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CAPSTONE MINING CORP.
Pinto Valley Property Mineral Resource Estimate
NI 43-101 Technical Report
Qualified Person: Garth Kirkham, P.Geo., Kirkham Geosystems Ltd. Burnaby, BC | 604.529.1070 | [email protected]
Effective Date: February 28, 2013 Release Date: June 12, 2013 Amended Date: December 11, 2013
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY TOC I
TABLE OF CONTENTS
1 SUMMARY ......................................................................................................................................... 1-1
2 INTRODUCTION ................................................................................................................................ 2-1
2.1 SOURCE OF DATA ......................................................................................................................... 2-1 2.2 SCOPE OF PERSONAL INSPECTIONS .............................................................................................. 2-1 2.3 UNITS OF MEASURE ...................................................................................................................... 2-1
3 RELIANCE ON OTHER EXPERTS ................................................................................................... 3-1
4 PROPERTY DESCRIPTION AND LOCATION ................................................................................. 4-1
4.1 LOCATION .................................................................................................................................... 4-1 4.2 TENURE, OWNERSHIP AND ENCUMBRANCES .................................................................................. 4-2 4.3 PERMITS ...................................................................................................................................... 4-3
5 ACCESSIBILITY, CLIMATE, INFRASTRUCTURE AND PHYSIOGRAPHY ................................... 5-1
6 HISTORY ........................................................................................................................................... 6-1
7 GEOLOGICAL SETTING AND MINERALIZATION.......................................................................... 7-1
7.1 GEOLOGICAL SETTING .................................................................................................................. 7-1 7.1.1 Mineralization ..................................................................................................................... 7-3 7.1.2 Local Geology and Alteration ............................................................................................. 7-7
7.2 INTRUSIVE PHASES ..................................................................................................................... 7-12 7.2.1 Pre-Mineralization Intrusives ............................................................................................ 7-12 7.2.2 Intra-Mineralization Intrusive Phases ............................................................................... 7-14
7.3 REGIONAL STRUCTURAL FRAMEWORK ......................................................................................... 7-16
8 DEPOSIT TYPES ............................................................................................................................... 8-1
9 EXPLORATION ................................................................................................................................. 9-1
9.1 KOZI PROSPECT ........................................................................................................................... 9-2 9.2 BONDI PROSPECT ......................................................................................................................... 9-4 9.3 MATI PROSPECT ........................................................................................................................... 9-5 9.4 OTHER COPPER OXIDE EXPLORATION ........................................................................................... 9-6
10 DRILLING .................................................................................................................................... 10-1
11 SAMPLE PREPARATION, ANALYSES AND SECURITY ......................................................... 11-1
12 DATA VERIFICATION ................................................................................................................. 12-1
13 MINERAL PROCESSING AND METALLURGICAL TESTING .................................................. 13-1
13.1 PREFACE ................................................................................................................................... 13-1 13.2 PINTO VALLEY PROCESS DESCRIPTION ....................................................................................... 13-1 13.3 RECENT METALLURGICAL TESTWORK .......................................................................................... 13-2 13.4 MINERALOGY OF THE ORE .......................................................................................................... 13-3 13.5 CRUSHABILITY ............................................................................................................................ 13-5 13.6 GRINDABILITY ............................................................................................................................. 13-6 13.7 PINTO VALLEY RECOVERY .......................................................................................................... 13-7 13.8 FLOTATION ................................................................................................................................. 13-8
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY TOC II
14 MINERAL RESOURCE ESTIMATE ............................................................................................ 14-1
14.1 INTRODUCTION ........................................................................................................................... 14-1 14.2 DATA EVALUATION ...................................................................................................................... 14-1 14.3 COMPUTERIZED GEOLOGIC AND DOMAIN MODELING .................................................................... 14-1 14.4 TOPOGRAPHY ............................................................................................................................. 14-8 14.5 COMPOSITES ............................................................................................................................ 14-10 14.6 OUTLIERS ................................................................................................................................ 14-13 14.7 TONNAGE FACTOR.................................................................................................................... 14-14 14.8 BLOCK MODEL DEFINITION ........................................................................................................ 14-14 14.9 VARIOGRAPHY .......................................................................................................................... 14-15 14.10 MINERAL RESOURCE CLASSIFICATION ................................................................................... 14-19 14.11 MINERAL RESOURCES .......................................................................................................... 14-23 14.12 MODEL VALIDATION .............................................................................................................. 14-28
15 MINERAL RESERVE ESTIMATES ............................................................................................. 15-1
16 MINING METHODS ..................................................................................................................... 16-1
16.1 MINING STRATEGY ..................................................................................................................... 16-1 16.2 MINE PLAN ................................................................................................................................. 16-1 16.3 MINE DESIGN ............................................................................................................................. 16-1
16.3.1 Pit Slope Angles ............................................................................................................... 16-2 16.4 MINING OPERATIONS .................................................................................................................. 16-3
17 RECOVERY METHODS .............................................................................................................. 17-1
17.1 PROCESSING STRATEGY ............................................................................................................. 17-1 17.1.1 Restart Existing Facilities ................................................................................................. 17-1 17.1.2 Primary Crusher ............................................................................................................... 17-1 17.1.3 Fine Crushing Plant .......................................................................................................... 17-1 17.1.4 Grinding Circuit ................................................................................................................. 17-2 17.1.5 Copper-Moly Flotation/Regrind ........................................................................................ 17-3 17.1.6 Moly Plant ......................................................................................................................... 17-3 17.1.7 Concentrate Handling ...................................................................................................... 17-3 17.1.8 Tailings Disposal / Water Reclaim ................................................................................... 17-3
17.2 FEED CHARACTERISTICS ............................................................................................................. 17-4 17.2.1 Predicted Ore and Ore Blends ......................................................................................... 17-4 17.2.2 Impact of Ore Variability and Blending ............................................................................. 17-4
17.3 TEST WORK ............................................................................................................................... 17-4 17.3.1 Extent of Test Work .......................................................................................................... 17-4 17.3.2 Overview of 2006 Test Work ............................................................................................ 17-4 17.3.3 Samples from the Pit Bottom and Core Shed .................................................................. 17-5
17.4 PROCESS PLANT DESIGN CRITERIA ............................................................................................. 17-5
18 PROJECT INFRASTRUCTURE .................................................................................................. 18-1
18.1 LOCATION .................................................................................................................................. 18-1 18.1.1 Battery Limits .................................................................................................................... 18-1
18.2 OVERVIEW OF EXISTING INFRASTRUCTURE .................................................................................. 18-1 18.2.1 Electric Power .................................................................................................................. 18-1 18.2.2 Water ................................................................................................................................ 18-2
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18.2.3 Sewage ............................................................................................................................ 18-2 18.2.4 Fuels ................................................................................................................................. 18-3 18.2.5 Storm Water Control......................................................................................................... 18-3 18.2.6 Tailings Disposal .............................................................................................................. 18-3 18.2.7 Tailings Dam No. 4 ........................................................................................................... 18-3 18.2.8 Tailings Dam No. 3 ........................................................................................................... 18-4 18.2.9 Buildings and Support Facilities ....................................................................................... 18-4 18.2.10 Maintenance Support and Shop................................................................................... 18-4 18.2.11 Communications........................................................................................................... 18-4 18.2.12 Security ........................................................................................................................ 18-4
18.3 LOGISTICS AND TRANSPORT ........................................................................................................ 18-5 18.4 CONSIDERATIONS FOR INFRASTRUCTURE .................................................................................... 18-5
19 MARKET STUDIES AND CONTRACTS ..................................................................................... 19-1
20 ENVIRONMENTAL STUDIES AND SOCIAL OR COMMUNITY IMPACT ................................. 20-1
21 CAPITAL AND OPERATING COSTS ......................................................................................... 21-1
22 ECONOMIC ANALYSIS .............................................................................................................. 22-3
23 ADJACENT PROPERTIES ......................................................................................................... 23-1
23.1 CARLOTA MINE ........................................................................................................................... 23-1 23.2 MIAMI MINE ................................................................................................................................ 23-2
24 OTHER RELEVANT DATA AND INFORMATION ...................................................................... 24-1
25 INTERPRETATION AND CONCLUSIONS ................................................................................. 25-1
26 RECOMMENDATIONS ................................................................................................................ 26-1
27 REFERENCES ............................................................................................................................. 27-2
28 DATE AND SIGNATURES .......................................................................................................... 28-1
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LIST OF TABLES
Table 1.1: Mineral Resources in Imperial Units ......................................................................................... 1-3 Table 1.2: Mineral Resources in Metric Units ............................................................................................ 1-3 Table 2.1: Units of Measure ....................................................................................................................... 2-2 Table 2.2: Frequently Used Acronyms and Abbreviations ......................................................................... 2-3 Table 4.1: Permits, Licenses and Authorizations for the Pinto Valley Project ........................................... 4-3 Table 6.1: BHP JORC Compliant Resources for Pinto Valley as at June 30, 2012 .................................. 6-2 Table 6.2: BHP JORC Compliant Proven and Probable Reserves for Pinto Valley as at June 30, 2012 . 6-2 Table 6.3: BHP JORC Compliant Resource for Pinto Valley as at June 30, 2013 .................................... 6-3 Table 6.4: BHP JORC Compliant Proven and Probable Reserves for Pinto Valley as at June 30, 2013 . 6-3 Table 9.1: Ore Type Summary for Pinto Valley Deposit ............................................................................ 9-2 Table 9.2: Chemical Assays Results for Ruin and Schultze Granite ......................................................... 9-3 Table 11.1: Analytical Results for Standard Reference Materials (2006 Pinto Valley Q/A Program)...... 11-3 Table 11.2: Analytical Results for Replicate Pulp Assays (2006 Pinto Valley Q/A Program) .................. 11-5 Table 11.3: Analytical Results for Duplicate Core Preparation and Assays (2006 Pinto Valley Q/A
Program) .................................................................................................................................................. 11-5 Table 11.4: Total and Stepwise Sampling Estimates and Analytical Variances ..................................... 11-7 Table 13.1: Summary of Testwork ........................................................................................................... 13-3 Table 13.2: Summary of Pinto Valley Ore Types ..................................................................................... 13-4 Table 13.3: Modal Mineralogy of Ruin Granite/Quartz Monzonite ........................................................... 13-5 Table 13.4: SMC Test Results on Pinto Valley Ore ................................................................................. 13-6 Table 14.1: Statistics for Total Copper and Molybdenum Percentages .................................................. 14-6 Table 14.2: Composite Statistics Weighted by Length (by Zone) .......................................................... 14-11 Table 14.3: Correlogram Model Data by Zone....................................................................................... 14-16 Table 14.4: Interpolation Parameters ..................................................................................................... 14-17 Table 14.5: Mineral Resources .............................................................................................................. 14-25 Table 14.6: Mineral Resources .............................................................................................................. 14-26 Table 14.7: Measured Mineral Resources ............................................................................................. 14-27 Table 14.8: Indicated Mineral Resources .............................................................................................. 14-27 Table 14.9: Inferred Mineral Resources ................................................................................................. 14-27 Table 16.1: Mine Equipment Fleet ........................................................................................................... 16-3
LIST OF FIGURES
Figure 4-1: Pinto Valley Mine Location Map (BHP 2013) .......................................................................... 4-1 Figure 5-1: Pinto Valley Mine Location Photo ............................................................................................ 5-1 Figure 7-1: Geological Map of the Western Half of the Gila-Miami District (Creasey, 1980) .................... 7-2 Figure 7-2: Diagrammatic Sketch of the Geologic Relations of the Rock Units in the Globe-Miami District
(Creasey, 1980) ......................................................................................................................................... 7-3 Figure 7-3: Surface Geology Map of the Pinto Valley Mine (Peterson et al, 1951) ................................... 7-6 Figure 7-4: Orebody Cross Section 3000 W looking west (BHP, 2007) .................................................... 7-6 Figure 7-5: Pinto Valley Geology Plan (BHP 2012) ................................................................................... 7-7 Figure 7-6: Generalized Columnar Sections of Sedimentary and Volcanic Rocks, Castle Dome Area
(Peterson et al, 1951) ................................................................................................................................. 7-8 Figure 7-7: Pinto Valley Alteration Plan (BHP 2012) ................................................................................. 7-9 Figure 7-8 Location and Distribution of the Main Structures of the Pinto Valley District ...................... 7-18
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY TOC V
Figure 8-1: Anatomy of a Telescoped Porphyry System (Sillitoe, 2010) .................................................. 8-2 Figure 8-2: Generalized Alteration-Mineralization Zoning Pattern for Telescoped Porphyry Copper
Deposits (Sillitoe, 2010) ............................................................................................................................. 8-3 Figure 8-3: Pinto Valley Alteration and Mineralization Plan Map (BHP, 2012) .......................................... 8-4 Figure 9-1: Intensity Mapping of Mineralization to Define Dominant Ore-Types. ...................................... 9-1 Figure 10-1: Drill Hole Section Showing Current Topography and Preliminary Optimized Pit ................ 10-2 Figure 10-2: Drill Hole Plan ...................................................................................................................... 10-3 Figure 10-3: All Drill Hole Collars ............................................................................................................. 10-3 Figure 11-1: Analytical Results from Standard Reference Materials ...................................................... 11-3 Figure 11-2: Relative Half Differences in Replicate Pulp Analyses (compares original PVO copper assays
with Skyline Laboratories repeats) ........................................................................................................... 11-4 Figure 11-3: Comparison of 15 Field Duplicate Samples (2006 Pinto Valley Q/A Program) .................. 11-6 Figure 11-4: Condensed Sample Handling and Chain of Custody Stream ............................................. 11-8 Figure 13-1: Ruin Granite / Quartz Monzonite Modified Bond Work Index (kWh/mt) .............................. 13-7 Figure 13-2: Pinto Valley Copper Recovery (1990 to 1998) .................................................................... 13-8 Figure 14-1: Plan View Showing Drill Holes Used in Resource Estimate ............................................... 14-1 Figure 14-2: Plan View Showing Mineralized Solids ............................................................................... 14-3 Figure 14-3: Plan View Showing Major Faults ......................................................................................... 14-3 Figure 14-4: Plan View Drill Holes with Domain Solids ........................................................................... 14-4 Figure 14-5: Drill Hole Database Showing Grades and Lithology Codes ................................................ 14-5 Figure 14-6: Contact Plots for Copper ..................................................................................................... 14-7 Figure 14-7: Contact Plots for Molybdenum ............................................................................................ 14-8 Figure 14-8: Plan View of Topographic Solids with Drill Holes ................................................................ 14-9 Figure 14-9: Plan View 3D Gridded Topography by Contour Range ...................................................... 14-9 Figure 14-10: Box Plot for Copper Composites by Zone ....................................................................... 14-12 Figure 14-11: Box Plot for Molybdenum Composites by Zone .............................................................. 14-12 Figure 14-12: Cumulative Frequency Plot for Copper (45-ft Composites) ............................................ 14-13 Figure 14-13: Cumulative Frequency Plot for Molybdenum (45-ft Composites) .................................... 14-13 Figure 14-14: Block Model Bounds ........................................................................................................ 14-14 Figure 14-15: Location of Grid and Model Limits ................................................................................... 14-15 Figure 14-16: Plan View of Block Model Showing Copper Grade Model at 3230 Elevation > 0.1% ..... 14-18 Figure 14-17: Plan View of Block Model Showing Molybdenum Grade Model at 3230 Elevation > 0.003%
............................................................................................................................................................... 14-18 Figure 14-18: Section of Block Model with Copper Grades > 0.1% Shown with Geology, Topography, and
Drill Holes ............................................................................................................................................... 14-19 Figure 14-19: Relative Confidence Limits for the 52,000 stpd Production Rate .................................... 14-21 Figure 14-20: Digitized Boundary Based on Distance to Nearest Composite (shown as dashed green
polyline) .................................................................................................................................................. 14-23 Figure 14-21: Optimized Pit with Block Model ....................................................................................... 14-24 Figure 14-22: Pit Optimization for Block Model...................................................................................... 14-25
_Toc374381923 Figure 14-24: Comparison of Ordinary Kriging (OK), Inverse Distance (ID
2) and Nearest Neighbour (NN)
Models .................................................................................................................................................... 14-32 Figure 14-25: Swath Plots ...................................................................................................................... 14-33 Figure 14-26: Copper Swatch Plots ....................................................................................................... 14-34 Figure 14-27: Molybdenum Swath Plots ................................................................................................ 14-35 Figure 16-1: Safety Berm Design Change ............................................................................................... 16-3 Figure 17-1: Sulphide Process Flow sheet .............................................................................................. 17-2
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Figure 23-1: Pinto Valley Mine and Adjacent Properties ......................................................................... 23-1
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1 SUMMARY
This Technical Report was prepared by Garth Kirkham, P.Geo., Kirkham Geosystems Ltd. The
report was commissioned by Capstone Mining Corp. (Capstone) in support of the sale by BHP
Copper Inc. (BHP) and Capstone's subsequent acquisition of the Pinto Valley Mine. In addition, the
resources reported herein will form the basis for ongoing advanced studies, such as a Feasibility
Study which will address the mine restart.
