ni 43-101 resources technical report el toro gold project - corporación del centro sac - perú
TRANSCRIPT
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Respectfully submitted to:Corporacion del Centro S.A.C.
By: SGS Canada Inc.
Yann Camus, Eng.
SGS Canada Geostat
Effective Date: October 28, 2014
NI 43-101 Resources Technical Report
El Toro Gold Project
Corporacin del Centro S.A.C.
Per
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NI 43-101 Resources Technical Report CDC Gold Corp. El Toro Gold Project Page II
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Disclaimer:
This document is issued by SGS Canada Inc. under its General Conditions of Service accessible at
http://www.sgs.com/terms_and_conditions.htm . Attention is drawn to the limitation of liability,
indemnification and jurisdiction issues defined there in. Any holder of this document is advised that
information contained herein reflects the Companys findings at the time of its intervention only and
within the limits of the Clients instructions, if any. The Companys sole responsibility is to its Client
and this document does not exonerate parties to a transaction from exercising their rights and
obligations under the transaction documents. Any unauthorized alteration, forgery or falsification of
the content or appearance of this document is unlawful and offenders may be prosecuted to the
fullest extent of the law.
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DATE AND SIGNATURE PAGE
The effective date of the Report on the El Toro Gold Project of Corporacin del Centro SAC (CDC) isFebruary 27, 2015.
Prepared by:
(Original copy signed and sealed)
Yann Camus, Eng. Date
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1 Executive Summary
1.1 General Information
The El Toro Project is located 3,200 m above sea level in the vicinity of the city of Huamachuco, within
one of the districts of the Snchez Carrin province, and 180 km from the Department of Trujillo in
northwestern Peru. The company has offices in Trujillo and Lima. The project is located within sheet 16-G:
Cajabamba of the IGN (Instituto Geogrfico Nacional), and its central UTM coordinates are 9,134,814mN
and 829,083mE (WGS84). The project is comprised of 9 mining titles totaling 4,569.70 hectares. The land
surface on which the current operation is locatedconsists of 253.17hectares (Figure 4-2). CDC holds
100% of the Property titles (mining rights) of the project.
1.2 Geology and Mineralization
The gold mineralization in the region of Huamachuco occurs mostly at the intersection of the Andean
structural "train" NW to NE transfer; other conditions prevail locally, as in Tres Cruces area and Chapel.
The gold mineralization identified in the El Toro deposit is of the type of high sulfidation epithermal in
clastic sedimentary rocks, such as sandstones and quartzites of the Chimu Formation.
The genesis of this deposit is very similar to others in its class, such as La Virgen and Shahuindo. Gold is
hosted within oxidation fractures in siliciclastic rocks (sandstone, quartzite and quartz sandstones), in
cubic pyrite hosted in the dacitic prophyry and occasionally in the quartzites. El Toro was a very active
system with clear evidence of tectonic and volcanic activity represented by facies hydrothermal alteration,superimposed breccias and fracture systems. At surface these gaps are seen as feeders through to
amass mineralizing fluids. The sandstone and quartzite breccia zones exhibit strong oxidation in contact
with the intrusive dacite.
1.3 Exploration
Drilling and field mapping started on the project in 1995 by Barrick Gold Corp. and Oromin. Since then,
companies such as Miner North and Cambior have performed various studies including surface
geochemistry and drilling.
As of 2010 the company Carlos Alberto Daz Marios (CDM) continues to perform exploration campaigns
in El Toro, including geochemical prospecting work, lab work, specialized studies and diamond drilling.
These studies were developed in partnership with private entities Geoval SA., Ak Drilling, MYAP (Dra.
Gladys Ocharn) and GEOEXINPE SAC, SAC Geomechanics, etc. The work completed to date includes:
detailed geological mapping, surface geochemical channels, RC drilling, photogrammetric restitution, etc.
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1.4 Metallurgical Testwork
The 2001-2005 metallurgical testing concluded that El Toro ore samples seem amenable to heap leaching
cyanidation. Recovery is little affected by grinding and 79.9% to 90 % Au is recovered with the samplescrushed between 1 inch down to 80% minus 200 mesh. It was recommended to perform column
cyanidation tests with coarser samples in the 1-3 inch range but it was never done. No metallurgical
testing was done between 2005 and 2014. In 2014 CDC began acquiring columns to be able to conduct
tests on site. It is planned to add more testing facilities and to conduct additional metallurgical testwork in
2015.
1.5 Site Visit and Data Verification
The author, Yann Camus Eng. of SGS Canada Inc. visited the project from October 28 to 30 of 2014. Theauthor visited the geology office, operations, and core facilities.
The author concludes that the digital database for El Toro deposit is reliable for resource estimation.
The author reviewed the continuity between different sample types including production holes, face
samples and diamond drillhole (DDH) samples; as a result the data is deemed reliable.
Eighty-seven (87) check samples have been requested; at the date of compiling this report the samples
were still being processed.
1.6 Mineral Resource Estimate
SGS completed the resource estimation with the following steps: validation of the drillhole, production
holes, trenches and face samples database, studied the various gold sample types for biases, interpreted
mineralized oxide volumes in 3D, estimated a block model inside these volumes using capped
composites, optimized an open pit to constrain the resource and classified the resource into measured,
indicated and inferred categories.
Face samples were not used in the estimation as it was determined they are biased. Soluble gold was
available for production holes only and was used to assist in the modelling of the volumes but not included
in the estimation of the block model. Only total gold was estimated. The block size of 6 m x 6 m x 6 mcorresponds to the previous resource estimation by Geoval as well as the bench height used for
production since 2012. A gold price of 1,256 US$/oz was used for the optimization of the open pit. The
costs used derive from the 2014 life of mine and the resulting marginal cut-off grade (COG) is 0.16 g/t Au.
The current operational COG is 0.3 g/t Au. For this report, the COG of 0.16 g/t Au was used for the base
case of the resources presented in Table 1-1. Resources are also available at COGs of 0.2, 0.3 and 0.5
g/t Au in Table 14-9.
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Table 1-1: Base case mineral resource estimates for the El Toro project (all oxides no sulfides)
1.7 Mineral Reserves, Mining, Processing, Infrastructures, Environmental, Costs
and Economic Analysis
As the El Toro project has been in operation since 2012 and continued to produce during compilation of
this report, these topics were not addressed by SGS. SGS recommends that these subjects be covered in
the next NI 43-101 technical report for this project.
1.8 Recommendations
The El Toro property is promising. After more than 3 years of production with no exploration during that
time, resources should still stand for multiple years. Continued exploration work is warranted in order to
replace and possibly contribute to current resources. Continued definition drilling and technical-
economical studies are also warranted since measured and indicated resources are currently somewhat
limited.
Recommendations Regarding the Next Resource Update
Prior to a resource update, it is recommended that CDC completes the following actions :
o Drillholes to better define a minimum of the next year or two of production.
o Re-log and re-assay of available core from the Cambior diamond drilling to compensate
for the lack of QA/QC, analyze for soluble gold and also to have a more homogeneous
lithology, alteration and mineralization logging in the database.
Recommendations to realize an advanced NI 43-101 technical report
Since this NI 43-101 resource technical report includes most of the parts of an advanced technical
report, costs will be significantly reduced.
CategoryTonnage
(t)
Au Grade
(g/t)
Au
OuncesMeasured 5,660,000 0.36 65,000
Indicated 19,060,000 0.45 276,000
Measured + Indicated 24,720,000 0.43 340,000
Inferred 25,460,000 0.49 398,000 0.16 /
: 28, 2014
1256$/
2014
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The budget estimation for the completion of a complete report (including resource update) is of
$ 180,000 USD.
General Recommendations
Current geology and technical team working at the El Toro operation should continue to study and
model the geology in order to understand how to better manage the production, the exploration
and also the resource estimation.
