El Domo, Curipamba

  • Investment terms

    Adventus Mining (“Adventus”) has the option to earn a 75% interest in the Curipamba Project by funding costs of US $25,000,000 (the “Earn-In”) over five years. Under the Curipamba Option Adventus has agreed to provide Salazar Resources with US $250,000 per year advance payments until achievement of commercial production, to a maximum of US $1,500,000. As operator, the Company also receives a 10% management fee on certain expenditures, with a prescribed minimum annual amount of US $350,000.

    Adventus has notified the Company that it has incurred or funded costs totaling US $11,883,628 as at March 31, 2019 towards the Earn-In. Once the feasibility study is completed Adventus is required to fund 100% of the development and construction expenditures to commercial production.

    Upon achievement of commercial production, Adventus will receive 95% of the dividends from the Curipamba Project until its aggregate investment, including the US $25,000,000, has been recouped minus the approximate Company carrying value of US $18,200,000 when the Curipamba Option was signed, after which dividends will be shared on a pro-rata basis according to their respective ownership. In certain circumstances where project development is delayed post earn-in, Adventus’ ownership position could be diluted.

  • Location

  • PEA

    A Preliminary Economic Assessment (“PEA”) for the El Domo volcanogenic massive sulphide deposit (“El Domo”), located within the Curipamba Project, Bolivar State, Ecuador was announced on 2 May 2019.

    The El Domo resource at 4.9% copper equivalent is almost an order of magnitude higher than average global copper grades, which is reflected in the compelling set of economics, and the project is located in an increasingly pro-mining jurisdiction, with good infrastructure.

    The PEA shows that El Domo can be a low-cost supplier of copper gold and zinc, generates cash flows after taxation of US$449 million over the initial six years of production, and delivers an IRR of 40% with a payback of less than two years.

  • PEA Results Summary

     

    PEA Base
    Case

    -10% Pricing

    +10% Pricing

    Long-term
    Consensus
    Forecast(3)

    Spot Prices
    as of April
    30, 2019

    After-Tax NPV ($M, 8% discount rate)(2)

    $288

    $225

    $342

    $330

    $271

    After-Tax IRR (%)(2)

    40%

    35%

    45%

    44%

    39%

    First 6 Years of After-Tax Cashflow ($M)

    $449

    $392

    $500

    $488

    $434

    Initial Capital Cost ($M, incl. refundable VAT)(4)

    $185

    Life of Mine ("LOM") Sustaining Capital Cost ($M)

    $105

    Total Capital Cost ($M)

    $289

    C1 Cost ($/lb CuEq, see production below)(5)

    $0.96

    $0.94

    $0.98

    $0.98

    $0.91

    Payback Period (years)

    Approximately 2 years

    Nominal processing capacity (tpd)

    1,750

    LOM CuEq Head Grade over 15 years

    4.9%

    Average annual payable production (Years 1 - 14)

    Cu = 8,495 t
    Au =24,433 oz
    Zn = 10,831 t
    Ag = 558,160 oz
    Pb = 564 t
    CuEq = ~19,000 t

    Metal prices assumed

    $3.15/lb Cu

    $1,350/oz Au

    $1.15/lb Zn

    $18.00/oz Ag

    $1.00/lb Pb

    $2.84/lb Cu

    $1,215/oz Au

    $1.04/lb Zn

    $16.20/oz Ag

    $0.90/lb Pb

    $3.47/lb Cu

    $1,485/oz Au

    $1.27/lb Zn

    $19.80/oz Ag

    $1.10/lb Pb

    $3.38/lb Cu

    $1,436/oz Au

    $1.22/lb Zn

    $19.80/oz Ag

    $1.00/lb Pb

    $2.91/lb Cu

    $1,285/oz Au

    $1.33/lb Zn

    $14.91/oz Ag

    $0.88/lb Pb

     

    Notes:

    1)

    Unless otherwise noted in this news release, all currencies are reported in US dollars on a 100% basis

    2)

    Assumes an 18-month construction period as the basis for the internal rate of return ("IRR") and net present value ("NPV") calculations

    3)

    Long-term, consensus metal forecasting has been provided by RPA

    4)

    Capital cost estimates used for the PEA are based off benchmarking and not engineering design

    5)

    C1 Cost is net of direct operating costs and royalties

  • Geology and Mineral Resource Estimate

    El Domo, located within the Curipamba project, Bolivar and Los Rios Provinces, Ecuador is hosted in a juvenile volcanic-magmatic arc of the Paleocene-Eocene Macuchi Terrane that is known to host at least two other volcanogenic massive sulphide deposits.

