
Occupational Health and Safety Regulation and other complementary MINEM/
measures in Mining (D.S. No. 055-2010-EM) OSINERGMIN
Cultural Heritage
National Cultural Heritage Law (Ley General del Patrimonio Cultural de la
Ministry of Culture
Nación ) (Law No. 28296)
Title VIII, Crimes against Cultural Heritage (Título VIII, Delitos contra el
Patrimonio Cultural) (Legislative Decree No. 635, amended by Law No. Ministry of Culture
28567)
Archaeology Research Regulation (Reglamento de Investigaciones
Ministry of Culture
Arqueológicas) (Supreme Resolution No. 004-2000-ED)
Entity that sets deadlines for the development and approval of
archaeology evaluation projects and the Certification of Non-existence of
Ministry of Culture
Archaeological Remains (D. S. No. 004-2009-ED and D.S. No. 009-2009-
ED)
Entity that approves Guidelines for Special Processes for the
Implementation of Supreme Decree No. 009-2009-ED (Ministerial Ministry of Culture
Resolution No. 012-2010-MC)
Auditing
Law No. 29325- Law of the National System of Environmental Evaluation
and Auditing (Ley del Sistema Nacional de Evaluación y Fiscalización
Ambiental)
Law of the Supervising Entity of Investment in Energy and Mining (Ley del
Organismo Supervisor de Inversión en Energía y Minería) (Law No. OSINERGMIN
26734) as amended
General Regulation of the Supervising Entity of Investment in Energy
(Reglamento General del Organismo Supervisor de Inversión en Energía) OSINERGMIN
(D. S. No. 054-2001-PCM) as amended
Entity that approves the beginning of Supervision, Auditing and Sanction
Responsibilities Transfer Process in Environmental Matters from MINAM
OSINERGMIN to OEFA (D. S. No. 001-2010-MINAM)
Entity that approves subject-matter aspects of the environmental
supervision, auditing and sanction responsibilities transfer in mining
OEFA/ OSINERGMIN
matters between OSINERGMIN and OEFA (Executive Board Resolution
No. 003-2010-OEFA-CD.
Project No.: 170848


Regulation of the Administrative Procedure of the Environmental
Evaluation and Auditing Entity (Spanish acronym: OEFA) (Reglamento del
Procedimiento Administrativo Sancionador del Organismo de Evaluación OEFA
y Fiscalización Ambiental) (Executive Board Resolution No. 033-2011-
OEFA-CD)
CONSTRUCTION PERMITS
MINEM - PERMITS
Authorisation to Start Mining Activities (for Pre-Mining Const & Operation ) MINEM
Beneficiation Concession ( Authorisation to construct Process Plant ) MINEM
COM - Certification of Mining Operations ( Explosives Use) by Contractors MINEM
Mining Closure Plan - Submittal/Approval MINEM
Establish Guarantee Funds for Closure (related to Closure Costs) MINEM
ANA / AAA / ALA - PERMITS
Preliminary construction water usage authorization for earthworks ANA / AAA / ALA
Authorisation for Construction Water Usage ANA / AAA / ALA
Authorisation for Construction of minor Hydraulic Infrastructure (Ponds, TSF ANA / AAA / ALA
Dikes, bridges, culverts, etc )
Hydrogeological study Approval by ANA ANA / AAA / ALA
Authorisation for Pit Dewatering ANA / AAA / ALA
Discharge Effluents (from Run-off and/or Rains) to Environment ANA / AAA / ALA
MTC - PERMITS
Permit for Construction & Right of Way / Roads MTC
Permit for Extra-width/overloaded freight MTC
Private Telecommunications Authorisation - Telecom Antenna Erection MTC
DICSCAMEC - PERMITS
Permit for Magazines ( Explosives Storage ) DICSCAMEC
Permit for Explosives Use DICSCAMEC
Permit for Explosives Transportation DICSCAMEC
Permit for Explosives Handling DICSCAMEC
Overall Permit for Explosives Use DICSCAMEC
OSINERGMIN /DREM - PERMITS
TEMPORARY MOBILE FUEL STORAGE (to support construction) OSINERGMIN /DREM
Fuel Ancillaries Detailed Engineering Completion OSINERGMIN /DREM
Certification of Design (for Temporal Fuel Station) OSINERGMIN /DREM
Construction of temporary fuel Facilities OSINERGMIN /DREM
ITF - Approval of Constructed Facility (Fuel Storage & Dispatch) OSINERGMIN /DREM
Register of Direct Consumer (For Storage & Use) - OSINERGMIN OSINERGMIN /DREM
PERMANENT FUEL STATION
Fuel Ancillaries Detailed Engineering Completion OSINERGMIN /DREM
Project No.: 170848


Certification of Design (for Permanent Fuel Station) OSINERGMIN /DREM
Construction of fuel Facilities OSINERGMIN /DREM
ITF - Approval of Constructed Facility (Fuel Storage & Dispatch) OSINERGMIN /DREM
Register of Direct Consumer (For Storage & Use) - OSINERGMIN OSINERGMIN /DREM
MINSA - PERMITS
Permit for Kitchen / Dining Rooms operation - DIGESA DIGESA
Permit for Medical Unit Operation - MINSA MINSA
Domestic Sewage Treatment for Discharge into Environment (OTF) - ANA ANA
Drinking Water Treatment Plant - DIGESA DIGESA
Remote Location Septic Tanks - DIGESA DIGESA
Portable Toilets Residues - Pre-Treatment Plant - DIGESA DIGESA
DIRANDRO - PERMITS
Restricted Chemicals Transportation and Handling (IQPF ) during
DIRANDRO
Construction- DIRANDRO
PERMITS FOR OPERATION
MINEM - PERMITS
Benefitiation Concession Title - (to operate) MINEM
Electrical Concession Title - (for Power Transmission & Use) MINEM
OTHER ENTITIES - PERMITS
Permanent Permit for Diesel/Oil Storage and Use (Direct Consumer) Osinergmin
Authorisation for Effluents (from run-off and/or Rains) Discharge to
ALA & AAA
Environment
Authorisation for Industrial Effluent Discharge/Reuse DIGESA & ALA
Authorisation for Treated Domestic Sewage Discharge/Reuse DIGESA & ALA
Restricted Chemicals Transportation and Handling (IQPF) MININTER/DIRANDRO
Abbreviations
Ministry of Environment (MINAM)
Ministry of Mining and Energy (MINEM)
Ministry of Agriculture (MINAG)
Ministry of Production (PRODUCE)
Ministry of Work and Employment Promotion (MTP)
Environmental Evaluation and Auditing Entity (OEFA)
Energy and Mining Investment Supervising Entity (OSINERGMIN)
General Bureau of Environmental Health (DIGESA)
National Water Authority (ANA)
National Service of Protected Natural Areas (SERNANP)
Peruvian Nuclear Energy Institute (IPEN)
Project No.: 170848

 Zincore has sufficiently addressed the potential environmental impact of the

operation, and subsequent draft closure and remediation requirements at the pre-
feasibility stage of study that Mineral Resources and Mineral Reserves can be
declared, and that the proposed mine plan is achievable
 Additional work will be required on contact water discharge and treatment
requirements in support of a final closure plan
 Initial baseline studies have shown the presence of flora and fauna species that
may require the presence of specialist management plans
 Archaeological and additional baseline studies will be required in support of
operational permitting
 Zincore has shown that the company can successfully negotiate community
agreements in support of exploration activities; it is a reasonable expectation that
such agreement can continue to be negotiated in support of additional exploration
and drilling activities
 Community agreements in support of mine development and mining operations will
need to be negotiated
 As the communities are widespread, and there is a significant distance between
the planned developments at Accha and Yanque, it is likely that any environmental,
social and permitting activities will have different timings for each area
 Different approaches will be needed to ensure that the needs and expectations of
communities, single-family households and farmsteads are appropriately managed
during future social and permitting activities, as each will have different
requirements of Zincore
 There is an expectation that some hamlets and isolated farmsteads may need to
be relocated to avoid mining impacts on the inhabitants. Such areas may include
housing or farming located within the expected blast zones of the open pits, or
along the proposed road and power line traverses. No formal identification of the
number of households that would be affected has been undertaken, and no
surveys of the areas of land that may be required have been completed.
Resettlement will require appropriate negotiation with affected parties and is likely
to include some form of compensation payments for land usage. Delays in
agreement negotiation represent a risk to the proposed Project development
timeline
Project No.: 170848

 There are a significant number of permits required in support of Project

development and construction. Delays in acquiring any of the key permits
represent risks to the proposed Project development timeline
 There are no other currently known environmental, social or permitting risks to
estimation of Mineral Resources or Mineral Reserves that are not discussed in this
Report.
Project No.: 170848

21.0 CAPITAL AND OPERATING COSTS
Years discussed in this Section are for illustrative purposes only as a production
decision has not been made by Zincore’s board, and permitting in support of
operations has not been granted.
21.1 Capital Cost Estimates
The PFS capital cost estimate is considered to be a Class 4 estimate in accordance

with the Association for the Advancement of Cost Engineers (AACE) capital cost
estimate definitions. The accuracy of the capital cost estimate for this study, taking
into account the current state of design and procurement, is considered to be within
±20% of final project costs. The level of definition is in the range of 1% to 15% and
engineering completion is within a range of 1–5%.
The total initial capital cost for the Project considering an outsourced strategy of mining
operation is summarized in Table 21-1.
Capital costs for surface facilities include the detail design, furnishing and the
construction / installation of all structures, utilities, materials, and equipment as well as
all associated indirect and management costs. The capital costs include contractor
and engineering support for commissioning of the facilities to ensure all systems are
operational. At the point of handover of the plant to the operations group, all
operational cost including ramp-up to full production are considered operations cost.
Costs were estimated for both the Base Case and Fume Case. In the Fume Case the
dehalogenation circuit is incorporated into the Pyrometallurgical facilities at the mine
site.
Project No.: 170848

Table 21-1: Total Capital Cost Summary – US$ M

Base Case (US Fume Case (US
Description
$M) $M)
Mining Direct Costs
Pre-Strip and pioneering 10.9 10.9
Process Plant Direct Costs
Mine infrastructure 6.9 6.9
Site development 4.5 4.1
Pyrometallurgical process plant 69.5 80.5
Hydrometallurgical refinery 79.9 0.0
Site utilities 15.4 9.2
Ancillary building 13.9 7.5
Waste storage facilities 7.5 7.5
Off project boundary services 20.1 15.4
Sub-Total Direct Mining Costs 228.6 142.0
Indirect costs
Indirect capital 62.0 39.3
Owner’s cost 11.4 7.1
Contingency – plant (20% of plant direct costs) 43.5 26.2
Sub-Total Indirect Costs 116.9 72.5
Total Project Costs 345.5 214.5
(1) Mining equipment is considered to be part of the contractor supply and is included as part of the operational costs in
Section 21.2. Infrastructure for the mine is included in the capital costs
(2) Project indirect costs for mining pre-strip and pioneering roads are included in the capital cost and are not broken out in
the table as a line item.
(3) Dehalogenation of the fume will be carried out using hydrometallurgical facilities in the Base Case and
pyrometallurgical facilities in the Fume Case.
(4) Contingency is based on an assumed 20% of direct costs.
(5) Owner’s costs are based on an assumed 10% of direct costs.
(6) Currency Exchange Rates used were $1USD = 2.78 Peruvian Nuevo Sol
(7) Estimate is based on 2nd Qtr. 2013
(8) Taxes not included
(9) Costs have been rounded
21.1.1 Process Plant Basis of Estimate
The capital cost estimate was based on a combination of vendor quotes, AMEC in-
house data, design drawings, site-specific information provided by Zincore, and the
proposed Project development schedule.
Direct costs were estimated based on project drawings and sketches, with appropriate
allowances included for each discipline. Where drawings were not available,
Project No.: 170848

conceptual quantities were used. Major equipment pricing was based on vendor
quotes.
Wage data were sourced from Peruvian regulations and are based on annual rates
established by the Peruvian Construction Chamber (Capeco) and the construction
union.
Indirect costs were estimated assuming an allowance of 27% of direct costs for the
Base Case and 28% for the Fume Case. Indirect costs include provision for Owner’s
Costs, which were based on 5% of direct costs. Contingency costs assumed 20% of
direct costs. No allowance was made in the contingency provisions for any scope.
21.1.2 Mining Capital Cost
Total open pit and underground capital costs for both the Base Case and Fume Case
over the life of mine are presented in Table 21-2 and Table 21-3.
Project No.: 170848

Table 21-2: Mining Capital Cost for the Base Case

Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 Yr10 Yr11
CAPEX 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Base Case P-2 P-1 (PP) P1 P2 P3 P4 P5 P6 P7 P8 P9 Total
Open Pit
Pre-Stripping USD '000 0 4,915 0 0 0 0 0 0 0 0 0 4,915
Pioneering Roads USD '000 3,500 1,500 1,000 0 0 0 0 0 0 0 0 6,000
TOTAL CAPEX OP USD '000 3,500 6,415 1,000 0 0 0 0 0 0 0 0 10,915
Underground
CAPEX USD '000 0 0 7,689 3,687 21 211 0 0 0 0 0 11,609
TOTAL CAPEX UG USD '000 0 0 7,689 3,687 21 211 0 0 0 0 0 11,609
Table 21-3: Mining Capital Cost for the Fume Case

CAPEX 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
FUME Case Unit P-2 P-1 (PP) P1 P2 P3 P4 P5 P6 P7 P8 P9 Total
Open Pit
Pre-Stripping USD '000 0 4,915 0 0 0 0 0 0 0 0 0 4,915
Pioneering Roads USD '000 3,500 1,500 1,000 0 0 0 0 0 0 0 0 6,000
TOTAL CAPEX OP USD '000 3,500 6,415 1,000 0 0 0 0 0 0 0 0 10,915
Underground
CAPEX USD '000 0 0 8,010 3,160 21 211 0 0 0 0 0 11,402
TOTAL CAPEX UG USD '000 0 0 8,010 3,160 21 211 0 0 0 0 0 11,402
Project No.: 170848

The Mine Capital cost estimate includes pre-stripping costs at the Accha open pit and
construction of the pioneering roads. The underground equipment and development
costs are presented separately. The Accha mine requires 4.6 km of pioneering roads
to be constructed (Yr 2 and Yr -1) and 6.9 km of pioneering roads at Yanque (Yr -1, Yr
1 and Yr 2). Both roads are required prior to production. Total capital for the roads is
estimated at US$5 M with an additional $1 M included as allowances.
21.2 Underground Mining Costs
The underground mine capital cost and sustaining capital were calculated using
Excel® tools with the same considerations as used for open pit cost estimation.
For the Base Case, the total estimated capital cost for the Accha underground mine is
US$11.61 M (Table 21-4), consisting of US$8.76 M for the pre-production period,
including all direct costs associated with development and US$0.93 M for mine
infrastructure construction, US$1.04 M for underground equipment acquisition and
US$0.88 M for working capital.
Table 21-4: Base Case Capital and Sustaining Capital Costs

