Exhibit 99.23

TECHNICAL REPORT ON THE SAN LUIS PROPERTY

District of Shupluy, Yungay Province, Ancash Department, Peru

Effective Date: January 15, 2025

Report Date: March 14, 2025

Report prepared for Highlander Silver Corp.

By Martin Mount, MSc MCSM FGS CGeol FIMMM CEng

Photograph of the Ayelén Vein cropping out at surface
(latitude 09° 23’ south by longitude 77° 47’ west)

DATE AND SIGNATURE PAGE

I, Martin Mount, MSc MCSM FGS CGeol FIMMM CEng (Qualified Person), do hereby certify that I am author of the report entitled “Technical Report on the San Luis Property” with the effective date of January 15, 2025.

Dated this 14th day of March, 2025.

(signed) Martin Mount        

Martin Mount

MSc MCSM FGS CGeol FIMMM CEng (QP)

Fellow of the Geological Society of London – Membership No. 16658.

Fellow of the Institute of Materials Minerals and Mining – Membership No. 47566

CONTENTS

Tables

Figures

Appendices

The San Luis Property is situated within the District of Shupluy, Yungay Province, Ancash Department of west-central Peru; approximately 513 km north-northwest of the city of Lima. The geographic centre of the property is at 09o23’ south latitude by 77o47’ west longitude, or Universal Transverse Mercator (UTM) 8,960,000 m north by 195,000 m east within Peruvian National Topographic System (NTS) map sheet 19-H. Reliant Ventures S.A.C. (“Reliant”) has been exploring this property since its discovery in June 2005.

On May 23, 2024, Highlander Silver Corp. (the “Company” or “HSC”) announced that it had acquired the San Luis Gold-Silver Project (the “San Luis Property”) from SSR Mining Inc. (“SSR Mining”), pursuant to a share purchase agreement dated November 29, 2023 (as amended, the “Share Purchase Agreement”).

The San Luis Property comprises 32 mineral rights which cover an area of approximately 23,298 ha. Out of these mineral rights, 31 are held by Reliant, while the remaining 1 is a recently staked claim held by CAPPEX Exploraciones S.A.C., (both subsidiaries of the Company), that the Company anticipates transferring to Reliant in due course.

The San Luis Property is situated regionally within the Cordillera Negra terrain of the Peruvian Andes. It is dominantly underlain by volcanic, volcanoclastic and sub-volcanic intrusive rocks of andesitic-dacitic to rhyolitic composition belonging to the Paleocene-age Calipuy Formation. The Lower Cretaceous Santa Formation of limestone and calcareous clay crops out locally as ‘windows’ within the younger overlying volcanic rocks and there are exposures of the Coastal batholith in the southwestern portion of the property.

North to northwesterly trending fault structures are the most important structural features within the property since they appear to control and host most of the known precious metal-bearing vein structures. Northwesterly and north-northwesterly trending faults, especially those hosting vein structures, have been repetitively active since the cessation of volcanism. Faulting and shearing have also occurred during and after vein emplacement resulting in well-developed vein breccia textures, open tensional sites for later dyke emplacement, and later brecciation and displacement of both the dykes and vein structures.

Three distinctly different mineral deposit types have been identified within the property. The most extensively explored are the epithermal, low sulphidation, gold and silver-bearing, quartz-calcite veins of the Ayelén system first discovered in 2005. The others, hydrothermal breccia-hosted base metal and manto-hosted occurrences, appear related to a buried intrusion situated centrally within what is referred to as the BP zone explored in the period 2010–2012, and centred approximately 6 km southeast of the Ayelén vein system.

A similar gold-bearing Bonita vein system was located 7 km to the south of the Ayelén occurrence in 2011-2012. Trenching and two preliminary drillholes confirmed anomalous gold-silver values.

The principal objective of this technical report was to review Reliant’s 2009 Mineral Resource estimates and supporting data on behalf of HSC, and prepare this independent updated estimate as summarized in Table 1-1.

Notes:

Exploration to date has demonstrated that the main property opportunity comprises the continued exploration for epithermal, low sulphidation, gold and silver bearing veins in order to increase property value, and it is recommended that further exploration be carried out.

The exploration objectives are clear and require more exploration to grow the current Mineral Resources and make new discoveries that could support further growth beyond this, with the priorities as follows:

A two-phase work program is proposed, with a total estimated cost of US$10 million, which includes a 15% contingency. A summary of the program along with detailed cost estimates is provided in Table 26- 1.

Phase 1 focuses on ground base discovery exploration work of Au/Ag veins to the south of Ayelén and in the area between Ayelén and Bonita, together with early delineation of resource potential in Bonita.

This phase is projected to require US$1.7 million and includes the following recommendations:

The extent of Phase 2 is partially contingent upon favourable results from Phase 1. The estimated cost for this second phase is approximately US$8.3 million, which will cover:

Table 1-2 – Recommended Work Program

The QP was retained by HSC in 2024 to conduct a review of the Mineral Resource estimate and supporting dn Luis Property, for the purposes of preparing a Technical Report following the guidelines of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).

This work involved a property visit carried out on March 20-21, 2024, examination of various mineral occurrences on the property, verification of drilling and sampling, data validation, review of the geological model and the previous Mineral Resource estimate and classification of NI 43-101-compliant Mineral Resources according to the guidelines set out by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM). An inspection of Reliant’s sample store (coarse rejects and assay pulps) was made on March 22, 2024, in Chorrillos, Lima.

This report complies with the disclosure and reporting requirements set forth in NI 43-101, Companion Policy 43-101CP to NI 43-101, and Form 43-101F1 of NI 43-101.

The metric system has been used throughout this report. Tonnes are dry metric of 1,000 kg, or 2,204.6 lb. All currency is in United States dollars and referenced as ‘US$’ unless otherwise stated.

The author of this current report is not qualified to provide comment on legal issues associated with the property included in Item 4 of this report. Inclusion of these aspects was based on a report provided by HSC’s counsel, Cillóniz & Valencia Abogados, confirmed current as of February 5, 2025, and has not been independently verified by the author. The author is therefore relying fully on such report as it pertains to legal matters disclosed in Item 4 of this report.

The San Luis Property is located in the high Andes of the Department of Ancash in Central Peru (Figure 4-1). The geographic centre of the property is at 09^o23’ south latitude by 77^o47’ west longitude, or UTM 8,960,000 m north by 195,000 m east within Peruvian NTS map sheet 19-H.

Figure 4-1 Location of the San Luis Property in Ancash, Peru

The property comprises 32 mineral rights covering an area of 23, 298.84 ha (Table 4-1 and Figure 4-2).

Out of the 32 mineral rights, a total of 31 have been granted definitive title to Reliant as metallic mining concessions, while the remaining mineral right (San Luis SW2) is a mining claim currently undergoing the corresponding titling procedure before INGEMMET.

All 31 titled mining concessions are registered and held under the name of Reliant, while CAPPEX Exploraciones S.A.C. (a subsidiary of the Company) is the titleholder of the San Luis SW2 mining claim. This concession is in the process of being transferred to Reliant.

The author understands that these mineral rights are in good standing, and he has not been made aware of any pending litigation or legal issues relating to the property. Mining concessions in Peru are irrevocable provided that their titleholder complies with the Maintenance Obligations referred to in Item 4.2. Except as set forth herein, the author is not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform work on the property.

Like other mining projects, San Luis is subject to various Peruvian mining laws, regulations and procedures. Mining activities in Peru are subject to the provisions of the Uniform Code of the General Mining Law (“General Mining Law”), which was approved by Supreme Decree No. 14- 92-EM, on June 4, 1992, and its subsequent amendments and regulations, as well as other related laws. Under Peruvian law, the Peruvian State is the owner of all mineral resources in the ground. The rights to explore for, develop and mine these mineral resources are granted by means of the “Concessions System”.

Mining concessions are considered immovable assets and are therefore subject to being transferred, optioned, leased and/or granted as collateral (mortgaged) and, in general, may be subject to any transaction or contract not specifically forbidden by law. Mining concessions may be privately owned and the participation in the ownership of the Peruvian State is not required. Buildings, workings and other permanent structures used in a mining operation are considered real property accessories to the concession on which they are situated.

Pursuant to article 39 of the General Mining Law, titleholders of mining concessions must pay an Annual Licence Fee (Derecho de Vigencia). The Licence Fee is due on June 30 of each year and is set at US$3.00 per hectare. Failure to pay Licence Fees for two consecutive years causes the termination (caducidad) of the mining concession. According to article 59 of the General Mining Law, payment for one year may be delayed and the mining concessions will remain in good standing provided the outstanding payment is made before June 30 of the following year.

To the date of this report, with the sole exception of the San Luis SW2 mining claim, all 31 mining concessions making up the San Luis Project are currently two years behind in License Fee payments, meaning payment of the 2024 and 2025 License Fees is pending.

Failure by Reliant to comply with, at least, payment of the 2024 Licence Fees applicable to these concessions, on or before June 30, 2025, will result in the termination of the corresponding mining concessions.

In the case of San Luis SW2, this mining claim is one year behind in License Fee payments, meaning payment of the 2025 License Fees is pending.

Legislative Decree 1010 dated May 9, 2008, Legislative Decree 1054 dated June 27, 2008, and Legislative Decree 1320 dated January 5, 2017, amended several articles of the General Mining Law referring to the Minimum Production Obligation, to the point of establishing a new regime for compliance with such Minimum Production Obligation (“New MPO Regime”).

According to the New MPO Regime, titleholders of metallic mining concessions must reach a minimum level of annual production (“Minimum Production”) of at least one (1) Tax Unit or “UIT” (UIT for the year 2025 was set at PEN5,350.00, approximately US$1,500) per hectare, within a period of 10 years, counted as from January 1st of the year following that in which title to concession was granted.

A mining concession that did not reach Minimum Production during the 10-year period mentioned above may remain in good standing for up to an additional 20 years, provided that the titleholder complies with payment of an annual Penalty payable until the year in which the mining concession reaches Minimum Production. The Penalty will be applied as from the year following that in which Minimum Production had to be reached.

The amount of the Penalty will be automatically increased every five years, as follows:

Payment of the Penalty may be waived, on an annual basis, in case the titleholder incurs in qualified exploration investments in the mining concessions in the order of at least 10 times the amount of the applicable Penalty.

Failure to comply with payment of the applicable Penalty for two consecutive years will cause the termination of the mining concession.

Same as in the case of Licence Fees, in the case of Penalties payment for one year may be delayed and the mining concessions will remain in good standing provided the outstanding payment is made before June 30 of the following year.

Notwithstanding the above, in the event the titleholder does not reach Minimum Production within a period of 30 years counted as from the year following the year in which title to concession was granted, the mining concession will be terminated.

In the case of concessions granted title on or before October 10, 2008, the 10-year period for reaching Minimum Production began on January 1, 2009.

To the date of this report, a total of 26 out of the 31 mining concessions making up the San Luis Property are subject to Penalty payments. In all these cases, Penalties have been timely paid up until the year 2023.

Payment of the 2024 and 2025 Penalties is pending in the case of all the 26 mining concessions referred to above. Failure to comply with, at least, payment of the 2024 Penalties on or before June 30, 2025, will result in the termination of the corresponding mining concessions.