This report is based primarily on data compiled and generated by BHP and drilling programs
conducted in 2011 and 2012, internal reports, and the JORC-compliant report, June 2012 Mineral
Resource & Ore Reserve Competent Persons Report: Pinto Valley (Preece and Baird, 2012).
Garth Kirkham, P. Geo., visited the property on May 14, 2013, and the laboratory facilities on May
15, 2013. The site visit included an inspection of the mine site infrastructure, core logging facilities,
offices, pit, core storage facilities, core receiving area, core sawing stations and a tour of the major
population centres and surrounding towns.
The Pinto Valley Mine and Concentrator are located at the west end of the Globe-Miami district,
approximately six miles west of the town of Miami in Gila County, Arizona at an elevation of
approximately 4,000 ft. Access to the mine is via U.S. Highway 60, approximately 80 miles east of
Phoenix to the Pinto Valley Mine Road, then approximately 1.5 miles north.
On April 28, 2013, Capstone entered into a purchase agreement (Purchase Agreement) with BHP
Copper Inc. (BHP Copper) pursuant to which Capstone proposed to purchase, through a wholly-
owned U.S. subsidiary, 100% interest in the Pinto Valley Mine and associated railroad operations for
US$650 million.
The Globe-Miami district is one of the oldest and most productive mining districts in the United
States. The first recorded production from the district was in 1878. Since that time, over 15 billion
pounds of copper have been produced.
Pinto Valley Mining Division originated as Miami Copper Company in 1909. In 1960, the Tennessee
Corporation took over Miami Copper Company, and, in 1969, Cities Service Company merged with
the Tennessee Corporation. In late 1982, Occidental Petroleum Corporation (Occidental) acquired
Cities Service Company. In February 1983, Occidental sold the Miami operations to Newmont
Mining Corporation. At this time, the company's name was changed to Pinto Valley Copper
Corporation (Pinto Valley Copper). In November 1986, Newmont merged the Pinto Valley Copper
assets into Magma Copper Company holdings, and Pinto Valley Copper became the Pinto Valley
Mining Division of Magma Copper Company. In December 1995, Broken Hill Proprietary Company
Limited (BHP) purchased Magma Copper Company. With the merger of BHP and Billiton, the Pinto
Valley Mining Division became the Pinto Valley Operations of BHP Copper Inc.
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The Pinto Valley Mining Division is located within the Globe-Miami mining district of central
Arizona. Several mines and numerous prospects have been developed in the area. Larger mines in
the district are porphyry copper deposits associated with Paleocene granodiorite to Granite Porphyry
stocks. The porphyry copper deposits have been dismembered by faults and affected by later erosion
and minor oxidation. Vein deposits and possible exotic copper deposits are also found within the
district.
The Globe-Miami district contains igneous, metamorphic, and sedimentary rocks of Precambrian,
Paleozoic, Tertiary, and Quaternary age. Precambrian basement rocks largely consist of Early
Proterozoic Pinal Schist intruded by granites correlative with peraluminous two-mica granite
batholiths that comprise the Proterozoic basement rocks throughout southern Arizona and New
Mexico. The Late Proterozoic Apache Group consists of (from oldest to youngest): the Pioneer
Formation, including the basal Scanlan Conglomerate; the Dripping Spring Quartzite, including the
Barnes Conglomerate; the Mescal Limestone; and, minor basalt closely associated with the Mescal.
These units are intruded by Apache Diabase sills of various thicknesses.
Paleozoic rocks in the district are the Cambrian Troy Quartzite, Devonian Martin Limestone,
Mississippian Escabrosa Limestone, and Pennsylvanian to Permian Naco Formation.
A large pluton of Schultze Granite was intruded into the Precambrian and Paleozoic wall rocks. Near
the northern-most exposures at the Inspiration mineral deposit, it has various textures and
compositions that have been called Granodiorite, Quartz Monzonite, and Porphyritic Quartz
Monzonite. A separate, Granite Porphyry has been mapped at Pinto Valley, Copper Cities, Diamond
H, and Miami East, and is seen near the vein-controlled mineralization at Old Dominion.
Tertiary sedimentary and volcanic rocks cover the mineralized units. The Whitetail Conglomerate
was formed as a result of regional uplift which contains weathered clasts of older rocks in a red iron
oxide-rich, very fine-grained matrix. A Miocene ash-flow tuff, known as the Apache Leap Tuff,
covered the area following the Whitetail Conglomerate, and further Basin and Range faulting and
subsequent erosion produced the Tertiary to Quaternary Gila Conglomerate from all older rocks. On
the west side of the Pinto Valley open pit, the Gila Conglomerate contains a basalt sill.
The hydrothermal ore deposits in the district comprise vein deposits and typical porphyry copper
deposits. On the basis of predominant metals, the vein deposits can be further divided into copper
veins, zinc-lead veins, zinc-lead-vanadium-molybdenum veins, manganese-zinc-lead-silver veins,
gold-silver veins, and molybdenum veins. The primary minerals of the porphyry copper deposits are
chiefly pyrite and chalcopyrite with minor amounts of molybdenite; gold and silver are recovered as
by-products. Sphalerite and galena occur locally in very small amounts. Silicate alteration
associated with the deposits includes potassic, argillic, sericitic, and propylitic alterations.
The Pinto Valley Mine has previously been in production and preliminary metallurgical and
geometallurgical work has already been completed; however, a more detailed and advanced program
is currently underway to augment this previous work which will eventually form the basis of a Pre-
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feasibility Study planned for late 2013. To-date, a broad characterization of recoveries exists for
copper and molybdenum at 88% and 50%, respectively.
The mineral resources are shown in Table 1.1 for Cu% and Mo%. These mineral resources are listed
at a base case cut-off grade of 0.25% Cu.
TABLE 1.1: MINERAL RESOURCES IN IMPERIAL UNITS
Total Cut-Off Ore Cu% Mo%
Cu% (tons)
Measured 0.25 443,030,204 0.384 0.010
Indicated 0.25 623,458,863 0.331 0.008
Measured & Indicated 0.25 1,066,489,067 0.353 0.009
Inferred 0.25 49,285,298 0.326 0.009
Note: This estimate has not been adjusted for the three months of mining
from date of start-up to February 28, 2013.
As Capstone is a Canadian issuer and BHP (the seller) is an Australian company, the author is also
reporting the resources in metric units for tonnage and contained copper. Molybdenum, however, is
reported in pounds, its most common unit. The mineral resources (in metric units) are shown in
Table 1.2 for Cu% and Mo%. These mineral resources are listed at a base case cut-off grade of
0.25% Cu.
The purpose of this Technical Report was to present the resource estimate for the Pinto Valley
Deposit. Therefore, the primary interpretations and conclusions of this report are related to the data,
analysis and methods related to the calculation of the resource estimate.
TABLE 1.2: MINERAL RESOURCES IN METRIC UNITS
Metric Copper Molybdenum Contained Contained
Tonnes (%) (%) Copper Molybdenum
(M) (k Tonnes) (M lbs)
Measured 402 0.38 0.010 1,544 89
Indicated 566 0.33 0.008 1,870 99
Measured & Indicated 968 0.35 0.009 3,414 188
Inferred 45 0.33 0.009 146 9
Notes: Mineral Resource Estimate, February 28, 2013, at a 0.25% COG. Any discrepancies in the
totals are related to rounding. This estimate has not been adjusted for the three months of mining
from date of start-up to February 28, 2013.
Mineral resources are not mineral reserves until they have demonstrated economic viability. Mineral
resource estimates do not account for a resource’s mineability, selectivity, mining loss, or dilution.
These estimates include Inferred mineral resources that are normally considered too geologically
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speculative for the application of economic considerations; therefore, they are unable to be classified
as mineral reserves. Also, there is no certainty that these Inferred mineral resources will someday be
converted into Measured or Indicated resources as a result of future drilling or after applying
economic considerations.
The Pinto Valley Mine has no declared mineral reserve estimates as per CIM definitions. All
previous mineral reserve estimates for Pinto Valley are considered to be historical in nature.
The objective of the proposed mining strategy is to deliver maximum value, with acceptable risk.
The restart provides immediate access to more than a 4-year’s supply of available mineralization
within the bottom of the current pit. The mine configuration, infrastructure, and site logistics
required to mine the exposed ore in the pit are the same as they were under previous operations and
it only pertains to the available resources at the bottom of the existing open pit. Operations at Pinto
Valley are established; processing facilities, shops, fuel bays, and other support functions are all
operational. Ramping-up capacities while further stabilizing these operations are both critical
measures for the success of the mining operation. The main risks to the mine plan are related to pit
slope stability.
The mining is executed as an owner/operator operation with a truck/loader fleet. The haulage fleet
consists of 15 haul trucks. The waste dump design places material as close to the pit rim as possible,
directly south of the leach dumps.
The planned mine production rate for ore and waste is 20.4 million mtpy, and 18.5 million mtpy of
ore to the concentrator. This aligns with the average concentrator production of 18.2 million mtpy
before sulphide operations were suspended in 2009. The waste/ore strip ratio for the mine is 0.1:1.
The mill ore cut-off is variable, nominally set at 0.25% TCu. Stockpile (leach) material-grade cut-off
ranges from 0.10% to 0.20% TCu. Material between 0.20% and 0.25% will be stockpiled for future
processing.
The existing concentrator process equipment and instrumentation will be refurbished; therefore, no
process flow sheet changes are anticipated. The flow process is conventional and consists of three
crushing stages (primary, secondary, and tertiary), three copper flotation stages (rougher, cleaner,
and scavenger), a molybdenum flotation circuit, and associated thickeners to control the density of
concentrates and tailings.
The Pinto Valley concentrator is an existing facility that will be refurbished and restarted without
any substantial modifications to the design criteria. The original plant design was for 36,300 mtpd.
Because of past modifications to increase throughput, the current target throughput is 50,800 mtpd
(dry) post ramp-up. The target concentrate grade is 28% with a total copper recovery of 87.5%.
The proposed project involves restarting the existing facility located at Pinto Valley, Arizona. All
environmental permits are in place; there is adequate tailings disposal capacity, electric power, and
water.
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Capstone will perform all marketing and sales administration.
No additional environmental or social impact assessments are required, other than those already in
place as a result of past operations.
Capstone has invested a total of $650 million toward the purchase of the Pinto Valley Operation
from BHP Copper. In addition, BHP Copper has invested approximately $192 million in capital
improvements in preparation for start-up.
At the closing of the acquisition by Capstone on October 11, 2013, the Pinto Valley Operations was
approximately 10 months into its re-commissioning by BHP Copper after the January 20, 2009
shutdown. As part of the re-start of operations, BHP Copper had completed a refurbishment
program to prepare for the restart of operations.
As at December 6, 2013, Capstone has owned the operation for approximately eight weeks and has
not yet completed the first full monthly close of the financial statements for the Pinto Valley
Operations under its ownership. As such, Capstone does not yet have information that it can report
on operating expenses. Additionally, the company does not have access to cost or operating data
predating its ownership. Even if that information were available, throughout 2013, the Pinto Valley
Operation has been in a start-up phase, with costs affected by transitional administrative support
arrangements with the former owner, production levels and efficiencies below name-plate levels, and
normal commissioning-related contractor costs. As a result, actual operating costs realized to date
are either not available or are not representative of the sustainable performance of the operations.
Capstone is currently in the process of compiling accurate and reliable cost estimates and sustaining
capital estimates in preparation for the completion of a current pre-feasibility study.
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In order to further evaluate the resource potential of the Pinto Valley Project and advance the project
by evaluating its economic viability, the following recommendations should be considered in 2013:
Incorporate remaining assay data from 2012-2013 drilling campaign.
To increase confidence and upgrade resource classification.
Continue with the QA/QC of the master database.
Continue density measurements and analysis.
Revise solids based on the most current assay data.
Documentation and project map of all drill data.
Improve documentation of procedures and protocols.
Continue with advanced metallurgical studies.
Continue environmental studies.
Continue with activities related to and completion of Pre-feasibility Study.
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2 INTRODUCTION
This Technical Report was prepared by Garth Kirkham, P.Geo., Kirkham Geosystems Ltd. The
report was commissioned by Capstone Mining Corp. (Capstone) in support of the sale by BHP
Copper Inc. (BHP) and Capstone's subsequent acquisition of the Pinto Valley Mine. In addition, the
resources reported herein will form the basis for ongoing advanced studies, such as a Pre-feasibility
study which will address the mine restart. This Technical Report was written in compliance with
disclosure and reporting requirements set forth in the Canadian Securities Administrators National
Instrument 43-101, Companion Policy 43-101CP, and Form 43-101F1 (collectively referred to as NI
43-101).
2.1 SOURCE OF DATA
This report is based primarily on data compiled and generated by BHP, drilling programs
conducted in 2011 and 2012, internal reports, and the JORC-compliant report, June 2012 Mineral
Resource & Ore Reserve Competent Persons Report: Pinto Valley (Preece and Baird, 2012).
2.2 SCOPE OF PERSONAL INSPECTIONS
Garth Kirkham, P. Geo., visited the property on May 14, 2013, and the laboratory facilities on
May 15, 2013. The site visit included an inspection of the mine site infrastructure, core logging
facilities, offices, pit, outcrops, core storage facilities, core receiving area, core sawing stations
and a tour of the major population centres and surrounding towns.
2.3 UNITS OF MEASURE
The units of measure used in this report are shown in Table 2.1. All currency quoted in this
report refers to U.S. dollars, unless otherwise noted. All distances and linear measurements are
given in feet and miles, unless otherwise noted. Frequently used abbreviations and acronyms are
shown in Table 2.2.