Item Cost (US$*000's)
Underground Mine Development 8,760
Underground Mine Infrastructure 0.932
Underground Equipment Capital and
1,036
Sustaining
Underground Working Capital 0.881
Total Capital and Sustaining 11,609
For the Fume Case, the total estimated capital cost for the Accha underground mine is
US$11.40 M, consisting of US$8.55 M for the pre-production period including all direct
costs associated with development, US$0.93 M for mine infrastructure construction,
US$1.04 M for underground equipment acquisition and US$0.88 M for working capital
(Table 21-5).
Table 21-5: Fume Capital and Sustaining Capital Costs

Item Cost (US$*000's)
Underground Mine
8,553
Development
Underground Mine
0.932
Infrastructure
Underground Equipment
1,036
Capital
Underground Working Capital 0.881
Total Capital and Sustaining 11,402
Project No.: 170848

21.3 Sustaining Capital Cost
All underground costs are treated in the financial model as sustaining capital costs.
No sustaining capital has been included for Mine equipment which is part of the
contractor’s operational costs. The Base Case includes $300,000 each of years 2021
and 2023 as an allowance for the hydrometallurgical facilities. No sustaining capital
was allowed for in the pyrometallurgical facilities given the short life of the project.
21.4 Operating Cost Estimates
Operating cost estimates were prepared for both the Base Case and Fume Case a
summary of operating costs are presented in Tables 21-6 and 21-7 respectively.
Table 21-6: Operating Cost Summary (Base Case)

mining costs)
16.80
Processing - Crushing/Pyro 33.00
Processing - Hydro (Refinery) 17.50
G&A – Total 4.90
Total 72.20
Figures have been rounded
Table 21-7: Operating Cost Summary (Fume Case)

mining costs)
14.50
Processing - Crushing/Pyro 32.80
Processing - Hydro (Refinery) 3.20
G&A – Total 3.70
Total 54.20
Figures have been rounded
Project No.: 170848

Mining operating cost estimates per tonne for Accha and Yanque open pits and Accha
underground are US$4.57/t and US$64.74/t respectively for the Base Case and
US$4.18/t and US$64.15/t for the Fume Case.
The process operating cost on a per tonne basis for the Base Case and the Fume
Case over the life of mine is US$50.50/t and US$36.02/t respectively.
The total average life of mine and process G&A cost on a per tonne basis for the Base
Case and Fume Case are US$4.91/t and US$3.70/t respectively.
21.4.1 Mining Operating Costs
AMEC estimated the open pit mine operating costs using a Xeras® software-based
cost model utilizing a first principle build-up. Mine operating costs are based on
contract mining, production quantities, local rates for major consumable costs,
equipment quotations from vendors, and a staffing plan.
The underground mine operation cost were calculated using Excel® tools with the
similar considerations to those of the open pit.
Operating costs are the ongoing operational costs to produce run-of-mine process
feed in the normal course of the operation. Operating costs incurred during the pre-
production period are capitalized. The total average open pit and underground
operating cost are US$4.57/t mined and US$64.74/t respectively for the Base Case
and US$4.18/t and US$66.15/t for Fume Case. The assumptions used and details of
the operational mining costs are shown in the following sections
Table 21-8 summarizes the Mine Contractor Operational Cost for open pit and
underground mines over the life of mine for the Base Case while Table 21-9
corresponds to the Fume Case.
Project No.: 170848

Table 21-8: Mine Contractor Operational Cost for the Base Case
OPEX Contractor 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
P-1
Base Case P-2 P1 P2 P3 P4 P5 P6 P7 P8 P9 Average
(PP)
Open Pit
Accha Ore US$/t 18.32 22.65 18.39 20.08 18.63 23.73 0.00 0.00 0.00 19.60
Accha Waste US$/t 4.01 3.68 3.89 7.23 5.27 6.88 0.00 0.00 0.00 4.14
Yanque Ore US$/t 4.21 3.79 3.91 4.33 4.06 3.88 4.45 3.66 5.66 4.07
Yanque Waste US$/t 6.05 3.16 3.17 3.43 3.05 3.16 4.71 3.52 4.75 3.45
Open Pit Average Cost US$/t 5.54 4.27 4.57 5.31 4.66 3.85 4.69 3.70 5.67 4.57
Underground Average
US$/t 66.69 63.59 63.63 64.49 66.03 65.68 64.74
Cost
Table 21-9: Mine Contractor Operational Cost for the Fume Case
OPEX (Contractor Option) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
FUME Case Unit P-2 P-1 (PP) P1 P2 P3 P4 P5 P6 P7 P8 P9 Average
Open Pit
Accha Ore US$/t 18.41 28.07 17.88 16.24 16.34 0.00 0.00 0.00 0.00 18.30
Accha Waste US$/t 4.09 3.96 3.96 5.55 5.65 0.00 0.00 0.00 0.00 4.21
Yanque Ore US$/t 4.28 4.05 4.01 4.21 4.29 3.67 4.00 3.24 3.45 3.86
Yanque Waste US$/t 8.51 3.42 3.26 3.12 3.16 2.93 3.95 2.95 3.64 3.29
Open Pit Average Cost US$/t 5.72 4.42 4.59 4.58 4.23 3.27 4.09 3.16 3.67 4.18
Underground Average
Cost US$/t 65.72 63.76 64.91 69.62 71.75 66.15
Project No.: 170848

The assumptions used and details of the operational mining costs estimation are
discussed in the following sections.
21.4.2 Open Pit Mining Costs
Mine operating costs, capital costs and sustaining capital costs were estimated using
Xeras® software. The estimation is based on contract mining, production quantities,
local rates for major consumable costs, equipment quotations from vendors, and a
staffing plan.
Operating costs are the continuous costs to produce run-of-mine process feed in the
normal course of the operation. Note that operating costs incurred during the pre-
production period are capitalized.
Capital cost is the capital required before production starts, which includes the pre-
stripping costs and the pioneering road cost.
After the estimation of open pit mining costs was carried out, a factor was applied to
estimate mine contractor to account for contractor profit. An assumed profit of 12%
was applied to costs. An additional factor of 15% was included to cover interest on
capital expenditure by the contractor.
Table 21-10 shows the assumptions for the contractor operational profit calculation.
Table 21-10: Detail of Contractor Operational Profit Assumptions

12% Profit Over No Profit Applied to
Drilling
Blasting
Loading
Hauling Mine Owner Overhead(*), MARC, Maintenance Spare Parts, Pit
Support Dewatering , Supplies, Explosives, Water
Ancillary
Overhead Contractor
Mine equipment CAPEX (**)
(*) Mine Management, Mine Operation, Mine Maintenance, Mine Technical Services.
(**) Mine equipment CAPEX: 15% of Banking Interest Rate was previously applied to this value.
21.4.3 Open Pit Cost of Major Consumables
Table 21-11 shows the costs of major consumables used in the estimation of the mine
operating costs. The cost of the major mine consumables were estimated on a unit
basis, with key elements including power, diesel fuel, drill and blast costs, and tyres.
Project No.: 170848

Table 21-11: Major Consumable Unit Costs

Consumable Price Units Detail
Electric Power 0.063 US$/kwh
Fuel Diesel 1.10 US$/litre
Bulk Ammonium Nitrate 748 US $/tonne
Bulk Emulsion 647 US $/tonne
Blast Stemming / Fuse / Booster etc 12.68 US $/ each
Steel Cost 2,890 US $/ each
Bit Cost 990 US $/ each
Hammer Cost 10,000 US $/ each
Tire_29.5_RR25 8,164 US $/ each Tire_Wheel_CAT_824
Tire_29.5 25 10,206 US $/ each Tire_FEL_CAT_980
Tire_14_24_12PR 734 US $/ each Tire_MOTO_CAT_160K
Tire_12_R20 990 US $/ each Tire_Truck_& Water
21.4.4 Open Pit Mine Staff and Contractor Salaries
Mine wages and salaries are based on wages and salaries for Peru from similar mine
operations.
21.4.5 Open Pit Operating Cost Estimate
AMEC utilized Xeras® activity based cost model software to estimate operating costs
in the following areas:
 Operations supervision, mine engineering, mine geology, ore control and assay
costs.
 Drilling: includes costs for primary production drilling, oversize drilling, and wall
control drilling. Also includes an allocation for maintenance costs.
 Blasting: assumes owner blasting and includes all costs to load, stem, and initiate
blasts.
 Loading: includes costs for primary loading equipment plus an allocation for
maintenance costs and tire costs.
 Hauling: includes costs for primary hauling equipment plus an allocation for
maintenance costs and tire costs.
 Support: includes costs for primary support equipment tasked with maintaining
roads, dumps and pit floors plus an allocation for maintenance costs and tire costs.
 Ancillary: includes costs for secondary support as transport of mine personnel, fuel
and explosive supply, and others.
Project No.: 170848

Contractor capital and service costs for the Base Case and Fume Case respectively
total US$12.53 M and US$12.54 M (Table 21-12).
Table 21-12: Equipment Capital and Service Covered by the Contractor

Base Case Fume Case
N° Cost Each Total N° Cost Each Total
Equipment (Units) (kUS$) (kUS$) (Units) (kUS$) (kUS$)
Major Fleet
FEL_CAT_980 1 554 554 1 554 554
Excavator_CAT_349_Primary 2 540 1,080 2 540 1,080
Drill_CAT_MD5050 2 523 1,045 2 523 1,045
Truck_Volvo_FMX_30t 7 180 1,257 6 180 1,077
Truck_Volvo_FMX_35t 8 184 1,471 9 184 1,655
Support Equipment
WheelDozer_CAT_814 1 678 678 1 678 678
MotorGrader_CAT_140K 1 565 565 1 565 565
Dozer_CAT_D8 2 680 1,360 2 680 1,360
WaterTruck_Volvo_FMX_20MT 2 175 350 2 175 350
Assembly 90 90
Ancillary 1,884 1,884
Spare Parts 512 512
Tire Press/ Tire Puller 58 58
Sub Total 10,903 10,908
15 % Banking Interest 1,636 1,636
12,539 12,544
Table 21-13 shows the contractor mine operating cost by area estimated for the Base
Case and for the Fume Case respectively. Haulage represents a significant portion of
the overall cost due to the cost of hauling from Accha to Yanque.
Table 21-13: Mine Operating Cost by Cost Area

Mining Cost Area Base US$/t Mined (%) Fume US$/t Mined (%)
Mine Overhead 0.58 12.6% 0.53 12.8%
Drilling 0.46 10.0% 0.42 10.1%
Blasting 0.59 13.0% 0.58 13.9%
Loading 0.63 13.8% 0.59 14.1%
Hauling 1.05 22.9% 0.91 21.9%
Support 0.94 20.5% 0.84 20.1%
Ancillary 0.32 7.0% 0.29 7.0%
Pit Dewatering 0.01 0.1% 0.01 0.3%
Total 4.57 4.18
The annual mine operating cost by year is presented in Table 21-14.
Project No.: 170848

Table 21-14: Annual Mine Operating Costs for Base & Fume Case
Base Fume
Operational Expense Operational Expense
Period (MUS$) (US$/t) (MUS$) (US$/t)
PP1
YR1 14.0 5.54 14.0 5.72
YR2 15.6 4.27 15.8 4.42
YR3 15.6 4.57 16.2 4.59
YR4 15.5 5.31 16.1 4.58
YR5 15.7 4.66 14.8 4.23
YR6 12.0 3.85 11.2 3.27
YR7 9.8 4.69 10.2 4.09
YR8 10.5 3.70 10.6 3.16
YR9 3.0 5.67 7.0 3.67
TOTAL 111.7 4.57 115.8 4.18
21.4.6 Underground Mine Operating Cost Summary
Underground mining costs, mine operating costs, capital costs and sustaining capital
costs were estimated using Excel® software. The estimation is based on production
quantities, local rates for major consumable costs, equipment quotations from vendors,
and a staffing plan.
The estimated development cost (CAPEX) and the mining operating costs were
estimated using cut and fill type mining. Breasting up was performed assuming the
work would be carried out by a specialty contractor. The price is structured using base
unit costs for each planned work activity as a direct cost with general and
administrative expenses (G & A) calculated separately from the direct costs. Direct
costs include labour working personnel, equipment, drill steels, materials, tools and
safety equipment. G & A costs include mobilization, installation and demobilization of
the contractor as well as the fixed costs of payroll, mine supervision, head office and
administrative expenses. Indirect costs are 51.7% of direct costs. A 12% profit was
applied to contractor expenses while strategic consumables such as fuel, maintenance
and cementing elements were assumed to be carried by the owner thereby minimizing
contractor costs. Table 21-15 identifies the assumptions with respect to contractor
profit.
Project No.: 170848

Table 21-15: Detail of Contractor Operational Profit Assumptions

12% Profit Over No Profit Applied to
Stope Preparation
Drilling
Blasting
Support Mine Owner Overhead, Consumables (Fuel, Portland
Loading cement, ground support) , Explosives, Ventilation, Energy,
Hauling compressor air and Water.
Backfill
Ancillary
Overhead Contractor
Source: AMEC Unpublished PFS Report 2013
21.4.7 Underground Cost of Major Consumables
Major consumables were appropriately estimated using unit pricing. Key consumables
in the underground include backfill and blasting supplies, shotcrete, electrical power
and diesel fuel (Table 21-16).
Table 21-16: Major Consumable Unit Prices

Consumable Price Units
Electric Power 0.063 US$/kwh
Fuel Diesel 1.10 US$/litre
Bulk Ammonium Nitrate 748 US $/tonne
Emulnor 3000 3.44 US $/kg
Fanel red/Tecnel N°1 at 20 milliseconds 1.62 US $/ each
Carmex c/connector 7' , boxes of 100 units 0.74 US $/ each
Wick fast 0.4 US $/ each
Cordon trigger 5 gr/m (5P) 0.25 US $/ each
7” Split Set 3.11 US $/ each
N° 8 4”x4” Wire Mesh 1.21 US $/ m2
2” Shotcrete 1.81 US $/ m2
Backfill 1.41 US $/ m3
Portland Cement 10.72 US $/ m3
21.4.8 Underground Mine Staff and Contractor Salaries
Mine wages and salaries were benchmarked against similar mine operations in Peru.
21.4.9 Underground Mine Operating Cost Summary
AMEC utilized Excel® based on a cost model to estimate operating costs in the
following areas:
Project No.: 170848

 Stope Preparation: at direct access ramp, includes costs of drilling blasting and
hauling, labour, materials, tools, ground support, contract´s overhead, utility and
fuel
 Production Drilling: includes costs of drilling with steel accessories, labour,
materials, tools, contract´s overhead, utility and fuel
 Blasting: includes costs of blasting, labour, materials, tools, contract´s overhead,
utility and explosives
 Support: includes rock bolts and accessories, welded mesh, shotcrete and support
equipment, tools, contract´s overhead, utility and fuel y consumables
 Loading: includes loading equipment (load-haul-dump vehicles), labour,
contractor´s overhead, utility, fuel and consumables
 Hauling: includes transport from mine to Yanque plant; equipment (truck), labour,
contract´s overhead, utility, fuel and consumables
 Backfill: includes costs of loading, hauling, labour, materials, tools, contractor´s
overhead, utility, fuel and consumables
 Ventilation: includes costs of energy for principal and auxiliary fans, install ducts
and labour
 Ancillary: includes costs for secondary services as haulage of personal mine,
energy, water, compressed air others
 Owner G&A: includes operations supervision, mine engineering, mine geology,
mine safety and general cost
 Mining cost includes the direct costs of labour, equipment, steels and drilling
accessories, materials, tools and safety equipment.
Contractor cost estimates included the cost of investment in equipment and service.
This estimate is presented in Table 21-17. Contractor capital and service costs for the
Base Case and Fume Case respectively are US$10.23 M and US$9.86 M.
Project No.: 170848