Pursuant to the General Mining Law:

Mine production in Peru is subject to a Royalty payable to the Government. The Royalty applies to gross sales and its percentage will depend on the company’s operating margin (income from sales of minerals minus production costs and operational expenses). Depending on the operating margin the royalty can range between 1% and 12% (Table 4-2). Royalty payments are tax deductible.

By public deed dated August 22, 2011, issued before notary public of Lima Anibal Sierralta Rios, Reliant granted SSR Mining Inc. (then called Silver Standard Resources Inc.) a perpetual 1% Net Smelter Return (NSR) Royalty on all minerals produced from the mining concessions referred to in Table 4-3.

By public deed dated August 22, 2011, issued before notary public of Lima Anibal Corvetto Romero, SSR Mining Inc. assigned all its rights and obligations under the Royalty Agreement in favour of Esperanza Resources Corp. (“ESC”).

By public deed dated August 1, 2011, issued before notary public of Lima Anibal Corvetto Romero, Reliant granted Esperanza Silver Perú S.A.C. a perpetual 1% NSR Royalty on all minerals produced from the mining concessions referred to in Table 4-4.

By public deed dated October 17, 2019, issued before notary public of Lima Luis Dannon Brender, Esperanza Silver Perú S.A.C. assigned all its rights and obligations under the Royalty Agreement in favour of Metalla Royalty & Streaming Ltd.

By public deed dated May 22, 2024, issued before notary public of Lima Luis Dannon Brender, Reliant granted SSR Mining Inc. a perpetual 4% NSR Royalty on all minerals produced from the mining concessions referred to in Table 4-5. The Royalty Agreements includes a buy-back right in favor of Reliant for 50% of the Royalty, subject to a payment of US$15,000,000 exercisable prior to mine construction (as such term is defined in the Royalty Agreement).

Income Tax applicable to companies and other corporate entities is currently set at 29.5%. Regarding the tax rate applicable to dividends, it is currently 5% and this has been in force since 2017.

According to the Peruvian Constitution, foreign investment is subject to the exact same rules as local investment. Furthermore, there are no restrictions on the ability of a company operating in Peru to transfer dividends, interest, royalties or foreign currency in to, or out of Peru, or to convert Peruvian currency into foreign currency.

Law 29789, dated September 28, 2011, created the Special Tax on Mining. This tax applies to operating profit and its percentage will depend on the company’s operating margin (income from sales of minerals minus production costs and operational expenses). Depending on the operating profit, the tax can range between 0% and 8.40% (Table 4-6). Special Tax payments are tax deductible.

Congress has approved a Temporary Net Assets Tax, which applies to companies subject to the General Income Tax Regime. Net assets are taxed at a rate of 0.4% on the value exceeding one million Peruvian soles. Taxpayers must file the tax return in the month of April (in accordance with the schedule of due dates for monthly tax returns for the March period) and the amounts paid can be used as a credit for Income Tax. Companies which have not started productive operations (such as exploration companies) are exempt from such tax.

The Tax Administration Superintendent is the entity empowered under the Peruvian Tax Code to collect government taxes. The Tax Administration Superintendent can enforce tax sanctions, which can result in fines, the confiscation of goods and vehicles, and the closing of a taxpayer’s offices.

Reliant state that from the review of the Cadastral Map issued by the Peruvian Geological, Mining and Metallurgical Institute (INGEMMET) in February 2025, it appears that none of the 32 mineral rights overlap Natural Protected Areas, identified Archaeological sites, Urban or Urban Expansion Areas, fragile ecosystems and/or other restricted areas.

The General Mining Law defines “Prospecting” as those activities aimed at identifying possible areas of mineralization by means of low impact activities (such as sampling, geophysics, geochemistry, topography among others of a similar nature), provided these activities are conducted by using minor equipment that can be transported without causing disturbances exceeding those usually associated with the ordinary movement of people and light vehicles. Due to the limited environmental impact associated with these activities, the General Mining Law establishes that these may be conducted freely nationwide, with the exception of areas covered by third-party mining concessions (in which authorization of the titleholder is required) and/or restricted areas in which the conduction of mining activities has been prohibited by a competent authority. These activities do not require any government approvals or authorization (including environmental permits).

Notwithstanding the above, as mining concessions are considered independent from (and do not grant any rights over) the land in which these are located, these activities (as well as any activity entailing use of surface land) will require an authorization granted by the owner of the surface land.

In this sense, Reliant as titleholder of the concessions making up San Luis Project can effectively conduct Prospecting Activities over these concessions without the need of obtaining any Government permit or authorization, provided the company has been authorized by the owner of the surface land to enter its property to conduct such activities.

Exploration Activities on the other hand are defined as the execution of mining activities aimed at demonstrating the location, dimensions, mineralogical characteristics and/or reserves found in mineral deposits by means of activities with a higher environmental impact (diamond drilling, RC drilling, tunnel digging, construction of facilities, etc.).

These activities are governed by the Environmental Regulations for Mining Exploration Activities, approved by Supreme Decree N°042-2017-EM. According to these and other applicable regulations, the conduction of drilling requires the granting of an Environmental Permit. There are three different types of environmental permits available for exploration, depending on the magnitude of the proposed activities, being these: (i) Environmental Technical Form (FTA) – For Drilling of up to 20 pads; (ii) Environmental Impact Statement (DIA) – for drilling up to 40 pads; and, (iii) Semi-Detailed Environmental Impact Statement (EIS-Sd) – for drilling up to 700 pads.

Furthermore, after obtaining the approval of the corresponding environmental permit, the conduction of these activities is conditioned to the granting of an Authorization to Commence Exploration Activities, issued the Ministry of Energy and Mines.

To the date hereof, Reliant holds an Environmental Impact Statement for Project Bonita (“DIA Bonita”) which allows the company to construct up to 32 drill pads for a total of 96 drill holes, located within the area of the Huanchuy mining concession. Furthermore, Reliant has obtained an Authorization to Commence Exploration Activities under the DIA Bonita.

The DIA Bonita and the Authorization to Commence Exploration Activities have a term of 27 months (including reclamation) counted as from the moment Reliant communicates to the Ministry that exploration work under the DIA Bonita has begun.

To the date of this report, Reliant has not initiated exploration work under the DIA Bonita.

With regards to the use of surface land for prospecting and exploration purposes, Reliant has executed a community agreement pursuant to which it was granted the right to conduct the exploration activities under the DIA Bonita (covering an area of 150.80Has), as well as the right to conduct sampling and mapping activities over the portion of San Luis Project that overlaps the community land.

The San Luis Property is readily accessible year-round by vehicle from either the cities of Carhuaz or Casma, on route from the capital city of Lima (Figure 5-1). It is approximately 113 km from Casma to the property via paved and secondary gravel roads, a total of 7 hours of driving from Lima.

The climate is generally quite arid from May to December, with daily temperatures ranging from 22°C to -10°C. The ‘rainy’ season, from January to April, has more moderate temperatures but also heavy rains, dense fog, hail and snow at higher elevations. Maximum monthly precipitations range from 206 mm in February to 2.5 mm in July (Pincus and McCrea, 2006).

The project site is rural and isolated. The nearest population centres are Tambra (located on the western limit of the property) and Pueblo Viejo (situated in the northeast portion of the project concessions). Both villages are located in the Shupluy District, Yungay Province, Ancash Department, and each has approximately 500 inhabitants. The larger population centres near the project are Casma, Carhuaz, and Huaraz. Each of these population centres have labour and services required to support the development of a mining project.

Reliant has two camp installations at the San Luis Property – the original exploration camp established at an elevation of 3,705 metres above sea level (masl), and a construction start-up camp established in 2010 at an elevation of ±4,000 masl.

The exploration camp is comfortably equipped for 18 staff, 8 technical and 5 security personnel, and includes a canteen, a large core store, core cutting and office facilities (Figure 5-2).

The construction camp (Figure 5-3) is not yet being used due to suspension of project development activities. It is built on three levels, and has accommodation and office capacity for 32 staff, 60 technicians, and there is additional space for workers that has not yet been built. The upper level includes a 2,000-gallon fuelling facility, and stores and maintenance space. There is a large generator on site which has never been put to work.

Power supply to the exploration camp comprises the use of two diesel generators which currently require maintenance.

The power company Distriluz and its local subsidiary Hidrandina have reportedly (BISA, 2010) applied for expansion projects that would allow San Luis to draw power from the grid, however, the QP is informed that the utility is unable to offer any assurance that these projects will proceed.

The physiography of the region is mountainous with high elevation rolling hills and valleys surrounding higher craggy snow-capped mountains, typical of the western front of the Peruvian Andes. Relief is high with local elevations varying from 3,700 m (12,140 ft) at the project campsite to 4,850 m (15,912 ft) masl at the peak of Cerro Huilcahuaín.

The local vegetation varies with elevation. Below 4,000 m elevation there are small deciduous trees and bushes and various grasses while above this elevation the mountain slopes are sparse covered with Stipa Ichu (grass) and various small bushes, typical of the ‘Puna’.

Domesticated llamas graze the local grasses, and there are several varieties of rodents, and resident and migratory birds within the property.

Existing water resources in the project area include several freshwater lagoons and some seasonal surface water. Some of the lagoons are currently used to supply water to the small adjacent communities of Tambra and Pueblo Viejo. This water is, however, subject to seasonal variations and anecdotal evidence indicates that water supplies could disappear during the dry season.

Specifically, four small lagoons are located within the project’s area of indirect influence (Figure 5-4). These include the Pacsococha and Orcuncocha lagoons, which drain to the Tocash gorge, as well as the Cotacocha and Yahuarcocha lagoons which drain their waters to the Huanchuy gorge. These lagoons could be used as a potential source of water supply if necessary.

Several other lagoons are located within the project’s area of direct influence, and these include Yanacocha, Azulcocha Baja, Huancacocha and Sejcacocha lagoons. Yanacocha lagoon drains towards the Iscupampa gorge while the others drain towards the Huanchuy gorge. The Sejcacocha lagoon was being planned (BISA, 2010) to be used as a location for the tailings storage facility.

The Tocash and Huanchuy gorges join with the Iscupampa gorge to the west of the project to form the Quellaycancha River. This in turn is a tributary of the Yaután River and the Yaután River sub-basin represents approximately 4% of the hydrographic basin of the Casma River.

With installation of a water diversion sump in Quebrada Huanchuy, it has been determined (BISA, 2010) that an adequate water supply can be maintained year-round to support the needs of the project and adjacent communities.

According to Konkin (2007) and Pincus and McCrea (2006), there is no evidence of any modern exploration work or previous land tenure in the vicinity of the San Luis vein system in the west-central portion of the property. Six kilometres to the southeast, there are historical test pits, short adits and evidence of past polymetallic ‘high grading’ operations within what is referred to as the BP zone that were reportedly active in the 1980s and possibly earlier.

It appears that artisanal miners extracted manto-hosted pyrrhotite-sphalerite-galena mineralization at what is referred to as the BP zone, and silver veins were mined at the Esperanza mine to the west of Ayelén. There is also evidence of trials at Yanacoto and San Simon where they appear to have transported hand-cobbed mineralization away for milling. Nevertheless, it appears that the Ayelén and the other precious metal-bearing vein structures are 2005 grassroot discoveries by Reliant, as there was no reported historical mineral resources or documented production from this part of the San Luis Property.