During exploration drilling, the QA/QC procedures should continue as done by CDM in 2013.
Verification of the documents and on site implementation by a QP will ensure procedures follow
industry standards to support future estimates and reports.
Repeats of whole sample batches should be requested from the laboratory if:
o A blank QA/QC sample returns more than 0.1 g/t Au
o One QA/QC standard failure is noticed
o Two QA/QC standard warnings are noticed
Option: Recommended Drilling to Extend Resources and Possibly Increase Open Pit Size and Resulting
Profitability
Areas with exploration potential that could materially affect the optimized open pit shell (see
Figure 1-1 to Figure 1-3). Areas with poor gold are sub-economical, some gold is slightly sub-
economical, good gold is sufficient for modelling and estimation and NA have laboratory results
missing from the database.
In order to drill potential areas visible in Figure 1-1, the recommended length of each drill hole
should be around 140 m on a drill grid of about 50 m x 100 m which delineates inferred resources.
According to the total size of the area with potential, it is recommended to have about 40
drillholes. The total meters drilled would therefore be about 5,600 m of drilling or a budget of
$ 1,000,000 USD. Drilling some of these holes in reverse circulation (RC) could reduce the budget
along with some of the time required to drill the 40 drillholes.
In order to drill additional potential areas visible in Figure 1-3, the recommended length of each
drill hole should be around 400 m. According to the total size of the area with potential, it is
recommended to complete 8 drillholes initially. The total meters drilled would therefore be about
3,200 m of drilling or a budget of $ 575,000 USD.
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Figure 1-1: Plan view with oxide body in red and potential areas for exploration in grey
Figure 1-2: Plan view of optimized pit shell and next figure section location
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Figure 1-3: Section of block model (black is not estimated), potential areas for exploration in grey
Optional: Recommendations Regarding the Exploration and Drilling of New Resources on the Property
(No budget)
Additional geophysics on the El Toro property is warranted. The principal actions could be to:
o Extend the deposit with resources.
o Find new targets for eventual drilling and resource development.
The El Toro property merits continued exploration work. Additional exploration drilling is therefore clearlywarranted on the Property.
While it was not in the current mandate, SGS noticed that process recoveries are not close to initial
testwork, a series of recommendations are listed here (No budget)
CDC should continue the construction of the metallurgical on site facility in order to do more tests.
A composite sample should be sent for gold mineralogy for metallurgical applications to better
understand how to unlock the gold from the ore. More testing may be advisable given the
complicated geological nature of the deposit but each sample requires a budget of about $ 9,000
USD.
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TABLE OF CONTENTS
1 Executive Summary ................................................................................................ iv1.1 General Information ....................................................................................................... iv
1.2 Geology and Mineralization ........................................................................................... iv
1.3 Exploration .................................................................................................................... iv
1.4 Metallurgical Testwork .................................................................................................... v
1.5 Site Visit and Data Verification ........................................................................................ v
1.6 Mineral Resource Estimate ............................................................................................. v
1.7 Mineral Reserves, Mining, Processing, Infrastructures, Environmental, Costs andEconomic Analysis .................................................................................................................. vi
1.8 Recommendations......................................................................................................... vi
2 Introduction .............................................................................................................. 1
2.1 General .......................................................................................................................... 1
2.2 Terms of Reference ........................................................................................................ 1
2.3 Currency, Units, Abbreviations and Definitions ............................................................... 1
2.4 NI 43-101 Disclosure ...................................................................................................... 2
3 Reliance on Other Experts ...................................................................................... 3
4 Property Description and Location ........................................................................ 4
4.1 Location .......................................................................................................................... 4
4.2 Ownership ...................................................................................................................... 6
4.3 Royalties......................................................................................................................... 6
4.4 Permits ........................................................................................................................... 6
4.5 Environmental Liabilities ................................................................................................. 6
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ...... 7
5.1 Physiography .................................................................................................................. 7
5.2 Accessibility .................................................................................................................... 7
5.3 Climate ........................................................................................................................... 85.3.1 Precipitation ................................................................................................................................... 85.3.2 Wind ............................................................................................................................................... 8
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5.4 Local Resources and Infrastructure ................................................................................ 8
5.5 Surface Rights .............................................................................................................. 10
6 History .................................................................................................................... 11
6.1 Prior Ownership of the Property and Ownership Changes ............................................ 11
6.2 Past Mineral Exploration Work ...................................................................................... 116.2.1 Oromin Barrick (1995-1996) .................................................................................................... 11
6.2.1.1 Surface Geochemistry ............................................................................................................. 116.2.1.2 Drilling ....................................................................................................................................... 11
6.2.2 Company Minera North (1998-1999) ......................................................................................... 126.2.2.1 Surface Geochemistry: ............................................................................................................ 12
6.2.3 Cambior (2003-2005) .................................................................................................................. 126.2.3.1 Restitution aerial photography (topography) ......................................................................... 126.2.3.2 Surface Geochemistry ............................................................................................................. 12
6.2.4 Minera Santa Marina (2006) ....................................................................................................... 12
7 Geological Setting and Mineralization ................................................................. 14
7.1 Regional Geology ......................................................................................................... 14
7.2 Property Geology.......................................................................................................... 157.2.1 Alteration ...................................................................................................................................... 16
7.2.1.1 Silicification .............................................................................................................................. 16
7.2.1.2 Phyllic (Quartz-Sericite) .......................................................................................................... 167.2.1.3 Argillic ....................................................................................................................................... 167.2.1.4 Propylitic ................................................................................................................................... 16
7.3 Structural Control.......................................................................................................... 17
7.4 Lithology and Stratigraphy ............................................................................................ 187.4.1 Chicama Formation - Upper Jurassic ........................................................................................ 187.4.2 Lower Cretaceous ....................................................................................................................... 19
7.4.2.1 Chim Formation ..................................................................................................................... 197.4.2.2 Santa Formation ...................................................................................................................... 207.4.2.3 Carhuaz Formation .................................................................................................................. 207.4.2.4 Farrat Formation Lower Cretaceous ................................................................................... 20
7.4.3 Inca, Chulec and Pariatambo Formation - Middle Cretaceous ................................................ 207.4.4 Volcanic Calipuy Formation - Upper Cretaceous to Lower Tertiary ........................................ 207.4.5 Intrusive Rocks ............................................................................................................................ 21