Table 21-17: Equipment Capital and Service Covered by the Contractor

Hydromet Fume
Mining Cost Area N° Cost Each Total N° Cost Each Total

(Units) (kUS$) (kUS$) (Units) (kUS$) (kUS$)
Major Fleet
Scooptram (LHD) 6 yd 4 620 2,480 4 620 2,480
Truck Volvo FMX 35t 10 184 1,840 8 184 1,472
Electro hydraulic Drill Jumbo (2
3 720 2,160 3 720 2,160
Boom)
Raise Climber (Alimak STH
2 410 820 2 410 820
5EE)
Raise Borer (650FCS) 1 950 950 1 950 950
Scaler 1 390 390 1 390 390
Support Equipment
Robot Lanzador 1 266 266 1 266 266
Huron 1 150 150 1 150 150
Bolter 77D 1 529 529 1 529 529
Jackleg Drills 10 5 45 10 5 45
Service Truck 1 45 45 1 45 45
Fuel & Lube Truck (Filltec UV2-
1 376 376 1 376 376
CE)
Ancillary
Van - Personal Transport 2 42 84 2 42 84
Pick up 3 31 93 3 31 93
10,228
Source: AMEC Unpublished PFS Report 2013
The contractor mine operating cost by each activity estimated for the Base Case and
the Fume Case respectively is shown in Table 21-18. One of the highest costs is
haulage, due to the long distance from the proposed mine at Accha to the primary
crusher at Yanque (60 km).
Project No.: 170848

Table 21-18: Underground Operating Cost by Activities
Mining Cost Area Hydromet US$/t Mined (%) Fume US$/t Mined (%)
Stope Preparation 14.66 22.6% 14.66 22.2%

Drilling 7.21 11.1% 7.21 10.9%
Blasting 2.43 3.7% 2.43 3.7%
Support 6.13 9.5% 6.13 9.3%
Loading 3.45 5.3% 3.45 5.2%
Hauling (to plant) 11.44 17.7% 11.44 17.3%
Backfill (waste and paste fill) 12.13 18.7% 12.13 18.3%
Ventilation1 0.79 1.2% 1.02 1.5%
Ancillary2 1.05 1.6% 1.14 1.7%
General & Administrative (Owner) 5.46 8.4% 6.55 9.9%
Total 64.74 100% 66.15 100%
1. Includes power, ducts and accessories. 2. Includes power, compressed air services, industrial water,
parts and repairs.
21.4.10 Process Operating Costs
The total process operating cost to process the mineralization at Accha and Yanque to
produce fume on site and subsequently transport and refine this in an off-site zinc
refinery to SHG zinc ingots, and a lead sulphate residue by-product, at the coastal
town of Ilo (Base Case), are shown in Tables 21-19 and 21-20.
Table 21-19: Process Operating Cost Summary (Base Case)

Description US$/a US$/t Ore US$/lb ZnRef Distrib. Cost
Labour 4,174,211 3.24 0.03 6.5%

Fuels 28,321,049 21.97 0.22 44.2%
Utilities 15,417,466 11.96 0.12 24.1%
Reagents & Consumables 8,244,438 6.40 0.07 12.9%
Maintenance 2,471,037 1.92 0.02 3.9%
Fume Transport 4,345,619 3.37 0.03 6.8%
Waste Management 1,106,915 0.86 0.01 1.7%
Sub-Total 64,080,735 49.71 0.51 100.0%
Contingency, 3% 1,124,974 0.87 0.01
Total 65,205,708 50.58 0.52
Project No.: 170848

Table 21-20: Process Operating Cost Summary (Fume Case)
Description US$/a US$/t Ore US$/lb ZnFume Distrib. Cost
Labour 2,234,715 1.71 0.02 4.8%

Fuels 27,960,391 21.37 0.23 60.2%
Utilities 2,879,382 2.20 0.02 6.2%
Reagents & Consumables 6,170,067 4.72 0.05 13.3%
Maintenance 1,516,206 1.16 0.01 3.3%
Fume Transport 4,715,389 3.60 0.04 10.2%
Waste Management 968,551 0.74 0.01 2.1%
Sub-Total 46,444,700 35.50 0.38 100.0%
Contingency, 3% 602,954 0.46 0.00
Total 47,047,654 35.97 0.38
The process operating costs to produce the Fume Case option (only oxide fume at
site) are shown in Tables 21-21 and 21-22. In this second case a dehalogenation
process, included in the initial fume refining stage in the Base Case, will be
constructed and operated at the mine site in order to achieve an acceptably low
halogen specification.
Table 21-21: Process Operating Cost by Area – (Base Case)
AREA US$/a US$/t Ore US$/lb ZnRef Distrib. Cost US$/t fume
PLANTS:
General (Manpower Plant) 4,299,437 3.33 0.034 6.6% 33.88
Primary & Secondary Crushing 588,313 0.46 0.005 0.9% 4.64
Waelz Kiln 40,219,091 31.20 0.318 61.7% 316.89
Leaching & Purification 8,128,402 6.31 0.064 12.5% 64.04
Electrolytic 11,434,528 8.87 0.090 17.5% 90.09
Melting & Casting 535,937 0.42 0.004 0.8% 4.22
Total 65,205,708 50.58 0.516 100.0% 513.76
Project No.: 170848

Table 21-22: Process Operating Cost by Area (Fume Case)
AREA US$/a US$/t Ore US$/lb-ZnFume Distrib. Cost US$/t fume
PLANTS:
General (Manpower Plant) 2,301,756 1.76 0.019 4.9% 18.57
Primary & Secondary Crushing 588,774 0.45 0.005 1.3% 4.75
Waelz Kiln 40,589,595 31.03 0.332 86.3% 327.48

Alkaline leaching 3,567,528 2.73 0.029 7.6% 28.78
Total 47,047,654 35.97 0.384 100.0% 379.58
Process operating costs are based on the consumption defined by the Project mass
balance and design criteria and the yearly production mine schedule. Reagent pricing
is based on recent quotations, power is based on quotations from local suppliers and
bench marked against other data sources.
The major process operating cost is the Waelz process plant operation, which in the
Base Case represents 62% of total costs. Anthracite coal delivered to site, as well as
fume transportation to the coastal refinery, account for 66% and 11% of the Waelz kiln
processing plant operating costs respectively in the Base Case. The second major
cost area is refinery electrowinning, at 17% of the total cost, of which 86% is directly
attributable to power consumption.
21.4.11 Process Labour Costs
The manpower requirement for the processing facilities both on site and off-site zinc
refinery were developed by AMEC based on experience of similar facilities in Peru.
21.4.12 Fuels
The process operating cost is sensitive to the processing fuel cost assumptions, and
specifically to the assumptions made for anthracite coal. Fuel costs are provided in
Tables 21-23 and 21-24.
Project No.: 170848

Table 21-23: Fuel costs (Base Case)

Description Units Units / a US$ / unit US$ / a % Dist.
Anthracite t 227,842 117 26,581,609 93.9%

Bunker C t 2,594 556 1,440,833 5.1%
Diesel 2 t 277 1078 298,606 1.1%
Total 28,321,049 100%
Table 21-24: Fuel costs (Fume Case)

Description Units Units / a US$ / unit US$ / a % Dist.
Anthracite t 225,825 117 26,346,233 94.2%

Bunker C t 2,632 556 1,462,006 5.2%
Diesel 2 t 141 1078 152,152 0.5%
Total 27,960,391 100%
Anthracite coal used by Waelz kiln accounts for 94% of the total processing fuel cost,
and about 40% of the total Base Case process operating cost. The consumption of
anthracite in the AZOD PFS is based on an anthracite/zinc+lead ratio in the kiln feed of
2.7 and 2.3 for Accha and Yanque respectively, determined by test work.
In the AZOD PFS the supply of anthracite (80%-85% carbon) is based on data
received from Materias Primas Andinas S.A.C (Andinas), an established Peruvian non-
metallic mineral distributor. Andina propose to supply anthracite from an existing
supply source located close to Alto Chicama, Trujillo in the north of Peru at a quoted
price of US$117/t to Cusco, about 80 km from site. A Currency Exchange Rate $1USD
= 3.00 Peruvian Nuevo Sol was utilized for anthracite. Transportation costs were
generated from quotations from multiple transport companies in order to confirm
transport costs. An indicated anthracite consumption of 227,842 t/a for the Base Case
represents about 47% additional transportation compared to the Fume Case 126,919
t/a transportation requirement.
Andina also indicated they might potentially be able to supply anthracite in the future
quarried from an as yet undeveloped, but nearby, source located close to Huancayo,
in Junin that should be followed during future detailed studies.
Project No.: 170848

21.4.13 Utilities
Utility consumption and costs summarized in Tables 21-5 and 21-26 have been
estimated based on load lists, quotations and database of similar Peruvian zinc
processing and refinery operations.
Table 21-25: Utility Costs (Base Case)

Description MW/a US$/MW US$/a
Power 247,880 52.9 13,106,214

Steam 1,566,345
Water 744,908
Total Utilities Cost 15,417,466
Table 21-26: Utility Costs (Fume Case)
Description MW/a US$/MW US$/a
Power 237,586 55 13,112,549

Steam 0
Water 463,863
Total Utilities Cost 13,576,412
The second major cost by area in the Base Case operating cost is refinery
electrowinning, at 17% of the total cost, of which 87% is directly attributable to power
consumption. The cost of electric power in the Cusco region is competitive due to the
existence of both hydroelectric and natural gas generation stations. A long term price
of 0.052/kWh at the refinery 0.055/kWh based on indexed quotations from EnerSur
was established. The industrial properties identified for the refinery at Ilo are located
adjacent to EnerSur generating facility accounting where the largest consumption of
energy occurs. Future synergies with EnerSur should be investigated in the next phase
so that prices can be formalized. Zinc electrowinning power consumption requirements
were estimated based on a factor of 1.5 MWh/t-fume.
Project No.: 170848

21.4.14 Reagents and Consumables
The unit cost and consumption assumptions used for the major process consumables
and reagents are summarized in Tables 21-27 and 21-28.
Table 21-27: Reagents Costs (Base Case)
Description Units Units/a US$ / unit US$ / a
Crushing Liners t 35 4,725 166,432

Refractory Bricks EA 305,900 4.54 1,389,660
Castable Refractory BG 101,677 36.0 56,635
Dolomite - for Yanque t 101,677 20 2,033,538

Sulphuric acid, H2SO4 cc t 8,525 130 1,108,226
Limestone, CaCO3 t 4,328 95 411,195
Sodium Carbonate, Na2CO3 t 9,885 230 2,273,468
Antimony trioxide, SbO3 kg 798 14 10,931
Flocculant kg 26,448 2 40,295
Copper sulphate, CuSO4.5H2O t 75 2,300 172,241
Crucible EA 3 2,100 6,300
Refractory Brick & castable EA 200 45 9,000
Pyrolusite ore t 921 230 211,899
Ba(OH)2 t 45 1,270 56,658
Na2SIO3 t 82 350 28,626
Glue t 18 5,000 89,225
KMnO4 kg 1 2,500 1,487
Electrodes - cathode EA 175 339 59,528
Electrodes - anode EA 36 1,282 45,923
Cells EA 1 28,900 28,195
NH4Cl t 22 630 14,053
Mould & Others EA 103 300 30,923
Total 8,244,438
Project No.: 170848

Table 21-28: Reagents Costs (Fume Case)

Description Units Units/a US$ / unit US$ / a
Crushing Liners t 35 4,725 166,762

Refractory Bricks EA 305,900 4.54 1,389,660
Castable Refractory BG 110,142 36.0 56,635
Dolomite - for Yanque t 110,142 20 2,202,833

Limestone, CaCO3 t 1,202 95 114,217
Sodium Carbonate, Na2CO3 t 9,653 230 2,220,226
Flocculant kg 12,953 1.5 19,734
Total 6,170,067
A significant quantity of dolomite is required for the Project, 110,142 t/a (Fume Case),
as a pyrometallurgical additive for processing Yanque process feed (10% of feed).
This represents the major process operating consumable cost input. Sodium
carbonate and sulphuric acid required for the dehalogenation and leaching of fume in
refining represent the second and the third highest cost inputs respectively.
Based on a preliminary dolomite investigation during the course of this PFS sources of
dolomite of sufficient quality and quantity were identified. Future work should include
additional exploration as well as confirmatory drilling. Given the high quantity of
dolomite needed, the process operating cost basis is moderately sensitive to the
dolomite price estimated. Future additive testing has been identified as an opportunity
that should be pursued.
Sulphuric acid consumption was determined based on Metallicon and Mintek

simulation and test work. A gross acid fume digestion consumption of about 8,525 t/a
is required for the entire process. However most of this consumption will be
regenerated in the electrowinning plant and consequently there will only be a net
make-up acid requirement for losses primarily associated with the production and sale
of by-product lead sulphate, as well as other much more minor volumes of purification
residues disposed of in residue storage ponds at the refinery site. An estimated net
acid consumption of about 67 kg/t fume is expected. The Ilo copper smelter of
Southern Peru Copper Corporation (Southern) operating at the port of Ilo, in this study
AMEC has assumed bulk sulphuric acid can be sourced locally and delivered to the
hydrometallurgical plant for US$130/t
Other major process reagent, consumable and price assumptions are based on
AMEC’s experience and database of other similar Peruvian zinc processing and
refinery operations.
Project No.: 170848

21.4.15 Maintenance
Maintenance costs of US$2.4 M/a (US$1.92/t) and US$1.5 M/a (US$1.16/t) were
estimated for the Base and Fume Cases respectively. This includes replacement
parts, repairs and service contracts and is about 3.9% (Base Case) of the process
equipment cost.
21.4.16 Fume Transport Cost
A cost of US$4.3 M/a (US$3.37/t) was estimated to transport an average 127,000 t/a
fume 700 km by truck to the refinery and port at Ilo. This is based on quoted costs and
a logistics model for a unit cost of US$34/t (US$0.044/km/t).
21.4.17 Waste Management
Process waste and residue management costs of US$1.1 M/a (US$0.86/t) and US$0.9
M/a (US$0.74/t) were estimated for the base and fume case respectively. No capital
or operating cost allowance has been made in the refinery for the long-term storage of
lead sulphate residue from leach digestion because it is assumed that this will all be
sold as a by-product. Other refinery residues produced are considered relatively
hazardous, but have a comparatively small volume and an allowance has been made
to collect and store these in lined ponds on site for disposal. Given the relatively short
mine life of the Project, the AZOD PFS assumes that closure costs associated with
these will be covered by salvage costs.
The largest component of the waste management cost (75%) in the Base Case is for
the transport and disposal of kiln slag produced to a waste dump close to the proposed
pyrometallurgical facility. The handling and disposal of waste residues, including slag,
is described in Section 18. Waelz kiln slag test work as part of the PFS indicates the
slag is ecologically stable and this is assumed in the AZOD PFS.
No provisions have been made in process operating or sustaining capital costs for
special storage (liners), continuous treatment, or water chemical treatment
requirements associated with the 6.3 Mt of slag that will be produced by the Project
over the mine life.
21.4.18 General and Administration
The total average life of mine G&A cost for the Base and Fume Cases are US$2.53/t
and US$1.44/t processed respectively. It represents 5% and 4% of the total process
operating cost for the Base and Fume Case respectively.
Project No.: 170848