The Ayelén and Inés vein gold discoveries were made by Reliant, a wholly owned subsidiary of ESC in 2005, which was followed by a 55% earn-in joint venture agreement with SSR Mining made later that year which led to the trenching and drilling exploration of the two main veins found during 2006–2008. SSR Mining’s percentage ownership was increased during 2009 to fund the Feasibility Study announced towards the end of 2010. The residual 30% of the Reliant property was then acquired by SSR Mining for the sum of US$18 million plus the return of 6.5 million shares and a 1% NSR.

An Environmental Impact Statement was approved in 2012 for construction of the project, although there has been no progress with this up to the date of this report. Instead, wider exploration activities were started with the exploration of nearby porphyry-related mineralization potential, and during 2014 the Bonita vein was discovered approximately 7.5 km to the south-southeast of the Ayelén discovery. It appears that SSR Mining was focusing Reliant to look for more gold potential in order to extend the life of mine indicated from the 2010 Feasibility Study.

SSR Mining then entered into joint venture or other agreement with Hochschild Mining in 2015, but this was soon terminated in 2016. SSR Mining then had to apply for an extension to the Environmental Impact Statement in order to keep the construction approval valid.

After 2016, the San Luis Project appears to have gone quiet again, and any further progress was further delayed during the 2019–2020 pandemic. In the period 2021–2023, there was a resumption of concession-wide field mapping, and it can be seen from a 2023 company presentation document that they were actively maintaining community relations, whilst exploring for more mineral resources. In the meantime, the decision to go ahead with construction remains on hold.

On May 23, 2024, HSC announced that it had acquired Reliant’s San Luis Gold-silver Project (the “San Luis Property”) from SSR Mining, pursuant to a share purchase agreement dated November 29, 2023.

Peru has a long and complicated geological history dominated by the Andean Cordillera that extends both north and south along the western margins of South America.

Most of the stratigraphy, structure, magmatism, volcanism and mineralization in Peru is spatially and genetically related to the tectonic evolution of the Andean Cordillera which is situated along a major convergent subduction zone where the oceanic crust, the Nazca Plate, slips beneath the overriding South American continental plate. The Andean Cordillera has a metamorphic rock basement of Proterozoic age on which Hercynian Paleozoic sedimentary rocks accumulated and were in turn deformed by plutonism and volcanism to Upper Paleozoic time. Beginning in the Late Triassic time, following Atlantic Ocean rifting, two periods of subduction along the western margins of South America has resulted in the formation of the present Andes; the Mariana-type subduction from the Late Triassic to Late Cretaceous and Andean-style subduction from the Late Cretaceous to the present (Benavides- Caceres, 1999).

The Western Andean Cordillera, or Cordillera Negra, is famous for its world-class base and precious- metal deposits; many of which have been intermittently mined since Inca times. Most of the metal deposits in Peru are spatially and genetically associated with metal-rich hydrothermal fluids generated along magmatic belts that were emplaced along convergent plate tectonic lineaments. Furthermore, many of these primary base metal deposits have undergone significant secondary enrichment over the last 30 Ma as a result of periodic continental uplift and weathering, followed by volcanic cover preservation (Quang et al., 2005).

Radiometric studies by Petersen (1999) correlated the igneous host rocks and attendant hydrothermal alteration for some of the largest and richest porphyry copper deposits in the world along the Western Andean Cordillera from 6° to 32° south latitude, including the Chalcobamba–Tintaya iron-gold-copper skarn and porphyry belt (30–35 Ma) in the main magmatic arc, southward through the Santa Lucia district (25–30 Ma) and into Chile. The Andahuaylas–Yauri Porphyry Copper Belt, a well-known 300 km long porphyry copper belt related to middle Eocene to early Oligocene calc-alkaline plutonism, is situated along the northeast edge of the Western Andean Cordillera.

The San Luis Property is situated regionally within the Cordillera Negra geomorphological terrain of the Peruvian Andes. A few kilometres east of the property is the northwest-trending Huaylas Valley, drained by the Rio Santa, and further east is the Cordillera Blanca which includes Cerro Huascaran, the second highest peak in South America at 6,768 masl.

The geology of the Cordillera Negra is dominated by andesitic volcanic and volcaniclastic rocks of middle Tertiary age (Figure 7-1). Tectonically deformed sedimentary rocks of Cretaceous age and granitoid rocks of the Coastal Batholith underlie the mainly intermediate volcanic rocks. The volcanic rocks of the Cordillera Negra in the project area belong to the Calipuy Formation of Eocene age (i.e. approximately 55–38 Ma.). This formation comprises lavas and synvolcanic dykes and sills, fine to coarse-grained pyroclastics and volcaniclastic units. The volcanics range in composition from andesites to dacites, with rhyolites being relatively minor volumetrically. A regional unconformity separates the Tertiary volcanic sequence from the underlying Cretaceous lithologies which predominantly consist of granodiorite along the western flank of the cordillera and marine sedimentary units along its eastern flank.

The succession of Cretaceous sedimentary rocks that probably form the core of the Cordillera Negra is well exposed along the eastern and western slopes of the Huaylas Valley that separates the Cordillera Negra to the west and the Cordillera Blanca to the east. The oldest of these rocks belong to the Upper Jurassic Chicama Formation of interbedded mudstone and sandstone cropping out northeast of the town of Yungay.

The Lower Cretaceous Chimu Formation conformably overlies the Chicama Formation. It includes a sequence of quartzite, sandstone and lesser shale. These siliciclastic rocks outcrop near the town of Pariacoto, situated southwest of the property, as well as in the Huaylas Valley to the east.

The Lower Cretaceous Santa Formation of limestone and calcareous clays, the Carhuaz Formation comprised of sandstone and quartzite with interbedded mudstone and the Farrat Formation of fine- grained quartzite with interbeds of red mudstone disconformably overlie the Upper Cretaceous Chicama Formation.

These formations are in turn overlain by a Cretaceous sequence of calcareous rocks belonging to the Pariahuanca, Chulec and Pariatambo formations that dominantly crop out along the eastern flank of the Cordillera Negra.

The Miocene to Pliocene-age Yungay Formation of dacitic tuff and ignimbrites fill the paleo-valley bottoms along the Santa River, east of the property, and recent fluvial and glacial unconsolidated sediments overlie all the above formations.

The western portion of the Cordillera Blanca is marked by a spectacularly rugged, permanently snow- capped mountain range formed by the rapid uplift and erosion of a granodioritic to tonalitic batholith that is exposed for more than 200 km in a northwest-southeast direction and 12–15 km west to east. Middle to Upper Cretaceous shale and limestone formations dominate the fold-and-thrust belt that parallels the eastern flank of this cordillera.

This region has undergone four main stages of structural deformation. The first stage resulted in the uplift of the Andean belt and the regression of Cretaceous seas from the region. This was followed by a major orogeny beginning in the late Palaeocene that produced the pronounced northwest-southeast trending folds and thrust faults that affected the early Jurassic to Cretaceous sedimentary rocks of the region. The third stage is characterized by regional block faulting which vertically deformed all the stratigraphy, including the basement rocks. The final stage of regional tectonism resulted in Pliocene to Pleistocene uplift of the Andean belt with the eastern Cordillera Blanca mountain range being uplifted more than the western Cordillera Negra.

The San Luis Property is dominantly underlain by volcanic, volcanoclastic and sub-volcanic intrusive rocks of andesitic-dacitic to rhyolitic composition belonging to the Paleocene-age Calipuy Formation. The Lower Cretaceous Santa Formation of limestone and calcareous clays crops out locally as ‘windows’ within the younger overlying volcanic rocks. Elsewhere, intrusions of the Coastal batholith are exposed in the southwestern portion of the property (Figure 7-2).

The property is predominantly underlain by Eocene-age volcanic and volcanoclastic rocks belonging to the Calipuy Formation (Figure 7-3). The basal section of the volcanic sequence is dominated by thick lavas and probably synvolcanic sills of massive, commonly medium-grained to feldspar porphyritic andesite (Figure 7-4). This sequence of volcanics is estimated to have a thickness greater than 300 m.

In the vicinity of the San Luis vein system and probably elsewhere on the property, the basal andesite flows are conformably overlain by a unit of andesitic tuff breccia of probably volcanoclastic origin. It contains boulder to pebble-sized clasts of a variety of andesite and possibly dacite lithologies and distinguished by the presence of pebble shards of black shale (Figure 7-5). This unit is of variable thickness, and where intersected by drilling it is in the order of 10–30 m thick.

A sequence of andesitic pyroclastic flows and possible air-fall ash and crystal-lithic tuffs directly overlie the coarse clastic unit (Figure 7-6). The pyroclastic flows are rich with lapilli-sized andesite clasts including dark green, chloritized pumice fragments that are commonly flattened to form fiamme (Figure 7-6). These pyroclastics are exposed at elevations greater than 4,300 masl comprising beds of 200 m thickness or more. They are the youngest extrusive volcanic rocks identified on the property to date.

Felsic volcanics have yet to be identified on the property, but rhyodacitic to rhyolitic dykes and sills intrude the andesitic lava and pyroclastic sequences. These dykes have also been emplaced along the same fault and shear structures hosting both auriferous and barren quartz-calcite veins. The dykes are aphanitic to weakly quartz-porphyritic and locally have flow banding, especially near their contacts.

Accompanying the Ayelén vein structure, there are two varieties of dykes, namely: feldspar (± quartz eye) porphyry (I2fp, qfp) and flow-banded spherulitic or amygdaloidal dyke (I2fb, sphl, amy). Both varieties appear to be of calc-alkaline composition. These dykes are described by Konkin (2007) as follows, from oldest to youngest:

At the separate BP zone, andesite lavas are intercalated with at least three units of fine-grained sedimentary rock including calcareous mudstone and impure limestone. These inter-beds are 0.5 m to 2.5 m thick and have been traced a few hundred metres along strike. The same calcareous units have been locally metasomatized to form calc-silicate exoskarn rock and pyrrhotite-sphalerite-actinolite ‘manto’ deposits.

The Lower Cretaceous Carhuaz Formation of sandstone and fine-grained quartzite with interbedded mudstone crops out as small ‘windows’ through the overlying Calipuy Formation. These isolated ‘windows’ appear to be spatially related to antiformal fold axis cores and local normal block faulting in the central and northern portions of the property. However, insufficient fieldwork has been carried out to determine their nature or stratigraphic position in the regional geologic setting.

Granodioritic intrusions of the Cretaceous to Paleocene-age Coastal batholith crop out within the western mineral concessions of the property, near the village of Tambra.

Colluvial deposits are omnipresent on the slopes of the volcanic hills and mountains, while fluvial-glacial deposits of variable thicknesses occur in the stream valleys.

Geological mapping by INGEMMET (1995) has identified several northwest-trending anticlinal and synclinal fold axes north and east of the San Luis vein system and BP zone, respectively. Regional compressional movement that has produced this folding appears to have also resulted in conjugate strike-slip faulting mapped within the northeast and northern portions of the property. Block-bounding faults appear to dominantly strike north-northwest and east-west, and dip from moderately to steeply eastward to sub-vertically. Relative displacements are in the order of tens of metres to perhaps more than 100 m.