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TABLE 2.1: UNITS OF MEASURE
Type Unit Unit Abbreviation Si Conversion1
area acre acre 4,046.86 m2
area hectare ha 10,000 m2
area square kilometre km2 100 ha
area square mile mi2 259.00 ha
concentration grams per metric ton g/t 1 part per million
concentration troy ounces per short ton oz/ton 34.28552 g/t
length foot ft 0.3048 m
length metre m Si base unit
length kilometre km Si base unit
length centimetre cm Si base unit
length mile mi 1,609.34 km
length yard yd 0.9144 m
mass gram g Si base unit
mass kilogram kg Si base unit
mass troy ounce oz 31.10348 g
mass metric ton t, tonne 1,000 kg
mass short ton T, ton 2,000 lbs
time million years Ma million years
volume cubic yard cu yd 0.7626 m3
temperature degrees Celsius °C Degrees Celsius2
temperature degrees Fahrenheit °F °F=°C x 9/5 +32
Note: 1 Si refers to International System of Units.
2 Degrees Celsius in not an SI unit, but is the standard for temperature.
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TABLE 2.2: FREQUENTLY USED ACRONYMS AND ABBREVIATIONS
AA Atomic absorption spectrometry Ag silver APP Aquifer Protection Permit As arsenic Au gold Ba barium BLM Bureau of Land Management C Celsius CIM Canadian Institute of Mining cm centimetre COG cut-off grade Cu copper DDH diamond drill hole
DWi drop weight index
E east
EA Environmental Assessment
ft feet g/t grams per tonne JORC Joint Ore Reserves Committee K potassium kg kilogram = 2.205 pounds km kilometre = 0.6214 mile kWh/m
3 kilowatt-hour per cubic meter
L litre LoM Life of Mine m metre = 3.2808 feet M million Ma million years old MLP Mined Land Reclamation Plan mm millimetre Mo molybdenum mT or mt metric tonne mtpd metric tonnes per day mtph metric tonnes per hour mtpy metric tonnes per year MVA megavolt ampere µm micron = one millionth of a metre N north Na sodium NSR Net Smelter Royalty oz troy ounce (12 oz to 1 pound)
Pb lead PIMA Portable Infrared Mineral Analyzer ppm parts per million ppb parts per billion PVO Pinto Valley Operations QA/QC Quality Assurance/Quality Control QEMSCAN Quantitative Evaluation of Minerals by SCANning electron microscopy RC reverse-circulation drilling method
RHD relative half difference
RQD rock quality designation
S south
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SEM scanning electron microscope SMC SAG Mill Comminution SRP Salt River Project SX-EW Solvent Extraction and Electrowinning t metric tonne
T short ton
U.S. United States
UTM Universal Transverse Mercator
W west
Zn zinc
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3 RELIANCE ON OTHER EXPERTS
This Technical Report was prepared by Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd.
To prepare this report, the author relied on exploration reports and data from previous exploration
programs, internal reports, and consultants’ reports, including the JORC-compliant report, June 2012
Mineral Resource & Ore Reserve Competent Persons Report: Pinto Valley, (Preece and Baird, 2012)
The author believes that the combined information, conclusions, and recommendations are accurate
and reliable. The author also believes that the drilling, geological, and geochemical data reported by
the companies and government agencies regarding the project and its environment are accurate and
reliable and have been performed by competent professionals operating to industry standards and
best practices.
This Technical Report was prepared using public and private information provided by BHP and
information from papers and previous technical reports listed in Section 19 of this report. The current
report also relies on the work and opinions of non-QP (qualified person) experts and non-
independent QPs. However, the author believes that the information provided and relied on for the
preparation of this report was accurate at the time of reporting, and that the interpretations and
opinions expressed by these individuals are reasonable and based on a current understanding of the
deposit. Each contributing QP has made a reasonable effort to verify the accuracy of the data used to
develop this report and takes full responsibility for the information contained in this report.
BHP Copper denied the author certain information relating to its business matters that were deemed
confidential and industry-sensitive. BHP Copper, through legal counsel, determined what material
was sensitive and unavailable for release. Although it is believed that all information relevant to the
creation of this Technical Report has been disclosed, unrestricted and free access was not given to
the author due to constraints under the U.S. laws.
The results and opinions expressed in this report are conditional on the aforementioned information
being current, accurate, and complete as of the date of this report, and provided with the
understanding that no information has been withheld that could affect the conclusions made in this
report. The author reserves the right to revise, but is not obliged to revise, this report and its
conclusions if and when additional information becomes available, subsequent to the date of this
report.
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4 PROPERTY DESCRIPTION AND LOCATION
4.1 LOCATION
The Pinto Valley Mine and Concentrator are located at the west end of the Globe-Miami district,
approximately six miles west of the town of Miami in Gila County, Arizona at an elevation of
approximately 4,000 ft. Access to the mine is via U.S. Highway 60, approximately 80 miles east
of Phoenix to the Pinto Valley Mine Road, then approximately 1.5 miles north (Figure 4-1).
FIGURE 4-1: PINTO VALLEY MINE LOCATION MAP (BHP 2013)
The Pinto Valley Mine is currently an operating open pit operation that consists of a single
truck/loader pit that is approximately 340 m deep, 1.5 km wide, and 2.1 km long. The pit is L-
shaped and is near the on-site infrastructure. There are suitable maintenance facilities for large
Pinto ValleyN
Pinto ValleyN
Pinto ValleyN
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pieces of earth-moving equipment, and for the mill and general personnel. Two previous tailings
dams have been rehabilitated and two tailings dams are currently operational. There is a Solvent
Extraction and Electro-winning (SX-EW) facility located on the eastern edge of the property,
opposite the leach dump.
4.2 TENURE, OWNERSHIP AND ENCUMBRANCES
On April 28, 2013, Capstone entered into a purchase agreement (Purchase Agreement) with BHP
Copper Inc. (BHP Copper) pursuant to which Capstone proposed to purchase, through a wholly-
owned U.S. subsidiary, 100% interest in the Pinto Valley Mine and associated railroad operations
for US$650 million.
Pinto Valley is a combination of fee land, patented mining and mill site claims, and unpatented
mining and mill site claims. As a whole, the land can support open pit mining, ore processing,
tailings storage, waste rock disposal, and the operation of milling equipment. The unpatented
mining claims and mill sites are accessible under the provisions of the U.S. federal Mining Law
of 1872, subject to approval from the U.S. Forest Service after the completion of an
environmental impact analysis under the National Environmental Policy Act (NEPA) in
connection with a proposed plan of operations (POO) governing portions of the property. The
NEPA review process includes interagency consultation on project alternatives and the mitigation
of environmental impacts. Use of the fee lands and patented mining claims and mill sites are
governed by a Mined Land Reclamation Plan (MLRP) and an Aquifer Protection Permit (APP),
both issued by the Arizona Department of Environmental Quality. To use the project's surface
rights and mine on the property requires the owner to obtain or transfer the plan of operations, the
MLRP and APP, and a number of other federal, state, and local permits and approvals; some of
these have been completed, and others are still in progress, but will be obtained or transferred
before or concurrent with the transfer of the Pinto Valley mine to Capstone. (Note: A complete
list of permits can be found in Appendix A).The core of the Pinto Valley property consists of 69
patented lode mining claims. Also included in the property are 53 patented mill sites. Adjacent to
and nearby the patented claims are 329 unpatented lode mining claims and mill sites. Most of the
unpatented mining claims and mill sites were staked on federal land administered by the U.S.
Forest Service, but a limited number of the unpatented mining claims and mill sites are on federal
land administered by the Bureau of Land Management (BLM). Seven parcels of fee (private) land
are associated with the property. A list of the unpatented mining claims and mill sites, patented
mining claims and mill sites, and fee lands can be found in Appendix B.
BHP Copper owns the patented mining claims and fee land parcels, which are private lands that
provide the owner with both surface and mineral rights. BHP Copper also owns the patented mill
sites. The patented mining claim block, located in the core of the property, is indicated in the field
by surveyed brass caps on short pipes cemented into the ground. The fee lands are located by
legal description and recorded at the Gila County Recorder’s Office. The patented mining claims,
mill sites, and fee lands are subject to annual property taxes. As long as the property taxes are
paid annually on these claims, there is no expiration date.
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BHP Copper also owns the unpatented lode mining claims and mill sites that are adjacent to and
nearby the patented claims. Wooden posts and stone cairns mark the unpatented mining claim
corners, end lines, and discovery monuments; all of these have been surveyed. The unpatented
mining claims and mill sites have no expiration date and can be maintained by filing the required
documents with the BLM, providing the required records to Gila County, and paying an annual
maintenance fee to the BLM of $140 per claim.
As Capstone is purchasing an operating mine, the property is subject to ongoing environmental
liabilities and reclamation obligations.
A 2% net smelter return (NSR) royalty applies to 26 of the unpatented mining claims.
4.3 PERMITS
The following sections list the permits that were required by Pinto Valley (detailed in Table 4.1):
TABLE 4.1: PERMITS, LICENSES AND AUTHORIZATIONS FOR THE PINTO VALLEY PROJECT
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5 ACCESSIBILITY, CLIMATE,
INFRASTRUCTURE AND PHYSIOGRAPHY
The Pinto Valley Mine and Concentrator are located at the west end of the Globe-Miami district,
approximately six miles west of the town of Miami in Gila County, Arizona at an elevation of
approximately 4,000 ft. Access to the mine is via U.S. Highway 60, approximately 80 miles east of
Phoenix to the Pinto Valley Mine Road, then approximately 1.5 miles north (Figure 5-1).
FIGURE 5-1: PINTO VALLEY MINE LOCATION PHOTO
The Pinto Valley Mine is currently an open pit operation that consists of a single truck/loader pit that
is approximately 340 m deep, 1.5 km wide, and 2.1 km long. The pit is L-shaped and is near the on-
site infrastructure. There are suitable maintenance facilities for large pieces of earthmoving
equipment, and for mill and general personnel infrastructure. Two previous tailings dams have been
rehabilitated and two tailings dams are currently operational. There is a Solvent Extraction and
Electro-winning (SX-EW) facility located on the eastern edge of the property, opposite the leach
dump.
The Pinto Valley Mine is located on Pinto Valley Road (FR 287). The site is approximately 4.8 km
(3 miles) north of U.S. Highway 60. The site can be accessed from Phoenix, Arizona, approximately
80 miles to the west), by traveling east on U.S. Highway 60. The site can also be accessed from
Tucson, Arizona (100 miles to the south) by traveling north on State Route (SR) 77 and then west on
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U.S. Highway 60. The mine property can be accessed using existing mine roads and the
southernmost segment of FR 287.
A large network of roads has been built to serve the Pinto Valley Mine. The primary access, FR 287,
is a paved road; all other roads are unpaved. Some roads are well-maintained to accommodate daily
traffic, whereas others are not maintained and require four-wheel drive vehicles. Although FR 287 is
a public road that passes through the mine property, public access to the mine facilities is restricted
and managed by gates and Pinto Valley Mine security personnel.
The regional climate is semi-arid. The average annual precipitation in the region is 58.4 cm and falls
in a bimodal pattern. Most of the rainfall occurs during the winter and summer months, with dry
periods in the spring and fall. Precipitation during the winter months (December through March)
usually occurs as long, steady storms. Although snow may occur at higher elevations, it does not
typically accumulate. Rain events during the summer months (July to early September) are typically
short with greater intensity due to the convective nature of thunderstorms. May and June are
typically the driest months of the year and can commonly result in drought conditions. For
approximately one year out of every four, the region may experience little to no precipitation for an
entire month.
The National Oceanic and Atmospheric Administration’s Climate Atlas of the United States and the
Western Regional Climate Center records include data from a station in Miami, Arizona
approximately 6 miles east of the site. The period of record for the Miami station is from 1914 to
2005. The average annual maximum temperature for the period of record at this station is 25°C . July
is the warmest month with an average maximum temperature of 36°C. The average annual minimum
temperature for the coolest month is 1°C in January.
The town of Miami, located 13 km (8 miles) east of the mine, had approximately 1,800 residents in
2011, and the town of Globe (the County seat), located 21 km (13 miles) east of the mine, had
approximately 7,500 residents in 2011. Copper mining provides the largest number of jobs in the
area. And because of a long-standing mining tradition in the area, local services are already in place
to supply the project's needs. The current level of community services is deemed to be adequate for
the needs of the mine. Medical facilities are available at the Cobre Valley Community Hospital
located in Miami. Fire, police, public works, transportation, and recreational facilities are in place
and fully functioning. The community has an adequate supply of permanent housing and temporary
housing to accommodate the Pinto Valley Mine's current workforce.
The Pinto Valley Mine is located in east-central Arizona in the structural transition zone between the
Sonoran section of the Basin and Range physiographic province to the south-southwest, and the
Colorado Plateau to the north. The terrain surrounding the mine property is generally mountainous,
dominated by sharp landforms and prolific exposures of the variety of bedrock formations present in
the region. The Pinto Valley Mine is entirely within the Pinto Creek watershed, where local
elevations range from about 1,067 m to 1,524 m above mean sea level.
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The Pinto Valley Mine lies entirely along the eastern flank of Pinto Creek, with numerous southwest-
trending to northwest-trending, ephemeral Pinto Creek tributaries crossing the property. Most of the
headwaters of these tributaries originate along a regional surface water divide that runs north to south
near the eastern Pinto Valley Mine property line. All surface water runoff from the site ultimately
flows into Pinto Creek, just west of the western boundary of the property. Pinto Creek flows from the
south to the north and flows into Roosevelt Lake and the Salt River.
Two types of hydrogeologic units are present at the site. The first and uppermost is the alluvial
system: this is a near-surface groundwater system consisting of shallow-circulating water moving in
the alluvium and the upper weathered portions of the underlying bedrock. The second is the bedrock
system: this consists of deeply-circulating groundwater moving through fractures and joints in the
consolidated bedrock underlying the area. Some units/sections of the bedrock system act more like
the alluvial system, including deeper weathered portions of the fractured bedrock and the Gila
Conglomerate.
The Pinto Valley Mine is near the boundary of areas mapped as the Interior Chaparral biotic
community and the Arizona Upland subdivision of Sonoran desertscrub biotic community. Plant
species on the property that are characteristic of the Arizona Upland community include saguaro,
blue palo verde, velvet mesquite, catclaw, four-wing saltbush, ocotillo, and Engelmann prickly-pear.
Plant species more characteristic of the Interior Chaparral community include Arizona white oak,
shrub live oak, one-seed juniper, point-leaf manzanita, sugar sumac, skunkbush, and canotia.
A variety of mammals, birds, reptiles, and amphibians comprise the wildlife community at the Pinto
Valley Mine. Because the property is located on the ecotone between two major plant communities,
wildlife diversity on the site also represents species adapted to both communities. Common wildlife
species that have been observed on site include rock squirrel, coyote, mule deer, Gambel’s quail,
Cooper’s hawk, mourning dove, Bell’s vireo, western scrub-jay, phainopepla, and canyon towhee.
Most of the species observed have wide environmental tolerances and are present in both plant
communities on the property.
The southwestern parts of the mine are near the perennial reach of Pinto Creek. The Pinto Creek
riparian zone is dominated by Fremont cottonwood, Goodding willow, Arizona sycamore, Arizona
cypress, and seep willow.