21.4.19 Contingency
The total process operating costs estimated include a 3% contingency on all aspects
except anthracite. Anthracite sensitivities are presented as part of Section 22.0 and
are discussed in further detail as part of the Risks in Section 25.2.
The QPs have reviewed the capital and operating cost provisions for the proposed
LOM plan that supports Mineral Reserves and the financial analysis and consider that
the basis for the estimates that include mine budget data, vendor quotes, and
operating experience, is appropriate to the known mineralization, mining and
production schedules, marketing plans, and equipment replacement and maintenance
requirements. Appropriate provision has been made in the estimates for the expected
mine operating usages including labour, fuel and power and for closure and
environmental considerations. Capital cost estimates include appropriate Owner,
contractor, sustaining and contingency estimates.
Capital costs over the projected LOM total US$345.8 M for the Base Case and
US$214.5 M for the Fume Case. Operating costs total $377 M or $89.94/t milled for
the Base Case and $243 M or $122.78/t milled for the Fume Case. No costs have
been included within the capital estimate to cover potential buyers’ costs to receive
and handling either a fume or lead sulphate product.
requirements associated with the slag production.
Project No.: 170848

22.0 ECONOMIC ANALYSIS
The results of the economic analysis represent forward-looking information that are
subject to a number of known and unknown risks, uncertainties, and other factors that
may cause actual results to differ materially from those presented here.
Forward-looking statements in this Report include, but are not limited to, statements
with respect to future metal prices, the estimation of Mineral Reserves and Mineral
Resources, metallurgical recoveries, in particular zinc recoveries, concentrate sales
contracts, the inability to confirm specific buyers and terms for the Fume product, the
timing and amount of estimated future production, costs of production, capital
expenditures and any requirements for additional capital, costs and timing of the
development of the deposits, permitting time lines, government regulation of mining
operations, environmental risks, unanticipated reclamation expenses, title disputes or
claims and limitations on insurance coverage.
Additional risk can come from conclusions of economic evaluations; changes in Project
parameters as mine and process plans continue to be refined, possible variations in
Mineral Reserves, grade or recovery rates; geotechnical considerations during mining;
failure of plant, equipment or processes to operate as anticipated; accidents, labour
disputes and other risks of the mining industry; and delays in obtaining additional
governmental approvals.
A preliminary mine schedule, operating and capital costs estimates were established
for the AZOD Project. Two cases were evaluated: Hydromet option, and Fume Case.
Hydromet case is considered to be the Base Case. This case is based upon the
production of refined SHG zinc ingots and a lead sulphate residue by-product
Years discussed in this Section are for illustrative purposes only as a production
decision has not been made by Zincore’s board, and permitting in support of
operations has not been granted.
Summary results are presented in Table 22-1. This case is based upon approximate
estimates of commercial parameters that may vary in the future.
Project No.: 170848

Table 22-1: Summary of Cash Flow Showing Sensitivities to Discount Rate

Base Case (Hydromet) Fume Case
After-Tax Pre-Tax After-Tax Pre-Tax
(US$’000) (US$’000) (US$’000) (US$’000)
Cumulative net cash flow
(undiscounted) 377,268 528,683 243,384 336,980
1
Net present value (2015)
Discounted at 5% 217,024 332,216 135,342 205,805
Discounted at 8% 150,123 248,917 91,073 151,221
Discounted at 10% 114,287 203,823 67,617 121,986
Discounted at 12% 84,081 165,472 48,011 97,321
Internal rate of return 20.5% 28.6% 19.2% 26.7%
Payback period (years) 3.8 3.0 3.9 3.2
Total start-up capital 345.5M 214.5M
Total life of mine capital 357.7M 225.9M
Projected life of mine (years) 8.0 9.0
1
NPV is as of 2015
In Table 22-2 and Table 22-3 cash costs are as defined by Wood Mackenzie (formerly
Brook Hunt) and are shown as costs per pound of payable zinc for the Base Case and
Fume Case respectively.
Table 22-2: Summary of Cash Costs – Base Case

Payable Metal
Cash costs
Mining 16.76 0.17
Process 50.50 0.52
G&A 4.91 0.05
Sub-total 89.94 0.92
Credits
Zinc premium (7.84) (0.08)
Lead (50.52) (0.52)
Sub-total (58.36) (0.60)
Adjusted cash costs
Total 31.58 0.32
Project No.: 170848

Table 22-3: Summary of Cash Costs – Fume Case

Payable Metal
Cash costs
Mining 14.53 0.16
Process 36.02 0.39
G&A 3.70 0.04
Sub-total 122.78 1.31
Credits
Zinc premium (not applicable)
Lead (57.78) (0.62)
Sub-total (57.78) (0.62)
Adjusted cash costs
Total 65.00 0.70
For the Base Case, the annual cash flows and cumulative cash flow are depicted in
Figure 22-1, and Figure 22-2, respectively.
Figure 22-1: Base Case after Tax Net Cash Flow (Undiscounted)
Project Cash Flow ‐ After Tax Undiscounted
500
400
300
US$ Million
200
100
0
(100)
(200)
(300)
2014 2016 2018 2020 2022 2024 2026
Year
Net Cash Flow Cumulative
Project No.: 170848

Figure 22-2: Fume Case After Tax Net Cash Flow (Undiscounted)
Project Cash Flow‐After Tax Undiscounted
300
250
200
150
US$ Million
100
50
0
(50)
(100)
(150)
(200)
2014 2016 2018 2020 2022 2024 2026
Net Cash Flow Year Cumulative
22.1 Valuation Methodology
Financial analysis of the AZOD Project was carried out using a discounted cash flow
(DCF) approach. This method of valuation requires projecting yearly cash inflows
(or revenues) and subtracting yearly cash outflows (such as operating costs, capital
costs, royalties, and taxes). The resulting net annual cash flows are discounted back
to the date of valuation and totalled in order to determine the Net Present Value (NPV)
of the Project at selected discount rates.
The internal rate of return (IRR) is expressed as the discount rate that yields an NPV
of zero.
The payback period is the time calculated from the start of production until all initial
capital expenditures have been recovered.
This economic analysis includes sensitivities to variations in operating costs, capital

costs, metal prices, anthracite, and grade.
All monetary amounts are presented in United States dollars (US$). For discounting
purposes, cash flows are assumed to occur at the end of each period.
Project No.: 170848

22.2 Financial Model Parameters
22.2.1 Smelting and Refining Terms
This case is based upon rough estimates of commercial parameters that have not
been fully validated. Negotiations to identify potential buyers of fume, to validate these
assumptions, were still in progress at the reporting date of this study.
For the Base Case two products will be produced: zinc ingot, and lead sulphate. It has
been assumed for the study that the zinc SHG ingots would be loaded in containers
and sold in Peru. A zinc ingot premium was allowed at US $0.08/lb of zinc. For lead
sulphate a payability of 95% with minimum deduction (MD) of three units was
assumed, as suggested by Wood Mackenzie. An average treatment charge of $284/t
was used in the financial analysis for lead sulphate. Zincore has assumed that
customers for the lead sulphate product would come from China and has included
shipping costs as such.
For the Fume Case, the two key economic elements of the standard bulk concentrate
contract are payability and treatment charge (TC). Standard payment terms for bulk
concentrate are presented below.
 Zinc: 80% of the zinc content will be paid, subject to a 7% minimum deduction
 Lead: 95% of the lead content will be paid, subject to a 3% minimum deduction
Forecast prices for a bulk concentrate based on Wood Mackenzie prices and
Treatment are presented in Table 19-6. Low and high estimates were provided by
Wood Mackenzie for financial modelling. Due to the uncertainty associated with sale
of fume, an average of the high estimate for treatment charges ($334/tonne) was used
for financial analysis.
22.2.2 Metal Prices
As part of the PFS, a study was undertaken by third-parties to provide independent

views of metal pricing forecasts and treatment charges. Unlike many other metals,
significant new sources of zinc have not been developed in recent years. Given that it
takes many years to develop a new mining operation, this has created a situation
where there are limited new sources of zinc that can be brought into the market in the
foreseeable future. This lack of new supply is set against a backdrop where a number
of the large producers of zinc have depleted their reserves and are nearing the end of
their expected lives. As a basic metal of industry used primarily for galvanizing steel,
there is a general consensus among metals markets participants that a supply-
demand imbalance is coming for zinc, with an expectation of long term price increases.
Project No.: 170848

The outlook for lead is also favourable given its use in batteries for motorized vehicles,
including automobiles and electric-bicycles that have been adopted in rapidly
modernizing economies such as China, India, Brazil and Russia. Unlike zinc, lead has
enjoyed a more favourable pricing environment in recent years, and the Company’s
forecast sources expect lead price increases to be more moderate than those for zinc
during the forecast AZOD Project mine life.
In order to balance this optimism, it was decided to use two sources of zinc and lead
pricing forecasts for the financial analysis in the PFS financial model. Metal prices are
reported as averages from forecasts from Wood Mackenzie, an acknowledged leader
in metals pricing and market terms, and forecasts from the World Bank. Treatment
charges, which are a critical factor in the end revenue streams, have been taken from
Wood Mackenzie sources. Table 22-4 shows the lead and zinc pricing assumptions
as used for the financial analysis in the PFS. Prices used in the table are higher than
the three-year moving average price of $US0.94/lb for zinc and $US1.01/lb for lead;
the effect of differing metal price assumptions on the financial model is provided as
part of the project sensitivities.
In addition, zinc premium of US$0.08/lb for super high grade cathode was allowed in
the Base Case.
Table 22-4: Project Pricing Assumptions

2017 2018 2019 2020 2021 2022 2023 2024 2025
Zinc US$/lb 1.36 1.37 1.33 1.22 1.18 1.18 1.18 1.18 1.20
Lead US$/lb 1.09 1.08 1.05 1.03 1.03 1.03 1.03 1.03 1.04
(1) Wood Mackenzie prices have been taken from that company’s June 2013 Metals Market Services
(2) World Bank prices have been taken from the World Bank website and are as at May 2013
(3) Pricing shown for years of planned production only
In addition, a zinc premium of US$0.08/lb for super-high grade cathode was allowed in
the Base Case.
22.2.3 Operating Costs
Operating costs used for the financial analysis are summarized in Table 21-19 for the
Base Case and Table 21-20 for the Fume Case.
22.2.4 Capital Costs
Capital costs are summarized in Section 21.1. These include US$345.5 M for the
Base Case and US$214.5 M for the Fume Case.
Project No.: 170848

22.2.5 Mineral Reserves
Financial analysis is based on the Mineral Reserves summarized in Tables 15-1 and
15-2 for each case, and assumes a mine life of eight years for the Base Case and nine
years for the Fume Case.
22.3 Working Capital
A working capital allocation of three months operating cost was included in the cash
flow model. The allocation varies throughout the Project life and peaks at US$17.6
million for Base Case and US$15.5 M for Fume Case. The assumption is made that
all of the working capital can be recovered at project termination. Thus, the sum of all
working capital over life of mine is zero.
22.3.1 Taxes
AMEC does not provide expert advice on taxation matters. The tax calculations are
made based on information that is publicly available. Net operating loss carry over,
from previous years for this project used is US$5.2 M, as provided by Zincore. This
includes losses carried forward from previous years, as specified in Peruvian tax law.
This information was provided by Zincore, and not verified by AMEC.
It is assumed that the AZOD Project will be subject to income and/or revenue taxes as
per Table 22-5.
Table 22-5: Tax Assumptions

Unit Value Details
Worker tax % 8
Corporate income tax rate % 30
Net operating loss carryover US$ 1.7
Royalties
Special mining tax
22.3.2 Royalties
Royalty payments are calculated based on Peruvian Law 29788. The current financial
model estimates the total value of royalty payments at US$16.4 M for the Base Case,
and US$8.8 for the Fume Case.
Project No.: 170848

22.3.3 Special Mining Tax
This royalty is based on Peruvian Special Mining Tax Law 29789.The current financial
model estimates the total value of this royalty payment at US$17.4 M for the Base
Case, and US$10.0 M for the Fume Case.
Special Mining Tax and Mining Royalty Tax were reviewed and verified by tax
advisors, Grant Thornton S.A.C.
Based on the above assumptions, Royalties and Special Mining Tax, the amount of
income taxes payable for the duration of the Project is US$151.4 M for Base Case,
and US$93.6 M for Fume Case.
22.3.4 Depreciation and Amortization
Depreciation was calculated based on the depreciating asset life; as a result all assets
and equipment are fully depreciated. The opening pool balance is US$24.8 and this is
amortized over the life of mine, as provided by Zincore. This cost includes exploration
and acquisition cost for Accha and Yanque Deposit.
22.3.5 Closure Costs and Salvage Value
Provisional closure costs of US$ 10 M and a salvage value of US$5 M have been
included in the model, and are based on benchmarked estimates. A more detailed
assessment of closure cost will be developed as the closure plan for the Project is
defined during future, more detailed study.
22.3.6 Financing
The economic analysis is based on 100% equity financing.
22.3.7 Inflation
The Base Case economic analysis included no inflation. Capital and operating costs
are expressed in 2nd quarter 2013 US dollars.
22.4 Results of the Economic Analysis
Cash flows on an annualized basis for the two cases are included as Table 22-6 (Base
Case) and Table 22-7 (Fume Case).
Project No.: 170848

Table 22-6: Base Case Cash Flow Model

Calendar year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Project year 1 2 3 4 5 6 7 8 9 10 11
Production year -2 -1 1 2 3 4 5 6 7 8 9
Production
Total
Waste Kdmt 14,898 1,528 2,614 2,287 1,722 2,180 2,106 728 1,406 327
Ore Mined Kdmt 10,571 996 1,180 1,360 1,416 1,374 1,169 1,435 1,445 196
Ore Rehandled Kdmt
Ore To Plant Kdmt 10,571 996 1,180 1,360 1,416 1,374 1,169 1,435 1,445 196
Zn grade % 5.05% 6.38% 6.63% 5.74% 5.50% 5.65% 5.06% 4.01% 2.69% 1.72%
Pb grade % 2.26% 1.04% 1.64% 1.88% 2.69% 2.04% 2.13% 2.81% 3.05% 4.23%
Zn recovery % 87.92% 87.63% 87.90% 88.26% 88.36% 88.38% 87.93% 87.30% 86.90% 86.90%
Pb recovery % 97.63% 97.55% 97.63% 97.57% 97.59% 97.59% 97.63% 97.68% 97.70% 97.70%
Capital expenditure
Construction & sustaining US$000 (357,765) (51,824) (186,568) (94,063) (24,417) (21) (211) (330) (330)
Extracted metal value