The north-northwest trending fault structures are important for their mineral exploration potential since they appear to control and host most of the known precious metal-bearing vein structures, such as the Ayelén vein which has been traced on surface for more than 720 m. Other vein structures of the San Luis vein system occupy similarly oriented fault structures striking northwest to north-northwest with variable dips. The faults hosting the Ayelén and Inés veins define the western and eastern limits respectively of a horst block that is at least 125 m wide. Here, massive andesite lava rock of the horst is structurally juxtaposed against younger pyroclastic rocks and tuff-breccias to the west and east respectively. The northwest and north-northwest faults, especially those vein-hosting structures, have been repetitively active since the majority of volcanism ceased, prior to the main epithermal veining events. However, faulting also occurred during and after vein emplacement resulting in the well-developed vein breccia textures, open tensional sites for later rhyodacitic dyking, and later brecciation and displacement of both the dykes and vein structures.

Pincus and McCrea (2006) documented a sequence of structural events that may have controlled the emplacement and subsequent deformation of the known vein structures. These structural events were interpreted as follows:

D2 deformation; Following the initial emplacement of the Coastal Batholith there was probably a period of tectonic relaxation resulting in readjustment of the stress regime and local horst and graben development accompanied by normal oblique/dip slip faulting. A well-developed horst can be seen that is bounded by the Ayelén and Inés veins. Strong brecciation of the S1 veins occurred during this period.

The Calipuy volcanic units have variable dips across the property but generally they are sub-horizontal to very shallow dipping. In the vicinity of the Ayelén and Inés veins zone, the country rocks commonly dip -10° to -20° west-southwest, whilst within the BP zone the lavas and sedimentary inter-bedding dip shallowly westward.

A regional unconformity separates the Eocene-age volcanic strata from the underlying Cretaceous-age intrusive and sedimentary rocks. Within the property boundaries, this unconformity has only been observed along the gravel track that leads from the exploration field camp to the Ayelén–Inés vein system. At an elevation of about 4,200 masl, medium-grained granodiorite forms the basement to the Tertiary volcanic pile. It is suspected by the project geologists that a basal conglomerate may occur with this unconformity: one rich in granodiorite clasts with detritus derived from Lower Cretaceous sedimentary rocks was found in the region.

Regional green-schist metamorphic facies affect the country rocks ubiquitously throughout the property and can be misinterpreted as distal hydrothermal alteration. In the volcanic and volcanoclastic rocks of the Palaeocene Calipuy Formation, mafic minerals have been chloritized, plagioclase phenocrysts have been saussuritized to varying degrees, and quartz, calcite and magnetite alteration products are common, especially in well sheared and fractured zones.

On the other hand, Konkin (2007) has described the hydrothermal alteration in the vicinity of the Ayelén vein as follows:

“Although much of the (Ayelén vein) system appears to be near-vertical, the strongest alteration occurs in the hanging wall or western portion of the vein and immediately adjacent to the rhyolitic dykes. The footwall geology is composed primarily of feldspar porphyry flows (V4fp) and its’ minor associated members (V4m, V4fbx, V4mg). These rocks exhibit weak argillic alteration at the immediate vein and dyke contacts but the alteration rapidly grades to a moderate propylitic alteration just a few centimetres from the structures. Weak to moderate propylitic alteration is commonly observed throughout this entire footwall unit. Very little iron oxidation is associated with the footwall zone.

The strongest alteration occurs throughout the upper half of the hanging wall sequence within the pyroclastic units along shears that host veins and dykes. Strong argillic alteration is observed over 1-2 meter widths within these shear zones. The majority of the pyroclastic upper volcanic sequences contain weak near-surface pervasive argillic alteration. This may be related to the chemical breakdown of the unit rather than the epithermal alteration. Otherwise the majority of the alteration is confined to weak-moderate propylitic alteration similar to that which occurs within the footwall.

Similar to the argillic alteration, strong to moderate limonitic fracture-controlled oxidation is commonly associated with and along the flow-banded rhyolite dyke and veins at the upper portion of the system. The oxide development decreases rapidly below 125-150 meters with only minor sporadic fracture controlled limonite. Due to the low volumetric presence of sulphides, the level of iron oxidation is considered to be low within the Ayelén vein.”

Geological mapping within the separate BP zone has identified several alteration facies typically associated with a shallow-buried calc-alkaline stock intruding volcanic and volcaniclastic country rocks. According to Ferraris (2007), the most intense hydrothermal alteration occurs in the immediate vicinity of hydrothermal breccia bodies, mantos, and dioritic intrusions and fault and shear structures. Silicification is widespread, as quartz fracture filling and veining; potassic alteration occurs peripheral to dioritic stocks and feldspar porphyry dykes; and argillic alteration, as montmorillonite and illite, occurs mainly in the volcanic country rocks with interbedded sedimentary beds.

Contact metasomatic alteration of the calcareous sedimentary units within the volcanic sequence has produced skarns (± grossularite) with manto mineralization, including pyrrhotite and pyrite with lesser sphalerite and chalcopyrite. Galena and molybdenite are rare. Iron oxide alteration (gossan) zones are widespread and affect all lithologies, especially the andesitic volcanics at higher elevations of the Huilcahuain mountain, and surrounding the feldspar porphyry intrusions at the Pucajirca summit (Ferraris, 2007).

Four main types of potentially economic mineralization have been identified on the property to date, including:

Recent exploration has identified a number of mineralized quartz veins in different areas of the property concessions, but the most intense and advanced exploration has been undertaken on the San Luis vein system, especially the Ayelén and Inés vein structures. The San Luis vein system includes, from west to east, five principal veins known as: ‘Ayelén’, ‘Inés’, ‘Paula’ and ‘Paula Split’, ‘Regina’ and ‘Sheyla’ (Figure 7-7). These en-echelon vein structures strike approximately west-northwest to northwest and are spaced at 400–600 m intervals within an east-west trend within the property. The combined strike length is almost 5 km, although less than one-quarter of this strike length has been explored to date.

The Ayelén and Inés vein structures were identified from surface trenching as carrying anomalous gold and silver values, and these became the focus of most of the 2006 and 2007 drilling programs since they were indicated to host the highest precious metal grades. Elsewhere, 21 other drillholes have tested some of the other quartz vein structures and stockwork-type mineralization identified to date.

The San Luis vein structures have continuous strike lengths over hundreds of metres and down-dip extents, based on drilling intercepts, exceeding 200 m. Vein thicknesses vary considerably due to local faulting, shearing and dyking; however, they range in true width from 50 cm to more than 10 m but commonly average 1.5 m to 3.5 m. The vein structures are controlled and hosted by normal faults that are sub-vertical to moderately to steeply inclined to the northeast.

At the Ayelén and Regina veins, rhyodacitic to rhyolitic dykes of 2–12 m thick have been emplaced along the controlling fault structures for the veining. Along the Ayelén vein structure, two or more felsic dykes have intruded both the fault and vein. It appears from drilling results that the dykes are dominantly post-mineral relative to the main auriferous vein mineralization but locally they do host volumetrically minor gold and silver-bearing mineralization that may be either late-stage primary or of secondary origin.

Textural features of the various San Luis veins are consistent with veins of low sulphidation epithermal origin, showing alternate colloform banding and laminae of white, grey, pale green quartz, chalcedony, carbonates and possible minor adularia (Figure 7-8 left) hosting grey bands of very fine-grained pyrite with electrum, acanthite and base metal sulphides (Figure 7-8 right). Lattice-type crystal growths can be locally observed where coarse calcite blades have been replaced by silica with chalcedonic quartz filling matrix between the silica pseudomorphs. In addition to these typical epithermal vein textures, the San Luis veins are composed in part of massive white quartz, repetitively brecciated vein quartz and tectonic breccia clasts composed of silicified, angular to partially-milled andesite clasts mixed with vein fragments that have been cemented with drusy and colloform quartz and calcite. The well mineralized Ayelén vein generally tends to display more complex vein textures than the other major veins, especially those hosting little or no significant precious metal mineralization such as the Regina and Sheyla veins (Burk, 2007).

Fifteen drill core samples of the wall-rocks were petrographically examined by consulting petrographers C. Leitch and J. Shannon to determine the mineralogy of the hydrothermal alteration, especially that of the Ayelén vein. According to Burk (2007), vein rock samples examined by Leitch contained small fragments of volcanic wall rocks, mainly medium-grained andesite, showing pervasive alteration to secondary growths of quartz-sericite-calcite/dolomite-pyrite. Similar alteration mineralogy also forms proximal haloes to the vein structures extending a few tens of centimetres from vein margins into the wall-rock andesitic volcanics. The sericite-rich ‘inner’ alteration facie grades outward from the veins into ‘outer’ facies of chlorite-sericite-calcite ± minor disseminated pyrite which generally extends a few metres away from the veins and locally up to 20 m. Sericite in the outer alteration facies tends to be replaced by albite further away from the veins.

Hydrothermal alteration is also developed in the felsic dykes that are spatially associated with some of the veins, typically consisting of moderate to strong replacement of plagioclase, alkali feldspar and minor biotite by sericite-calcite with minor disseminated, fine-grained pyrite. Within the zone of supergene oxidation, which extends little more than 15–20 m below surface along the Ayelén vein, the relatively minor amounts of pyrite in the mineralized veins (less than 5% by volume) have been converted into limonite-goethite fracture fillings and coatings. Metallic minerals, except for pyrite, only occur in trace amounts and are generally very fine-grained. Minute grains of native gold, native silver, electrum, acanthite, sphalerite, chalcopyrite, galena and possible tetrahedrite have been observed microscopically (Leitch, 2007). Visible gold (or electrum) was observed by the author in outcrops of the Ayelén vein near Trench 10. These precious metal and sulphide minerals are seen to generally occur in paragenetically late quartz + sericite ± calcite veinlets and breccias-fillings.

The following text provides more detailed descriptions of the principal vein structures comprising the San Luis vein system.

Ayelén Vein

The Ayelén vein is the most extensively explored and better mineralized of the known vein structures (Figure 7-9). Trenching and diamond drilling have traced this structure along a strike length of over 720 m with down-dip extensions of 100–327 m, striking of 340–345°. Surface mapping results indicate the vein structure dips -75° to -85° west-southwest, but drilling results show the controlling fault structure(s), subsurface individual vein segments and post-mineral dykes dip vertically to -80° west-southwest. True thicknesses of individual vein segments vary from tens of centimetres to over 10 m, averaging 1.5 m to

3.0 m wide.

Figure 7-9

Geology of the Ayelén and Inés vein structures (modified from Pincus and McCrea, 200C)

Thirty-two surface trenches were excavated along the surface trace of the Ayelén vein and 108 diamond drillholes, totalling 19,195.15 m, have tested its down-dip extensions during the 2006 and 2007 exploration programs. The results of this work show that the vein structure has been displaced by faulting and shearing repeatedly during the emplacement of the veining, mineralization and later dyking. The mineralizing events appear to have extended from the initial vein emplacement to after the emplacement of the two varieties of felsic dykes since, although generally barren, the dykes do host very local fracture filling precious and base metal mineralization. Repetitive faulting and shearing have produced multiple lenticular vein bodies or segments that dominantly occur on the footwall or east-northeast side of the dykes in the southern portion of the structure but occur between and bound the dykes on both sides towards the north-northwest end. Thus, the collective Ayelén vein structure has been subdivided into hangingwall and footwall sections based upon their relative position with respect to the post-mineral dykes.

Vein composition, texture and mineralogy are characteristically epithermal, low sulphidation vein type. Quartz, chalcedony, calcite and minor adularia are the main gangue minerals, occurring with typical banding, layering and brecciation. Electrum, acanthite and other silver sulphosalts are the main economic minerals accompanied by trace amounts of sulphide minerals including: pyrite, chalcopyrite, galena and sphalerite.