    Sulphide mineralization at El Domo is principally located at the contact between a felsic volcanic dome and overlying volcaniclastic strata and is generally flat lying. It has been traced for approximately 800m in a north-south direction and between 350m and 500m east-west. 

    A Mineral Resource estimate for El Domo has been completed as part of the PEA to include all infill drilling completed in 2018. The updated, open pit constrained, Mineral Resource estimate for El Domo has an effective date of 2 May 2019 and is supported on information provided from 309 core boreholes, totalling 60,449 metres, completed between 2007 and 2018. The new Mineral Resource estimate has a total tonnage distribution of approximately 14%, 73%, and 13% classified in the Measured, Indicated and Inferred categories, respectively.

    Measured Mineral Resources for El Domo total 1.4 million tonnes grading 1.92% copper, 0.37% lead, 3.52% zinc, 3.75 g/t gold and 58 g/t silver. The Indicated Mineral Resources for El Domo total 7.5 million tonnes grading 2.02% copper, 0.26% lead, 2.81% zinc, 2.33g/t gold and 49 g/t silver. The Inferred Mineral Resources for El Domo total 1.3 million tonnes grading 1.52% copper, 0.20% lead, 2.25% zinc, 1.83 g/t gold and 42 g/t silver.

  • Total Mineral Resource for El Domo

    Resource
    Category

    Tonnes
    (Mt)

    Grade

    Contained Metal

    Cu
    (%)

    Pb
    (%)

    Zn
    (%)

    Au
    (g/t)

    Ag
    (g/t)

    Cu

    (kt)

    Pb
    (kt)

    Zn

    (kt)

    Au
    (koz)

    Ag

    (koz)

    Measured

    1.4

    1.92

    0.37

    3.52

    3.75

    58

    27.8

    5.3

    50.9

    174

    2,704

    Indicated

    7.5

    2.02

    0.26

    2.81

    2.33

    49

    150.9

    19.7

    210.3

    559

    11,884

    M+I

    8.9

    2.00

    0.28

    2.93

    2.56

    51

    178.7

    25.0

    261.3

    733

    14,588

    Inferred

    1.3

    1.52

    0.20

    2.25

    1.83

    42

    20.1

    2.7

    29.7

    78

    1,783

  • Pit Constrained Mineral Resource for El Domo

    Resource
    Category

    Tonnes
    (Mt)

    Grade

    Contained Metal

    Cu
    (%)

    Pb
    (%)

    Zn
    (%)

    Au
    (g/t)

    Ag
    (g/t)

    Cu

    (kt)

    Pb
    (kt)

    Zn

    (kt)

    Au
    (koz)

    Ag

    (koz)

    Measured

    1.4

    1.92

    0.37

    3.52

    3.75

    58

    27.8

    5.3

    50.9

    174

    2,704

    Indicated

    5.7

    1.74

    0.28

    2.60

    2.47

    51

    99.0

    16.1

    147.8

    452

    9,417

    M+I

    7.1

    1.78

    0.30

    2.78

    2.73

    53

    126.8

    21.4

    198.7

    627

    12,121

    Inferred

    0.7

    0.67

    0.21

    1.72

    1.60

    46

    4.6

    1.5

    11.9

    36

    1,032

  • Underground Mineral Resource for El Domo

    Resource
    Category

    Tonnes (Mt)

    Grade

    Contained Metal

    Cu
    (%)

    Pb
    (%)

    Zn
    (%)

    Au
    (g/t)

    Ag
    (g/t)

    Cu

    (kt)

    Pb
    (kt)

    Zn

    (kt)

    Au
    (koz)

    Ag
    (koz)

    Indicated

    1.8

    2.91

    0.20

    3.51

    1.85

    43

    51.9

    3.6

    62.5

    106

    2,467

    Inferred

    0.6

    2.46

    0.19

    2.82

    2.09

    37

    15.5

    1.2

    17.8

    42

    751

    Link to 2 May 2019 PEA and Mineral Resource Estimate Update [here]

  • Future Work

    Adventus, Salazar and Consultants have identified several areas and opportunities that may provide significant costs savings and improved economics for the project. Post-PEA the team will embark on additional technical work and trade-off engineering studies to better position and further de-risk the project, including but not limited to the following: mining, milling and metallurgy, tailings ttorage and waste rock facilities, and local infrastructure.

    In addition, the partnership will continue to conduct exploration activities within the 21,500-hectare Curipamba project which encompasses El Domo. The objective of continuing regional exploration is to develop and assess targets that could further maximize flexibility with respect to future development decisions on the El Domo, Curipamba project.

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