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6 HISTORY
The Globe-Miami district is one of the oldest and most productive mining districts in the United
States. The first recorded production from the district was in 1878. Since that time, over 15 billion
pounds of copper have been produced.
Pinto Valley Mining Division originated as Miami Copper Company in 1909. In 1960, the Tennessee
Corporation took over Miami Copper Company, and, in 1969, Cities Service Company merged with
the Tennessee Corporation. In late 1982, Occidental Petroleum Corporation (Occidental) acquired
Cities Service Company. In February 1983, Occidental sold the Miami operations to Newmont
Mining Corporation. At this time, the company's name was changed to Pinto Valley Copper
Corporation (Pinto Valley Copper). In November 1986, Newmont merged the Pinto Valley Copper
assets into Magma Copper Company holdings, and Pinto Valley Copper became the Pinto Valley
Mining Division of Magma Copper Company. In December 1995, Broken Hill Proprietary Company
Limited (BHP) purchased Magma Copper Company. With the merger of BHP and Billiton in 2001,
the Pinto Valley Mining Division became the Pinto Valley Operations of BHP Copper Inc.
Development of the Pinto Valley open pit began in 1972, and the mine and concentrator went into
production in 1974. Previously, a chalcocite-enriched zone of the deposit was mined from 1943 until
1953, as the Castle Dome Mine. Sulphide ore from the Pinto Valley open pit operation was
processed at the unit's concentrator, which produced a copper concentrate containing approximately
28% copper and a molybdenum disulphide by-product. The copper concentrate was then trucked to
a smelter and refinery in San Manuel, Arizona. In February 1998, sulphide mining and milling was
suspended due to depressed copper prices. The concentrator was placed under care and maintenance
and the mining equipment fleet was sold. Operating and environmental permits were maintained
during the suspension of sulphide operations, as were the water and electrical systems, although
these were maintained at lower usage rates than during mining and milling operations. Cathode
copper production continued during the suspension of sulphide operations at the Pinto Valley and
Miami SX-EW facilities.
In April 2006, a study was completed to determine the feasibility of rehabilitating the mill and
flotation plant and restart mining activities; it concluded with an Independent Peer Review in
September 2006. A provisional approval for restart was granted in December 2006 and final
approval was granted in early 2007. The resource and reserve estimates made in 1996 were reviewed
and validated during the Feasibility Study, and these estimates were restated in June 2007. The Pinto
Valley Mine operated for 18 months before depressed copper prices forced it to be placed under care
and maintenance again. The notice and cessation of the operation occurred on January 20, 2009.
In 2011, a new study was commissioned to restart the mine; it was peer reviewed and approved by
BHP Copper Inc. in January 2012 and the mill was restarted in December 2012.
The declared resource and reserve statement (JORC compliant) for Pinto Valley by BHP Copper Inc.
are published in “BHP Annual Report 2013”. Capstone has not completed the work necessary to
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verify the classification of the resource and reserve statement. Capstone is not treating the resource
and reserve statement as NI 43-101 defined mineral resources and mineral reserves verified by a
qualified person. The historical estimates should not be relied upon. The Pinto Valley Operation will
require considerable further evaluation which Capstone’s management and consultants intend to
carry out in due course. Capstone does not have a copy of the report that includes the resource and
reserve statement signed by a professional geologist. Therefore, Capstone cannot verify the resource
or reserves or comment on whether the estimate was made in compliance with the current standards.
Capstone is not relying on these estimates.
As at June 30, 2012 the Pinto Valley copper resources and reserves are as reported as follows:
TABLE 6.1: BHP JORC COMPLIANT RESOURCES FOR PINTO VALLEY AS AT JUNE 30, 2012
TABLE 6.2: BHP JORC COMPLIANT PROVEN AND PROBABLE RESERVES FOR PINTO VALLEY AS AT JUNE 30,
2012
Note that the resources listed in Table 6.1 are inclusive of reserves. Also note that Sulphide
resources and reserves are reported at a 0.25% TCu cut-off grade whilst the Low Grade Leach
resources and reserves are reported at a 0.10% TCu cut-off grade. BHP Copper did not publish or
report molybdenum resources or reserves.
Pinto Valley resumed mining in November of 2012 and resources were recalculated and published in
“BHP Annual Report 2013”. As at June 30, 2013 the Pinto Valley copper resources are reported as
follows:
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TABLE 6.3: BHP JORC COMPLIANT RESOURCE FOR PINTO VALLEY AS AT JUNE 30, 2013
TABLE 6.4: BHP JORC COMPLIANT PROVEN AND PROBABLE RESERVES FOR PINTO VALLEY AS AT JUNE 30,
2013
Note that the resources listed in Table 6.3 are inclusive of reserves. Also note that Sulphide resources
and reserves are reported at a 0.25% TCu cut-off grade whilst the Low Grade Leach resources and
reserves are reported at a 0.10% TCu cut-off grade.
During financial year ending June 30, 2013, sulphide mining resumed at Pinto Valley with
production for financial year ending June 30, 2013 of 16.6 kt of copper concentrate and 4.9 kt of
copper cathode.
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7 GEOLOGICAL SETTING AND
MINERALIZATION
7.1 GEOLOGICAL SETTING
The Pinto Valley Mining Division is located within the Globe-Miami mining district of central
Arizona. Several mines and numerous prospects have been developed in the area. Larger mines in
the district are porphyry copper deposits (Creasey, 1980) associated with Paleocene (59 to 63 Ma)
Granodiorite to Granite Porphyry stocks. The porphyry copper deposits have been dismembered
by faults and affected by later erosion and minor oxidation. Vein deposits and possible exotic
copper deposits are also found within the district.
The Globe-Miami district contains igneous, metamorphic, and sedimentary rocks of Precambrian,
Paleozoic, Tertiary, and Quaternary age. Figure 7-1 shows a simplified geological map of the
western half of the district. Figure 7-2 shows a diagrammatic sketch that indicates the age and
spatial relationships of the major rock units.
Precambrian basement rocks largely consist of Early Proterozoic Pinal Schist (~1700 Ma)
intruded by granites correlative with 1450 Ma peraluminous two-mica granite batholiths that
comprise the Proterozoic basement rocks throughout southern Arizona and New Mexico. The
Late Proterozoic Apache Group consists of (from oldest to youngest): the Pioneer Formation,
including the basal Scanlan Conglomerate; the Dripping Spring Quartzite, including the Barnes
Conglomerate; the Mescal Limestone; and, minor Basalt closely associated with the Mescal.
These units are intruded by 1100 Ma Apache Diabase sills of various thicknesses.
Paleozoic rocks in the district are the Cambrian Troy Quartzite, Devonian Martin Limestone,
Mississippian Escabrosa Limestone, and Pennsylvanian to Permian Naco Formation.
During the Eocene (60 to 62 Ma), a large pluton of Schultze Granite was intruded into the
Precambrian and Paleozoic wall rocks. Near the northern-most exposures at the Inspiration
mineral deposit, it has various textures and compositions that have been called Granodiorite,
Quartz Monzonite, and Porphyritic Quartz Monzonite (Olmstead and Johnson, 1966). Creasey
(1980) refers to this as the porphyry phase of the Schultze Granite. A separate, Granite Porphyry
has been mapped at Pinto Valley, Copper Cities, Diamond H, and Miami East, and is seen near
the vein-controlled mineralization at Old Dominion. Rocks identical to this Granite Porphyry are
seen in the Miami-Inspiration mineral deposit, but they have not been systematically mapped as a
separate unit.
Tertiary sedimentary and volcanic rocks cover the mineralized units. The Whitetail Conglomerate
was formed as a result of regional uplift approximately 32 Ma. Rocks of the Whitetail
Conglomerate contain weathered clasts of older rocks in a red iron oxide-rich, very fine-grained
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matrix, and detrital to exotic copper mineralization is not unknown. A Miocene ash-flow tuff,
known as the Apache Leap Tuff, covered the area following the Whitetail Conglomerate (21 Ma).
Further Basin and Range faulting and subsequent erosion produced the Tertiary to Quaternary
Gila Conglomerate from all older rocks. On the west side of the Pinto Valley open pit, the Gila
Conglomerate contains a basalt sill.
FIGURE 7-1: GEOLOGICAL MAP OF THE WESTERN HALF OF THE GILA-MIAMI DISTRICT (CREASEY, 1980)
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Note: Abbreviations used for Figure 7-2 are as follows: AG, Apache Group; AL, Apache Leap Tuff; DB, Diabase
EL, Escabrosa Limestone; GC, Gila Conglomerate; GM, granite of Manitou Hill; LG, Lost Gulch Monzonite; MD,
Madera Diorite; MF, Martin Limestone; NL, Naco Limestone; PS, Pinal Schist; RG, Ruin Granite; SG, Schultze
Granite; SOG, Solitude Granite; TQ, Troy Quartzite; WS, Willow Spring Granodiorite; WT, and Whitetail
Conglomerate.
FIGURE 7-2: DIAGRAMMATIC SKETCH OF THE GEOLOGIC RELATIONS OF THE ROCK UNITS IN THE GLOBE-MIAMI
DISTRICT (CREASEY, 1980)
7.1.1 Mineralization
The hydrothermal ore deposits in the district comprise vein deposits and typical porphyry copper
deposits. On the basis of predominant metals, the vein deposits can be further divided into copper
veins, zinc-lead veins, zinc-lead-vanadium-molybdenum veins, manganese-zinc-lead-silver veins,
gold-silver veins, and molybdenum veins (Peterson, 1962). The primary minerals of the porphyry
copper deposits are chiefly pyrite and chalcopyrite with minor amounts of molybdenite; gold and
silver are recovered as by-products. Sphalerite and galena occur locally in very small amounts.
Silicate alteration associated with the deposits includes potassic, argillic, sericitic, and propylitic
alterations.
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The Pinto Valley is a hypogene orebody with chalcopyrite, pyrite, and minor molybdenite as the
only significant primary sulphide minerals. It is the underlying protore of the chalcocite-enriched
Castle Dome deposit exhausted in 1953 (Peterson et al., 1951).
Host rock for the Pinto Valley porphyry copper deposit is the Precambrian age Lost Gulch Quartz
Monzonite, which is equivalent to the Oracle or Ruin Granite (Breitrick and Lenzi, 1987).
Formation of the deposit was associated with the intrusion of small bodies and dikes of Granite
Porphyry and Granodiorite that are of similar composition and age as the Schultze Granite, at
about 61.2 Ma. Copper mineralization has been dated at 59.1 Ma (Creasey, 1980).
Primary sulphide ore minerals consist of pyrite, chalcopyrite, and minor molybdenite that occur
in veins and microfractures, and less abundantly as disseminated grains predominantly in biotite
sites. The ore zone grades outward into a pyritic zone with higher total sulphide content and the
ore zone grades inward toward the low-grade core which has lower total sulphides. Molybdenum
distribution generally reflects copper distribution, with higher molybdenum values usually found
in the higher-grade copper zones.
Sulphide deposition at Pinto Valley is controlled to some extent by the host rock. For the most
part, the host is Lost Gulch Quartz Monzonite and Porphyritic Quartz Monzonite, which are
similarly altered and mineralized. The sulphide content decreases in Precambrian Aplite
intrusions. Aplite usually contains less than 0.25% copper, whereas adjacent Quartz Monzonite
may have as much as 0.6% copper. The deficiency of copper in Aplite is probably due to the
absence of biotite, which makes up about 7% of Quartz Monzonite. Disseminated chalcopyrite
shows an affinity for biotite, where it is seen to be disseminated through the biotite or partially
replacing it. Additional chalcopyrite is also present in veins which cut both rock types.
Small intrusions of Granite Porphyry extend beyond the main mapped unit shown in Figure 7-3
as mimicking the pit outline. Where Quartz Monzonite constitutes ore (more than 0.3% copper),
and the Granite Porphyry does not usually contain ore grades (about 0.15% to 0.2% copper).
Granite Porphyry contains sulphide veins but generally lacks disseminated sulphides in biotite
sites.
The shell has the appearance of a hook in plan view (Figure 7-3) and mimics the pit outline. Rock
located south of the ore has decreasing sulphide content and numerous barren quartz veins. This
area has been interpreted as a low-grade core, and this low-grade zone corresponds spatially with
the Granite Porphyry, which is seen as a poor lithologic host for ore-grade mineralization
elsewhere in the deposit. Rock located north of ore has progressively more abundant, late-stage
quartz-pyrite-sericite veins.
Cross section 3000 West (Figure 7-4) shows drill holes and sulphide copper block model contours
based on BHP’s JORC-compliant 2007 block model. The section is drawn through the "hook" in
Quartz Monzonite west of the large granodiorite and Granite Porphyry exposures. It shows a
central low-grade zone surrounded by an ore shell. The core of the shell dips steeply to the north.
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The South Hill fault cuts the ore shell and associated alteration to the south. The shallow dipping
Flat Fault cuts off the ore beneath the southern limb of the grade shell.
The sections suggest that the original configuration of the copper zone was that of a distorted,
inverted bowl with its long axis striking approximately N80E.
The deposit is bound by post-mineral faults. The South Hill fault is on the south side, the Jewel
Hill fault is on the east side, and the Gold Gulch fault is on the west side. Minor post mineral
normal displacement has taken place on the Dome fault, a pre-mineral structure that strikes north-
easterly across the north limb of the deposit.
Diabase forms thin dikes in pit exposures. These dikes commonly contain higher copper content
than surrounding Quartz Monzonite. In the eastern part of the deposit, a Diabase sill lies at the top
of the ore. Diabase west of the Gold Gulch fault is mineralized by pyrite and chalcopyrite veins
with abundant magnetite near mineralized Granite Porphyry.
A geological mapping exercise of Pinto Valley was conducted in early 2012 using the Anaconda
method producing three, GIS-registered layers showing geology, alteration style and
mineralization.
A total of 45 rock samples were submitted for analysis using Iogas geostatistics. Both transmitted
and reflected-light thin sections were prepared for petrographic analysis of select samples.
Spectral analysis of clays and micas from select sites was performed to determine if clay species
were of hydrothermal origin.
Mapping the regional Pinto Valley tenement has identified a number of new mineral
occurrences. Copper mineralization was observed at a number of contacts between two
genetically different granitic bodies. Surface exposure of porphyry breccia systems were also
found bearing pyrite and chalcopyrite in a jarosite-dominated oxide precipitate. These sites were
analyzed with field portable TerraSpec which detected dickite, indicating hydrothermal
alteration. A number of massive magnetite/hematite seams bearing manganese, pyrite, and
copper were mapped in skarn contacts around the fringe of limestone bodies. A skarn
occurrence was found in contact with an intrusive Diabase unit bearing a stockwork of sulphide-
rich "D" veins. Also a number of old workings were found throughout the area, testing a range
of copper-bearing geological settings, such as porphyry stock, pegmatitic intrusive, mineralized
skarn, intrusive contact, and oxide occurrence under tertiary cover.
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FIGURE 7-3: SURFACE GEOLOGY MAP OF THE PINTO VALLEY MINE (PETERSON ET AL, 1951)
FIGURE 7-4: OREBODY CROSS SECTION
3000 W LOOKING WEST (BHP, 2007)
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7.1.2 Local Geology and Alteration
The following sections describe the main rock, alteration, and mineralization types on site as
shown in Figures 7-5, 7-6, and 7-7.