According to Pincus and McCrea (2006), the weighted average grade from 2006 surface trench sampling along a 350 m strike length is 51.7 g/t Au and 1,078 g/t Ag. The mineral resources of the Ayelén and Inés vein structures is the subject of this review of the Reliant ‘Mineral Resource Estimate’ previously carried out (Blanchflower, 2009).

At the southern end of the vein structure, at local grid line 1575 m north, lenses of brecciated quartz veining occur between three rhyolitic dykes that vary in thickness from 3 m to 7 m and dip 80° southeast. On grid line 1675 m north, 100 m to the north-northwest, three drillholes have intersected several rhyolitic dykes (or faulted dyke segments) with a number of 50–150 cm thick quartz veins between them and on the footwall side of the dyking. This set of veins is well developed at a vertical depth of about 75 m and weakens near surface. A 4–5 m thick brecciated quartz vein was encountered on the west or hangingwall side of the felsic dykes that extends to a depth of at least 150 m below surface. Higher grade precious metal mineralization is prevalent on the eastern or footwall side of veins from surface to a vertical depth of about 200 m.

On grid line 1750 m north, the Ayelén vein structure is in part formed by a quartz-healed, apparently milled tectonic breccia that follows the eastern branch or splay of a bifurcating normal fault structure. The previously mentioned felsic dyke is interpreted to have been intruded into the western splay of the fault zone. Based on drilling results, the two splayed fault structures merge together at about 100 m below surface, beneath which there is a lens of brecciated quartz-calcite vein rock and hydrothermally altered wall-rock breccia. This well-mineralized lens of veining and brecciation is up to 6 m thick and extends 70 m down-dip on the western side of the felsic dyke.

Around grid line 1825 m north, the Ayelén vein structure simplifies and trends approximately 5–7° or more to the north. This inflection in the strike of the vein structure is interpreted to be the loci of an intersecting northwest-trending fault. At this location, there is a single vein segment in the upper 100 m that trends along the eastern (footwall) side of the rhyolitic dyke. This vein of variably textured epithermal quartz pinches down within about 90 m below surface and continues downward as a narrow shear infilling along the margins and contained within the rhyolitic dyke. There are also two other weakly mineralized, narrow quartz vein segments at a depth of 200 m below surface, one within the dyke and one on the footwall side. These lenticular vein segments within the otherwise barren dyke may be either faulted slices or evidence of post-dyking mineralization during late-stage tectonism. The highest grade gold-silver mineralization occurs within 100 m of surface.

Further to the north, on grid line 1900 m north, the Ayelén vein structure occurs as a single, wedge-shaped lens of quartz veining that is up to 9 m thick at surface and narrows down to less than 1 m at 120 m below surface before pinching out entirely. The vein is situated on the eastern side of a 3–7 m thick, steeply westward dipping rhyolitic dyke. At a vertical depth of 100 m, the felsic dyke merges with the main sub-vertical dyke body that continues to depth. Between a vertical depth of 50 m and 100 m, there is a narrow mineralized quartz vein between the two branches of the rhyolitic dyke structure. At a vertical depth of 190 m, veining along the Ayelén vein structure reappears in the form of two relatively thin brecciated veins, but these are only weakly mineralized.

The Ayelén vein structure continues north-northwest on the eastern side of the rhyolitic dyke. On grid line 2000 m north, there are two well-mineralized vein segments to a vertical depth of 100 m below surface, varying in true thickness from 1 m to more than 3 m each. Beneath this level, the veins pinch out against the rhyolitic dyke margin. At 200 m below surface, thin breccia veins or lenses of hydrothermal breccia exist along both margins of the rhyolitic dyke, but these do not carry any significant gold or silver values.

From grid lines 2000 m to 2100 m north, the Ayelén vein appears like sheeted veins of quartz breccia on both sides of the rhyolitic dyke. The highest gold and silver values are hosted in 1–10 m thick veins within 30–100 m of surface.

Close to the northern limits of the well-mineralized section of the Ayelén vein structure, on grid line 2175 m north, there are two separate rhyolite dykes separated by 3–15 m. The 3–4 m thick eastern dyke appears to be the rhyolite body along which most of the Ayelén veining follows while the 8–11 m thick western dyke is quartz porphyritic. Brecciated quartz veins, 50–150 cm thick, occur on both sides of and in between the two dykes. This segment of the Ayelén vein structure is weakly mineralized.

Inés Vein

The Inés vein structure is situated approximately 110 m east of the Ayelén vein structure, trends north-northwest at 320–340° and dips -50° to -75° north-northwest (Figure 7-9). Drilling and geo-modelling results indicate that the primary and easterly-dipping normal fault structure controlling this vein may intersect the Ayelén vein structure in the vicinity of surface trench number 16 at UTM. 190455 m east by 8961000 m north with parasitic structures trending northward. The main brittle-ductile structure appears to be a listric fault, since the vein dips about -75° eastwardly near surface then progressively more gently at -60° to -45° as it is traced downwards. The Inés vein crops out as series of discontinuous resistant ridges for more than 2,200 m along strike with apparent widths of 2.0 m to 7.5 m, but assay results from the outcrop and surface trench samples show that only a relatively short section of the Inés vein is significantly mineralized with gold and silver. This mineralized section is situated where it is closest to the Ayelén vein.

Based on drilling and mapping results, the Inés vein has the appearance of a brittle-ductile fault zone, approximately 1–5 m wide, hosting anastomosing veinlets of quartz and tectonic breccias healed by quartz and coarse-grained calcite. Sizeable epithermal quartz structures such as that forming the Ayelén vein are not commonly developed along the Inés vein structure, except where it is well mineralized (Burk, 2007).

Prospecting, geological mapping, surface trenching and 28 diamond drillholes, totalling 3,157.8 m, has tested the Inés vein with most of the work being undertaken along its 475 m long northwest portion. The drillholes usually ranged between 75 m and 250 m in length and were inclined westward. Drilling results indicate that only a short section of Inés vein, perhaps 100 m in strike length, is host to potentially economic gold-silver mineralization.

Along grid line 1825 m north, the Inés vein structure is a continuous, arcuate structure, 1–3 m thick, that can be traced to a vertical depth of at least 150 m. Within 50 m of surface, the structure consists of banded quartz hosting significant gold and silver mineralization. With depth the banded quartz appears replaced by weakly to unmineralized massive to highly fractured quartz-calcite vein gangue. At a depth of 100 m or more, hydrothermal breccia rock dominates the structure where fragments of andesitic flow rock are encrusted or supported by quartz and calcite (Burk, 2007).

Paula and Paula Split Veins

The Paula and Paula Split vein structures are situated approximately 650 m east of the Inés vein. These two veins coalesce at 191900 m east by 8960100 m north. They crop out as discontinuous resistant quartz vein exposures along a strike length of 1,100 m. The main Paula vein structure strikes north- northwest at 320–330°, and dips at -50° to -75° northeastwardly. The structure appears to pinch and swell with an apparent maximum thickness of 9.5 m (Pincus and McCrea, 2006). The parasitic Paula Split vein structure branches to the north-northwest and parallels the Paula vein for a few hundred metres. It may join the main vein at depth.

The Paula vein structure has been tested to depths of 50–255 m from surface with 10 diamond drillholes, totalling 1,759 m, spread out along a 350 m long section of its known strike length. Each of the drillholes intersected the anticipated structure but encountered zones of discontinuous thin quartz veins and veinlet stockworks containing traces of disseminated fine-grained pyrite and in some cases minor aggregates of chalcopyrite. None of the intercepts yielded precious metal assays of economic significance.

When drilling the Paula vein structure, drillholes P-SL-065, P-SL-112 and P-SL-122 intersected a buried vein, approximately 1–2 m thick, on the eastern side of the Paula vein that hosts geochemically significant values of gold and silver. This ‘Cristina’ vein strikes at 345° and dips 60° eastwardly and represents a potential drilling target for future exploration (Burk, 2007).

Regina Vein

The Regina vein structure crops out approximately 2 km east of the Ayelén vein or 600 m east of the Paula vein. It has a rhyolitic dyke along its western margin, similar in size and appearance to those along the Ayelén vein structure. At outcrop, the Regina vein structure is characterized by its breccia texture with abundant angular fragments of sericite and calcite-altered andesite encrusted with drusy and colloform banded quartz which attains a maximum thickness of 4.2 m. Rock sampling in 2006 traced this vein structure for 500 m along a northwesterly trend. According to Pincus and McCrea (2006), “Eight grab samples returned low gold and silver values (up to 4 ppm Ag) but were strongly anomalous in arsenic and less so in antimony.”

In 2007, five diamond drillholes tested the Regina vein structure beneath its strongest surface expression. Four drillholes (R-SL-50, R-SL-51, R-SL-52, and R-SL-54) were completed from two drill sites situated about 75 m apart. These drillholes tested the vein structure at vertical depths of between 50 m and 100 m. Only slightly anomalous gold values were encountered in drillhole R-SL-54. A fifth, deeper drillhole was directed in between the two-hole fans and intersected the Regina vein structure 250 m below surface. It failed to intersect any significant precious metal values (Burk, 2007).

Sheyla Vein

The Sheyla vein structure is situated 2.5 km east of the Ayelén vein, or 400 m east of the Regina vein. Prospecting and diamond drilling has traced this quartz breccia vein for 700 m along a northwesterly trend with a maximum apparent thickness of 3 m. Four drillholes (S-SL-44, S-SL-46, S-SL-47, and S-SL-48), totalling 595 m, from two sites 240 m apart, intersected the vein structure between 65 m and 125 m below surface. Only traces of fine-grained pyrite and acicular tourmaline were encountered in the vein intercepts with no significant gold and silver values (Burk, 2007).

Puca-Puca Quartz Stockwork

A limonitic quartz stockwork zone outcrops along the access road that passes between the Regina and Paula veins. It was deemed worthy of evaluation and in 2007 two drillholes tested this 20 m wide quartz veinlet structure. The first hole was planned to intersect the targeted zone at a depth of 250 m, but it failed to encounter any significant veining or brecciation. A shorter hole was then drilled to cut the stockwork 75 m below surface, but it too failed to intersect anything of interest (Burk, 2007).

The BP zone is situated approximately 6 km southeast of the San Luis vein system (Figure 7-10). It covers approximately 12 km2 where the Calipuy Formation is prominently stained by limonite, goethite and hematite derived from the pyritized andesitic country rocks, which is readily visible in the IKONOS satellite imagery (Figure 7-10). At the centre of this zone, within a glacial cirque on the northern flank of Cerro Huillcahuain, there are a number of small, abandoned trenches and short adits collectively known as the ‘Patococha’ mineral showings. These minor workings were reportedly active in the 1980s and possibly earlier where the local miners ‘high-graded’ sub-horizontal tabular ‘manto’ bodies of fairly coarse-grained pyrrhotite-sphalerite mineralization and transported the hand-cobbed mineralization away for milling.

The Patococha ‘manto’ or skarn occurrences are 50–250 cm thick. They have been traced along strike for several tens of metres, and dip -20° south to southwestwardly (Figure 7-11). According to Ferraris (2007), these mantos are commonly associated with quartz stockwork veining within the underlying andesitic volcaniclastics, and usually terminated by strike-slip faulting trending northwest and steeply dipping (Figure 7-11 left). They are hosted within a sequence of andesite lava flows and are interpreted by the project geologists to be metasomatic deposits where interbedded, fine-grained, sedimentary units have been partially replaced by hydrothermal intergrowths of pyrrhotite, sphalerite, galena, actinolite-tremolite and chlorite.