7.5 Mineralization ............................................................................................................... 21
8 Deposit type ........................................................................................................... 23
8.1 Deposit Summary ......................................................................................................... 23
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8.2 Epithermal Deposits ..................................................................................................... 23
8.3 Geological Characteristics ............................................................................................ 24
8.3.1 High Sulfidation Type .................................................................................................................. 248.4 Mineralized High Sulfidation Systems ........................................................................... 26
8.4.1 Fluid Characteristics .................................................................................................................... 268.4.2 Permeability ................................................................................................................................. 278.4.3 Alteration ...................................................................................................................................... 278.4.4 Mineralization ............................................................................................................................... 29
9 Exploration ............................................................................................................. 30
9.1.1 Photogrammetric restitution ........................................................................................................ 309.1.2 Surface Geochemistry................................................................................................................. 30
9.1.3 Drilling .......................................................................................................................................... 3010 Drilling ................................................................................................................. 31
10.1 Oromin- Barrick Gold ................................................................................................. 32
10.2 Cambior..................................................................................................................... 32
10.3 Carlos Daz Marios (CDM)....................................................................................... 33
11 Sample preparation, Analyses and security..................................................... 34
11.1 Sample Preparation ................................................................................................... 34
11.2 Analyses.................................................................................................................... 3411.2.1 Laboratory Certification ............................................................................................................... 3411.2.2 Analytical Procedure ................................................................................................................... 34
11.3 Quality Control and Quality Assurance Programs ...................................................... 3611.3.1 Results of Quality Control and Quality Assurance Monitoring ................................................. 3711.3.2 Standards Statistics..................................................................................................................... 3711.3.3 Blanks Statistics .......................................................................................................................... 3911.3.4 Duplicate Sampling ..................................................................................................................... 40
11.4 Conclusion ................................................................................................................ 45
12 Data verification .................................................................................................. 46
12.1 Site Visit .................................................................................................................... 47
12.2 Standard Verification of the Geological Database ...................................................... 48
12.3 Verification of QAQC Results .................................................................................... 48
12.4 Verification of Ore Wireframe Shells .......................................................................... 48
12.5 Controls on Gold Grade ............................................................................................. 48
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15 Mineral Reserve Estimates ................................................................................ 86
16 Mining Methods .................................................................................................. 87
17 Recovery Methods .............................................................................................. 88
18 Project Infrastructure ......................................................................................... 89
19 Market Studies and Contracts ........................................................................... 90
20 Environmental Studies, Permitting and Social or Community Impact ........... 91
21 Capital and Operating Costs.............................................................................. 92
22 Economic Analysis ............................................................................................. 93
23 Adjacent Properties ............................................................................................ 94
23.1 Epithermal Gold Deposits in Sedimentary Rocks ....................................................... 9423.1.1 La Virgen Deposit ........................................................................................................................ 9423.1.2 La Arena Deposit ......................................................................................................................... 9523.1.3 Lagunas Norte- Barrick Gold Corp. ............................................................................................ 97
24 Other Relevant Data and Information ............................................................... 98
25 Interpretation and Conclusions ......................................................................... 99
26 Recommendations .............................................................................................100
27 References .........................................................................................................104
27.1 Web and Databases References ............................................................................. 104
28 Certificates of Qualified Persons .....................................................................105
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LIST OF FIGURES
Figure 1-1: Plan view with oxide body in red and potential areas for exploration in grey ____________ viiiFigure 1-2: Plan view of optimized pit shell and next figure section location _____________________ viiiFigure 1-3: Section of block model (black is not estimated), potential areas for exploration in grey _____ ixFigure 4-1: El Toro project location map _________________________________________________ 4Figure 4-2: Claims area of El Toro Project _______________________________________________ 5Figure 5-1: Landscape at the mine _____________________________________________________ 7Figure 5-2: Local infrastructures Huamachuco, as viewed from the mine site ____________________ 9Figure 5-3: Offices at the El Toro Project mine ____________________________________________ 9Figure 7-1: Regional geology ________________________________________________________ 14Figure 7-2: Contact between the sandstones from the Chim Formation and the dacitic porphyry_____ 16Figure 7-3: El Toro hydrothermal alteration zones ________________________________________ 17Figure 7-4: Regional structural interpretation ____________________________________________ 18Figure 7-5: Stratigraphic column (after V. Quirita, 2006) ____________________________________ 19Figure 7-6: Mineralization models (from CDC Gold Corp.) __________________________________ 22Figure 8-1: High sulfidation epithermal deposits model (modified from Hedenquist and Lowenstern) __ 23Figure 8-2: Conceptual model for styles of magmatic arc epithermal Au-Ag and porphyry Au-Cu (image
sourced from Corbett and Leach, 1998) ________________________________________________ 24Figure 8-3: Epithermal deposits global occurrences (image sourced from Corbett and Leach, 1998) __ 26Figure 8-4: Vuggy silica alteration of porphyritic fragments breccia matrix (Corbett, 2002) _________ 28Figure 8-5: Vuggy silica alteration of lapilli tuff (Corbett, 2002) _______________________________ 28Figure 8-6: Vuggy silica alteration of porphyry intrusion (Corbett, 2002) ________________________ 28Figure 11-1: Geoval Standard 201 OREAS samples ______________________________________ 37Figure 11-2: Geoval Standard 901 OREAS samples ______________________________________ 38Figure 11-3: CDM Standard 201 OREAS samples ________________________________________ 38Figure 11-4: CDM Standard 901 OREAS samples ________________________________________ 39Figure 11-5: Blanks Au (ppm) samples Geoval _________________________________________ 40Figure 11-6: Blanks Au (ppm) - CDM __________________________________________________ 40Figure 11-7: Geoval duplicates Au (ppm) _______________________________________________ 41Figure 11-8: Au original vs Au duplicates - Geoval sampling ________________________________ 41Figure 11-9: CDM duplicates Au (ppm)_________________________________________________ 42Figure 11-10: Au original vs Au duplicates CDM sampling _________________________________ 42
Figure 11-11: Au blasthole original vs duplicates _________________________________________ 43Figure 11-12: Au face samples original vs duplicates ______________________________________ 44Figure 12-1: Panorama of the office and workings ________________________________________ 47Figure 12-2: Core storage facility displaying proper storage _________________________________ 47Figure 13-1: Sample preparation _____________________________________________________ 53Figure 13-2: Sample preparation of composite sand-5 _____________________________________ 54Figure 13-3: Results of the bottle test for the intrusive sample _______________________________ 57Figure 13-4: Results of the bottle test for the Sand-5 sample ________________________________ 58Figure 14-1: Plan view of drillholes (DDH and RC) at the El Toro Project _______________________ 63Figure 14-2: Scatterplot of paired 6 m composites in DDHs vs BHs ___________________________ 64