FIGURE 7-5: PINTO VALLEY GEOLOGY PLAN (BHP 2012)
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FIGURE 7-6: GENERALIZED COLUMNAR SECTIONS OF SEDIMENTARY AND VOLCANIC ROCKS, CASTLE DOME
AREA (PETERSON ET AL, 1951)
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FIGURE 7-7: PINTO VALLEY ALTERATION PLAN (BHP 2012)
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Pinal Schist
Lower Precambrian Pinal Schist is a fine-grained, well-bedded sediment dominated by biotite
lesser muscovite and quartz, and in some areas, such as south of the south hill fault, bears
garnet and chlorite. Grain sizes range from coarse quartz sericite schist to fine-grained
quartz, sericite, and chlorite schist which at times displays magmatic segregation of biotite
and quartz-rich seams up to 15 cm wide. The rock is extensively deformed bearing tight to
isoclinal folding and faulted extensively by various intrusive events.
Dripping Spring Quartzite
Precambrian Dripping Spring Quartzite contains a range of internal variation from upper
coarse to medium-grained quartzite with cross bedding to lower thinly laminated fine-
grained, well-sorted sediments at the base. This unit is typified by variably-coloured beds of fine
sediment that display the well sorted nature of the rock which preserves current direction and
energy regimes. Beds range from red-brown to red-purple to purple-black alternating with thin
beds of arenatious shale.
Mescal Limestone
Mescal Limestone, a sedimentary unit, was observed mainly in the northwestern part of the study
area. It is comprised of limestones, dolomites, and large amounts of chert. This Precambrian
unit overlies the Pinal Schist and is overlaid by the Precambrian Basalt.
Precambrian Basalt
Precambrian Basalt, a basic volcanic unit, was recognized in the northern limit of the Pinto
Valley tenements. This rock has a black colour, with vesicles and some calcite-calcedonic
amygdales. This unit overlies the Mescal Limestone and is cover by the Troy Quartzite.
Troy Quartzite
Troy Quartzite, a Cambrian unit, is a distinct marker unit underlying the Martin Limestone,
with unconformable boundaries separating upper and lower limestone units. Welded by cherts
and siliceous cements, this fine-grained sediment is very resistant to weathering, and, therefore, it
forms ridges and escarpments adjacent to limestone units. Where outcropped, the quartzite is
a well- bedded, well- sorted unit forming gullies and gorges when exposed, sculptured by
surface water ways. A quartzite conglomerate bed exists at the base of this unit comprised of
well-rounded quartz pebbles in a sandy silicified matrix; iron oxide staining gives this rock is
characteristic red-brown colour.
Martin Limestone
Martin Limestone is a massive sequence of layered brown to grey-coloured carbonatious rocks
with only a minor presence of fossil fragments. It is interbedded with fine red sandstones and
shales. This unit overlies the Troy Quartzite and it underlies the Escabrosa Limestone.
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Escabrosa Limestone
Escabrosa Limestone is a more massive, poorly-bedded limestone; this unit outcrops as bold cliff
faces appearing as a medium to light grey colour underlying the Naco Limestone. Mississippian
in age, these lower beds appear oolitic with nodular calcareous formations; some beds contain
crionoid fragments.
Naco Limestone
Naco Limestone is thinly-bedded and has a mid-grey colour with thin laminations of calcareous
sediments and marls separating limestone beds displaying crinoids, bivalves, and other marine
fossil fragments. Lower horizons and the basal unit are especially comprised of cherts, marls and
well-bedded calcareous sediments.
Whitetail Conglomerate
Tertiary in age, the Whitetail Conglomerate is distinguished from other sedimentary units by
the exclusion of dacite and tuff lithologies. Mostly well-bedded, often hematite-rich in both
matrix and coating of clasts, this unit only outcrops where it is revealed by the erosion of the
dacite cover. The unit is matrix-supported, generally well-bedded displaying gradational
fining-up sequences. Clasts are subrounded to angular in a poorly sorted matrix with some
quartzite horizons comprised of well-rounded quartz-rich and lithic fragments cemented by
coarse quartz sands. This unit overlies and postdates mineralization; therefore, it has little
potential for economic value.
Gila Conglomerate
The Gila Conglomerate unit overlies and is the youngest of all sedimentary units of tertiary
and quaternary age. The unit is distinguished by the inclusion of all local lithologies: the
Apache Group, Paelozoic Limestones, Diabase, and dacite tuff with some Pinal Schist
fragments. Poorly sorted but in parts moderately well-stratified, it is compositionally matrix-
supported. The unit is comprised of dominantly cobble to pebble-sized subrounded clasts.
The composition of the rock is highly variable, often representing the dominant local lithology.
Clast sizes decrease to the east of the project area where the unit becomes more of a distal
fan conglomerate with bedding stratification. This unit overlies and postdates
mineralization; therefore, it has little potential for economic value.
Tertiary Alluvium
Tertiary Alluvium is a poly-lithologic detritus of some boulder-sized, but mostly cobble and
more finely-sized, poorly sorted and poorly cemented sediments. Detritus lines low lying areas,
commonly occurring at the base of steep slopes undergoing active erosion. Components often
show evidence of reworking, resedimentation, and welding by modern calcrete and silcrete
cements.
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7.2 INTRUSIVE PHASES
In the Pinto Valley project area, a series of intrusive bodies have been mapped with litho-
chemistries ranging from intermediate to acid digenetic composition. Units have been
classified using mineralogy, crosscutting, and inclusion relationships into an order of
emplacement. The intrusive history of Porphyry Copper (Molybdenum) emplacement in the
Pinto Valley district is classified into pre, intra and post-mineralization stages. Descriptions
of copper-bearing intrusive events are detailed below.
7.2.1 Pre-Mineralization Intrusives
Manitou Granite
Manitou Granite is prevalent in the southeast portion of the study area, approximately 700 m
from the Pinto Valley pit. Occupying an area of approximately 0.2 km2 and outcropping as
elongate bodies trending in a northeasterly direction, this unit intrudes the Precambrian Pinal
Schist basement. The Manitou Granite itself has been intruded by Precambrian Ruin Granite
and a series of fine and course-grained aplitic intrusive phases related to this magmatic event.
The Schultze Granite was the last unit to intrude the Manitou Granite in a much later tertiary
period.
Macroscopically this rock is dark brown with a phaneritic texture; it is equigranular, medium-
grained, with anhedral crystals of quartz (20%), subhedral undifferentiated mafics (7%), anhedral
muscovite (5%), orthoclase (25%), and subhedral-euhedral plagioclase (38%).
This unit has a prevalent slight to moderate foliation which has deformed the original
equigranular texture. Minerals are generally elongate with the long axis of grains ordered in a
preferred orientation or, in some cases, partially destroyed: this has been observed in some
locations with respect to mafic minerals. Manitou Granite is the youngest Precambrian Intrusive.
Willow Spring Granodiorite
Willow Spring Granodiorite is an intrusive unit that outcrops in the southeastern sector of the
study area, occupying approximately 0.4 km2. This unit outcrops as elongate bodies trending
north-northeast, intruded by Precambrian Ruin Granite and also by the Tertiary Schultze
Granite. It is also in fault contact with the Gila Conglomerate unit.
Macroscopically this granite is mottled by dark brown minerals, has a slightly porphyritic,
phaneritic and inequigranular texture with medium-sized grains. The rock is comprised of quartz
anhedral-subhedral (15%), biotite-amphibole (12%) which is partially replaced by chlorite,
orthoclase (15%) subhedral-euhedral of sizes ranging from 4-10 mm, and subhedral-euhedral
plagioclase (38%).
This intrusive unit is Precambrian age; this has been determined by crosscutting relationships,
and has also been dated by Creasey (1980).
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Ruin Granite
Ruin Granite is an intrusive unit that outcrops over an area of approximately 2.1 km2, which
has been exposed primarily by the excavation of the Pinto Valley pit. This rock is the primary
host rock of copper mineralization in economic concentrations and has been dated at
Precambrian age (Creasey, 1980). The granite has also experienced a series of magmatic-
hydrothermal events resulting in the emplacement of porphyry copper systems. The Ruin Granite
is in fault contact with the Pinal Schist unit to the south and a stacked series of faults to the
west, with repetitious sedimentary units. Granites of the southeastern sector of the study area
have been intruded by the Willow Spring Granodiorite and Tertiary Schultze Granite, and in
one area it is in fault contact with the Gila Conglomerate. A zone to the north of the Pinto Valley
pit puts the Ruin Granite in contact with Precambrian Dripping Spring Quartzite sediments and
Diabase dike intrusions.
Macroscopically, this rock has pinkish-brown colour, with phaneritic, inequigranular coarse
texture with anhedral quartz crystals (25%), anhedral-subhedral biotite (7%), anhedral
muscovite (3%), subhedral-euhedral orthoclase (35%) with some phenocrysts up to 60 mm,
and subhedral-euhedral plagioclase (38%).
There have been a series of aplitic phases related to Ruin Granite emplacement, the highest
concentration of these is in the southeastern sector of outcrop. Numerous small dykes also
occur within the Pinto Valley pit. The aplitic intrusives are a pinkish-brown colour, dominated by
equigranular quartz; they have a fine-grained sugary texture, and are dominated by potassic
feldspar. The intrusive complex related to the Ruin Granite has Precambrian age (Creasey, 1980).
Diabase
Diabase is a sub-volcanic Cretaceous or later unit that is most prevalent in the northern area of the
project, but it also occurs as sills and minor dykes throughout most of the project area. This unit
occupies approximately 1.5 km2 of the project area. The Diabase most commonly intrudes
Precambrian units, such as the Apache Group sediments and Ruin Granite. The unit is generally
covered by post-sedimentary units, including the Martin, Escabrosa, and Naco Limestones,
and is partially covered by Gila Conglomerate and the Apache Leap Tuff.
This unit is of fine to medium-grained mafic composition, bearing pyroxene and hornblende
mafics minerals, and lesser plagioclase. This unit has different phases, with early medium to
coarse textures that range to later, fine-grained, textured intrusions.
This unit commonly contains 1% to 2% disseminated pyrite and trace chalcopyrite, but it will
bear stronger sulphide content, especially chalcopyrite when proximal to a porphyritic source.
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Schultze Granite
Schultze Granit is Tertiary in age; this plutonic body has been dated at 61 Ma from similar
outcrops sampled in the Miami-Inspiration area (Creasey, 1980). This unit represents the main
pre-mineral stage of the Laramide intrusions and the magmatic source of the metal-bearing
porphyritic intrusions in the district. This unit outcrops generally in the southern part of the
project area with batholitic dimensions of 1.5 km2 outcrops. This unit has also been observed
intruding the Ruin Granite and Pinal Schist. In some places, the unit is covered by the Quaternary
basalt and is in fault contact with the Gila Conglomerate.
Macroscopically, this rock has phaneritic texture and inequigranular texture of medium to coarse-
sized grains, with books of biotite (8%), subhedral 1-3 mm sizes, quartz (20%), subhedral 2-8
mm sizes, K-Feldspar of orthoclase variety (25%), subhedral-euhedral 3-15 mm sizes, and
plagioclase (47%) with 2-4 mm sizes.
7.2.2 Intra-Mineralization Intrusive Phases
In the Pinto Valley district a suite of porphyritic intrusive units have been identified that have age
and genetic relationships with a number of igneous events. Intrusives were found to have a
composition varying from Quartz Monzonite to Granite. The following sections describe these
units.
Early Granite Porphyry
A family of porphyritic intrusives appear in the form of dykes and stocks in the central sector of
the Pinto Valley pit. A number of small finger-like projections stemming from granitic porphyry
stocks and dykes also exist in the western section of the pit, with a predominant northeast trend.
This Early Granite Porphyry unit has been observed intruding the country rock Ruin Granite, and
has been observed to have been crosscut by the Intramineral-late granodiorite phases.
Macroscopically, the rock is pinky-brown to grey in color, phaneritic, of porphyritic texture with
an inequigranular grain shapes. Mineral composition comprises 40% phenocrysts with
approximately 60% groundmass characterized by aggregates of quartz and feldspar: quartz eye
phenocrysts (3% to 7%) are euhedral-subhedral that range between 2-4 mm in size; books of
biotite (5% to 8%) are subhedral that range between 1-3 mm in size; orthoclase feldspar occupies
(20% to 25%) are euhedral-subhedral that range between 3-5 mm in size; and, plagioclase (60%
to 65%) are subhedral-euhedral that range between 2-5 mm in size.
There are a number of additional observations for this unit that are associated with magmatic-
hydrothermal activity and suggest this intrusive phase is responsible for introducing
mineralization into the Pinto Valley system. It has been recognized that a clear relationship exists
between the development of strong late-magmatic and early hydrothermal potassic alteration (K-
Feld, biotite, and silica). Early hydrothermal activity has also produced extensive quartz “A” vein
development, along with sulphide mineralization where chalcopyrite content is greater than
pyrite. The presence of quartz "B" veinlets with minor molybdenite content also occurs in close
proximity to the "A" vein sets.
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Intramineral Granite Porphyry
An intramineral phase of phorphyry has been identified in the northeastern sector of the Pinto
Valley pit. Intramineral Granite Porphyry outcrops as a stock elongate in an east-west direction
hosted in Ruin Granite, though crosscutting relationships were not observed between this and the
Earlier Granite Porphyry. This intrusive unit mainly crosscuts the Ruin Granite country rock,
Pinal Schist, and Diabase lithologies.
In a hand specimen this rock is brown-grey in colour, with a phaneritic texture, inequigranular
with a strong porphyritic texture with 40% to 45% phenocrysts and remaining 55% to 60% as
groundmass with aggregates of quartz and feldspar. Mineralogically, eye quartz comprises 10%
to 15% of the rock; grains are euhedral-subhedral and range between 2-4 mm in size. Books of
biotite comprise 3% to 5% and grains are subhedral and range between 1-3 mm in size.
Orthoclase feldspar comprise 30% to 35% and grains are euhedral-subhedral and range between
of 4-10 mm in size, and plagioclase comprise 50% to 55% and grains are subhedral-euhedral and
range between 2-5 mm in size.
This porphyritic unit exhibits minor hydrothermal alteration and only displays minor potassic
alteration and “A” quartz vein sets. Minor disseminated mineralization has been observed; the
unit was found with a zone of strong phyllic alteration in the Pinto Valley deposit associated with
extensive “D” veining. The observed mineralogy and alteration styles suggest that this intrusive
was emplaced later in the magmatic-hydrothermal history of Pinto Valley porphyry copper
deposit.
Intramineral-Late Granodiorite
The Intramineral-Late Granodiorite unit outcrops as a large body in the southeastern area of the
Pinto Valley project with a second zone in the west mapped as northeast-trending minor bodies.
Crosscutting relationships suggest that this unit intruded both porphyritic units in the mine.
In a hand specimen this rock is grey-brown in colour with a phaneritic texture; it is equigranular,
fine to medium-sized grain with the following mineral composition: hornblende (5%), subhedral-
euhedral 1-2 mm size; books of biotite (5%), subhedral 1-2 mm size; K-feldspar (10%) subhedral
2-3 mm; quartz (12%), and crystals of plagioclase (68%) subhedral to euhedral with 2-3 mm in
size.
This unit exhibits only minor mineralization as 1% to 2% disseminated pyrite-chalcopyrite; thin
quartz veins exist but are generally unmineralized. Only weak hydrothermal alteration was
observed and described as a weak potassic alteration; this suggests that this intrusive unit was
injected late in the Laramide intrusive history. Crosscutting relationships indicate that this unit
truncates the late-magmatic potassic event.