Besides pyrrhotite, sphalerite is the most common sulphide mineral found in the mantos with reported zinc contents ranging up to 12% (Burk, 2007). Galena may be nearly absent or occur in significant amounts. It is reported that some samples returned values of up to 6% lead (Burk, 2007). Chalcopyrite and possibly other sulphides, such tetrahedrite-tennantite, are locally present in trace to minor amounts. Samples with relatively high lead contents have correspondingly higher silver and gold concentrations (Burk, 2007).

Lithogeochemical sampling of the exposed manto occurrences has been undertaken and a combined magnetics and induced polarization geophysical survey of the BP zone has been carried out. A number of the east-west and north-south oriented survey lines passed over the sulphide replacement bodies. No diamond drilling within the zone has yet been specifically targeted to test the economic potential of the manto mineralization.

Hydrothermally brecciated, intensely altered and mineralized andesite crops out a few hundred metres north of the Patoccocha manto deposits, central to the much larger gossan area defining the BP zone. Bedrock exposures occur around a small pond and bog locally known as Laguna Patococha, suggesting that the breccia body has an elliptical shape with surface dimensions in the order of 400 m by 200 m (Figure 7-12). Significant pyrite, chalcopyrite, sphalerite and minor galena mineralization occurs within a brecciated matrix.

During 2007, Reliant carried out geological mapping, at a scale of 1:2,000, lithogeochemical sampling survey (75 samples), conducted a combined magnetics and induced polarization geophysical survey, and completed four diamond drillholes, totalling 1,067 m, within the BP zone.

According to Burk (2007) and based upon surface outcrop and drill core observations, medium-grained andesitic flow rocks around Laguna Patoccocha have been strongly fractured and locally brecciated, apparently as a result of hydrostatic over pressuring related to a well-evolved hydrothermal event. In addition to brittle deformation, the hydrothermal fluids caused relatively widespread and locally intense mineral alteration of the andesitic country rocks. Macroscopic examinations indicate that original plagioclase-pyroxene composition of the intermediate volcanics was initially affected by pervasive potassium metasomatism resulting in fine-grained intergrowths of brown biotite and secondary alkali feldspar (albite ± orthoclase) with finely disseminated and fracture filling pyrite mineralization (Figure 7-13).

The phyllically altered volcanic rocks were strongly fractured and altered by a third stage of hydrothermal fluids that replaced sericite with kaolinite and minor calcite and quartz. Open spaces within well brecciated rocks were infilled by relatively coarse-grained pyrite and lesser amounts of chalcopyrite, sphalerite and galena. Calcite and drusy quartz also occur as crystal growths in open fractures and breccia vugs.

The three superimposed hydrothermal alteration facies at Laguna Patoccocha are interpreted to indicate a hydrothermal system with an initial potassic signature with each subsequent facie being progressive at a lower temperature. The key secondary phases that were stable during each of the three stages are represented by biotite, sericite and kaolinite, respectively. It is possible that this “collapsing” hydrothermal system had evolved from a magma source that could also be the source of an unidentified buried porphyry intrusion beneath the altered andesitic volcanics (Burk, 2007).

At BP zone, in the central-east part of the San Luis Project, the dominated andesitic volcanic rocks are widely altered to pyrite- and pyrrhotite-bearing, biotite hornfels by a concealed intrusive centre. Within the southern part of the alteration zone, the andesitic rocks and a shallowly inclined rhyolite sill host a porphyry-type veinlet stockwork, with surface dimensions of at least 800 m by 600 m (Sillitoe, 2011). Additional stockwork veining is reportedly also present at surface some 1 km farther north.

According to Sillitoe (2011), the stockwork is formed by D-type quartz-pyrite-(pyrrhotite) veinlets, with sericitic selvages up to 1 cm wide, which attain intensities of 20–40 per linear metre. Earlier B-type veinlets are much less abundant, ranging from <1 to a maximum of 3 per linear metre. The B-veinlets generally contain molybdenite, pyrite and, locally, minor chalcopyrite, and many of the wider (>0.5 cm) veinlets display the characteristic confinement of molybdenite grains to the veinlet margins. The B-veinlets lack alteration selvages and, in places in the andesitic host rocks, contain flakes of biotite (and minor epidote), implying that they accompanied potassic alteration: a conclusion further supported by the presence of clots and veinlets of biotite throughout the stockworked andesitic rocks. In contrast, the rhyolite sill is everywhere sericitic altered, a feature believed to be attributable to its more felsic, iron-poor initial composition.

The stockworked rocks are only weakly mineralized, averaging only several hundred parts per million copper, much of it contributed by disseminated grains of chalcopyrite. Molybdenum values are erratically distributed but attain several hundred ppm where the B-veinlets are most closely spaced.

Two dacite porphyry dykes, containing plagioclase, biotite and subordinate quartz phenocrysts, were observed in drill core from holes BP-SL-148 and 151. The porphyry is chloritized and only weakly veined compared to the immediate host rocks. Sillitoe (2011) interpreted that these dykes are late inter-mineral in timing and they emanated from a concealed porphyry centre beneath the observed BP stockwork zone, but after completion of most of the alteration and mineralization.

Sillitoe (2011) stated that such B-type and D-type veinlets are generated exclusively in porphyry copper systems, implying that a progenitor stock must be present at depth. That early-mineral porphyritic stock was not identified neither on surface mapping nor in the drillholes made to date.

Two petrographic analyses were carried out on samples from the Ayelén vein. One was performed by Dr Craig Leitch and the other was prepared by BISA.

Dr Leitch analysed nine samples of sawn core to determine:

Dr Leitch reports that “the samples mostly consist of epithermal-looking quartz-carbonate-sericite vein material with textures ranging from breccia to crustiform, colloform banded, comb- or cockade-textured, to locally vuggy or very fine-grained (“chalcedonic”), with only minor sulfides. Clasts in breccia veins are mainly intensely altered, to quartz-sericite-carbonate-local chlorite, rutile, and only rarely retain vestiges of former (felsic to intermediate, volcanic to hypabyssal?) origin. Carbonate likely includes calcite and dolomite (plus local Fe-calcite and ankerite?). Sulfides are mainly fine-grained pyrite, commonly partly to wholly replaced by limonite, but in several samples trace to significant base-metal sulfides, including chalcopyrite, sphalerite (ranging from colourless or pale yellow, low Fe, to almost opaque, due to minute oriented inclusions of chalcopyrite), galena (rarely intergrown with acanthite or tetrahedrite?), and rare possible marcasite (?). In 5 (possibly 6) of the 7 samples from drillholes SL609, 610, 613 and 702, rare small (<15 to 100 micron) particles of yellow-brown, partly tarnished (?) possibly native Au or electrum occur, mostly associated with either relatively late carbonate, sericite, quartz veinlets or fractures; they only locally appear to be locked within carbonate or pyrite (or limonite after pyrite), not quartz or adularia. In the two samples from SL01 and 02, traces of highly tarnished, possibly native Ag/electrum (?) as ragged particles or aggregates up to 200 microns across are also associated with late quartz, sericite veinlets or open fractures. No evidence of enrichment of Au or Ag was noted in the sections”.

BISA carried out mineralogical analyses on 11 samples collected from diamond drill core and surface trenches in the Ayelén vein area.

BISA reports that “vein material mostly consists of quartz, calcite, sericite and illite. Quartz is present in different forms such as hyaline quartz, gray and chalcedonic with banded, crustiform and brecciated textures.

Microscopic evaluation indicates three common groups of minerals:

BISA reports that gold is mainly present as electrum and in smaller amount as free fine-grain gold (0.002 mm to 0.04 mm). Native gold appears to contain some silver giving it a pale colour and, in some cases, causing it to be confused with electrum. Silver, in addition to electrum, is present as argentite and argento-jarosite associated to pyrite and grey quartz. The amount of silver in electrum varies and often it is difficult to identify if silver is native silver or electrum.

Pyrite is the most abundant sulphide. It is often associated with occurrences of native gold, native silver and electrum as indicated in Figure 7-14. Chalcopyrite, galena and sphalerite are present in trace amounts. Their amounts tend to increase with depth. Hematite, goethite and limonites are observed in the upper part of the mineralized system.

Four distinctly different mineral deposit types have been identified within the property. The most extensively explored are the epithermal, low sulphidation, gold and silver-bearing, quartz-calcite veins of the San Luis vein system, while the others, hydrothermal breccia-hosted base metal, manto-hosted occurrences and copper-molybdenum porphyry type stockwork, appear related to a buried intrusion, possibly of calc-alkaline composition, central to the BP zone.

The vein-hosted gold-silver occurrences, and the hydrothermal breccia and manto-hosted base metal mineralization are relatively close, and appear to share common regional structural controls.

The gold and silver-bearing veins of the San Luis vein system have many characteristics typical of ‘epigenetic or epithermal, low sulphidation, precious metal vein deposits’. According to Simmons et al. (2005), “Epithermal deposits comprise epigenetic ores that are generally hosted by coeval or older volcanic rocks. Most commonly, mineralized bodies occur in veins with steep dips that were formed through dilation and extension. Some are hosted by major faults but more commonly they are hosted by minor faults with smaller displacements (< 10 m)” (Pincus and McCrea, 2006).

The following description of low sulphidation precious-metal vein-hosted mineralization was documented by Pincus and McCrea (2006) after Simmons et al. (2005):

“Low sulphidation mineralization consists of a gangue mineral assemblage containing quartz-calcite-adularia-illite. Gold typically occurs as electrum and silver occurs as electrum, acanthite and other silver sulphosalts. Epithermal deposits are characterized by a variety of textures including crustiform banding, often with interlayers of quartz and sulphide minerals. Bands are often interrupted indicating repeated pulses of mineralization. Lattice textures in which calcite crystals have been replaced by quartz and brecciation are also common characteristics.

Interpretations of the epithermal model indicate that ore-bearing fluids typically travel along structural pathways at high temperatures with sufficient hydrostatic pressure to prevent boiling. When the pressure drops suddenly through faulting or rupture, boiling occurs and the fluids quickly deposit their mineral load in available open spaces. Deposition of minerals, particularly quartz will typically occur in these open spaces with bands growing from either wall inward. Open spaces are eventually sealed by this growth until ruptured once again by underlying fluid pressure or new faulting and the process begins over again. This repeated rupturing results in the interrupted banded texture typical of epithermal veins.

As described above, structural features, particularly faulting and fracturing, are a key element in controlling the location of ore deposition. Ore ‘shoots’ will typically occur in dilational zones, which in turn result from a variety of local stresses. Often these stresses are repeated along the length of a vein structure resulting in multiple ore-shoots.

The total precious metal content of epithermal systems can often be significant. Some deposits have been characterized as ‘bonanza’, that is greater than 1 million ounces of gold at a grade of greater than 30 grams per tonne. Significant deposits that have been classified as low-sulphidation epithermal deposits include: Fresnillo in Mexico (800,000 ounces Au and 516 million ounces Ag), The Comstock Lode in California (7.6 million ounces Au and 176 million ounces Ag), El Peñon in Chile (3.8 million ounces Au and 63 million ounces Ag) and Midas in Nevada (2.5 million ounces Au and 30 million ounces Ag) (Hedenquist et.al., 2005).”