Cathode
Zinc US$000 1,303,471 166,817 208,178 202,697 185,814 178,292 135,404 130,788 87,700 7,781
Concentrate
Lead US$000 534,109 24,264 44,746 57,433 84,477 62,158 55,213 89,452 97,775 18,591
Total US$000 1,837,580 191,080 252,924 260,130 270,291 240,450 190,616 220,241 185,475 26,372
Smelter deductions/premiums
Cathode
Zinc US$000
Premium US$000 82,856 9,823 12,118 12,160 12,138 12,094 9,185 8,872 5,949 518
Concentrate
Lead US$000 (31,418) (1,427) (2,632) (3,378) (4,969) (3,656) (3,248) (5,262) (5,751) (1,094)
Total US$000 51,438 8,396 9,485 8,781 7,168 8,438 5,937 3,610 198 (576)
Treatment charge
Pb concentrate US$000 (129,836) (5,613) (10,493) (13,876) (20,702) (15,232) (13,530) (21,921) (23,961) (4,506)
Product transport
Cathode
Land freight US$000 (282) (33) (41) (41) (41) (41) (31) (30) (20) (2)
Port storage & handling (705) (84) (103) (103) (103) (103) (78) (75) (51) (4)
Concentrate
Land freight US$000 (305) (13) (25) (33) (49) (36) (32) (51) (56) (11)
Port storage & handling US$000 (762) (33) (62) (81) (121) (89) (79) (129) (141) (26)
Ocean freight US$000 (24,480) (1,058) (1,978) (2,616) (3,903) (2,872) (2,551) (4,133) (4,518) (850)
Total US$000 (26,533) (1,221) (2,209) (2,875) (4,218) (3,141) (2,772) (4,419) (4,785) (893)
Project No.: 170848

Net Smelter Return US$000 1,732,650 192,642 249,708 252,160 252,540 230,514 180,251 197,511 156,926 20,397
Production costs
Mining US$000 (177,215) (13,706) (26,117) (31,979) (29,040) (28,633) (22,103) (12,979) (10,732) (1,926)
Process US$000 (533,881) (50,535) (63,000) (70,319) (75,507) (71,509) (58,834) (69,827) (65,415) (8,935)
G&A US$000 (51,883) (5,001) (6,251) (6,251) (6,251) (6,251) (6,251) (6,251) (6,251) (3,126)
Total US$000 (762,979) (69,242) (95,368) (108,549) (110,797) (106,394) (87,188) (89,057) (82,398) (13,986)
Closure & salvage
Closure costs US$000 (10,000) (10,000)
Salvage value - crusher US$000 5,000 5,000
Total US$000 (5,000) (5,000)
Operative Earnings
Operative Earnings before taxes US$000 964,670 123,400 154,340 143,611 141,742 124,121 93,064 108,453 74,528 1,411
Depreciation US$000 (24,794) (40,964) (51,191) (53,298) (51,761) (44,145) (54,179) (54,828) (6,411)
Operative Earnings before taxes less depreciation US$000 583,098 98,606 113,377 92,420 88,445 72,359 48,918 54,275 19,700 (5,000)
Royalty payment
Portion of NSR/Operative Earnings % 0.00 0.00 51.19 45.40 36.65 35.02 31.39 27.14 27.48 12.55 0.00
Royalty percentage % 0.00 0.00 1.94 1.53 1.00 0.91 0.74 0.56 0.57 0.14 0.00
Royalty factor 0.000 0.000 0.038 0.034 0.027 0.026 0.024 0.021 0.021 0.012 0.000
Applied royalty US$000 (16,474) (3,741) (3,816) (2,530) (2,307) (1,708) (1,010) (1,134) (227)
Special Mining Taxation

Special mining taxation percentage 1.8 1.5 1.1 1.0 0.9 0.7 0.7 0.3
Special mining taxation factor 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02
Special Mining Taxation US$000 (17,412) (3,441) (3,698) (2,705) (2,528) (1,972) (1,256) (1,401) (410)
Depreciation
Depreciation pool opening balance 24,834 76,659 263,226 332,495 315,949 264,778 211,692 160,261 116,115 62,266 7,438
Depreciation pool addition US$000 357,765 51,824 186,568 94,063 24,417 21 211 330 0 330 0 0
Depreciation used US$000 (381,572) 0 0 (24,794) (40,964) (51,191) (53,298) (51,761) (44,145) (54,179) (54,828) (6,411)
Depreciation closing balance 76,659 263,226 332,495 315,949 264,778 211,692 160,261 116,115 62,266 7,438 1,027
Taxation
Operating cash flow US$000 969,670 0 0 123,400 154,340 143,611 141,742 124,121 93,064 108,453 74,528 6,411
Depreciation US$000 (381,572) 0 0 (24,794) (40,964) (51,191) (53,298) (51,761) (44,145) (54,179) (54,828) (6,411)
Pre-tax net cash flow US$000 588,098 0 0 98,606 113,377 92,420 88,445 72,359 48,918 54,275 19,700 0
Royalty US$000 (16,474) 0 0 (3,741) (3,816) (2,530) (2,307) (1,708) (1,010) (1,134) (227) 0
Special Mining Tax US$000 (17,412) 0 0 (3,441) (3,698) (2,705) (2,528) (1,972) (1,256) (1,401) (410) 0
Worker Tax US$000 (44,337) 0 0 (7,314) (8,469) (6,975) (6,689) (5,494) (3,732) (4,139) (1,525) 0
Pre-tax net cash flow (after royalty, SMT & worker tax) US$000 509,875 0 0 84,109 97,393 80,210 76,921 63,184 42,919 47,600 17,538 0
Carryover NOL available US$000 15,483 5,161 5,161 5,161 0 0 0 0 0 0 0 0
Carryover NOL used US$000 5,161 0 0 5,161 0 0 0 0 0 0 0 0
Carry forward NOL US$000 0 0 0 0 0 0 0 0 0 0 0 0
Net taxable income US$000 504,714 0 0 78,948 97,393 80,210 76,921 63,184 42,919 47,600 17,538 0
Income tax payable US$000 (151,414) 0 0 (23,685) (29,218) (24,063) (23,076) (18,955) (12,876) (14,280) (5,261) 0
Project No.: 170848

Capital expenditure
Construction & sustaining US$000 (357,765) (51,824) (186,568) (94,063) (24,417) (21) (211) (330) (330)
Working capital US$000 (17,616) (6,778) (3,462) (898) 1,370 4,894 (879) 1,573 21,796
Construction, sustaining & working capital US$000 (357,765) (51,824) (186,568) (111,679) (31,195) (3,483) (1,109) 1,040 4,894 (1,209) 1,573 21,796
Net project cash flow

Pre-tax US$000 528,683 (51,824) (186,568) (2,775) 107,162 127,918 129,109 115,986 91,959 100,570 73,939 23,207
After tax US$000 377,268 (51,824) (186,568) (26,460) 77,944 103,855 106,033 97,030 79,083 86,290 68,678 23,207
Payback
Pre-tax cumulative net cash flow US$000 (51,824) (238,392) (241,168) (134,006) (6,087) 123,022 239,008 330,966 431,536 505,476 528,683
Pre-tax payback Years 3.0 1.0 1.0 1.0 0.0
After tax cumulative net cash flow US$000 (51,824) (238,392) (264,852) (186,908) (83,053) 22,980 120,010 199,093 285,383 354,061 377,268
After tax payback Years 3.8 1.0 1.0 1.0 0.8
Table 22-7: Fume Case Cash Flow Model

Calendar year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Project year 1 2 3 4 5 6 7 8 9 10 11
Production year -2 -1 1 2 3 4 5 6 7 8 9
Production
Total
Waste Kdmt 16,979 1,444 2,548 2,334 2,273 2,381 2,233 1,059 1,898 809
Ore Mined Kdmt 11,533 996 1,203 1,416 1,412 1,225 1,302 1,441 1,445 1,094
Ore Rehandled Kdmt
Ore To Plant Kdmt 11,533 996 1,203 1,416 1,412 1,225 1,302 1,441 1,445 1,094
Zn grade % 4.61% 6.74% 6.98% 6.07% 5.62% 5.91% 3.99% 3.35% 2.11% 1.16%
Pb grade % 2.58% 1.08% 1.76% 2.30% 2.78% 2.05% 2.60% 2.72% 3.08% 4.68%
Zn recovery % 91.99% 91.80% 92.06% 92.46% 92.68% 92.27% 91.68% 91.00% 91.00% 91.00%
Pb recovery % 97.65% 97.55% 97.64% 97.56% 97.59% 97.65% 97.67% 97.70% 97.70% 97.70%
Capital expenditure
Construction & sustaining US$000 (225,947) (32,182) (115,854) (61,646) (16,032) (21) (211)
Extracted metal value (After Shipping Losses)

Fume US$000 2,030,372 209,552 283,027 306,683 285,569 229,043 198,862 201,136 171,101 145,400
Total US$000 2,030,372 209,552 283,027 306,683 285,569 229,043 198,862 201,136 171,101 145,400
Smelter deductions/premiums
Concentrate
Zinc US$000 (285,708) (36,845) (46,805) (46,679) (39,696) (34,683) (24,732) (22,975) (20,539) (12,753)
Lead US$000 (76,526) (7,408) (9,355) (10,408) (10,164) (8,862) (8,266) (8,616) (7,702) (5,744)
Total US$000 (362,234) (44,253) (56,160) (57,087) (49,860) (43,546) (32,998) (31,591) (28,242) (18,497)
Project No.: 170848

Treatment charge
Pb concentrate US$000 (364,265) (34,188) (43,765) (50,166) (49,693) (43,326) (40,411) (42,121) (37,655) (22,939)
Product transport
Concentrate
Port storage & handling US$000 (1,928) (181) (232) (266) (263) (229) (214) (223) (199) (121)
Ocean freight US$000 (61,968) (5,816) (7,445) (8,534) (8,454) (7,371) (6,875) (7,166) (6,406) (3,902)
Total US$000 (63,896) (5,997) (7,677) (8,800) (8,717) (7,600) (7,089) (7,389) (6,605) (4,024)
Net Smelter Return US$000 1,239,977 125,114 175,424 190,630 177,299 134,571 118,365 120,035 98,599 99,939
Production costs
Mining US$000 (167,619) (13,045) (26,025) (31,689) (28,472) (21,940) (18,695) (9,047) (11,821) (6,885)
Process US$000 (415,422) (37,699) (49,023) (56,476) (56,523) (47,274) (44,519) (46,606) (43,091) (34,212)
G&A US$000 (42,624) (3,705) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (5,000) (3,919)
Total US$000 (625,666) (54,449) (80,048) (93,165) (89,995) (74,214) (68,214) (60,652) (59,912) (45,016)
Closure & salvage

Closure costs US$000 (10,000) (10,000)
Salvage value - crusher US$000 5,000 5,000
Total US$000 (5,000) (5,000)
Operating Earnings
Operating Earnings before taxes US$000 609,311 70,665 95,377 97,464 87,304 60,357 50,150 59,383 38,687 49,924
Depreciation US$000 (14,925) (25,066) (31,950) (31,852) (27,669) (29,416) (32,548) (32,638) (24,717)
Operating Earnings before taxes less depreciation US$000 358,530 55,740 70,310 65,514 55,452 32,688 20,735 26,835 6,049 25,207
Royalty payment
Portion of NSR/Operative Earnings % 44.55 40.08 34.37 31.28 24.29 17.52 22.36 6.13 25.22
Royalty percentage % 1.47 1.19 0.88 0.74 0.45 0.25 0.39 0.06 0.48
Royalty factor 0.033 0.030 0.026 0.024 0.019 0.014 0.017 0.010 0.019
Applied royalty US$000 (8,836) (1,842) (2,092) (1,682) (1,304) (608) (296) (467) (60) (484)
Special Mining Taxation

Special mining taxation percentage 1.4 1.2 1.0 0.9 0.6 0.4 0.5 0.1 0.6
Special mining taxation factor 0.03 0.03 0.03 0.03 0.02 0.02 0.02 0.02 0.02
Special Mining Taxation US$000 (9,971) (1,800) (2,147) (1,858) (1,509) (804) (462) (643) (121) (628)
Depreciation
Depreciation pool opening balance 24,834 57,016 172,870 219,591 210,557 178,628 146,987 119,318 89,903 57,355 24,717
Depreciation pool addition US$000 225,947 32,182 115,854 61,646 16,032 21 211 0 0 0 0 0
Depreciation used US$000 (250,781) 0 0 (14,925) (25,066) (31,950) (31,852) (27,669) (29,416) (32,548) (32,638) (24,717)
Depreciation closing balance 57,016 172,870 219,591 210,557 178,628 146,987 119,318 89,903 57,355 24,717 0
Taxation
Project No.: 170848

Operating cash flow US$000 614,311 70,665 95,377 97,464 87,304 60,357 50,150 59,383 38,687 54,924
Depreciation US$000 (250,781) (14,925) (25,066) (31,950) (31,852) (27,669) (29,416) (32,548) (32,638) (24,717)
Pre-tax net cash flow US$000 363,530 55,740 70,310 65,514 55,452 32,688 20,735 26,835 6,049 30,207
Royalty US$000 (8,836) (1,842) (2,092) (1,682) (1,304) (608) (296) (467) (60) (484)
Special Mining Tax US$000 (9,971) (1,800) (2,147) (1,858) (1,509) (804) (462) (643) (121) (628)
Worker Tax US$000 (27,578) (4,168) (5,286) (4,958) (4,211) (2,502) (1,598) (2,058) (469) (2,328)
Pre-tax net cash flow (after royalty, SMT & worker tax) US$000 317,146 47,931 60,786 57,016 48,428 28,774 18,378 23,667 5,398 26,768
Carryover NOL available US$000 5,161 5,161 5,161
Carryover NOL used US$000 5,161 5,161
Carry forward NOL US$000
Net taxable income US$000 311,985 42,770 60,786 57,016 48,428 28,774 18,378 23,667 5,398 26,768
Income tax payable US$000 (93,595) (12,831) (18,236) (17,105) (14,528) (8,632) (5,513) (7,100) (1,619) (8,030)
Capital expenditure
Construction & sustaining US$000 (225,947) (32,182) (115,854) (61,646) (16,032) (21) (211)
Working capital US$000 (15,111) (6,820) (3,560) 813 4,224 1,628 1,815 381 16,629
Construction, sustaining & working capital US$000 (225,947) (32,182) (115,854) (76,757) (22,852) (3,581) 602 4,224 1,628 1,815 381 16,629
Net project cash flow

Pre-tax US$000 336,980 (32,182) (115,854) (13,901) 63,000 85,385 80,882 60,667 49,422 58,030 38,417 63,114
After tax US$000 243,384 (32,182) (115,854) (26,732) 44,764 68,280 66,354 52,035 43,908 50,930 36,798 55,084
Payback
Pre-tax cumulative net cash flow US$000 (32,182) (148,036) (161,937) (98,937) (13,552) 67,330 127,997 177,418 235,449 273,866 336,980
Pre-tax payback Years 3.2 1.0 1.0 1.0 0.2
After tax cumulative net cash flow US$000 (32,182) (148,036) (174,768) (130,004) (61,724) 4,630 56,665 100,573 151,503 188,301 243,384
After tax payback Years 3.9 1.0 1.0 1.0 0.9
Project No.: 170848