Porphyritic Granodiorite
The Porphyritic Granodiorite intrusive unit was observed in the southwestern boundary of the
Pinto Valley area as a small body intruding into the Pinal Schist and the Schultze Granite (Figure
7-4).
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In a hand specimen, this unit has medium-sized grains, inequigranular with some porphyritic
textures. Mineral composition is: quartz (10%) anhedral 1-3 mm in size; books of biotite (8%)
subhedral-euhedral size of 1-3 mm diameter; hornblende (2%) subhedral averaging 1-2 mm; K-
Feldspar (15%) subhedral 2-4 mm diameter; and, plagioclase (65%) subhedral-euhedral that
range between 2-6 mm.
This intrusive was found at a site which had been disturbed by a small shaft and old
workings. Copper oxide was evident coating rocks close to the mouth of the small mine
opening. Minor hydrothermal alteration was observed as chlorite replacing mafic minerals. This
intrusive is most probably related to the granodioritic intrusive event in the Pinto Valley
area.
Breccia Porphyry
Near the southeastern boundary of the Pinto Valley Mine area, two sub-outcrops of a unit with
intrusive brecciaed features were found. This unit is called Breccia Porphyry and intrudes the
Ruin Granite as a small dike swarm (Figure 7-5).
In a hand specimen this unit displays a brecciated texture, comprised predominantly of a
groundmass material (approximately 70%), with surrounding fragments of rock and broken eye
quartz (10-15%) that range in size between 2-4 mm.
This unit was tested using a PIMA spectrometer for hydrothermal alteration minerals revealing
an upper crustal association of dickite-kaolinite-pyrite. Some leaching of minerals, mainly
jarosite and minor goethite, were also confirmed by TerraSpec analysis. This is an extremely
important finding because the mineral is associated with the advanced argillic alteration zone in
the upper crust.
Microscopic study of thin sections revealed the presence of a brecciated texture. Intrusive
fragments of granite monzogranite were observed with clearly defined borders, only some had
moderately rounded margins indicating a lack of any reaction with the matrix. The matrix is
composed of rock flour, various clay species, disseminated dickite, and traces of muscovite and
brown biotite.
Features described in this rock suggest a stage of phreatic brecciation, possibly related to the
activity of a nearby hydrothermal system.
7.3 REGIONAL STRUCTURAL FRAMEWORK
A number of structural events were identified during the mapping exercise showing a high level
of complexity in both the extent of deformation and the timing of the various events.
Considerable deformation of the units has persisted from the Precambrian era to Tertiary Basin
and Range events involving reactivation of many earlier structures.
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The main structures identified in the project are related directly to a set of lineaments, faults, and
fractures with north-south orientation (Figure 7-8).
The oldest fault observed is the South Hill Fault. Field observations suggest that this fault
controlled the emplacement of all the Precambrian intrusive phases along a northeast trend.
The last reactivation along this fault has reverse movement, with a southeastern dip which
has truncated mineralization of the Pinto Valley deposit; this fault has placed the Pinal Schist
over the Ruin Granite.
Most north-south structures are a product of extensional deformation from the Basin and Range
event; the best example is the Gold-Gulch Fault that separates, via horst and graben blocks,
the Apache Group sediments and the Ruin Granite, respectively. Other big faults are the Dome
Fault and the Jewel Hill Fault with normal movement, displaying more restricted deformational
features.
Locally, the fault systems at surface present a north-northwest pattern with normal
movements. Some minor reverse and transcurrent faults were observed and are closely related
to the huge structures like Riedel-type faults, which all show subvertical dips.
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Note: South Hill Fault, Gold-Gulch Fault; Dome Fault; Jewel Hill Fault and the blue colour represent the
secondary structures.
FIGURE 7-8 LOCATION AND DISTRIBUTION OF THE MAIN STRUCTURES OF THE PINTO VALLEY DISTRICT
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8 DEPOSIT TYPES
Pinto Valley is classified as a copper-molybdenum porphyry system. A large volume of literature
exists on porphyry deposits because of their large size and economic importance. The following
description of a porphyry deposit is from a summary by Sillitoe (2010):
“Porphyry deposits are typically centred on polyphase stocks and porphyry dyke swarms, with skarn
deposits formed adjacent to and epithermal deposits above the porphyry mineralization (see Figure
8-1). The metal endowment of a porphyry system is related to the geochemistry of the oxidized
magmas that contribute to the formation of the stocks and dykes, with gold and/or molybdenum
commonly found in association with copper. Porphyry deposits typically occur in association with
Mesozoic and Tertiary intrusions, probably as a result of poor preservation of older rocks.”
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FIGURE 8-1: ANATOMY OF A TELESCOPED PORPHYRY SYSTEM (SILLITOE, 2010)
Porphyry systems are typically zoned from a potassic-altered (biotite-potassium feldspar) core
overlying barren, calcic-sodic altered rock, upward through phyllic-altered (sericite or chlorite-
sericite) margins to propylitic-altered (chlorite-epidote) rocks (Figure 8-2). Porphyry systems also
grade upward into advanced argillic and silicic alteration related to epithermal mineralization.
Alteration zoning may be complex and overlapping due to successive injections of magma into
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country rocks. The vertical distance between porphyry mineralization and overlying epithermal
mineralization may range from one telescoped kilometre to several un-telescoped kilometres.
FIGURE 8-2: GENERALIZED ALTERATION-MINERALIZATION ZONING PATTERN FOR TELESCOPED PORPHYRY
COPPER DEPOSITS (SILLITOE, 2010)
Hypogene copper mineralization is disseminated and veinlet-hosted, and zoned from bornite-rich in
the core through chalcopyrite to pyrite in distal areas. Magnetite (in copper-gold porphyries) and
molybdenite (in copper-molybdenum porphyries) are common accessory minerals.
Quartz veins and veinlets as stockworks and sheeted arrays are ubiquitous in these systems, and
typically occur in a sequence from early quartz-feldspar "A" veins, through quartz-sulphide (mainly
chalcopyrite-molybdenite) "B" veins with potassic-altered margins to late, sulphide-dominant
(primarily pyrite) "D" veins with phyllic-altered margins (Gustafson and Hunt, 1975), as shown in
Figure 8-3. Veining in copper-gold deposits may differ slightly, with quartz-magnetite-chalcopyrite
and magnetite-dominant "M" veins present or dominant (Arancibia and Clark, 1996).
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FIGURE 8-3: PINTO VALLEY ALTERATION AND MINERALIZATION PLAN MAP (BHP, 2012)
Due to the large amount of disseminated pyrite in most porphyry systems, these systems are
susceptible to supergene weathering and leaching. Copper is oxidized and leached from areas above
the water table and deposited as chalcocite and other supergene copper minerals at or near the water
table, leading to enrichment in copper grades. Supergene chalcocite enrichment can increase grades
locally by 200% to 300% or more, with a significant impact on the overall economics of these
deposits.
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Alteration and mineralization associated with high sulphidation epithermal deposits in the upper
portions of porphyry systems consist of pyrite, enargite, and covellite hosted in silicified and often
brecciated silicified volcanic rocks, accompanied by advanced argillic alteration minerals, including
pyrophyllite, alunite, dickite, and kaolinite (Hedenquist et al, 2000). Alteration and mineralization at
this elevation in the system comprise a lithocap and may be far more laterally extensive than the
porphyry deposit itself.
Proximal skarn deposits are typically located laterally from porphyry deposits (Meinert, 2000). They
consist of replacement bodies within (endoskarn) or marginal to (exoskarn) the causative intrusion.
Skarn may be particularly well-developed in limestones and other calcium or carbonate-rich rocks.
Skarn alteration assemblages include garnet, pyroxene, wollastonite, magnetite, actinolite, pyrite,
magnetite, and chalcopyrite.
Copper-molybdenum porphyry and skarn mineralization are all found in close proximity in the Pinto
Valley area. Mineralization is associated with an overlap of phyllic and potassic alteration, a
supergene chalcocite blanket, and adjacent areas of hornfelsing and skarn alteration.
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9 EXPLORATION
Surface mapping has been the main source of additional data throughout the identification phase for
Pinto Valley 2 (PV2). Two campaigns were conducted on separate occasions to improve both the
geotechnical and geometallurgical knowledge of the deposit. All work stated in this section was
performed by or on behalf of BHP Copper.
The surface mapping for geotechnical information focused primarily on the bedding planes, major
structures, and overall geological strength index. As a result, a more targeted geotechnical testing
program has been developed for the selection phase.
Various ore-types were confirmed using surface mapping and by reviewing core logs. Alteration
zones and ore-types were identified in the pit wall and correlated against core samples taken in
previous drill campaigns. The visual ore classification will be confirmed (and refined if necessary)
using the laboratory petrographic facilities, labspec, and whole rock chemical analysis.
Descriptions from the core logs were used to plot the correlation between rock type and alteration
zone (Figure 9-1) using ioGlobal software. On completion of this analysis, the primary ore-types
were classified to determine the necessary sampling program for the selection phase. Table 9.1
shows the proportion of ore-types in the overall deposit for PV2. The most important ore-types were
narrowed down to Ruin Granite, Quartz Monzonite, and Diabase (ore types 1, 2, and 4, respectively,
are shown in Table 9.1). These ore-types are based on relative abundance, gangue mineralogy,
copper grade, alteration, and the potential impact on overall production (recovery, throughput, and
consumption of reagents/energy).
FIGURE 9-1: INTENSITY MAPPING OF MINERALIZATION TO DEFINE DOMINANT ORE-TYPES.
Ruin Granite/Biotite
Quartz Monzonite-
Porphyry/Chloride/Clay
Quartz Monzonite-
Ruin granite/No Alteration/Sericite
Diabase//Calcite-
Biotite-No alteration
Aplite/No alteration-
Sericite
Granodiorite/
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TABLE 9.1: ORE TYPE SUMMARY FOR PINTO VALLEY DEPOSIT
Ore ID Ore-Type TCu% Range
Averge
TCu% Observed Proportion Alteration
1 Ruin Granite/Quartz Monzonite 0.2 – 0.40% 0.37% 80-85% Potassic
2 Quartz Monzonite (with quartz veins) 0.2 – 0.40% 0.36% 6-10% Potassic
3 Granite Porphyry 0.2 – 0.25% 0.22% 5-8% Quartz Sericite
4 Diabase 0.2 – 1.0% 0.45% 2-3% Potassic
5 Aplite 0.2 – 0.25% 0.20% 1-2% Potassic
6 Quartzite/Granodiorite 0.2 – 0.25% 0.22% 0-1% No alteration
During the brownfield surface mapping campaign in the Pinto Valley district a number of new
copper mineralization occurrences were identified. Three principal targets zones are presented
below.
9.1 KOZI PROSPECT
Mapping over the Ruin Granite, southeast of the Pinto Valley pit, a zone of small bodies with a
brecciated texture (Breccia Porphyry) was found bearing some evidence of hydrothermal
alteration, relict sulphide boxwork, and some pyrite grains. Outcrop is generally poor due to the
steep angle of hill sides and narrow but rounded ridge tops. It is difficult to find moderately
fresh rock in this area; most surface material is extensively weathered and or loose surface
rubble.
Particular attention was paid to the bleached-looking alteration of feldspars; spectral
analysis suggests the presence of Dickite-Kaolinite. Small 1 mm diameter muscovite flakes
appear to be a later generation of alteration; biotites are also altered and act as a nucleus around
which sulphides have precipitated. Sulphide boxwork and primary pyrite grains were
recognized. This zone of clay alteration appears to cover an area of approximately 20 m2, and
is strictly related to the Breccia Porphyry.
Further evidence of alteration and porphyry emplacement was observed and this was confirmed
to be a thin section of breccia with a rock-flour matrix, broken quartz fragments, and the lithics of
granitic compositions along with the presence of kaolinitic clays and dickite in the matrix
.
The reflected-light thin section of this rock shows the presence of sulphides, mainly pyrite and
minor chalcopyrite in the matrix of breccia, which has been partially replaced by goethite. Note:
These rocks are partially leached.
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This reflected-light thin section clearly indicates that this rock is a breccia, suggesting a
hydrothermal origin related with phreatic stages. This is because it has a majority of subrounded
fragments and lower metal content along with the presence of rock-flour matrix and development
of advanced argillic clays.
Mapping the boundary of Ruin Granite 120 m to the southeast of the Breccia Porphyry, a zone
bearing copper oxides along the Schultze Granite contact was evident. Oxides coat Shultz Granite
outcrop and subcrop, especially in an area surrounding a milky quartz vein. The vein is generally
very vuggy and bears boxwork after sulphide dissolution. At Site 361, copper oxides are
dominantly comprised of malachite and azurite precipitating with siliceous cement over an area
of approximately 25 m2 of subcrop. Chemical assay reports for samples taken from this area
indicate > 1% Cu (Table 9.2).
The copper oxide species indicate that it originates within the quartz veins. Veins contain
abundant (up to 4%) course-grained chalcopyrite with some grains up to 5 mm; some are
moderately fresh, and goethite boxwork runs extensively through the centre of the vuggy coarse
vein. Note: The Ruin Granite-bearing disseminated chalcopyrite also contains coarse muscovite,
calcite, and quartz. The rock displays some in situ oxidation of chalcopyrite, with copper oxide
precipitation on the muscovites and micas. Contact-style mineralization between the two
genetically different granites is most prevalent in the Ruin Granite, which occupies the northern
flank of this feature.
Microscopic description indicates coarse-grained texture granite, with minor deformation of
quartz, some subhedral orthoclase, and replacement of a later phase of coarse muscovite and
calcite.
TABLE 9.2: CHEMICAL ASSAYS RESULTS FOR RUIN AND SCHULTZE GRANITE
Sample Cu ppm Mo ppm Ag ppm Zn ppm
75163 Ruin Granite 128 34.8 < 0.1 177
75164 Ruin Granite 3780 37.2 0.9 204
75165 Schultze Granite
> 10000 21.8 < 0.1 978
75181 Ruin Granite 7930 286 3 578
The chemical assay report for samples with chalcopyrite in the Ruin Granite show important
anomalous content of copper, molybdenum, silver, and zinc (Cu-Mo-Ag-Zn) (Table 9.2).
One hundred and fifty metres to the northeast of Site 361 in a creek line to the south, at the base
of the above feature, float-bearing magnetite was encountered at Site 363. The source was not
found; however, the float displayed a vuggy rock re-welded with hematite (martite).
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Appearing as an extensively altered Ruin Granite with coarse muscovite, no outcrop exists at this
site; however, there were a number of float rocks in random locations in this vicinity. Rock chip
samples bearing magnetite returned encouraging results from multi-element assay reports
displaying anomalous copper; it is expected that this rock is also anomalous in gold, although
assays are still pending. Surrounding this location, goethite and chalcopyrite grains up to 3 mm in
diameter in Ruin Granite were observed in a rock with moderate to strong coarse muscovite. This
altered zone appears to be locally related to the intrusion of Schultze Granite, but the anomalous
mineralization of Cu-Mo-Ag-Zn suggests that this system must be surrounding a hydrothermal
system. Evidence of hydrothermal alteration was not observed in relation to the porphyritic
system, but an intense hydrolytic event is related to the coarse muscovite in Ruin Granite.