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Figure 14-3: Au g/t histogram of 4,521 original assays from the mineralized zones (DDH, RC, TR) ____ 65Figure 14-4: Location of sections used for the ore-shell model _______________________________ 66Figure 14-5: Modeling of the sulfides on bench 3,499 mZ using solubility from production data_______ 67Figure 14-6: Modeling of the sulfides on bench 3505 mZ using solubility from production data _______ 67Figure 14-7: Interpretation of sulfides on Section 8.0 ______________________________________ 68Figure 14-8: Interpretation of oxides and sulfides on Section 8.0 _____________________________ 68Figure 14-9: Interpretation of sulfides on Section 11.0 _____________________________________ 69Figure 14-10: Interpretation of oxides and sulfides on Section 11.0 ___________________________ 69Figure 14-11: Interpretation of sulfides on Section 14.0 ____________________________________ 70Figure 14-12: Interpretation of oxides and sulfides on Section 14.0 ___________________________ 70Figure 14-13: Oblique view of the sectional interpretations for the oxides _______________________ 71Figure 14-14: Oblique view of the resulting solid wireframe for the oxides_______________________ 71Figure 14-15: Oblique view of the sectional interpretations for the sulfides ______________________ 72
Figure 14-16: Oblique view of the resulting solid wireframe for the sulfides ______________________ 72Figure 14-17: Oblique view of the solid wireframes for both the oxides and the sulfides ____________ 73Figure 14-18: Longitudinal view looking northeast displaying all composites used for the estimation ___ 74Figure 14-19: The best variogram produced using production composites alone__________________ 75Figure 14-20: Best continuity shown on bench 3,499 mZ with production drillholes ________________ 76Figure 14-21: Best continuity shown on Section 11.0 with production and exploration drillholes ______ 76Figure 14-22: Histogram of estimated capped gold in block model (one max grade at 2.93 g/t) _______ 78Figure 14-23: Plan view of the optimized pit shell _________________________________________ 82Figure 14-24: View in 3-D of optimized pit shell __________________________________________ 82Figure 14-25: Optimized open pit section showing the block classification and topography __________ 83
Figure 14-26: Comparison of mineral resource estimates at varying cut-off grades ________________ 85Figure 23-1: Map of adjacent gold deposits _____________________________________________ 94Figure 26-1: Plan view with oxide body in red and potential areas for exploration in grey __________ 101Figure 26-2: Plan view of optimized pit shell and next figure section location ___________________ 102Figure 26-3: Section of block model (black is not estimated), potential areas for exploration in grey __ 102
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LIST OF TABLES
Table 1-1: Base case mineral resource estimates for the El Toro project (all oxides no sulfides) _____ viTable 2-1: List of abbreviations _______________________________________________________ 2Table 4-1: Summary of El Toro project mining claims _______________________________________ 5Table 6-1: Surface geochemistry work _________________________________________________ 13Table 6-2: Exploration work on the Property before CDC Gold Crop. __________________________ 13Table 8-1: Genetic types of epithermal gold deposits ______________________________________ 25Table 10-1: Drilling summary ________________________________________________________ 31Table 10-2: Drilling data verification ___________________________________________________ 32Table 11-1: Geochemistry analysis and detection limits (ICP12B) _____________________________ 35Table 11-2: Certified values, SDs, 95% confidence and tolerance limits for OREAS 201 ____________ 36Table 11-3: Certified values, SDs, 95% confidence and tolerance limits for OREAS 901 ____________ 37Table 11-4: Au blasthole statistics ____________________________________________________ 43Table 11-5: Au face samples statistics _________________________________________________ 44Table 13-1: Amenability of gold recovery by cyanidation (2011 tests) __________________________ 50Table 13-2: Bottle test results intrusive (2001) ___________________________________________ 51Table 13-3: Bottle test results sandstone (2001) __________________________________________ 51Table 13-4: Results of column cyanidation tests __________________________________________ 51Table 13-5: Identification of samples __________________________________________________ 52Table 13-6: Chemical assay of head samples ___________________________________________ 55Table 13-7: ICP scan of samples _____________________________________________________ 56Table 13-8: Summary of the cyanidation test results for the intrusive sample ____________________ 57Table 13-9: Summary of the cyanidation test results for the Sand-5 composite ___________________ 58Table 13-10: Summary of cyanidation test results for sample GR-28 __________________________ 59Table 14-1: Exploration and production holes summary ____________________________________ 62Table 14-2: QAQC samples completed by CDC gold ______________________________________ 62Table 14-3: Composite statistics______________________________________________________ 74Table 14-4: Variogram parameters used in the estimation __________________________________ 75Table 14-5: Search parameters for each of the 3 estimation passes ___________________________ 77Table 14-6: Density statistics (t/m
3) ___________________________________________________ 78
Table 14-7: Open pit optimization parameters ___________________________________________ 81Table 14-8: Base case mineral resource estimates for the El Toro Project (all oxides no sulfides) ___ 83
Table 14-9: Mineral resource estimates at varying cut-off grades (all oxides no sulfides) __________ 84Table 23-1: Regional stratigraphic column of La Arena and surrounding areas ___________________ 96Table 23-2: Barricks Reserve/Resources-2013 __________________________________________ 97Table 23-3: Epithermal gold deposits in the La Libertad Region gold zone (from SNL web site) _____ 97
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2 Introduction
2.1 General
SGS Canada Inc. (SGS) was contracted on August 18, 2014, by CDC Gold (CDC) to conduct a NI 43-
101 technical resource report on the El Toro project located in the town of Huamachuco in Northwestern
Peru.
This report presents a resource on the El Toro gold project. It has been prepared under the requirements
and following the guidelines of the Canadian National Instrument 43-101 (NI 43-101) for use by CDC
Gold.
2.2 Terms of Reference
SGS Canada Inc (SGS) has been retained by Corporacin del Centro S.A.C (CDC Gold) to prepare a
technical report and resource estimate of the El Toro Gold Project in accordance with the Canadian
National Instrument 43-101 (NI 43-101). The information disclosed in this report is derived from previous
technical reports, information provided by CDC, the internet, and three site visits to the project.
2.3 Currency, Units, Abbreviations and Definitions
All measurements in this report are presented in the metric system. Monetary units are in United Statesdollars (USD$) unless otherwise specified. The metric coordinate system is Universal Trans Mercator
WGS84.
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Table 2-1: List of abbreviations
Abbreviation Units Abbreviation Units
t Metric tonnes kg KilogramsMt Million tonnes g Grams
tpd Tonnes per day NSR Net Smelter Return
m Metres S South
cm Centimetres N North
mm Millimetre E East
km Kilometre W West
L Litre ha Hectare
mL Millilitre m Cubic metres
ppm Parts per million CAD$ Canadian Dollars
QA Quality Analysis QC Quality Control Degrees % Percent
C Degrees Celsius MMI Mobile Metal Ion
CoG Cut-Off Grade Fe Iron
Cu Copper Au or AuT Gold (total)
Pb Lead AuS Soluble gold
Zn Zinc AgT Total silver
As Arsenic AgS Soluble silver
Hg Mercury CDC Corporacin del Centro S.A.C.
Mo Molybdenum Ma Millions Years
2.4 NI 43-101 Disclosure
The technical information in this report has been prepared in accordance with Canadian regulatory
requirements by independent Qualified Persons, or under the supervision of, as set out in the National
Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).
The Mineral Resource estimates set out in this report were classified according to the CIM Definition
Standards - For Mineral Resources and Mineral Reserves (as adopted by CIM Council in November
2010). Readers are advised that Mineral Resources do not demonstrate economic viability. Mineral
Resource estimates do not account for mineability, selectivity, mining loss and dilution. These MineralResource estimates include Inferred Mineral Resources that are considered too geologically speculative to
contribute to economic studies and cannot be transferred to reserves. There is no certainty that Inferred
Mineral Resources will be converted to Indicated and Measured categories with further drilling, or into
Mineral Reserves, once economic considerations are applied. Technical information in this report was
reviewed and adopted by all Qualified Persons.
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3 Reliance on Other Experts
This report was prepared in accordance to the NI 43-101, for El Toro Gold Project of Corporacin del
Centro S.A.C. (CDC Gold).
Some information has been sourced from the previous Technical Report by GEOVAL (Terrones &
Castaeda, 2012).
SGS Qualified Persons were provided information, have drawn conclusions and made estimates to the
best of their knowledge, based upon reviewing;
Information provided by CDC Gold (CDC) and their technical staff;
Public information available at the time of preparation;
Personal inspections of the Project; External data;
Assumptions, conditions and qualifications established in this report.
Contributions by Oscar Fras (CDC), Alberto Velzquez (CDC), Walter Acero (CDC), Carlos Salinas
(CDC), Jess Dextre (CDC), Francisco Youpanqui (CDC), Enrique Lopez (CDC), Erikzon Catacora
(CDC), Jos A. Terrones (Geoval) and Rodrigo Carneiro (SGS) and their support in preparing the
resource estimation and technical report are duly noted and appreciated.
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4 Property Description and Location
4.1 Location
El Toro Project is located 3,200 m above sea level in the vicinity of the city of Huamachuco, within a
district of the Snchez Carrin province, at La Libertad Department and 180 km from the town of Trujillo in
northwestern Peru. The company has offices in Trujillo and Lima (Figure 4-1).
Figure 4-1: El Toro project location map
The project is located within sheet 16-G (Cajabamba) of the IGN (Instituto Geogrfico Nacional) and its
central UTM coordinates are 9,134,814mN and 829,083mE (WGS84).
El Toro Mine
Office
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The project is comprised of 9 mining titles totaling 4,569.70 hectares (Table 4-1).
Table 4-1: Summary of El Toro project mining claims
The land surface on whichthe current operationis locatedconsists of253.17hectares.CDC is presently
negotiating the purchase of additional land and while this addition may not be directly related to the
operation, it may holdfuturestrategic importance (Figure 4-2).