22.5 Sensitivity Analysis
A sensitivity analysis was performed, taking into account variations in capital

costs, operating costs, metal prices, anthracite prices, and grade. The results
are shown in Tables 22-8 and 22-9.
Table 22-8: Summary of Base Case Economic Sensitivity to Changes in Key

SENSITIVITY Change in Factor (US$ ‘000)
OF NPV @ 8%
(2015) -30% -20% -10% 0% 10% 20% 30%
Capital 213,943 192,783 171,509 150,123 128,678 107,132 85,573
expenditure
Operating 233,379 205,975 178,280 150,123 121,603 92,814 62,670
expenditure
Metal price (63,269) 12,252 83,044 150,123 216,251 281,677 346,670
Anthracite 174,419 166,341 158,234 150,123 141,987 133,806 125,597
price
Grade (23,059) 36,395 94,119 150,123 205,635 260,686 315,526
Table 22-9: Summary of Fume Case Economic Sensitivity to Changes in Key

SENSITIVITY Change in Factor (US$ ‘000)
OF NPV @ 8%
(2015) -30% -20% -10% 0% 10% 20% 30%
Capital 131,928 118,337 104,725 91,073 77,380 63,656 49,897
expenditure
Operating 159,214 136,783 114,070 91,073 67,806 44,226 20,369
expenditure
Metal price (125,567) (40,995) 29,491 91,073 151,599 211,439 270,774
Anthracite 116,821 108,269 99,685 91,073 82,406 73,713 64,990
price
Grade (73,829) (12,658) 41,161 91,073 140,576 190,163 239,921
(1) Metal prices represent a ±10, 20, and 30% change applied to both to zinc and lead price
(2) Grade represents a ±10, 20, and 30% change applied to both zinc and lead grades
Sensitivities are also shown graphically in Figures 22-3 and 22-4.
Project No.: 170848

Figure 22-3: Summary of Base Case Economic Sensitivity to Changes in Key

Sensitivity of NPV 8%
400,000
300,000
NPV 8% (US$000)
200,000
100,000
0
(100,000)
‐40% ‐30% ‐20% ‐10% 0% 10% 20% 30% 40%
Change In Factor
Capital Opex Metal Prices Anthracite Price Grade
Figure 22-4: Summary of Fume Case Economic Sensitivity to Changes in Key

Sensitivity of NPV 8%
300,000
250,000
200,000
NPV 8% (US$000)
150,000
100,000
50,000
0
(50,000)
(100,000)
(150,000)
‐40% ‐30% ‐20% ‐10% 0% 10% 20% 30% 40%
Change In Factor
Capex Opex Metal Prices Anthracite Grade
The results from the analysis showed that the Project sensitivity is (in order from
highest to lowest) metal price, grade, operating expenditure, capital expenditure
and anthracite prices.
Project No.: 170848

Cash flow models were also prepared considering the current three-year moving
average zinc and lead prices and resulted in after tax undiscounted cumulative
net cash flows of US$169.9 M for the Base Case and US$64.3 M for the Fume
Case.
Project No.: 170848

23.0 ADJACENT PROPERTIES
There are no relevant adjacent properties to the AZOD Project.
Project No.: 170848

24.0 OTHER RELEVANT DATA AND INFORMATION
24.1 Risks and Opportunities
A Project risk and opportunity analysis was performed, with the key findings
summarized in the following sub-sections.
24.1.1 Risks
The development of the baseline information and the process of obtaining the EIA and
construction permits in a time frame that will allow the Project to capitalize on high
forecast zinc and lead prices represents a risk to the Project. Delays in the any aspect
of this process could lead to delays in production.
Delays and costs associated with obtaining community consent and approvals to
execute the project could impact both the capital cost and the schedule of the project.
Water coming from the slag storage facility, the processing plant and the pit could
potentially fail to meet either LMPs or ECAs for barium, arsenic, cadmium,
manganese, lead and zinc. The Project has planned for lime treatment to be added to
the sedimentation pond elements such that these elements (e.g. Cd, Pb, Zn) will drop
to meet the local discharge standards. Barium concentrations, on the other hand, may
require a different and more advanced treatment.
Due to the limited hydrogeological information available at the elevations of the

proposed underground mine, this component could not be considered in the Accha
water balance. Larger volumes of water would require additional dewatering capacity
thereby incurring additional costs. Further investigations to characterize the
hydrogeological conditions of the underground mine are proposed for future study
phases.
The Project has assumed based on available geotechnical information that the open
pit can be mined simultaneously with the underground. As additional geotechnical
information for the underground mine becomes available this assumption may need to
be reviewed.
The samples of Yanque mineralization tested to date cannot be considered completely

representative of the deposit. The existing test work results on these are however
probably reasonably indicative of the likely metallurgy for use in the PFS.
There has been limited characterization of the elements outside of the payable
elements and there is currently insufficient information to provide meaningful
Project No.: 170848

comments on deposit heterogeneity. In addition to limited knowledge of penalty-

incurring elements such as F and Cl, variations in the Fe: Mg ratios within the deposits
have not been quantified. Variations may result in the lowering of the melting point
within the kilns. Changes in the melting point may require considerations of other
additives than the dolomite that is currently envisaged.
The overall SiO2, CaO, MgO and FeO ratios in the charge to the kiln influence the
overall operation of the kiln, and hence recovery of Zn and Pb. This is especially true
for Yanque material, in which the ratios seem to influence the melting of the ore, and
hence recovery. The SiO2 ratio to other oxides may present a risk in the kiln operation
as the optimum ratios are not currently well defined.
The process operating cost is highly sensitive to the processing fuel cost assumptions,
and specifically to the assumptions made for anthracite coal. A rise in the Peruvian
Sole in comparison to the US dollar or any increase in transportation costs could
impact the financials of the Project.
The fume product from the Waelz kilns can form a very fluffy blowing material and
sometimes this may be sintered or calcined in another kiln to improve its material
handling characteristics for transportation but this step is not considered in this study.
There is a risk that future more detailed test work, including an investigation of the
material handling and transport aspects of fume from site to a coastal based refinery
during detailed studies, may indicate the current handling assumptions are difficult to
implement without additional on-site treatment.
The current mine plan is limited by the Waelz kiln throughput capacity. Larger kilns
are outside of standard designs and any changes in recoveries or changes in additives
to improve recovery could reduce kiln throughput, requiring a strategy that would
require four smaller kilns to meet the production requirements and incurring increases
in capital and operating costs.
The haul road represents a significant capital expenditure and the logistics of carrying
out an upgrade while executing construction needs to be further evaluated. A more
detailed basement of shipping envelope at each phase of the road upgrade should
also be carried out. There is a risk that the construction could be delayed if the road
upgrade cannot be concurrently executed with construction of the facilities at Yanque.
The Base Case is based upon the production of refined SHG zinc ingots and a lead
sulphate residue by-product with an assumed lead grade supported by test work of
51% Pb. Pricing assumptions are based upon marketing specialist estimates of
commercial parameters including treatment charges. No buyers have been
approached formally to validate the pricing assumptions.
Project No.: 170848

The Fume Case is based upon marketing specialist estimates of commercial

parameters including treatment charges. No buyers have been approached formally to
validate these assumptions in this case either.
Pricing for zinc and lead are based on an average of Wood Mackenzie and World
Bank prices. While there is consensus among market specialists that zinc and lead
will increase in price the forecasts vary. Not realizing the prices established for the
project represents a risk that will impact the financial returns on the project.
No penalties associated with F, Cl or other contaminant have been included in the

financial analysis as there is currently insufficient information to determine what the
final level of these may be in the product and therefore determine the impact on the
assumptions in the financial model. These elements should be added to the ICP
analyses for all future drill and check assay programs. Additional elements may be
added during future studies.
The open pit and mine plan assume the use of a contractor to carry out the mining. In
discussion with contractors a model was established based on profit and financing.
There is a risk that contractor pricing when received may differ from this pricing,
affecting mining cost estimates.
24.1.2 Opportunities
Further of investigation of alternative anthracite sources closer to the pyrometallurgical

plant have the potential to reduce the plant operating cost.
Preliminary reviews of the pre strip at Accha indicated that it may be feasible to reduce
the duration of the pre-strip. Taking advantage of this would take the pre strip off of the
schedule critical path and contribute to a reduction in capital cost.
Opportunities exist within the plant layouts at both the metallurgical facilities to reduce
the overall foot print and earthworks.
A number of alternative access/haul road routes were reviewed at a conceptual level.

Other options were identified but not fully analysed. Constructing an alternative haul
and transmission line route could mitigate risks of impacting the construction schedule
and provides opportunities to reduce costs
Project No.: 170848

25.0 INTERPRETATION AND CONCLUSIONS
25.1 Mineral Tenure, Royalties and Surface Rights
Information supplied by legal experts supports the statements by Zincore that the
Project is wholly-owned by an indirectly-held Zincore subsidiary; five of the
concessions are held under option and the legal opinion supports that the option
agreement is valid. Information provided by legal tenure experts retained by Zincore
also supports the statements that the mining tenure held is valid, and are considered
sufficient to support declaration of Mineral Resources and Mineral Reserves
Royalties are payable on a sliding-scale to the Peruvian government. Two third-party

royalties are payable; however, the concessions subject to the royalty provisions do
not yet have identified Mineral Reserves.
There are no current surface rights held by Zincore. Agreements have been
concluded with local communities to allow exploration access to selected concessions;
however, surface rights will have to be acquired through agreement or purchase to
support any future mining activity. Surface rights will also need to be acquired to
support construction and operation of any hydrometallurgical plant and for
development of the proposed power line and haul road routes
25.2 Environment, Social and Permits
Zincore has sufficiently addressed the potential environmental impact of the operation,
and subsequent draft closure and remediation requirements at the pre-feasibility stage
of study that Mineral Resources and Mineral Reserves can be declared, and that the
proposed mine plan is achievable. However, additional work will be required on
contact water discharge and treatment requirements in support of a final closure plan
Initial baseline studies have shown the presence of flora and fauna species that may
require the presence of specialist management plans. Archaeological and additional
baseline studies will be required in support of operational permitting
Zincore has shown that the company can successfully negotiate community
agreements in support of exploration activities; it is a reasonable expectation that such
agreement can continue to be negotiated in support of additional exploration and
drilling activities.
Community agreements in support of mine development and mining operations will

need to be negotiated. There is an expectation that some hamlets and isolated
farmsteads may need to be relocated to avoid mining impacts on the inhabitants.
Project No.: 170848

Such areas may include housing or farming located within the expected blast zones of
the open pits, or along the proposed road and power line traverses. No formal
identification of the number of households that would be affected has been
undertaken, and no surveys of the areas of land that may be required have been
completed. Resettlement will require appropriate negotiation with affected parties and
is likely to include some form of compensation payments for land usage. Delays in
agreement negotiation represent a risk to the proposed Project development timeline.
There are a significant number of permits required in support of Project development

and construction. Delays in acquiring any of the key permits also represent risks to the
proposed Project development timeline.
25.3 Geology and Mineralization
The Accha and Yanque lead–zinc mineralization are considered to be examples of

highly-weathered carbonate replacement deposits.
The geological understanding of the settings, lithologies, and structural and alteration
controls on mineralization in the different zones is sufficient to support estimation of
Mineral Resources and Mineral Reserves. The geological knowledge of the area is
also considered sufficiently acceptable to reliably inform mine planning at a pre-
feasibility level of study.
The mineralization style and setting is acceptably understood and can support
declaration of Mineral Resources and Mineral Reserves.
Further work will be required at Yanque to better establish the geological contacts that
are currently obscured by talus. Due to the topographic constraints on establishment
of drill pads, this area has the widest drill spacing, and consequently the geological
model at Yanque is sensitive to variations in the location and dip of the interpreted
contacts.
25.4 Exploration and Drilling
Some remnant artisanal mining activity is visible in the Project area; however, all such
workings are currently inactive. Prior to Zincore’s tenure, Minera del Suroeste S.A.C.,
Savage Resources Ltd., Pasminco Limited, and Rio Tinto Minera Peru conducted
exploration activities in the period 1994 to 2006. Work completed included
prospecting, trenching, core drilling, auto magneto telluric (AMT), induced polarization
(IP) and magnetometer geophysical surveys. Zincore acquired the Project in 2006,
and has subsequently completed geological mapping, core drilling, metallurgical test
work, Mineral Resource estimation, and mining and technical studies. The exploration
Project No.: 170848

programs completed to date are appropriate to the style of the deposits, prospects and
occurrences.
A total of 345 drill holes (60,827.60 m) have been completed over the entire Project
area in the period 1994 to 2012. Of the drill total 291 holes (51,151.6 m) were
completed by Zincore during the period 2006 to 2012. This total includes exploration,
metallurgical and geotechnical drilling. The quantity and quality of the lithological,
geotechnical, collar and down hole survey data collected in the exploration and infill
delineation drill programs at Accha and Yanque are sufficient to support Mineral
Resource and Mineral Reserve estimation.
There is no information available on the sampling methods and QA/QC employed for
the legacy drill programs; however, sufficient programs of reanalysis and twin drilling
have been performed that the data can be accepted for use in estimation; in addition,
the majority of the core is available for inspection and review.
Since inception of the Zincore drill campaigns, data have been collected following
industry-standard sampling protocols. Programs have included submissions of SRMs
and blank samples for QAQC purposes.
ALS and ACME Laboratories in Lima have acted as the primary laboratories during the
Zincore drill programs. Check assays were performed by SGS Peru, also in Lima. All
three are accredited third-party commercial laboratories.
Although the SRM material has not been analysed by round-robin, review of the SRM
data do not indicate consistent analytical precision issues. No significant
contamination was noted during review of the blank data.
Specific gravity determination procedures are consistent with industry-standard

procedures. While there are sufficient acceptable specific gravity determinations to
support the specific gravity values utilized in tonnage interpolations, additional
determinations to support feasibility-level studies are recommended
25.6 Data Verification
The process of data verification for the Project has been performed by external
consultant firms from 2006 to date, in support of technical reports and Mineral
Resource estimates. Verification has included site visits, core twinning of legacy drill
holes, review of lithology, collar and down-hole survey data, review of trench versus
core data, check assaying, and QA/QC data checks.
Project No.: 170848