This prospect has two types of geological indicators of hydrothermal activity. The first indicator
is the phreatic breccia, with occurrences of dickite-kaolinite and pyrite; this suggests that this
zone has been exposed to advanced argillic alteration. This is because dickite-kaolinite exists in
the upper crustal conditions following hydrothermal alteration associated with porphyry copper
emplacement. The specimens tested may belong to the roots of an advanced argillic-altered zone,
as evidenced by the presence of remnants that usually follow extensive weathering and erosion.
The second indicator is related to the Cu-Mo anomalies in the Ruin Granite: all the features
suggest a possible connection to the pegmatite zones related to the intrusion of granitic magma--
in this case, the Schultze Granite.
9.2 BONDI PROSPECT
The Bondi Prospect is related to the Dripping Spring Quartzite, and some zones with hornfels of
biotite-magnetite outcrop as a 90-metre high cliff face and narrow gully incised by active creek
systems, near the tails facility. The quartzite is very fine to fine-grained, well bedded, well sorted
quartz dominated sediment with minor pebble conglomerate beds. On a number of cliff faces in
this gully, copper oxides line exposed surfaces and natural cave formations. The oxides, including
malachite and azurite, appear to have been introduced via seep of underground aquifer
movement.
Sediments in some bands near the occurrence of copper oxides are studded with up to 4% fine-
grained disseminated mineralization and little veins of pyrite grains, and possible chalcopyrite.
These beds are discrete, greater than 10 m from oxide occurrences; sediments exhibit a much
lower 1-2% disseminated mineralization. The area warrants further review to identify the source
of copper oxide precipitate.
A unit contact between the Mescal Limestone and the Dripping Spring Quartzite exhibited
hematite and iron oxide seams in replacement silica rich beds. Narrow seams of limestone have
been replaced by a calc silicate event forming wollastonite crystals up to 3 mm in diameter,
diopside, and disseminated pyrite and minor chalcopyrite.
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Some bands have been metamorphosed and marbleized into light green, very hard chert-rich beds
which are strongly outcropped and more resistant to weathering. In this area, limestone beds
predominantly displayed disseminated magnetite over an area of 150 – 200 m.
Near the tailings dam, at Site 1118, a series of massive magnetite veins outcrop at up to 40 m
long and 3 m wide. As massive magnetite veins, these replacement beds are very hard and
resistant to weathering, contain abundant hematite oxide and some disseminated pyrite and
possible traces of chalcopyrite and bornite. These wide veins and narrower outlying magnetite
veins are parallel-bedded, produced by dissolution and replacement of calcareous horizons.
This site displays a high development of prograde skarn alteration indicated by the development
of brown garnet, pyroxene, diopside, and wollastonite. Wollastonite grains are particularly well
developed, up to 4 mm in diameter with well formed crystal habits. Diopside and garnets are
fewer and rarely occur in close proximity to massive metalliferous veins.
A retrograde mineral assemblage has also been observed comprised of chlorite, magnetite,
hematite, pyrolusite, and silica. Sulphide assemblage includes pyrite and traces of chalcopyrite
and bornite in limestone beds. A Diabase sill injected into the Mescal Limestone has explored a
bedding parallel zone, mapped in road cutting outcrops within the Mescal unit. The Diabase unit
has numerous iron oxide veins as a stockwork of near vertical vein sets at approximately 30 cm
intervals, regularly between 0.5-1.5 cm in diameter. The vein wall rock interface alteration is also
strongly iron-stained; very little quartz was observed in the iron oxide vein sets. The vein set post
dates the Diabase emplacement as veins cross cut the body and penetrate a short distance into the
surrounding limestone beds.
It is difficult to state the copper source at this prospect due to the oxidation observed in the
quartzites, and it is important to note that this state is structurally complex and partially covered
by post-mineral cover (Whitetail Conglomerate). The skarn evidence may be related to the
Diabase intrusions, but the presence of strongly altered rock and a source of sulphur and metal
can precede a close granitic source. It is important to note a stockwork of leached veins was
found in the Diabase, which is possibly related to another fluid source.
9.3 MATI PROSPECT
Mapping in the limestones sequences 250 m to the northeast of the pit revealed a skarnification
zone, identified by prograde stage development of pyroxene and wollastonite and retrograde stage
of epidote. Both are associated with iron replacement stages in the limestones with injection of
sulphide to the system, represented by pyrite-chalcopyrite and bornite. The supergene process
was observed with the presence of copper oxide mineralization, mainly malachite and azurite.
This zone is related to old mine workings. The magnetite, sulphide bed had a 50 x 50 m zone that
varied from 4 to 12- metre orientated bedding parallel to the limestones.
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This prospect is particularly interesting because the presence of copper sulphides related to the
magnetite replacement suggests an origin associated with a tertiary intrusion. This is because the
host rocks are Paleozoic limestones that formed post-Diabase intrusion; in this case, the only
probable source must be related to a later intrusive.
9.4 OTHER COPPER OXIDE EXPLORATION
Two small zones with copper oxide mineralization were identified. The first one was in the
southwest boundary of Pinto Valley, near the Carlotta mine cross road. An old mine of copper
oxides was discovered: the mineralization is primarily comprised of malachite and is related to a
dyke of Porphyritic Granodiorite. This rock intrudes the Schultze Granite and is a restricted body
with anomalous concentrations of greisens veins bearing copper sulphides. No disseminated
mineralization was observed.
Another occurrence of copper oxides was found in an outcrop of Apache Leap Tuff related to a
small paleochannel in an active creek. The mineralization observed consists mainly of
chrysocolla, black copper oxides, and minor malachite. This zone extends for only 5-6 m and no
primary source was detected.
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10 DRILLING
A data room was setup by BHP to disclose information and reports, including the drill hole data,
required during the due diligence process; these data continues to be available until the purchase date
of the property. Drilling documentation was limited to internal reports, and there were no listings for
vintage data, methods used, or pre-2010 drilling procedures, other than those found in the internal
reports. A complete list of the drill hole collars included in the BHP Pinto Valley database can be
found in Appendix C.
The pre-2006 Pinto Valley drilling programs were comprised of a combination of core, rotary, and
churn drill holes. Churn holes defined much of the early Castle Dome reserve, which has been
mined out. Post-Castle Dome holes were drilled on an original spacing of 400 ft east-west and 200 ft
north-south. Later, drilling was done to infill the original grid to 200 ft spacing in some areas.
Drilling that has occurred since the 1986 block model was constructed includes 10 core holes (E 52
through E 61) and 3 reverse circulation rotary holes (RC62 through RC64) drilled in 1992. From the
beginning of 1996 to April 1997, 67 reverse circulation exploration and infill holes were drilled: 48
RC holes (AD and NR-Series totalling 29,665 ft) drilled in 1996, and 19 RC holes (WW and 97-
Series totalling 8,520 ft) drilled during 1997. The WW and 97-Series were drilled in the interior pit
and through the Gold Gulch and Continental faults. Seven of the exploration holes were drilled east
of the existing pit and laid the ground work for future plans of an east pit expansion, known as the
Satellite Pit.
The current Pinto Valley drill hole database contains a significant amount of drilling that defined the
grades in the block model that have been mined out, especially as they relate to the Castle Dome
mining activity shown in Figure 10-1.
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FIGURE 10-1: DRILL HOLE SECTION SHOWING CURRENT TOPOGRAPHY AND PRELIMINARY OPTIMIZED PIT
All drill hole collar locations were surveyed. The majority of the drill holes are vertical and,
therefore, do not have downhole surveys. However, a majority of the inclined holes do have
downhole surveys.
From 2006 through 2008, there have been various drilling campaigns with mixed purpose:
delineation, exploration, geotechnical, and resource classification upgrade drilling. These include 18
G-Series geotechnical holes, 11 HW-Series holes in 2007, 17 PZ-Series holes drilled in 2008, 17 S-
Series holes drilled in 2008, 24 B-Series holes drilled in 2008, and 4 DH-Series holes drilled in 2008.
The most current drilling occurred in 2010 which focused on exploration, and in 2011 and 2012
which focused on infill drilling for resource classification upgrade in support of restarting operations.
Ten holes were drilled in 2010, 40 holes were drilled in 2011, and 64 holes were drilled in 2012.
Figure 10-2 shows a plan view with topography and the 2010, 2011, and 2012 drilling campaigns.
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Note: 2010, 2011, and 2012 drilling shown in red, green, and blue, respectively.
FIGURE 10-2: DRILL HOLE PLAN
FIGURE 10-3: ALL DRILL HOLE COLLARS
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The combined database (Appendix C) comprises 1,031 drill holes, as shown in Figure 10-3.
Note: Assay results were pending for seven 2011 holes and thirty-four 2012 holes at the effective
date of this report.
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11 SAMPLE PREPARATION, ANALYSES AND
SECURITY
Once drilling is completed, the core is transported to the core handling facility. Here it is placed in
wax-covered core boxes with depth markers for every drill run of up to 10 ft. QuickLogs are done at
core reception which includes initial lithology and a visual estimation of mineralization and
alteration, particularly biotite content. The mine is set up on a bar code system for ease of handling
and to track the core and samples. There is a triple bar code tag: the first tag is for the half core that
remains in the box, the second tag is for the split that is sent to the lab for analysis, and the third tag
is for the coarse duplicate and is used to tag the pulps and rejects. The core is logged for geology and
split by saw at one of two stations.
The QuickLog data and the detailed logs are entered into an acQuire® relational database system
which also records the collar, survey, assay, lithology, alteration, mineralization, and geotechnical
(RQD) data. This data is tagged and tracked using the bar codes, and all subsequent assay
information provided by the laboratory, including the QA/QC data, is linked to the database. The
system is secured by BHP using protocols and procedures which appear to be extremely stringent. A
dispatch report is created which is then sent to the laboratory and subsequently matched against the
shipments. Deviations and discrepancies are reported and investigated. Any updated assay data from
the laboratory is linked to the bar code system and relayed to the company electronically via Excel®
CSV files and imported into acQuire® automatically. The data is imported into MineSight for the
purpose of resource estimation.
A number of different companies and laboratories have provided assay services to Pinto Valley over
the years. Details of sampling and assaying procedures used during the earlier stages of operation
are not readily available. Procedures used by outside labs that ran assays for some of the later drilling
campaigns, such as those performed by Mountain States for the RC holes and Chemex for the AD
holes, are also not readily available. The analytical procedures currently in place at Pinto Valley are
in line with industry standards for total copper, but procedures are BHP-specific with respect to acid
soluble copper (i.e., digestion with 10% sulphuric acid, placed in a hot bath at 40C, and read after
40 minutes).
Samples were assayed for total copper and acid soluble copper. Composites representing 30-50 ft of
the sample rejects were made and these composites were assayed for total copper, oxide copper,
molybdenum, sulphur, and trace metals of gold and silver. Comparisons were made between the
total copper and acid soluble copper assays from the original assay intervals and the composite
intervals.
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Independent audits of the Pinto Valley assays were conducted in 1992 and 2000. Results were as
follows:
assay values in the Pinto Valley database have been reliably entered;
total copper assays in the Pinto Valley database are reproducible and can be considered
representative within normally-accepted limits of error;
total copper assays in holes below the current pit base can also be considered
representative within normally-accepted limits of error, except in the deeper parts of
some RC holes where they may be low-biased. However, using these assays to estimate
grades in the model is acceptable because they will tend to provide a conservative rather
than an overly optimistic estimation of grades;
acid soluble assays in the Pinto Valley database vary considerably depending on the
drilling campaign and;
reserves, resources, and production at Pinto Valley are reported as sulphide copper,
which is calculated by subtracting acid soluble copper from total copper. Because biases
exist in the acid soluble copper assays, this procedure generates sulphide copper values
that are biased relative to each other as a function of the drilling campaign. However,
sulphide copper values are only slightly lower than overall total copper values, so it can
be reasonably assumed that the sulphide copper values are also globally correct within
normally-accepted limits of error.
As part of the start-up Feasibility Study done in 2006, a QA/QC program was conducted on 101
randomly selected drill hole assay interval pulp samples and 15 randomly selected core assay
intervals. Samples were sent to Skyline Assayers and Laboratories (Skyline Labs) in Tucson,
Arizona to be analysed for total copper and acid soluble copper. Skyline Labs was instructed to
analyse the samples for acid soluble copper using BHP lab procedures. Before the lab processed
these samples, BHP provided instructions for the pulp sample analytical procedures and also
provided a sequential pulp sample list. Included in this QA/QC program for the Feasibility Study
were seven sets of a known National Institute of Standards and Technology (NIST) standard pulps:
Copper Ore Mill Heads standard at 0.84% Total Copper, and a Copper Mill Tails standard at 0.091%
Total Copper. These known standard sets were inserted in sequential order for analysis preceding
the 15th pulp sample in the analytical run. All relative precisions are discussed at a 95% confidence
level (estimated using the Student’s T-distribution).
The analytical results from the standard samples are shown in Table 11.1 and Figure 11-1; both
include standards supplied by the Pinto Valley Operations (PVO) project team and those used by
Skyline Labs for internal QA/QC. A relative bias of -2% (Skyline Labs is lower than acceptable) is
determined from these samples, with a relative precision of 4% for the standards greater than 0.1%
Cu and 10% for the reference sample containing 0.09% Cu. These results provide an estimated
precision for pulp and instrumentation sampling.
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TABLE 11.1: ANALYTICAL RESULTS FOR STANDARD REFERENCE MATERIALS
(2006 PINTO VALLEY Q/A PROGRAM)
Standard No.
Accepted Value
Ave. Skyline
Std. Dev. Skyline
Relative Difference
Relative Std. Dev.
Relative Precision
Inte
rnal S
kylin
e
CGS-2 1 1.177 1.153 N/A -0.020 N/A N/A
CGS-3 1 0.646 0.650 N/A 0.006 N/A N/A
CGS-4 1 1.947 1.939 N/A -0.004 N/A N/A
CGS-6 1 0.318 0.317 N/A -0.003 N/A N/A
PV
O
High-grade 7 0.840 0.820 0.006 -0.024 0.007 0.017
Low-grade 7 0.091 0.089 0.004 -0.027 0.043 0.104
Total (All Samples) 18 0.589 0.579 N/A -0.018 0.033 0.070
Total (> 0.1% Cu) 11 0.906 0.891 N/A -0.017 0.021 0.048
FIGURE 11-1: ANALYTICAL RESULTS FROM STANDARD REFERENCE MATERIALS
The re-assay program for stored pulp samples shows that historical quality control measures used in
the PVO analytical laboratory were variable: at times they were extremely good, but at other times
y = 0.99x - 0.00
R2 = 1.00
0.0
0.5
1.0
1.5
2.0
0.0 0.5 1.0 1.5 2.0
Accepted Values (wt% Cu)
Skyli
ne V
alu
es (
wt%
Cu
)
Skyline Standards
PVO Standards
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
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they were lower, although at acceptable levels. The relative half differences (RHD) of the samples
are presented in sequential order in Figure 11-2; it can be seen that the drill hole series is well
correlated with the variability and bias of repeat assays. Because of the consistent results from the
reference standards included in the samples submitted to Skyline, it can be assumed that the
variability in the drilling programs originate with the analytical precision at PVO, and not at Skyline
Labs.
Note: Samples are shown in sequential order of analyses, but are grouped by drill hole identification.