Figure 4-2: Claims area of El Toro Project
Code Name Zone Map Reference Holder Department Province District Area (Ha)
P63000311 ISABELITA 17 16-G CARLOS ALBERTO DIAS MARIOS LA LIBERTAD SANCHEZ CARRION HUAMCHUCO 63.50
15009015X01ROSA AMPARO
A.C.117 16-G CORPORACION DE L CE NTRO S .A .C LA LIBE RTAD S ANCHE Z CA RRION HUAMCHUCO 840.00
15009021X01ROSA AMPARO
A.C.717 16-G CORPORACION DEL CENTRO S.A.C LA LIBERTAD SANCHEZ CARRION CURGOS/HUAMACHUCO 660.00
15009020X01ROSA AMPARO
A.C.617 16-G CORPORACION DE L CE NTRO S .A .C LA LIBE RTAD S ANCHE Z CA RRION HUAMCHUCO 666.18
15009017X01ROSA AMPARO
A.C.317 16-G CORPORACION DE L CE NTRO S .A .C LA LIBE RTAD S ANCHE Z CA RRION HUAMCHUCO 520.00
15009019X01ROSA AMPARO
A.C.517 16-G CORPORACION DE L CE NTRO S .A .C LA LIBE RTAD S ANCHE Z CA RRION HUAMCHUCO 360.00
10138907 RODRIGO PRIM ERO 17 16-G CORPORACION DEL CENTRO S.A .C LA LIBERTAD SANCHEZ CARRION HUAM CHUCO 100.00
15009018X01ROSA AMPARO
A.C.417 16-G CORPORACION DEL CENTRO S.A.C LA LIBERTAD SANCHEZ CARRION CURGOS/HUAMACHUCO 620.02
15009016X01ROSA AMPARO
A.C.2 17 16-G CORPORACION DE L CE NTRO S .A .C LA LIBE RTAD S ANCHE Z CA RRION HUAMCHUCO 740.00
4,569.70TOTAL SURFACE (Ha)
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4.2 Ownership
CDC holds 100% of the property titles (mining rights) of the project.
4.3 Royalties
Since 2019, CDC Gold and Minera San Antonio S.R.LTDA have a contractual mineral royalty for the
production of processed ore mined and sold derived from the mining rights. The royalties are equivalent to
1% of the value of net sales of concentrates or metals obtained from the processing of minerals in the
mining rights.
4.4 Permits
CDM holds 100% of the mining permits. CDC is currently in the process of acquiring all permits relevant to
its mining operations presently owned by CDM. SGS has neither validated ownership of mining permits
nor has sufficient information to qualify this statement at this time; additional documents must be acquired
and reviewed in order to fully ascertain the validity of this affirmation.
4.5 Environmental Liabilities
The former owner declares that informal miners illegally invaded part of the mining rights and prevented
access to the holder for a period of approximately 6 years. Environmental authorities of the sector wereaddressed regarding this issue. As a result, the former owner was unable to perform environmental
rehabilitation and proper closure of the exploration work conducted years prior.
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5 Accessibility, Climate, Local Resources, Infrastructure and
Physiography
5.1 Physiography
The majority of the project area is relatively rugged with elevations ranging from sea-level to between
3,100 to 3,450 m. The rugged terrain can make access to certain parts of the project area problematic,
particularly in the wet season.
The study area is categorised by eroded moderate rocky hills and slopes and steep sided streams. The
landscape has also been reshaped from ongoing agricultural activities from centuries of human
occupation.
The study area is located in the Andes and vegetation is mainly grass. The near-absence of soils and light
organic matter coating and Andean floristic species spreads throughout the area.
Figure 5-1: Landscape at the mine
5.2 Accessibility
The nearest international airport to the project area is Lima. Trujillo can be reached by plane or by roads.
From Trujillo, the town of Huamachuco is accessed by paved roads (10A, & 3N); the El Toro project
facilities and infrastructure can be accessed from Huamachuco heading NE via an unpaved road easily
traversed using a 4x4.
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5.3 Climate
The climate in Peru typically varies from tropical in the east to dry desert in the west, and temperate to
frigid in the Andes. The terrain in Peru consists of the western coastal plain (costa), high and ruggedAndes in the center (sierra) and lowland jungle of the Amazon Basin (selva) in the east. Lima, the capital
of Peru, is located 480 km south of Huamachuco.
The climate of Huamachuco is temperate, moderately rainy, and temperature range is moderate. This is
an area identified as the floor of the Andean slope with altitudes varying from the 3,100 to 3,450 m.
Daytime temperatures in Huamachuco will generally reach highs of around 27C mostly between
February to March. The average minimum temperature drops down to around 15C at night. The coldest
temperatures occur between July and November. The Heat Index indicates no major discomfort given
average maximum temperatures and humidity levels.
5.3.1 Precipitation
The average rainfall in Huamachuco throughout the year is 3.7 days and can reach up to 15 from
February to March. A minimum of 0 days are generally observed from April to October. Small increases
are present in May and from July to august can reach 6 days. The rainy season from November to March
is defined as "winter" in Huamachuco, while from April to October is considered "summer" as
characterized by a lack of rain, very sunny days and very cold nights.The driest month is July. There is
only 11 mm of precipitation in July and most precipitation occurs in March. The cumulative annual average
is 905.50mm.
5.3.2 Wind
The yearly average daily wind speed is around 12 km/h (7 knots). In recent years the maximum sustained
wind speed has reached 93 km/h (50 knots).
5.4 Local Resources and Infrastructure
A regional airport in Trujillo and a local airport in Huamachuco are operational. Regional (paved) and local(unpaved) roads access the project easily. The national energy network, local labour, cellular and internet
coverage are present at the site.
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Figure 5-2: Local infrastructures Huamachuco, as viewed from the mine site
The population of the surrounding villages depends mainly on mining and agriculture. Traditional farming
is the main activity in the region. The mining activity is considered artisanal. Local workers have minimal
technical knowledge and lack ecological knowledge. Mineral exploitation by the local miners occurs
through conventional mining methods, without any mine planning or design, and has no environmental
impact studies and no mitigation plans. The Libertad and Cajamarca Departments are currently the main
producers of gold in the country. Specialized labour such as geology and mining would be availablemostly from greater populated and educated centers such as Lima.
The El Toro Project includes an operating mine with fully functional mining infrastructure. Additional
information of the mining methods, processing and infrastructure are briefly described in sections 16, 17
and 18 of this report.
Figure 5-3: Offices at the El Toro Project mine
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5.5 Surface Rights
CDC holds sufficient surface rights for mining operations. SGS has neither validated ownership of surface
rights nor has sufficient information to qualify the previous statement at this time; additional documentsmust be acquired and reviewed in order to fully ascertain the validity of this affirmation. It is strongly
recommended that a qualified person investigate this further, ideally an individual with sufficient
knowledge of surface rights in Peru and in the exact vicinity of the Project.
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6 History
6.1 Prior Ownership of the Property and Ownership Changes
El Toro is a historic gold deposit; residents of Trujillo formed the Minera San Antonio SRL. In 1995 they
signed an option agreement with companies Oromin and Barrick Gold Corporation, who explored the
deposit in 1995 and 1996.
Subsequently they agreed to transfer the property to North Compaa Minera SA., which performed
exploration programs during 1998 and 1999. Despite the maturity of the project the company decided to
stop the work program.
In October 2003 the project was optioned by Cambior, who executed exploration programs on theproperty for 2 years. In October 2005 Cambior informed Minera San Antonio SRL. of the suspension of
their obligations.
In mid 2006 Empresa Minera San Antonio S.R.L. entered in negotiations with Minera Santa Marina to
advance project development of the El Toro Project. As a result, Minera Santa Marina SA purchased
concessions from Minera San Antonio in June 2006. Minimal detail is available for this owner.
Currently, Corporacin del Centro (CDC) owns all concessions of the El Toro deposit.