The currently understood geological model is summarized in Figure 8-1.

The BP zone has many features indicative of a central, buried intrusion responsible for locally intense brittle fracturing, hydrothermal breccia bodies, multiple alteration facies, peripheral ‘manto’ or skarn occurrences, and base and precious metal mineralogy with an intrusion-related, possibly calc-alkaline, porphyry-style signature. These deposits typically occur in association with the emplacement of high-level stocks during extensional tectonism related to regional strike-slip faulting at convergent plate boundaries or back-arc spreading following continent margin accretion. Any type of country rock may be mineralized but commonly the high-level stocks and related dykes intrude their coeval and cogenetic volcanic piles (Panteleyev, 1995).

Calc-alkaline porphyry deposits typically have stockworks of quartz veinlets, quartz veins, closely spaced fractures and breccias containing pyrite and chalcopyrite with lesser molybdenite, bornite and magnetite occurring in large zones of mineralization in or adjoining porphyritic intrusions and related breccia bodies. Disseminated sulphide minerals are present, generally in subordinate amounts. The mineralization is commonly spatially, temporally and genetically associated with hydrothermal alteration of the host rock intrusions and wall-rock (Panteleyev, 1995). Intrusions range from coarse-grained phaneritic to porphyritic stocks, batholiths and dyke swarms; rarely pegmatitic. Compositions range from calc-alkaline quartz diorite to granodiorite and quartz monzonite. Commonly there are multiple emplacements of successive intrusive phases and a wide variety of breccias (Panteleyev, 1995).

Following a three-day visit to the San Luis Property, Richard Sillitoe (2011) provided Reliant with the following observations:

Sillitoe’s report included the following conceptual diagram (Figure 8-2) in relation to the BP zone.

According to Cox and Singer (1988), typical global calc-alkaline porphyry copper-molybdenum (± gold) deposits contain median values of 500 million tonnes with 0.41% Cu, 0.016% Mo, 1.22 g/t Au and 1.22 g/t Ag. Examples of this deposit type include: Brenda, Huckleberry and Schaft Creek (British Columbia, Canada); Casino (Yukon, Canada); Inspiration, Morenci, Ray, Sierrita-Esperanza, Twin Buttes, Kalamazoo and Santa Rita (Arizona, USA); Bingham (Utah, USA); El Salvador (Chile); and Bajo de la Alumbrera (Argentina).

Most of the exploration work has been focused on a 400–500 m section of the Ayelén vein structure and 100–150 m of the Inés vein structure where the highest gold and silver grades have been found to occur. These two vein structures have been tested with 136 diamond drillholes drilled in 2007–2008, totalling 22,354 m, and over 70 shallow trenches (Appendix A refers) from which surface channel samples have been collected. Elsewhere, the other vein structures and the BP zone have been tested with 25 diamond drillholes during this period, totalling 4,673 m.

The following text documents the exploration work undertaken by Reliant during the latter half of 2006 and 2007, and briefly summarizes earlier exploration work. The 2005 and early 2006 exploration work and their results are well documented in the November 2006 Technical Report by W.J. Pincus and J.A. McCrea.

The San Luis Property was first visited by ESC field personnel in June 2005. They discovered and sampled the Inés vein structure which returned values ranging from trace to 1.56 g/t Au and 0.8–100 g/t Ag. During a later property visit in July 2005, the Ayelén and Paula vein structures were discovered, prospected and channel sampled.

The channel samples from the Ayelén vein returned values ranging from 0.026 g/t to 173.8 g/t Au and 23 g/t to 2,504 g/t Ag (Pincus and McCrea, 2006). Prospecting work by ESC later in the year led to the discovery of the nearby Sheyla and Regina vein structures.

Dr Eric P. Nelson was retained to carry out geological mapping and a detailed structural analysis of the area surrounding the San Luis vein system at a scale of 1:2,000.

Systematic channel sampling of the Ayelén and Inés vein structures was initiated in January 2006 and completed by November 2006 after being delayed during the rainy season (Table 9-1). According to Pincus and McCrea (2006), 32 separate trenches were excavated along the trend of the Ayelén vein structure at 25 m intervals and 403 channel samples were collected along these trenches from the vein structure and wall-rock (Figure 9-1). True thicknesses of the samples were calculated using the vein dips at each sample site. These vein dip angles varied from -70° to -85° west-southwestwardly. The results of the channel sampling showed that the Ayelén vein structure hosted values ranging from trace to 134 g/t Au and 5.3–2,246 g/t Ag over true vein thicknesses of 0.98–7.14 m (Pincus and McCrea, 2006). Figure 9-2 shows the locations of channel samples and results along the central portion of the Ayelén vein structure.

Table 9-1 Summary of surface trenches by vein target area

Twenty-five trenches were excavated across the Inés vein structure at 25 m intervals and 90 channel samples were collected along these trenches from the vein structure and wall-rock. Vein structure dip angles varied from -65° to -75° northeast from which true thicknesses of the structure were calculated. Pincus and McCrea (2006) reported precious metal values for samples that graded greater than 1 g/t Au or representing longer true widths across the Inés vein structure. The reported results ranged from trace to 21.07 g/t Au and trace to 1,969 g/t Ag over true widths from 0.66 m to 3.43 m.

The results of this work identified the high gold and silver grades hosted by the Ayelén and Inés vein structures and showed that these veins have features commonly associated with typical low sulphidation epithermal vein systems. A detailed description of the trenching and rock geochemical sampling work is documented in the technical report by Pincus and McCrea (2006).

The results of the 2006 trenching program justified the start-up of diamond drilling in the same year (Item 10 refers).

During the latter half of 2006, ESC and SSR Mining formed a joint venture and continued their exploration efforts through their joint venture subsidiary company, Reliant, under the terms of their joint venture agreement.

The existing field camp was renovated and expanded to accommodate anticipated field staff, diamond drillers and other contract personnel. In addition, the on-site core logging, sampling and storage facilities were renovated with sufficient capacity to process, handle and store all anticipated drill core.

Drill access roads had been constructed and drill pads excavated on all the known vein structures and within the BP zone for the 2006 and 2007 drilling programs. Access drill road construction included ditching and installation of culverts for surface water management and erosion control.

Reliant retained Mr Fernando Ferraris, CPG, to conduct a combined geological mapping and lithogeochemical sampling survey of the BP zone at a scale of 1:2,000. The results of his work were reported in the private Technical Report Pucajirca Hydrothermal Altered Zone, Ancash Department, Central Perú, dated July 2007.

Exploandes Mining Exploration Consulting and Services of Lima, Peru was retained by Reliant to carry out a property-wide stream sediment (silt) geochemical sampling survey. This work was undertaken in two stages during the period of October 30 to December 30, 2006. A total of 187 stream sediment samples were collected and submitted for multi-element analysis including four standard, four blank and four field duplicate samples for quality assurance and quality control (QAQC) evaluation.

The results of the silt sampling survey showed a number of drainages within the property with geochemically anomalous precious- and/or base metal-in-silt values worthy of follow-up prospecting and further rock geochemical sampling.

Most of the rock geochemical sampling work was undertaken within the BP zone during the mapping and sampling work by Fernando Ferraris (2007). A total of 105 rock samples were reportedly collected and analysed for 26 elements using inductively coupled plasma (ICP) techniques. The analytical results were then statistically analysed and plotted to show the distribution of gold, silver, base metals and a variety of trace elements within the BP zone.

The plotted geochemical results showed a spatial association of anomalous base metal-in-rock values within the manto and intrusive breccia-hosted mineralization. In addition, the distribution of anomalous copper, molybdenum, gold and silver-in rock values indicated that there may be a buried intrusion centrally located within the BP zone that may have been responsible for the widespread pyritization, together with an anomalous suite of elements commonly associated with an intrusion-related, porphyry-style occurrence.

Arce Geofisicos (“Arce”) of Lima, Peru was contracted to carry out a combined ground magnetics and induced polarization survey. This work included surveying 19,850 m in three east-west and five north- south profile lines across the central BP zone, and 3,500 m in five southwest-northeast profile lines across the northern extensions of the San Luis vein system area (Figure 9-2). The surveying work was completed during the period of August 23 to September 6, 2007 (Arce, 2007).

According to the September 2007 geophysical report submitted by Arce, “The magnetic profiles were surveyed with readings every 10 meters, employing three Scintrex ENVI proton magnetometers, one for base station. The Induced Polarization profiles were surveyed with constant-spacing measurements taken at 50m intervals, employing the Pole-Pole (2-Array) electrode configuration, with a plotting point at mid-distance between the moving electrodes C1 and P1; seven successive “a” spacings of 50m, 100m, 150m, 200m, 250m, 300m and 350m were used, with apparent chargeability (Ma) and apparent resistivity (Ra) readings.

Line preparation and staking were topographically controlled with the GPS/OMNISTAR system, using a TDS Ranger 300X data processor and a Trimble AGGPS114 receiver. Expected errors are in the sub- metric range for the X-Y coordinates. GPS elevations have been corrected using bench mark SNL-18 located at Rocahuaran.”

The following geophysical results for the BP zone were summarized from the September 2007 geophysical report by Arce:

In 2007, Reliant continued drill testing of the Ayelén and Inés vein structures and proceeded to drill test the other known San Luis vein systems, including: Paula, Paula Split, Regina, Sheyla and Puca-Puca. Near the end of the field season four drillholes tested coincident geological, geophysical and geochemical anomalies in the vicinity of the mineralized hydrothermal breccia situated centrally within the BP zone. A total of 133 HQ-size diamond drillholes were completed during the 2007 field season totalling 23,261.05 m.

A more detailed summary of the 2006 and 2007 drilling programs follows in Item 10 of this report. Appendix I of the 2008 Technical Report (Blanchflower) contains a tabulation of all pertinent 2006 and 2007 drilling data and their mineralized intercepts made at that time.

The results of the 2006 and 2007 exploration work carried out by Reliant were summarized by Blanchflower (2008) as follows.

BISA (2010) reported that a “feasibility level” geotechnical and hydrogeological drilling program was completed for all project surface facilities being considered at that time. This comprised a geophysics survey, 11 drillholes totalling approximately 500 m, and 27 tests pits (and road cuts) were excavated and mapped in the accumulation of subsurface data across the project site and in areas that were restricted to drilling equipment.

After finalization of the 2007–2008 exploration activities attention had been turned to preparing an NI 43-101 compliant Mineral Resource estimate for the Ayelén and Inés veins (Lecher et al., 2009), which was then followed up by a project Feasibility Study (Kaye et al., 2010) focused on a standalone underground mining operation. Exploration activities do not appear to have been resumed until 2010.

Following a site visit to the San Luis Property by Sillitoe (2011), attention was drawn again to exploring the BP zone. This was followed up by a site visit by Drobek (May 2012) which recommended a preliminary drilling program of six drillholes totalling 4,300 m aimed at the potential porphyry target outlined by Sillitoe.

It appears that during the period 2011–2012, surface mapping was being carried out over and around the BP zone as evidenced from an Internal Report by Somers et al. (December 2012) which summarized the work that had been carried out. Figure 9-3 shows the prospective areas identified, and Figure 9-4 shows detail of the BP zone.