Based on these checks, a reasonable level of verification has been completed, and no
material issues would have been left unidentified from the programs undertaken.
25.7 Metallurgical Test Work
Pyrometallurgical pilot test work conducted to date on samples from Accha indicates
that conventional Waelz kiln processing can be used to recover zinc and lead to a
fume product. The recovery of zinc for the Phase 1 pyrometallurgical tests at IMN
were 88.51% and 89.36% respectively, while the lead recovery was >97% for both.
Pilot plant test work which yielded a classical grade recovery curve and indicated that
zinc recovery of about 95% can be expected at a fume grade of about 60% zinc. Lead
recovery is expected to exceed 97%. In the PEA a relationship for anthracite to zinc
was established. This was updated in the PFS to incorporate lead. Utilizing this
relationship, the preferred operating point and recoveries were selected resulting in an
assumed recovery for zinc of 91.99% and for lead of 97.65%.
There appears to be significant variation in the mineralization characteristics across

the Yanque deposit, with some samples melting during test work, resulting in lower
than expected recoveries. Differences in test results suggest that the quality of any
dolomite must be considered when making up the kiln charge and the overall balance
of quartz, CaO, FeO and MgO must be considered when sourcing the dolomite.
recovery of zinc to the PLS in excess of 98%. Hydrometallurgical purification of the
PLS via zinc cementation would be an acceptable processing route for the Waelz kiln
fume, and would produce an advance electrolyte to the electrowinning circuit for the
production of SHG zinc meeting the required specifications. Halide levels in the fume
remain in excess of those allowed, indicating that halide removal via calcination and
leaching might be required.
25.8 Mineral Resource and Mineral Reserve Estimates
Mineral Resources and Mineral Reserves for the Project, which have been estimated
using core drill data, have been performed to industry best practices, and conform to
the requirements of CIM (2010). The Mineral Reserves are acceptable to support
mine planning;
Reviews of the environmental, permitting, legal, title, taxation, socio-economic,

marketing and political factors and constraints for the Project support the declaration of
Mineral Reserves using the set of assumptions outlined;
Project No.: 170848

Factors which may affect the estimates include changes to the assumptions used to
generate the data for consideration of reasonable prospects of economic extraction for
Mineral Resource estimates and the final Mineral Reserve pit shells and stope
outlines; issues related to mineral processing that include reliable supply of coal for
use in the Waelz kiln process, production of high quality fume, and hydrometallurgical
issues related to the production of zinc ingot; the estimated tonnage of mineralization
to be mined from underground may vary as infill drilling from underground provides
more detailed information about geomechanical characteristics, thickness and
continuity of grade in this portion of the deposit; delays or other issues in reaching
agreements with local communities; changes in land tenure requirements or in the
permitting requirements and estimates of insitu bulk density are presently based on
samples taken from core drilling and determination of density based on larger-scale
excavations or production may reveal densities that are different than those currently
estimated for the deposit.
25.9 Mine Plan
In the Base Case, the open pit at Accha will have a seven year mine-life, including one
year of pre-production. The Yanque open pit will have eight full years of production
and two months in the ninth year. The combined open pit production capacity has a
peak of 1,340 kt and a stripping ratio of 1.58 (waste/plant feed).
In the Fume Case the Accha open pit wll have a six year mine life, including one year
in the pre-production. The Yanque open pit has an approximate eight year mine life.
The combined open pit production capacity peaks at 1,349 kt and has a stripping ratio
of 1.58 (waste/ plant feed).
The underground pre-production development at Accha will start during the first year of
production of the open pit and will consist of 3,879 m for the Base Case and 4,135 m
for the Fume Case. Development is distributed among the following: main access
drive, service ramp, ore passes, ventilation raises, backfill raises. Total development
will take two years approximately for a total of 6,533 m for the Base Case and 6,399 m
for the Fume Case. Once developed, the Accha underground Base Case mine will
produce over six years, supplementing open pit production from Accha for the first five
years then replacing open pit production in its sixth and final year. Similarly, the Accha
underground Fume Case mine will produce over five years, supplementing open pit
production from Accha for four years then replacing open pit production in its fifth and
final year. The final year of production at Accha for each case is from underground
sources.
The life-of-mine operating cost for the open pit contractor averages US$4.57/t mined
for the Base Case and US$4.18/t mined for the Fume Case. This cost is related to a
Project No.: 170848

conventional open pit mining operation, consisting of drilling, blasting, loading and
hauling. The primary crusher will be located at the Yanque site; the mine to plant ore
trucking distance averages 1.5 km for the Yanque mine and about 62 km atfor the
Accha mine. WRDs will be located 1.85 km and 2.8 km from the pits at Yanque and
Accha respectively.
For the Base Case the impact of the haulage distance for the ore from Accha is
reflected in the open pit operational cost of US$19.60/t of ore for Accha, US$4.07/t ore
for Yanque and US$64.74/t ore for the Accha underground operation. In the Fume
Case, the open pit operational cost is US$18.30/t ore at Accha, US$3.86/t ore for
Yanque and US$66.15/t ore for the underground operation. Accha underground mine
operating costs include ore haulage to the Yanque plant, contractor-based costs and
the costs associated with cemented backfill. These estimates are considered
reasonable based on the mining method selected and benchmarking against other
Peruvian mines operating with similar mining methods.
The estimated open pit operational cost for the contractor includes a 12% utility and an
equipment capital investment of US$12.53 M for the Base Case and US$12.54 M for
the Fume Case. The open pit operational cost reaches US$111.7 M for the Base
Case and US$115.8 M for the Fume Case. The estimated operational cost is in line
costs from similar Peruvian mine operations contractors.
The estimated Owner mine capital expenditure to develop the Accha and Yanque
open pit is US$10.915 M for both the Base and Fume Cases; this includes the pre-
stripping and construction of the pioneering roads. Underground mine capital costs for
both cases are approximately US$11.5 M, where development is equivalent to 75%
and the remaining 25% corresponds to mine equipment, infrastructure and working
capital.
AMEC carried out open pit sensitivities for the main parameters that influence the pit
shells, finding the final pit configurations were moderately to highly sensitive to
fluctuations in commodity prices and recoveries. The Accha pit is highly sensitive to
pit slope angles and the Yanque pit is highly sensitive to processing costs. A 10%
reduction of zinc and lead prices results in a 20% and 25% decrease in ore within the
final pit shells for the Base and Fume Case. Conversely, a 10% increase in metal
prices increase the ore available at Accha by 10% and by 25% at Yanque.
Under the economic conditions dictated by operating, costs, mining capital, and WRD
construction, a lower stripping ratio was targeted. While the ore to the plant may
increase it does not offset the higher waste content in the pits which is associated with
the higher stripping ratios. Improved economics are achieved with a lower strip ratio
and lower waste material.
Project No.: 170848

25.10 Process Recovery Plan
pyrometallurgical plant for the reductive roasting of Yanque and Accha Zn–Pb
The Project will utilize Waelz kiln technology, which, while having a long mining and
processing history is not currently a widely-utilized technology.
It is assumed that all by-product residue lead sulphate will be sold, and no bulk storage
or disposal facilities are included in the PFS infrastructure layout.
25.11 Infrastructure Requirements
On-site infrastructure at Accha and Yanque will consist of two open pits and one
underground mine, access and haul roads, two WRFs, a slag storage facility, water
diversion structures and water storage ponds, accommodation complex, mine offices,
and truckshop facilities. The hydrometallurgical plant, offsite at Ilo, will include the
actual refinery, and supporting office and workshop space.
Electricity will be provided via the existing Peruvian national grid for both the mine
sites, the pyrometallurgical plant and the hydrometallurgical plant.
Process and potable water supply will be provided by pit dewatering of the Yanque
deposit. A desalination plant is expected to provide the required water for the
hydrometallurgical plant.
The infrastructure as proposed is considered by the QPs to be appropriate to support

the envisaged PFS mine plan.
The results of this mass balance indicated that water from the waste dumps could be
discharged to a sedimentation pond and eventually to the environment without
exceeding maximum allowable limits.
25.12 Marketing and Price Forecasts
No formal market entry studies have been conducted. Wood Mackenzie completed a
review of the likely markets for Project product, using product specifications sourced
from test work on Project samples; this review indicated that there are potential buyers
for the zinc ingots, lead sulphate and fume production. The assumed level of
payabilities for lead sulphate concentrate and zinc-lead oxide concentrate (Fume)
used in the PFS were derived from market studies conducted by Wood Mackenzie and
Project No.: 170848

commissioned by Zincore, however, no buyers have been directly approached by

Zincore to confirm the assumed levels of payability.
Lead sulphate concentrate and zinc-lead oxide concentrate (fume) are not
conventional products, and global markets for this material are small.
Reviews of the likely product makeup, based on the metallurgical test work, suggests
additional penalties could be incurred. This was not confirmed with any potential
buyers, and there is currently no provision in the financial model for contaminant
penalties
There are currently no contracts in place to market any future Project production.
The average of World Bank and Wood Mackenzie pricing is acceptable for use in the
financial model. Wood Mackenzie holds the view that there is likely to be a short-term
increase in zinc pricing between 2016 and 2020, such an increase would significantly
enhance Project economics.
25.13 Capital and Operating Costs
The capital cost estimate was based on a combination of vendor quotes, AMEC in-
house data, design drawings, site-specific information provided by Zincore, and the
proposed Project development schedule. Capital costs total $345.5 M in the Base
Case and $214.5 M in the Fume Case. No costs have been included within the capital
estimate to cover potential buyers’ costs to receive and handling either a Fume or lead
sulphate product.
Operating costs were estimated using unit pricing for major consumable items,
benchmarked Peruvian mine wages and salaries, vendor quotations, and the proposed
Project development schedule. Estimates used a Xeras® software-based cost model
that employed a first principle build-up. Operating costs total $377,M or $89.94/t milled
for the Base Case and $243M or $122.78/t milled for the Fume Case.
requirements associated with the slag production.
25.14 Financial Analysis
Based on the assumptions outlined in the financial analysis, the Base Case and the
Fume Case show positive Project economics.
Project No.: 170848

The sensitivity analysis shows that the Project is most sensitive to variations in (in
order from highest to lowest) metal price, grade, operating expenditure, capital
expenditure and anthracite prices. Zincore, through its wholly indirectly-owned
subsidiary Collasuyo has exploration concessions, permits and community relations
agreements required to allow them to continue to explore and carry out study work on
the AZOD Project. There are no environmental, archaeological, social or political
conditions that would limit Zincore’s ability to continue to advance the Project.
25.15 Risks and Opportunities
The main risks facing Project development in the timeline envisaged in the PFS
include delays in obtaining key permits, delays and costs incurred in obtaining social
licence and surface rights, contract execution risks associated with road development
and access during Project construction activities, and fluctuations in metal pricing and
product sales pricing.
Opportunities include potential reductions in the amount of pre-stripping required at

Accha, reductions in the overall plant footprints, and consideration of alternative haul
and transmission line routes to minimize costs.
Project No.: 170848

26.0 RECOMMENDATIONS
A two-phase work program is recommended. The first phase will consist of activities
required to support completion of an EIA while the second phase will consist of the
completion of the feasibility study (Table 26-1). The phases can be conducted
concurrently; however, work on the environmental baseline and surface rights in
Phase 1 should commence immediately. The intent of the work program is to finalize
the EIA and FS in parallel such that both are available to support the permitting
process. Estimated costs are provided as a range as Zincore may choose to execute
some work internally as opposed to using third-party consultants.
Table 26-1: Recommended AZOD Project Work Plan Budget

Item Estimated Cost (US$ M)
Phase 1 Environmental and Permitting

Surface Rights 0.5–0.75
Environmental Baseline 1.5–2.0
Environmental Impact Basement 0.6–0.8
Subtotal Environmental and Permitting 2.6–3.55
Phase 2 Feasibility Study
Geotechnical Drilling 1.0–1.5
Geomechanical Study
(Ilo, Pyro, Accha and Yanque Mine Areas) 0.4–0.5
Hydrology / Hydrogeology /Geochemistry Study 0.5–0.6
Geotechnical Site Investigations
Infrastructure & Hydrolytic Plant 0.2–0.3
Mineral Resource Support
(Additional mapping, trenching and small drill progam) 0.5–0.75
Marketing Studies 0.2–0.3
Metallurgical Test Work 0.75–1.0
Power Line FS Study 0.3–0.4
Haul Road FS Study 0.3–0.4
Mine Planning and Mine Design 0.75–1.0
Process Design 0.3–0.4
Project Management, Engineering and Reporting 4.0–4.5
Subtotal Project Management, Engineering and Reporting 9.2–11.65
Estimated Total Cost Phases 1 and 2 11.8–15.2
Within each technical discipline, the following recommendations should be addressed

as part of the discipline area noted in Table 26-1.
Project No.: 170848

26.1 Phase 1
 Surface Rights:
- Establish initial data base of land ownership to determine surface rights
associated with mines, pyrometallurgical plant, hydrometallurgical plant, mine
infrastructure, power line and haul road routes.
- Determine through trade off optimum mode of acquisition of surface rights at Ilo
in order to facilitate EIA and FS design. Rights should be obtained through
purchase, lease or other mechanism.
 Environment, Social and Permits

- Review and update or commence data collection for baseline studies on the
socio-economic and cultural settings of the rural communities of Lacca-Lacca,
Yanque, Paccobamba, Gran Chico and Parcco.
- Commence archaeological baseline studies, with an initial focus on the Yanque
area.
- Identify all stakeholders and establish a stakeholder database.
- Establish which householders or communities may require resettlement, assess
the social baseline for those affected to allow initial development of an action
and social management plan
26.2 Phase 2
 Geology and Mineral Resources

- Zincore continue improving the geological model of the high grade mineralized
algal reef unit at Accha, in particular establishing positions and influence of post
mineralization faulting.
- Investigation of insitu bulk density is recommended at both deposits as more
detailed density models will be required for future studies, because the cost and
tonnage factor of ore and waste is very important to Project economics.
Excavation of pits and trenches and comparison of excavated volumes with the
moist and dried mass of excavated material would provide a validation of the
estimated bulk density and moisture content of mineralization and waste.
- Mapping and drilling on the southwestern edge of the Yanque deposit are
challenging as a result of the steep slope along which the deposit is exposed
and as a result this portion of the deposit has a relatively high uncertainty in
estimated tonnages and grades. Additional trenching or diamond drilling is
recommended to test the thickness of mineralization along the western edge of
the deposit.
Project No.: 170848

- Additional drilling will be required to support the estimation of Measured mineral

resources at Yanque. An infill drilling campaign is recommended for the
northern end of the deposit where mineralization is exposed or near surface as
this part of the deposit will be mined early in the project life. Infill drilling should
be carried out with detailed core logging, density determination, sampling,
assaying, geological and geotechnical logging, core photography and an
assaying quality assurance program. Approximately 40 drill holes averaging
50 m or 2,000 m of drilling would be required to reduce the drill pattern to a
nominally 30 m pattern.
 Geotechnical / Hydrogeological Studies

- A geotechnical and geomechanical study is required to support mining method
selection and mine design parameter assessment for open pit and underground
mining. A geotechnical study would also improve confidence in the viability of
recovering the Accha crown pillar and inform rock mass characteristics,
allowable development sizes, production opening sizes, ground support
requirements, stope layouts, and the production sequencing required to ensure
safe and economical mining for the underground mine.
- An evaluation of local hydrogeological characteristics to determine the effects
on the mine of the ground water, and mine inflow rates for both the Yanque
open pit and the Accha open pit and underground mines should be initiated.
- Additional geochemical characterization, water balance, and mass balance
calculations or modeling should be conducted in later stages of the project to
better define the type of water treatment that may be required to meet the
required water quality standards.
- Geotechnical field investigations should be carried out to evaluate if there are
better alternative waste dump locations at the Accha and Yanque deposits
 Mining
- Conversion of the resource model from Psad-56 to WGS 84 in order to align
with the future requirements of the EIA.
- Solicit firm price quotions for contract mining in order to confirm cost
assumptions made for the contractor in both open pit and underground.
- Review the final pits for Accha with the objective of improving the ore recovery
by avoiding over-mining of waste over ore mining.
- Optimize the pre strip and pioneering road development at Accha in order to
minimize the duration of pre-production activities.
- Perform a detailed evaluation of the simultaneous operation of the Accha open
pit and underground mines.
Project No.: 170848