6.2 Past Mineral Exploration Work
6.2.1 Oromin Barrick (1995-1996)
Between 1995 and 1996 the exploration companies Oromin and Barrick Gold Corporation signed an
option agreement with the owners of the project to carry out exploration on El Toro. Work on the property
included geological mapping, surface geochemistry and reverse circulation (RC) drilling.
6.2.1.1 Surface Geochemistry
A sampling program was completed on rock outcrops, soils and structures with filling (veins). A total of
994 samples were taken and the work grid almost entirely covered the El Toro project.
6.2.1.2 Drilling
The drill program was carried out between December and June of 1995 and 1996 and 50 drillholes
totaling 3,994.50 m were drilled. The technique used for drilling was reverse circulation (RC) with
FOREMOST W750 drills, having a capacity of 250.00 m/day. A total of 3,995 samples were taken
systematically from each 1.50 m drilled.
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6.2.2 Company Minera North (1998-1999)
North executed exploration during 1998 and 1999 with the goal of developing an operation. They
completed geological mapping, surface geochemistry, and a geophysical survey.
6.2.2.1 Surface Geochemistry:
The surface geochemistry program consisted of sampling outcrops. This campaign was developed within
a program of regional geochemical reconnaissance. A total of 233 samples were collected on the
property.
In August 1999North conducted ageophysical helimagnetic survey. The purposeof this studywas to
attempt toidentify aporphyriticintrusive bodythat could containCu-Au mineralization.
6.2.3 Cambior (2003-2005)
In 2003, Cambior acquired the El Toro Project. The following two years consisted of advanced exploration
work including: Photographic Restoration (2,000 ha), geological mapping (500 ha), surface geochemistry
and drilling. In October 2005, Cambior informed Minera San Antonio SRL. of the suspension of its
obligations.
6.2.3.1 Restitution aerial photography (topography)
In May 2004, Eagly MAPPING completed an aerial photograph of 2,000 ha (5 x 2 km) from the central
area of the El Toro Project. Georeference points and a baseline were also surveyed in order to perform
the mapping, sampling and drilling.
6.2.3.2 Surface Geochemistry
Surface geochemistry work consisted of geochemical stream sediment sampling, soil, and rock outcrop
trenches totalling 1,834 samples.
6.2.4 Minera Santa Marina (2006)
At the time this report was written, no information was available regarding this owner.
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Table 6-1: Surface geochemistry work
Sample Type Number of Samples
Rock 1004
Soils 159
Sediments 53
Trench 618
Total of Samples 1834
Table 6-2: Exploration work on the Property before CDC Gold Crop.
Type of geological work Unit of measure Planned Actual
Geological prospecting at 1:10,000 scale
Radiometric surveys Line km 18.0 18.0
Excavation of pits Line m 55.0 55.0
Geochemical sampling around aureoles of secondarydispersion
Sample 750.0 748.0
Geochemical sampling of outcrops Sample 0.0 55.0
Geochemical channel-sampling of pits Sample 55.0 55.0
Geochemical channel-sampling of outcrops Sample 0.0 15.0
Line cutting Line km 17.0 13.4
Pegging profiles and baselines at 25 m intervals Line km 20.4 21.0
Research at 1:50,000 scale
Research traverse Line km 25.0 25.0
Geochemical sampling of outcrops Sample 0.0 22.0
Litho-geochemical investigation following the traces of
dispersion
Sample 100.0 122.0
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7 Geological Setting and Mineralization
7.1 Regional Geology
The regional geology is dominated by a thick sequence of Mesozoic marine clastic and carbonate
sedimentary rocks, which are bound to the west by the Mesozoic to Early Tertiary Coastal Batholith and to
the east by the Paleozoic metamorphic fringe. This zone covers part of the eastern sector of the Tertiary
volcanics and also a part of the western sector of the Mesozoic sedimentary fringe. Sedimentary rocks are
represented by pelitic sequences from the Upper Jurassic age, considered as the base of the stratigraphic
column in the region (Chicama Formation), followed by Cretaceous sequences of predominantly clastic
silty sand at the bottom (Chim formation) and muddy -calcareous rocks at the top (Chim, Santa,
Carhuaz and Farrat formations) (Figure 7-1).
Figure 7-1: Regional geology
The sedimentary units are covered by Tertiary volcanic rocks of predominantly andesitic lavas alternating
with dacitic pyroclastic horizons (Calipuy Group). K-Ar radiometric dating performed by Cambior, indicates
that the superior level of these volcanics present in the Quesquenda area have ages of 18 million years
(Ma) for andesitic lavas and 16 Ma for the dome andesitic volcanic porphyry Sulcahuamga in the area of
Alto Chicama.
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The intensely folded and faulted sedimentary series are cut by hypabyssal intrusions of Tertiary age,
apparently related to the occurrence of dome landforms, and preferably emplaced within the NW SE
structural corridor. These intrusive rocks are usually emerging as small stocks isolated in or on the
periphery of the dome landforms. At depth, these stocks seem to merge and form a more intrusive body,as in the " Huamachucos Dome " and "Algamarcas Dome". Peripheral intrusions surround select domes
in laccolithic forms, such as La Arena and Toro. The composition of intrusive domes varies from porphyry-
diorite to andesitic-dacitic porphyry to quartzite. Radiometric dating done by Cambior indicates several
generations of intrusives, whose range of ages is between 25 to 18 Ma. In the highlands and on the
slopes to the east and west of the "Cordillera del Huaylillas" (Dome of Huamachuco), thick accumulations
of glacial material (100 m) are observed.
7.2 Property Geology
The El Toro deposit consists of disseminated gold (Au) located in the sandstones of the Chim Formation.
The orebody is located within the mineralized fringe of northern Peru consisting of gold deposits hosted in
Cretaceous sedimentary rocks and associated with deep sub-volcanic intrusions. The metallotect is the
Chim Formation, which consists of sandstone, quartzite, quartz sandstone, coal and clay siltstones with
lenticular facies that pinch out laterally (Rivera 1980).
The El Toro deposit lies within a large mineralized corridor and the genesis of this deposit is very similar to
others of its class, such as La Virgen and Shahuindo. Gold is hosted in the oxidation fractures within
siliciclastic rocks (sandstone, quartzite and quartz sandstones) and cubic pyrite hosted in the dacitic
prophyry and occasionally in the quartzite. El Toro was a very active system with clear evidence of
tectonic and volcanic activity represented by hydrothermal alteration facies, superimposed breccias, andfracture systems. These facies provided conduits for mineralized fluids. The sandstone and quartzite
breccia zones exhibit strong oxidation (jarosite, goethite and hematite) in contact with the intrusive dacite.
The intrusion, a dacitic porphyry, is located in the central part of the recumbent anticline orientated to the
west. The fracture-hosted economic gold mineralization displays strong oxidation in the stockwork,
suggesting decent grades.
In the northwest side of the hill there is a stock from a dacitic porphyry which cuts the sedimentary
sequence trending northeast. This sedimentary sequence presents a strong argillitic alteration with a
system of stockwork veins. Strong argillic alteration is also observed at the contact between the daciticintrusive and the sandstones, sometimes reaching up to 20 m wide The breccia matrix constitutes either
intrusive or sandstone and hosts gold veinlets. Intense fracturing areas are observed that give a "sugary"
texture. These areas do not have economic gold (Au), but localized moderate sericite alteration can be
considered as an economic gold anomaly. Areas of compaction within the sandstone offer zones of
enrichment between bedding planes, allowing for mineralized lenses to form. The minerals consist of
goethite, jarosite and hematite, and range in thickness from 0.5 to 0.25 m. The greatest potential resource
lies within the sandstones. The local geology and stratigraphy is shown in Figure 7-5).