The BP zone is described as a gossanous area measuring 3.5 km by 2.5 km located at the northeast of the mapped area (Konkin, 2007). Ferrari (2007) first suggested the BP zone was part of a hidden porphyry copper system as indicated in this area by the occurrence of a large hydrothermal altered zone, stockwork of porphyry type veinlets, two porphyritic events, breccias, and mantos. Sillitoe (2011) later confirmed that a well-developed stockwork of porphyry-type veinlets probably defines the lateral limits of a concealed porphyry centre.

In 2007 and 2008, six drillholes, referred to as BP-SL132 to BP-SL133 and BP-SL148 to BP-SL151, were drilled directly under the anomalous copper and molybdenum surface samples collected from Ferrari (2007) (Konkin, 2007: Konkin et al., 2008; Figure 19). However, only weakly anomalous metal values of up to 0.12% Cu and 0.077% Mo were obtained over sporadic 2–9 m intervals throughout BP-SL148 and BP-SL151, while the other four holes returned no economically significant metal values (Konkin, 2007: Konkin et al., 2008). From 2008 to 2011, additional surface sampling and mapping allowed the definition of the stockwork boundaries and the anomalous molybdenum boundary (Figure 9-3). After the revision of Drobeck (2012) and Soler (2012), four proposed holes (600 m depth) were defined as priority to drill the copper-molybdenum porphyry target in 2013 (Figure 9-4). However, exploration was suspended, and these holes were never drilled.

Source: Somers et al. (2012)

With reference to the other areas explored during 2011–2012, Somers et al. (December 2012) summarized the following:

“Detailed mapping at a scale of 1:10,000 allowed a subdivision of the stratigraphy of the mapped area into formal formations and informal lithofacies and facies. The oldest formation is represented by the Cretaceous sediments, i.e., the quartzite and polymictic pebble to boulder conglomerate lithofacies, which occur as xenolithic fragments within the andesitic and dacitic intrusions respectively. The Paleocene Calipuy Formation is the most abundant formation in the mapped area, which consists of an andesitic polymictic volcaniclastic lithofacies, locally intercalated with a dacitic polymictic volcaniclastic lithofacies conformably overlain by a flow-banded feldspar- and biotite-phyric dacitic flow lithofacies. The Paleocene Calipuy Formation is intruded by synvolcanic feldspar- and mafic mineral-phyric andesitic dikes and sills, which were emplaced prior to the mineralization events. Two intrusive pulses of granodiorite and feldspar- and biotite-phyric dacite were emplaced before or during the epithermal mineralization event for the former, before or during the porphyry mineralization event for the latter, and after the epithermal and porphyry mineralization events for both. Rhyolitic dikes are interpreted as genetically related to the epithermal vein formation, but were emplaced prior to this mineralization as observed at the Ayelén vein system.”

Somers et al. (December 2012) go on to say that “during mapping program 2012, two new targets were discovered, the south extension of the Cu-Mo porphyry target at BP zone (Figure S-3 and Figure S-4 show location) and the precious and base metal epithermal quartz veins at San Simon and at Yanacoto (Figure S-3 shows location). Three other occurrences, discovered between 200C and 2011, are the oxidized Au- Ag-rich epithermal quartz veins at Bonita and the Ag-Pb-Zn±Cu-rich phreatomagmatic breccia and mantos at BP zone. Recommendations for each area are given below.

The south extension of the Cu-Mo porphyry target at BP zone will be tested in 2013 with the four proposed drillholes. It is recommended to drill to depth of more than C00 m as outlined by Sillitoe (2011). In addition to the recommendation of Sillitoe (2011), other Cu-Mo porphyry deposits were discovered in Peru with deep drilling beyond C00 m such as for the Haquira project in southern Peru owned by First Quantum Minerals Ltd. The Cu-Mo porphyry target and the gossanous area extend further to the south beyond the mapped area, and therefore, it is recommended that SSR acquires the accesses and exploration rights for the Chacchan Community to explore the entire Cu-Mo porphyry target.

For the San Simon target (C00 m by 400 m) and Yanacoto target (400 m by 500 m), detailed mapping (1:2,000) and sampling (spaced by 20 to 30 m maximum) of extensions of know veins, stockworks, rhyolitic dikes, and structures is recommended. This will define the location of the precious and base metal in preparation to drill 20 holes in 2014. The drill program objectives are: (1) drill underneath the precious and base metal anomalous zones to define the depth extent of the epithermal quartz vein mineralization and (2) drill one deep hole to test for stockwork zone commonly associated with precious and base metal epithermal veins at depth.

For the Bonita target (Figure S-3 shows location), it is recommended to do trenches of 200 m length every 30 m with retro excavator. Each trench will have approximately 10 channel samples that will average 2 to 3 m length. This will represent a total of approximately 300 samples for 20 trenches. The new trenches will better constrain the gold and silver anomalies of the epithermal quartz veins that will be used later to plan a drillhole program of 20 holes in 2014.”

It is concluded from a later presentation document that not all these trenches were carried out, although two diamond drillholes were drilled across one section of the Bonita mapped vein system (Figure 9-5 and Figure 9-6), and that further drilling was being planned. The two holes showed positive results, but also indicated (Figure 9-5) that the gold-silver grade might be declining with depth as had been previously found in relation to the Ayelén and Inés veins.

Trench sampling and drilling at Bonita appears to have ceased after 2012. Renewed interest in 2023 is evidenced from an application to MINEM dated 2/06/2023 to drill the holes previously planned together with surface trenching.

This application met with approval from MINEM dated 4/12/2023, of 37 surface trenches and 32 drilling platforms with reference to proposed exploration of the “Bonita” exploration target. Pursuant to applicable law, exploration activities under the Bonita DIA must commence on or before June 2, 2028. Failure to do so will result in the expiration of the Bonita DIA.

After an eight-year gap in activities, exploration on the San Luis Property was restarted in mid-2021 once access permission was granted by the Ecash and Cochabamba communities.

The main objective was to search for new gold-silver vein targets within the concessions surrounding the known Ayelén zone. This comprised a grassroots reconnaissance program covering a wide area starting to the east and northeast and where several new veins were found, and the continuation of known veins was confirmed (Figure 9-7).

Two of the veins found comprised the closely spaced north-south trending quartz veins, referred to as the Gemelas veins. These were traced up to 110 m length with widths up to 1.20 m. Ten samples were taken, and the West vein (Figure 9-8) returned values up to 13.6 g/t Au and 14.35 g/t Ag.

Table 9-2 summarizes highlights of the other veins found and sampled, although these results have not been checked by the QP.

Source: Reliant

Revision of the 2006–2007 drill cores was also being carried out at the same time, and from which it was recognized that the gold mineralization in the Ayelén vein is controlled not only by structures but also by lithology. Whilst the Ayelén vein is spatially related to northwest-trending steep fault where it is emplaced along with two-stages of rhyolite dyking, it is now interpreted that the gold mineralization is probably related to a lithological arrangement when andesitic flows contact the footwall and an andesitic tuff contacts the hangingwall. Furthermore, the combined relationship between the magnitude of fault displacement and the gold endowment (Rhys et al., 2020) is an important feature to be considered (Figure 9-9).

It is this feature that has been taken into consideration with regards to the target generation process for low-sulphidation epithermal veins in the San Luis Property, and where faulting along the Ayelén West vein and Carhuan Puquio veins to the west of Ayelén (Figure 9-10) indicates a similar faulting and wall- rock association to that identified adjacent to the Ayelén and Inés veins.

Reliant has consequently proposed (September 2023) an initial drilling program comprising 10 widely spaced drillholes (80–100 m spacing) aimed at the down-dip extension of the Ayelén West vein and totalling 1,890 m, and nine similarly spaced drillholes aimed at the down-dip extension of the Carhuan Puquio vein. The QP is in general agreement with this proposal, with the exception that results from the shallow drillholes should be evaluated prior to drilling the deeper holes. The Gemelas veins warrant further sampling and possible drilling as well.

Also proposed was a program of 10 drillholes aimed at probing the possible in-depth extensions of the Ayelén vein. However, in this case the QP is not in agreement with Reliant’s proposed deep drilling, when the cost would be better spent on the necessary drilling required to increase confidence and convert Indicated Mineral Resources to Measured Mineral Resources at and near surface.

Other work carried out during this period, was to re-log and carry out further drillhole sampling of the wall-rocks of the Ayelén and Bonita zones with a view to evaluating the open pit bulk mining of these deposits. However, the QP has reviewed the additional sampling and assaying data and considers that bulk tonnage at Ayelén is unlikely to add any value to the project, and that no opinion can be given in the case of the Bonita zone until the proposed trenching and diamond drilling has been carried out.

The last project work carried out by Reliant included re-evaluation of the 2009 geological model and Mineral Resource estimate. However, this work was carried out in-house, not checked externally, and is not therefore considered relevant to the information supporting the current technical report.

The property has been tested by 184 bore holes, totalling 43,949 m of diamond drilling.

Table 10-1 summarizes the diamond drilling carried out on each of the tested exploration targets within the property.

A summary of all holes drilled, their target, coordinates, azimuth, angle and depth is presented in Appendix B of this report. A summary of all the principal drillhole intersections is presented in Appendix C.

On September 25, 2006, Reliant (then owned by Esperanza) commenced the first drilling program on the San Luis Property. A minimum of 4,000 m of HQ-size diamond drilling was proposed to evaluate the indicated higher-grade sections of the Ayelén and Inés vein structures as well as other vein targets on the property. At the time of the Pincus and McCrea technical report (November 22, 2006), 12 drillholes had been completed, totalling 1,500 m, and the drill core assay results from the first four drillholes were reported.

Between September 25 and December 16, 2006, Reliant (now under joint venture between Esperanza and SSR Mining) completed 28 HQ-size bore holes, totalling 3,764.9 m, to initially test the central portion of the Ayelén vein structure and northwest portion of the Inés vein structure (Figure 10-1).

Source: Reliant

Drilling resumed on January 10, 2007, and during the next 10 months Reliant drilled an additional 133 HQ-size diamond drillholes. This work continued the evaluation of the Ayelén and Inés vein structures and tested the other five veins of the San Luis vein system. The final four drillholes of the 2007 field season tested several exploration targets within the BP zone with the last 2007 drillhole (BP-SL-133) being completed on October 18, 2007.

Boart Longyear of Lima, Peru was the diamond drilling contractor for all of the drilling. Boart Longyear provided two diamond drill rigs, namely LF-70 and LY-44 rigs, capable of recovering HQ-size and NQ- size core. All drillholes were started with HQ-size equipment and only occasionally reduced to NQ-size if poor ground conditions were encountered.

Heavy equipment was utilized to construct drill access roads, drill sites, support the rigs during drilling, and to rehabilitate the drill sites afterwards.

The locations of the 2006 drillholes were based largely on positive results from trenching and channel sampling along the Ayelén and Inés vein structures. Subsequent drilling on these structures was positioned to follow mineralized shoots along strike and down dip at a drilling density of ±40 m spacing, sufficient to start modelling the veins and estimate their mineral resources. Drilling on the other vein structures and within the BP zone was directed at coincidental geological, geochemical and/or geophysical targets.

Drillhole collars were reportedly surveyed initially with global positioning system (GPS) instrumentation and later using Distamat surveying techniques. Downhole survey measurements were recorded at 50 m intervals and near the terminus of each drillhole. Occasionally, extra downhole surveys were requested near-surface to obtain a more accurate azimuth and inclination than that determined using a handheld compass. Every downhole survey was recorded on the field geologic log and in the ‘Survey’ of the drilling database.