- Improve the cost estimate for extraction and knowledge of the source with
respect to dolomite on the project site.
- Carry out test work on material for underground backfill on detritic cemented
material.
- Develop an improved Owners’ cost model, defining in more detail the Owner
requirements.
 Metallurgical Test Work

- Additional pyrometallurgical test work recommended for the FS should be
conducted on samples more representative of the mine plan grade to verify the
recovery and metallurgical conclusions of this study, specifically with regards to
the Yanque ore body
- The difference in melting temperatures determined from the test work indicates
significant variability across the Yanque ore body. Additional Bunte-Baum-
Reerink test work based on more detailed geological zoning of the Yanque ore
is recommended.
- Additive testing on the Yanque ore using a number of previously untested
additives is recommended
- Conduct a bulk hydrometallurgical evaluation of the entire chosen flow sheet,
using no synthetic solutions to determine exact impurity deportments, as well as
the condition of the final cathodes. Electrowinning of zinc from the liquor
generated by treatment of the ZnO fume should be conducted to confirm that
the quality and morphology of the cathodes produced meets the specifications
for SHG cathode.
- Due on the extremely fine PSD of the Yanque fume, rheology tests as part of
the solid/liquid separation tests are recommended in future test work due to
concern regarding the viscosity of the sample.
- It is also recommended that solid-liquid separation studies are undertaken to
characterise the leach residues – specifically with regards to wash efficiencies
and ratios of the halide and neutral leach residues.
- Verification of the magnesium, calcium, iron and silica ratios should be
determined prior to any future test work.
- Specific materials handling test work should be conducted as part of a
Feasibility Study to determine the exact flow characteristics of the AZOD fume
for use in detailed engineering and design.
 Infrastructure
- Complete a power line study validating routing in support of EIA.
Project No.: 170848

- Complete a FS-level haul road design focusing on optimizing cut and fill in
conjunction with tradeoffs with other possible routes.
- Establish and review the logistics and shipping plan for construction execution
aligning plan with shipping envelopes during each phase of the widening of the
access/haul road.
 Marketing and Price Forecasts

- Updated market studies and firm price quotations should be obtained for lead
sulphate and local purchasers should be specifically identified for zinc ingot.
- Study and Technical Management of all participants and components of the
feasibility study and completion of engineering design and reporting.
Project No.: 170848

27.0 REFERENCES
Agapito, 2008. Pre-Feasibility Geotechnical Assessment, Accha Project, Peru.

Unpublished report prepared by Agapito Associates, Inc. for Zincore. 68p.
AMEC, 2011. AZOD Project PEA Study Report: unpublished internal preliminary
economic assessment report prepared by AMEC Peru for Zincore dated 15 September
2011.
AMEC, 2013. AZOD Project Final Pre-Feasibility Study Report: unpublished internal
pre-feasibility study (PFS) report prepared by AMEC Peru for Zincore dated 15 August,
2013
Benavides, O., 2011. Legal Opinion Letter for Exploraciones Collasuyo S.A.C.
Unpublished legal opinion on the AZOD Project exploration concessions, community
agreements, underlying agreements and ownership structure prepared for Collasuyo
by Oscar Benavides of the law firm Rodrigo, Elias & Medrano dated 23 September,
2011. 31p.
Boni, M., Balassone, G., Arseneau, V. and Schmidt, P., (2009). The nonsulphide Zinc
Deposit at Accha (Southern Peru): Geological and Mineralogical Characterization.
Economic Geology, v. 104. 267-289 pp.
CHR Metals Limited 2012a. Zinc and Lead Prices and Treatment Charges and the
Marketability of AZOD Products 2015-2025: unpublished report prepared by CHR
Metals Limited for Zincore , September 2012, 13p.
CHR Metals Limited 2012b. Zinc and Lead Prices and Treatment Charges and the
Marketability of AZOD Products 2015-2025, Updated May 2013 Prices: unpublished
report prepared by CHR Metals Limited for Zincore, September 2012, 13p.
Coaquira, A. 2011a. Estudio de Impacto Ambiental semidetallado Proyecto de

Exploración ACCHA – Categoría II. Unpublished semi-detailed environmental impact
assessment study report prepared by EQUUS Equilibrio y Desarrollo EIRL for Zincore.
Coaquira, A. 2011b. Estudio de Impacto Ambiental semidetallado Proyecto de

Exploración “Yanque- Dolores” – Categoría II. Unpublished semi-detailed
environmental impact assessment study report prepared by EQUUS Equilibrio y
Desarrollo EIRL for Zincore.
Project No.: 170848

Einaudi, M.T., Meinert, L.D. & Newberry, R.J. (1981). Skarn deposits. In: Economic
Geology 75th Anniversary Volume 1905-1980, Skinner, B.J. (Ed.), pp. 317-391,
Economic Geology Publishing Company, Catalog Card No. 81-84611, New Haven.
Einaudi, M.T. & Burt, D.M. (1982). Introduction - Terminology, classification, and
composition of skarn deposits. Economic Geology, Vol. 77, No. 4, pp. 745-754, ISSN
0361-0128.
Hatch, 2010a. September 17, 2010, Final Report: Preliminary Pilot Plant Test Work
Yanque Ore.
Hatch, 2010b. July 9, 2010, Final Report: Preliminary Pilot Plant Test Work Accha Ore
(15% Zn).
Hitzman, M.W., Reynolds, N.A., Sangster, D.F., Allen, C.R., Carman, C.E., 2003.
Classification, Genesis, and Exploration Guides for Nonsulphide Zinc Deposits.
Economic Geology, vol. 98, 685-714 pp.
INGEMET, 1975. Bulletin N° 27 “Geología de los cuadrángulos de Andahuaylas” Hoja

28-p, Abancay Hoja 28-q y Cotabambas Hoja 28-r Escala 1:100000, INGEMMET,
1975
INGEMET, 1983. Bulletin N° 35 “Geología de los cuadrángulos de Chalhuanca” Hoja

29-p, Antabamba Hoja 29-q y Santo Tomás Hoja 29-r Escala 1:100000, INGEMMET,
1983.
INGEMET, 1994. Bulletin N° 52 “Geología de los cuadrángulos de Cuzco” Hoja 28-s y

Livitaca Hoja 29-2 Escala 1:100000, INGEMMET, 1994.
INGEMET, 2011. Bulletin N° 138 “Geología del cuadrángulo de Cuzco” Hoja 28-s
Escala 1:50000, INGEMMET, 2011.
Instytut Metali Niezelasnych 2013: Verification of Results of Research Conducted in

Laboratory Conditions. Production of 300 kg of Dust for Hydrometallurgical Testing,
Report No: 7120/13
Leach, D.L., and Sangster D.F., 1993, Mississippi Valley – Type Lead-Zinc Deposit in
Mineral Deposit Modeling, GAC Special Paper 40, edited by Kirkham, R.V. et. al
McMahon, A.M., 2008a. Technical Report for the Yanque Deposit, Peru.
Unpublished Technical Report dated April 14th, 2008. 64 pp.
Project No.: 170848

McMahon, A.M., 2008b. Technical Report for the Accha Deposit, Peru. Unpublished
Technical Report dated January 18th, 2008. 83 pp.
McMahon, A.M., Miranda, H.M. and de Wet, K., 2008. Technical Report for the Accha
Zinc Property, Peru. Unpublished Technical Report dated June 9th, 2008. 92 pp.
Megaw, P., 1998. Carbonate-hosted Pb-Zn-Ag-Cu-Au replacement deposits: An

exploration perspective, in Lentz, D.R., ed., Mineralized intrusion-related skarn
systems: Mineralogical Association of Canada Short Course Notes, v. 26, p. 337–357.
Megaw, P.K.M., Ruiz, J. & Titley, S.R. (1988). High-temperature, carbonate-hosted

Ag-Pb-Zn(Cu) deposits of Northern Mexico. Economic Geology, Vol. 83, No. 8, pp.
1856-1885, ISSN 0361-0128.
Metallicon, 2010a, Preliminary Pyrometallurgical and Hydrometallurgical Tests (Accha

and Yanque Test Work). Unpublished metallurgical test work report prepared by
Metallicon for Zincore dated 19 April, 2010.
Metallicon, 2010b. Summary of Accha Preliminary Pilot Plant Test Work.

Unpublished metallurgical test work report prepared by Metallicon for Zincore dated 18
August, 2010.
Metallicon, 2010c, Summary of Yanque Preliminary Pilot Plant Test Work.

Unpublished metallurgical test work report prepared by Metallicon for Zincore dated 13
September, 2010.
Metallicon, 2011. Summary of the findings of the Pyrometallurgical Additive Test Work
Conducted at Mintek, South Africa. Unpublished metallurgical test work report
prepared by Metallicon for Zincore dated 1 June, 2011.
Metallicon Process Consulting 2012. Summary of the Findings of Phase 1

Pyrometallurgical Test Work Conducted at IMN, Poland, Report No: ZIN008-012
Metallicon Process Consulting 2013a. Summary and Interpretation of the Findings of

Phase 2 Pyrometallurgical Test Work Conducted at IMN, Poland, Report No: ZIN008-
016
Metallicon Process Consulting 2013b. Summary and Interpretation of the Findings of

Stage 2 Hydrometallurigcal Test Work Conducted at Mintek, South Africa, Report No:
ZIN008-017
Project No.: 170848

Mintek, 2010. Report No. 5580 Evaluation of Recovery of Zinc from Peruvian Deposits
through Low Temperature Reductive Roasting and Alkali Leaching. Unpublished
metallurgical test work report prepared by Mintek for Zincore dated 15 April, 2010.
Mintek, 2011. Dissolution of Zinc Oxide Fume in Sulphuric Acid to Characterize its
Leaching Potential – Stage 1. Unpublished metallurgical test work report prepared by
Mintek for Zincore dated 4 April, 2011.
Mintek, 2013. Test Work to Evaluate Different Process Options for the Production of
Special High-Grade Zinc from Zinc Oxide Fume, Report No: 6497
Perelló J., Carlotto V. Zarate A.,Ramos P., Posso H., Neyra C., Caballero A., Fuster
N., and Muhr R., 2003. Porphyry Style Alteration and Mineralization of the Middle
Eocene to Early Oligocene Andahuaylas – Yauri Belt, Cusco region, Peru;
Econ.Geology, vol.98, 2003, 1575-1605 pp.
Pincock, Allen and Holt, 2008. Pre-Feasibility Mine Plan Study for the Accha Mineral
Deposit, June 2008
Sinclair, RJ 2005: The Extractive Metallurgy of Zinc: The Australasian Institute of

Mining and Metallurgy, Spectrum Series Volume 13, Carlton, Australia
Stubens, T.C., 2011. Technical Report on the Mineral Resources of the Accha
Deposit, Cusco Department, Peru. Unpublished NI 43-101 Technical Report prepared
by qualified person Thomas.Stubens P.Eng. of Micon International Ltd. for Zincore
Metals Inc. dated 5 May, 2011. 96 pp.
SNC Lavalin, 2008. Prefeasibility Study Vol I, for the Accha Concentrator Project,
Dated on April 2008, 17 pp.
Winter, L.D.S., and Schmidt, P.R., 2006. National Instrument 43-101 Technical Report,
Zincore Metals Inc., Accha-Yanque Zinc Belt Project, Department of Cusco, Peru,
August 31, 2006, revised 2 October, 2006
Winter, L.D.S, 2006. National Instrument 43-101 Technical Report, Zincore Metals
Inc., Accha-Yanque Zinc Belt Project, Department of Cusco, Peru, 31 August 2006.
Zincore, 2011. 2010 Annual Report. publicly filed Annual Report prepared by Zincore
Metals Inc. dated 18 March, 2011. 40 p.
Project No.: 170848


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Zincore Metals Inc.

AZOD Zinc Oxide Project,

Prepared for: Zincore Metals Inc.

Project Number: 170848

I am a Practising Member of The Association of Professional Geoscientists of Ontario. I

As a result of my experience and qualifications, I am a Qualified Person as defined in National

I am independent of Zincore as independence is described by Section 1.5 of NI 43–101.

Dated: 26 August 2013

“signed and sealed”

Christopher Wright P.Geo.

AMEC (Perú) S.A.

As a result of my experience and qualifications, I am a Qualified Person as defined in National

I am independent of Zincore as independence is described by Section 1.5 of NI 43–101.

Dated: 26 August 2013

Sergio Munoz, CMC.

AMEC (Perú) S.A

I am a member of Association of Professional Engineers and Geoscientists of Saskatchewan. I

I have practiced continuously in my profession for seventeen years, 12 in operations and 5 in

As a result of my experience and qualifications, I am a Qualified Person as defined in National

I am independent of Zincore as independence is described by Section 1.5 of NI 43–101.

Dated: 26 August 2013

“signed and sealed”

William Bagnell, P.Eng.

AMEC Americas Ltd

As a result of my experience and qualifications, I am a Qualified Person as defined in National

Directors: M.M. Valenta B. Mulcahy H. Snyman

I am independent of Zincore as independence is described by Section 1.5 of NI 43-101.

Dated: 26 August 2013

Directors: M.M. Valenta B. Mulcahy H. Snyman

I am a Professional Engineer of the Association of Professional Engineers and Geoscientists of

As a result of my experience and qualifications, I am a Qualified Person as defined in National

I am independent of Zincore as independence is described by Section 1.5 of NI 43–101.

Dated: 26 August 2013

“signed and sealed”

Stewart Twigg, P.Eng.

AMEC (Perú) S.A

I am a member of Professional Engineers Ontario. I graduated from the University of British

I have practiced my profession for over 10 years.

As a result of my experience and qualifications, I am a Qualified Person as defined in National

I am independent of Zincore as independence is described by Section 1.5 of NI 43–101.

Dated: 26 August 2013

“signed and sealed”

Vikram Khera, P.Eng.

AMEC Americas Ltd

As a result of my experience and qualifications, I am a Qualified Person as defined in National

I have not visited the AZOD Zinc Oxide Project.

I am independent of Zincore as independence is described by Section 1.5 of NI 43–101.

Dated: 26 August 2013

“signed and stamped”

Stella Searston, RM SME.

AMEC E&C Services, Inc.

1.0 SUMMARY ............................................................................................................................. 1-1

Project No.: 170848

4.1 Property and Title in Peru ...................................................................................................... 4-1

Project No.: 170848

8.1 Comment on Section 8........................................................................................................... 8-2

Project No.: 170848

12.1 Winter and Schmidt (2006) .................................................................................................. 12-1

Project No.: 170848

14.12 Mineral Resource Statements ............................................................................................ 14-19

Project No.: 170848

16.12 Auxiliary Equipment ........................................................................................................... 16-49

Project No.: 170848

19.1.1 Forecast Metal Pricing ................................................................................................... 19-1