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Figure 7-2: Contact between the sandstones from the Chim Formation and the dacitic porphyry
7.2.1 Alteration
The sandstones display silicification, typical of hydrothermal breccias, with localized phyllic alteration
(sericite) and intense fracturing. The alteration of the porphyry is moderate to strong along the peripheral,
and gradually decreases to propylitic and / or chloritic towards the center (Figure 7-3).
7.2.1.1 SilicificationSilicification is the dominant alteration observed in the deposit. It can be difficult to clearly identify the
silicification in siliciclastic rocks but it usually generates a massif texture. This alteration is restricted in
proximity to the mineralization ducts.
7.2.1.2 Phyllic (Quartz-Sericite)
This alteration is present in the sandstones along the border of the silicification zones. Interstitial sericite is
generally present in low to moderate quantities but is occasionally pervasive in fractured areas of the
sandstone.
7.2.1.3 Argillic
This hydrothermal alteration is dominant in the dacitic porphyry. It obliterates primary textures when thealteration is strong. In cases where the alteration is not very invasive, original porphyritic textures are
observed with a white-beige color indicative of the argillic presence.
7.2.1.4 Propylitic
This hydrothermal alteration is generated as distal halo argillic alteration, identified as phenocrysts
replacement by chlorite in the dacite porphyry. The rock is a greenish color with disseminated pyrite
mineralization in the fractures of the well preserved porphyritic rock.
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Figure 7-3: El Toro hydrothermal alteration zones
7.3 Structural Control
The North Peruvian Andes show remarkable and complete Cretaceous siliciclastic sedimentation and
accumulated in a carbonate platform followed bya major subsidencewhich, during the Cenozoic, was
affected bya compressivetectonic phase. The result isasystem of foldsandthrust faultsconvergingto
the east.
The high-angle AndeanNW-SE fault system is the main control on the trend of the Arena and La Virgen
deposits. This in turn intersected other subsidiary structural systems trending NE-SW, EW and NS,
generating excellent areasof weakness to host economic mineralization. This whole system is cut by
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numerous stocks and sub-volcanic porphyry domes with felsic compositions, which were a source of
mineralizingfluidsfor differentmineralized areasin the rangecovered by theChimFormation.
Figure 7-4: Regional structural interpretation
7.4 Lithology and Stratigraphy
7.4.1 Chicama Formation - Upper Jurassic
The Chicama Formation comprises thinly interbedded mudstone, bituminous mudstone, siltstone, and
minor sandstone with local intercalations of clay and reworked tuffaceous material. These terrigenous
sediments were deposited in a shallow, inland-sea basin flanked to the east by the emerged continent and
to the west by a volcanic arc. The sediments eroded from the continental side are mainly quartz sands,
while the sediments derived from the volcanic arc are typically clay-rich and tuffaceous material. The
shallow, restricted nature of this basin resulted in the development of a reducing environment, which
favoured the formation of organic deposits. These organic deposits are present as bituminous or
anthracitic coal beds. Regionally within the Chicama formation, small gold mineralization structures
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associated with stocks and sills of dacitic composition have been recognized. Usually they possess
irregular amounts of polymetallic elements (Hg-As-Ag-Cu-Zn-Pb) as well.
7.4.2 Lower Cretaceous
The Lower Cretaceous is characterized by clastic sedimentation in a highly oxygenated sea environment.
To the east, the continent was affected by continuous uplift concurrent with basin subsidence. These
conditions resulted in a significant accumulation of detrital sediments. Additionally during this period, the
island arc to the west of the sedimentary basin was subjected to intense erosion due to a reduction in
magmatic activity. This resulted in the formation of a highly oxygenated, open sea environment as
opposed to the reducing conditions created by the inland sea during the Jurassic.
7.4.2.1 Chim Formation
The Chim Formation consists of a sequence of alternating sandstones, quartzites with shales at the
bottom. The upper part consists of a sequence of white quartzite. This unit conformably overlies the
Chicama unit. In the lower and intermediate levels of the Chim formation, occurrence of gold
mineralization is frequent in the contact breccias. Several gold deposits hosted within the Chim
Formation have been identified in the recent exploration boom, Chim such as La Arena, La Virgen and
the Santa Rosa mine (Comarsa) (Figure 7-5). The La Arena site is located at the base of the Chim
Formation sediments.
Figure 7-5: Stratigraphic column (after V. Quirita, 2006)
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7.4.2.2 Santa Formation
This unit is characterized by shales, marly limestones and dark gray interbedded sandstones. The Santa
Carhuaz Formation overlies the Chim and records sediment deposition during a relatively passive
tectonic period.
7.4.2.3 Carhuaz Formation
The Carhuaz Formation consists of grey, dirty sandstone with a red and purple hue interbedded with grey
mudstone. White quartzite beds are interbedded with sandstone and mudstone in the upper portion of this
sequence. Alternations of shales and gray, reddish to pink sandstones are also observed, occasionally
alternating with white quartzite at the top of the beds.
7.4.2.4 Farrat Formation Lower Cretaceous
The Farrat Formation consists of thick, white sandstone beds that commonly display planar cross
stratification and local pebble conglomerates. The Farrat Formation is similar to the Chim Formationhowever, the Farrat Formation lacks the coal beds and grey colour observed in the latter.
During the Upper Cretaceous and part of the Lower Tertiary, extensional tectonism facilitated the
emplacement of plutons along the length of the coast, culminating in the emplacement of the Coastal
Batholith west of the Project area.
The sequence consists of white sandstone and medium to coarse grained quartzite, approximately 500 m
thick. This formation conformably overlies the Carhuaz formation. The clastic horizons of the Farrat
sequence are considered excellent hosts for disseminated gold mineralization due to their permeability, as
is observed in the El Toro deposit.
7.4.3 Inca, Chulec and Pariatambo Formation - Middle Cretaceous
The units consist of alternating sandstones, shales and limestones. No occurrence of gold mineralization
is known in these formations.
7.4.4 Volcanic Calipuy Formation - Upper Cretaceous to Lower Tertiary
During the Tertiary, the magmatic arc migrated further east initiating the onset of continental volcanism
and the development of small volcanic arcs oriented in a south-southwest/north-northeast direction. Thisevent resulted in the present day alignment of the volcanic structures of the Calipuy in the area southwest
of Huamachuco, east of the deposit area. The Calipuy Group rocks are calc-alkaline in composition and
are predominately andesite, with lesser dacite and rhyolite observed. The volcanic structures are
predominantly domes or dome complexes.
The bottom consists of a thick sequence of rhyolitic, rhyodacitic and dacitic lavas. In both areas of the
edge, it has been possible to recognize subvolcanic structures associated with hydrothermal activity.
Based on field observations, these volcanics have been assigned to the upper Cretaceous to Lower
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Tertiary. Recent K-Ar radiocarbon dating results from Geochron Cambior Laboratories (July 1998)
reported ages of 16.5 Ma to 18.9 Ma (middle Miocene) for samples taken from the top of the sequence.
7.4.5 Intrusive Rocks
In the region between Huamachuco and Cajabamba, hypabyssal intrusive bodies of tertiary age have
been recognized and are related to the presence of dome forms, emplaced within a NW-SE structural
corridor, cutting Mesozoic sedimentary formations. Usually, these intrusives emerge as small stocks
isolated in or on the periphery of the domes landform. Their compositions vary from diorite porphyry
andesitic, dacitic porphyry and quartzite porphyry. At depth, these stocks seem to unite and form one
larger intrusive body, as in the "Domo Huamachuco" and "Domo Algamarca". Certain sub-volcanic
hypabyssal domes have laccolithic peripheral intrusions with a strong NW-SE structural control, such as
La Arena and Virgen. Other intrusions associated with minor dome forms are located in the Cochapampaarea. These intrusions represent the southern periphery of the Algamarca Dome, which has a central
dacitic composition that changes gradationally to andesitic at its limits. Between the towns of Marcabal
and Purumarca, hypabyssal intrusive outcrops of intermediate composition have also been identified,
covering areas up to 4 x 2 kilometers, cutting the Chicama shales and sandstones of the Chim formation.
Radiometric ages, with the exception of the Florida deposit, clearly indicate that the hypabyssal intrusions
predate Calipuy volcanics.
7.5 Mineralization
The gold mineralization in the region of Huamachuco occurs mostly at the intersection of Andeanstructural "train" NW to NE transfer. Structural factors related to the transfer affected alignment of the
volcanic centers and dome complexes during emplacement.
In sedimentary environments, permeable characteristics of clastic rocks combined with faulting, intrusions,
and the degree of fracturing and / or brecciation, present the ideal conditions of formation of gold deposits,
such as La Virgen, La Arena, Shahuindo and Santa Rosa. Finally, the lithological composition of the
intrusive (preferably intermediate to felsic) and degree of fracturing in the stockwork is crucial to the
formation of Cu-Mo-Au porphyry deposits.
There is a direct genetic relation between the Cu-Mo porphyry systems, epithermal sediment-hosted Au,
and polymetallic veins that occur in the periphery of the hypabyssal intrusive, as is observed in the Arena
and Shahuindo deposits in Algamarca.
At the El Toro site, economic Au mineralization is hosted in quartzites and sandstones, which are strongly
fractured and the fractures are filled with iron oxides (goethite, jarosite and hematite). In various El Toro
breccias (hydrothermal, contact and tectonic types), Au grade varies according to the fluid origins and
host rock composition. Breccia thicknesses range from 0.05 to 2 m. Pyrite is the most abundant sulfide
and is found mainly in the dacitic intrusive. Chalcopyrite, bornite, chalcocite and covellite are also
observed, mainly at the dacitic porphyry intrusive contact with the sandstones.
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Figure 7-6: Mineralization models (from CDC Gold Corp.)
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8 Deposit type
8.1 Deposit Summary
The gold mineralization type identified in the El Toro deposit is of the high sulfidation epithermal in clastic
sedimentary rocks, such as sandstones and quartzites of the Chimu Formation. The volcanic
assemblages epithermal acid-sulfate alteration is not well documented, and is presented with varying
intensities and dimensions regarding its lateral and vertical zonation. The deposit shows a clear structural
control, which is characteristic of these deposits; its tectonic setting is determined by the interaction of
faults. The principal tectonic event generated an opportunity for the development of cortical dacitic sub-
volcanic rocks flanking the anticline.
8.2 Epithermal Deposits
Epithermal gold ( Cu & Ag) deposits form at shallower crustal levels than porphyry Cu-Au systems, and
are primarily distinguished as low or high sulfidation using a criteria of varying gangue and ore mineralogy,
deposited by the interaction of various ore fluids with host rocks and groundwater. High sulfidation
systems vary with depth and permeability control, and are distinguished from several styles of barren acid
alteration.
Figure
8-1: High sulfidation epithermal deposits model (modified from Hedenquist and Lowenstern)
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8.3 Geological Characteristics
Crustal level and ore fluid characteristics provide the first and second order distinctions in the classification
of Pacific Rim magmatic arc gold deposits.
Figure 8-2: Conceptual model for styles of magmatic arc epithermal Au-Ag and porphyry Au-Cu (image sourced from
Corbett and Leach, 1998)
8.3.1 High Sulfidation Type
Although termed acid sulphate in the early geological literature (Heald et al., 1987), high sulfidation
systems are now well defined by characteristic alteration and mineralization (Corbett and Leach, 1998;
Sillitoe, 1999; White and Hedenquist, 1995). The term acid sulphate is now preferred for alteration formed
by collapsing surficial cooler acidic waters (Corbett and Leach, 1998), typically within low sulfidation
systems. High sulfidation gold deposits are the major producers in the Andes of South America (e.g.
Yanacocha, Pierina, El Indio, La Coipa), and represent some significant undeveloped resources (e.g.,
Pascua-Lama-Veladero, Chile-Argentina).
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Table 8-1: Genetic types of epithermal gold deposits
High sulfidation (HS) Low sulfidation (LS)
Genetically related
volcanic rocks
Mainly andesite- rhyodacite Andesite- rhyodacite- rhyolite
Deposit form Disseminated: dominant
replacement: common
stockwork: minor
Open-space veins: dominant
stockwork: common
disseminated & replacement: minor
Alteration Zone Aerially extensive & visuallyprominent
Commonly restricted and visuallysubtle
Quartz gangue Fine-grained, massive, mainly
replacement origin; residual,
slaggy (vuggy) quartzcommonly
hosts ore
Chalcedony &/or quartz displaying
crustiform, colloform, bladed,
cockade & carbonate-replacement
textures; open space filling
Carbonate gangue Absent Ubiquitous, commonlymanaganoan
Other gangue Barite widespread with ore;native
sulfur commonly fills openspaces
Barite & (or) fluorite present locally;
barite commonly above ore
Sulfide abundance 10-90 vol% mainly fine-
grained,partly laminated pyrite
1-20 vol%, but typically
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Figure 8-3: Epithermal deposits global occurrences (image sourced from Corbett and Leach, 1998)
8.4 Mineralized High Sulfidation Systems
Mineralized high sulfidation epithermal gold deposits predominantly occur in younger, poorly eroded
magmatic arcs (e.g., Andes of South America), although some are noted on the older arcs of eastern
Australia. Thus, most occur in volcanic host rocks and demonstrate associations with sub-volcanicintrusions, particularly flow dome complexes. Most are also commonly localised by similar major structural
corridors to those which host porphyry Cu-Au deposits, where more deeply eroded.
8.4.1 Fluid Characteristics
High sulfidation deposits are typically derived from fluids enriched in magmatic volatiles, which have
migrated from intrusion source rocks at depth to elevated epithermal crustal settings, with only limited
dilution by groundwater or interaction with host rocks. Major dilatant structures or phreatomagmatic
breccia pipes provide conduits for rapid fluid ascent, facilitating the evolution of the characteristic high
sulfidation fluid. As the rapidly rising fluid becomes depressurised, magmatic volatiles (dominantly SO2butalso HCL, CO2, & HF) come out of solution and react with water (magmatic and groundwater) and oxygen
to produce increasing concentrations of H2SO4. Under lower temperature conditions (
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Leach, 1998), in which this alteration results from the interaction with host rocks of the more rapidly
migrating volatile rich-component of the high sulfidation fluid, while the subsequent liquid-rich component
deposits sulfides and Au-Ag-Cu mineralization.
8.4.2 Permeability
Dilatant structures or phreatomagmatic breccia pipes commonly provide conduits for the rapid introduction
of hot acidic fluids into the epithermal environment where they react with host rocks to produce
characteristic alteration. Most ore systems display elements of structural, breccia, or lithological control
(Sillitoe, 1999; Corbett and Leach, 1998). In many instances structural controls predominate in the deeper
portions and pass upwards to a lithological control. Dilatant subsidiary structures with angular
relationships to major structural corridors host ore and facilitate rock reaction, while elsewhere permeable
host rock lithologies may control fluid flow. At the Maragorik deposit in Papua New Guinea, fluids whichproduced alteration are interpreted to pass from structures to permeable lithologies, but later
mineralization is only well developed at the intersection of structures and lithology (Corbett and Hayward,
1994).
Diatreme flow dome complexes are the most important breccia control (e.g. Pascua, Wafi, Yanacocha,
Veladero), particularly at the contact between the diatreme and brecciated host rocks, although phreatic
breccias are locally recognised. Many deposits are associated with dome margins (Gray and Coolbaugh,
1994). The rapid fluid depressurisation associated with violent diatreme eruptions facilitates dissociation
of acid-bearing fluids resulting in initiation of high sulfidation alteration, and als