FIGURE 11-2: RELATIVE HALF DIFFERENCES IN REPLICATE PULP ANALYSES
(COMPARES ORIGINAL PVO COPPER ASSAYS WITH SKYLINE LABORATORIES REPEATS)
Table 11.2 shows the statistical summaries of the 2006 quality assurance program on replicate pulp
assays, broken down by drilling campaign. Although close similarities exist between the WW-, RC-,
and E-Series holes, there are only limited samples from the latter two series, and these tend to be
low-grade. Because the WW- and 97-Series holes were drilled around the same time and at a much
different time than the remaining holes, these holes should be categorized as having similar
laboratory quality practices. The AD-Series holes seem to have been assayed under different
protocols, and are grouped with the E-Series because of their similar drilling dates. Additional
information presented below further suggests this grouping for the purpose of estimating analytical
uncertainty. Based on the replicate pulp program, the AD- and E-Series holes have a relative bias of
-0.50
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
0 20 40 60 80 100 120
Item Number
Rela
tive H
alf
Dif
fere
nce
<0.1% Cu samples >0.1% Cu samples Standards
WW- ,RC- and E-
prefix Holes
AD-prefix Holes 97-prefix
Holes
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+2.5% (original assays higher than Skyline) and precision of 6%, compared to the remaining holes
that have a bias and precision of approximately -1.5% and 9%, respectively (Table 11.2).
TABLE 11.2: ANALYTICAL RESULTS FOR REPLICATE PULP ASSAYS
(2006 PINTO VALLEY Q/A PROGRAM)
Drill Hole
Program
Copper Ave. (%) Linear Fit Average Relative
Data Subset No. Skyline PVO Slope RHD ARHD Precision
WW-, RC-
& E-Series
All Data 29 0.254 0.247 0.95 0.000 0.049 0.138
> 0.1% Cu Only
23 0.313 0.303 -0.017 0.035 0.103
AD-Series All Data 50 0.277 0.291 1.05 0.016 0.034 0.135
> 0.1% Cu Only
45 0.302 0.318 0.025 0.025 0.058
97-Series All Data 22 0.300 0.290 0.91 -0.016 0.029 0.080
All Samples All Data 101 0.275 0.278 1.00 0.004 0.037 0.123
> 0.1% Cu Only
90 0.304 0.307 0.005 0.029 0.074
Note: RHD (relative half difference) defined as (PVO-Skyline)/(PVO+Skyline); ARDH (absolute relative half difference);
Rel Err (relative error), calculated as the square root of the average squared relative half difference at the 95% confidence
level as estimated through the Student's T-distribution.
Fifteen field duplicates of split core from drill holes lying in sequence between E-21 and E-60 are
summarized in Table 11.3 and Figure 11-3. The relative bias between the two core halves is nearly
identical to that seen in lab assays for the AD-Series holes, with PVO core assays approximately 3%
higher grade than the replicate values. The relative precision of the two core halves at copper grades
above 0.1% Cu is slightly more than double the analytical precision of AD-Series pulp replicates
(Table 11.3). The AD-Series replicate pulp assays plot on the least square linear fit from the E-
Series duplicate core assays; this further suggests the similarity between the results.
TABLE 11.3: ANALYTICAL RESULTS FOR DUPLICATE CORE PREPARATION AND ASSAYS
(2006 PINTO VALLEY Q/A PROGRAM)
Sample Set No. Skyline
Cu% PVO Cu% RHD ARHD
Relative Precision
All Samples 15 0.304 0.322 -0.006 0.114 0.453
Samples > 0.1% Cu 12 0.368 0.389 0.032 0.058 0.167
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 11-6
FIGURE 11-3: COMPARISON OF 15 FIELD DUPLICATE SAMPLES
(2006 PINTO VALLEY Q/A PROGRAM)
Based on the E- and AD-Series results, the total relative sampling standard deviation for the split
core samples above 0.1% Cu is estimated to be approximately 8%: 86% of the sampling variance is
due to core splitting and sample preparation errors, and 14% is due to analytical variance within the
PVO lab. Instrumentation errors associated with the QA/QC analytical process is responsible for
about 0.5% of the total variance. The relative bias of about 2.5% between PVO and Skyline
laboratories is the result of an absolute bias of -2.7% between the Skyline Lab and the international
standard; these results are summarized in Table 11.4.
The sampling and preparation errors of the reverse circulation samples could not be fully determined
due to a lack of field duplicates, which occurred during the original program or the current program.
Field sampling of RC cuttings are generally associated with lower variances than sampling of drill
core, which can offset the higher laboratory variances measured for the 1996-1997 programs (Table
11.4). The analytical bias seen in these samples, corrected for the Skyline bias, are estimated to be
4% lower than the international standards.
y = 1.00x + 0.02
R2 = 0.94
0.00
0.20
0.40
0.60
0.80
0.00 0.20 0.40 0.60 0.80
Skyline Assay (wt. % Cu)
PV
O A
ssay (
wt.
% C
u)
Core Duplicates
Pulp Replicates
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 11-7
TABLE 11.4: TOTAL AND STEPWISE SAMPLING ESTIMATES AND
ANALYTICAL VARIANCES
Drill Hole Samples Total Relative Errors Stepwise Relative Error
No. Bias Std. Dev. Variance Bias Variance Std. Dev.
Core Sampling Variance (E-Series core duplicates) 12 0.032 0.0760 0.00577 0.006 0.00495 0.070
PVO Analytical Variance (AD-Series pulp replicates) 45 0.025 0.0287 0.00082
-0.001 0.00079 0.028
Skyline Analytical Variance (Reference Material) 7
-0.027 0.0058 0.00003
-0.027 0.00003 0.006
Reverse Circulation Variance (WW- and 97- series)
Unknown
PVO Analytical Variance (WW/97-Series pulp replicates) 43
-0.017 0.0454 0.00206
-0.044 0.00203 0.045
Skyline Analytical Variance (Reference Material) 7
-0.027 0.0058 0.00003
-0.027 0.00003 0.006
The current Pinto Valley QA/QC procedures are based on leading practices as defined by BHP
Billiton and used throughout BHP's group of assets. These have been developed in conjunction with
other BHP Billiton base metal mines. The process, as shown in Figure 11-4, ensures that suitable
checks are in place for each step of the sampling and data gathering activities.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 11-8
FIGURE 11-4: CONDENSED SAMPLE HANDLING AND CHAIN OF CUSTODY STREAM
The following QA/QC criteria were used to validate the results and samples:
i) TCu > AsCu, except when;
a. TCu < 0.1 and ASCu < 0.1
b. TCu/SCu > 1.05
If not (AsCu > TCu), reject and report loss of precision to the laboratory and BHP
geologists, and send the following for reanalysis: 10 samples before and 10 samples after
the rejected sample. Include results in the monthly QA/QC report.
ii) Blanks (Cu):
a. < 6 times TCu, threshold limit = OK
b. < 6 times Mo, threshold limit = OK
c. If not, reject and report lost of accuracy to the laboratory and BHP geologists, and send
the following for reanalysis: 10 samples before and 10 samples after the rejected sample.
Include results in monthly a QA/QC report.
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iii) Standards (Cu):
a. < 2σ = OK
b. If > 2σ, reject and report lost of accuracy to the laboratory and BHP geologists, and send
the following for reanalysis: 10 samples before and 10 samples after the rejected sample.
Include results in monthly QA/QC report.
c. >3σ Reject and report lost of control of accuracy to the laboratory and BHP geologists,
send to reanalysis 10 samples before and 10 samples after the sample rejected. Include in
monthly QA/QC report.
iv) Field Duplicates, Crushing, and Pulp Duplicate (for Cu):
a. Protocols and procedures are in place to define sampling and laboratory errors within a
large group of samples and batches however; this is not used to reject a batch.
Assays are imported to the BHP Server for approval. This is done for each batch according to the
criteria above. The geologist that logged the drill hole uses the following procedures to approve the
QA/QC for each batch:
1. The authorized geologist or data manager enters the BHP Data Portal and selects the area,
project, and Batch List.
2. Review QA/QC results, particularly “Company Standards” (that includes blanks) and
“Lab Standards” to approve a batch according to points 2.ii and 2.iii, above.
3. Review the Field Duplicates, Coarse Duplicates, Pulp Duplicates, and Lab Assay Repeats
as well. This information is then compiled to generate a QA/QC report detailing any
errors associated with the splitting and crushing procedures for that particular batch.
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12 DATA VERIFICATION
Garth Kirkham, P. Geo., visited the property on May 14, 2013. The site visit involved an inspection
of the core logging facilities, offices, outcrops, historic drill collars, core storage facilities, core
receiving area, core sawing stations, and a tour of the major centres and surrounding towns that are
affected by the mining operation.
The tour of the offices, core logging and storage facilities showed a clean, well-organized,
professional environment. On-site staff led the author through its chain of custody and methods used
at each stage of the logging and sampling process.
The author randomly selected four complete drill holes from the database and laid the core out at the
core storage area. Site staff supplied the logs and assay sheets so the author could verify the core and
logged intervals. The data correlated with the physical core and no issues were identified. In
addition, the author toured the complete core storage facility, pulling and reviewing core throughout
the tour. No issues were identified and recoveries appeared to be very good to excellent.
The author is confident that the data and results are valid based on the site visit and inspection of all
aspects of the project; this confidence extends to the methods and procedures used. It is the opinion
of the independent author that all work, procedures, and results have adhered to best practices and
industry standards required by NI 43-101. No duplicate or verification samples were taken to verify
assay results, but the author believes that the work is being conducted by a well-respected, large,
multi-national company that employs competent professionals that adhere to industry best practices
and standards.
The author also visited the Skyline Assayers & Laboratories (Skyline Labs) on May 15, 2013. The
laboratory tour was performed by Jim Martin, Senior Chemist and Arizona Registered Assayer (No.
11122), who provided a complete review of the laboratory facilities, laboratory preparation
procedures, instrumentation, assay methods, quality assurance and control protocols, and reporting
procedures. The laboratory appeared to be operated in a very professional manner as is expected
from a widely-used North American laboratory facility. Skyline Labs, because of its long-standing
service to many large copper mines, appear to specialize in and have extensive experience with the
assay processes and procedures for copper. Skyline Labs have been ISO 17025 certified since 2008.
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 13-1
13 MINERAL PROCESSING AND
METALLURGICAL TESTING
13.1 PREFACE
The Pinto Valley Mine has previously been in production and preliminary metallurgical and
geometallurgical work has been completed, as described below. However, a more detailed and
advanced program is currently underway that will augment this previous work and form the basis of
a Pre-feasibility Study planned for late 2013. The work described below is included only as it relates
to thoroughness. Note: the only information derived from this section is a broad characterization of
recoveries for copper and molybdenum of 88% and 50%, respectively.
The sections below were supplied by BHP and the author feels that this information is useful for the
sake of thoroughness, and the author also feels that it is reliable information because the mine has an
excellent understanding of the metallurgical and physical properties of the ore.
13.2 PINTO VALLEY PROCESS DESCRIPTION
Run-of-mine ore is delivered by haul truck to a Fuller-Traylor 60 x 89 inch gyratory primary
crusher. Primary crushed ore is then transported by an apron feeder and conveyor to the coarse
ore stockpile, which has a nominal live capacity of 30,000 mT.
The primary crushed ore is reclaimed from the coarse ore stockpile to the fine crushing plant.
The fine crushing plant consists of three secondary screens, three 7-ft standard Nordberg
crushers, six tertiary screens, six 7-ft Nordberg short head crushers and a tertiary feed bin. The
primary crushed ore is first screened to remove fines before the open circuit secondary crushing.
The undersize from the secondary screens is conveyed directly to the fine ore storage bin. The
secondary crushed product is screened and tertiary crushed in a closed circuit. The tertiary screen
undersize is conveyed with the secondary screen undersize to the fine ore storage bin. The fine
ore storage bin has a nominal live capacity of 39,000 mT.
Ore is reclaimed from the fine ore storage bin to the primary grinding circuit which consists of six
18 x 21 ft Allis Chalmers overflow ball mills, each driven by a 4,000 hp motor and operated in a
closed circuit with three 33-inch Kreb cyclones. The primary grinding circuit targets an 80%
passing size (P80) of approximately 270 µm (28% + 65 Mesh). The primary grinding cyclone
overflow is fed to the copper-molybdenum rougher circuit. Flotation reagents including lime,
xanthate dithiophosphate (DTP), and fuel oil are added to the grinding circuit in preparation for
flotation.
In the copper-moly flotation circuit, additional lime, xanthate, DTP, and frothers are added to the
pulp slurry, as required. The rougher flotation circuit consists of sixty-five 1,000-ft3 Wemco cells
configured in three banks, with two ball mills feeding each bank. The rougher concentrate is
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reground in a closed circuit with two ball mills to a P80 of approximately 50 µm before being fed
to four 8 x 40 ft column cells. The column cell concentrate, the final Cu-Mo concentrate, contains
27%–29% Cu and 0.35%–0.7% Mo. A bank of fifteen 300-ft3
Wemco cleaner scavenger cells
processes the column cell tails.
The thickened Cu-Mo slurry is sent to the Moly plant. The Moly plant consists of four banks of
Agitair rougher cells of six 50-ft3 cells each and a column cleaner section. NaSH is added to the
slurry to provide depression of copper and iron sulphides and fuel oil is added as a moly
promoter. The moly rougher tailing is the final copper concentrate. The final molybdenum
product is thickened in a 26-ft moly thickener, filtered on a disk filter, dried, and bagged for
shipment.
The final copper concentrate is thickened to 60% solids and flows by gravity from the copper
thickeners to one of the two copper slurry storage tanks. The slurry is pumped from the storage
tanks to the Filter Plant, where it is dewatered before it is dispatched by truck.
13.3 RECENT METALLURGICAL TESTWORK
Table 13.1 summarizes the geometallurgical test work that has been conducted on Pinto Valley
ore since 2007. Some of this test work is still in progress and will be reported by September
2013. A selection of results from this test work is presented in this report.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 13-3
TABLE 13.1: SUMMARY OF TESTWORK
2007 GeoMet
2013 GeoMet
Validation Total
Ore Characterization
ICP-SAFus (including Re, S, Au, Ag)
- 48 - 48
Cu, Mo, Fe, S, Insol 49 * - 11 60
AsCu 49 * - - 49
CNSolCu - 48 - 12
Seq Leach - 10 2 12
QEMSCAN 11 48 - 60
MLA - - 1 1
Density by Gas Pycnometer - 48 - 48
Comminution
SMC Tests - 4 2 6
Full Bond Tests 7 10 11 28
Mod Bond Tests 14 48 - 62
Crushing Plant Survey for JKSimMet Modelling
- 1 - 1
Flotation
Rougher Kinetics Test 2 21 11 34
Full MFT Tests 10 6 - 7
Variability MFT Tests 49 48 - 97
Flotation Survey for Fleet Calibration
1 - - 1
Note: *Calculated from flotation products.
13.4 MINERALOGY OF THE ORE
The Pinto Valley ore can be divided into five ore types. The major ore type is a Ruin
Granite/Quartz Monzonite, which comprises greater than 90% of the ore. Table 13.2 summarizes
the five ore types.
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TABLE 13.2: SUMMARY OF PINTO VALLEY ORE TYPES
Ore ID
Ore type T Cu% Range
Average T Cu%
Observed Proportion
Alteration
1 Ruin Granite/Quartz Monzonite
0.2-0.4% 0.37% 90-97% Potassic/Sericitic
2 Granite Porphyry 0.2-0.25% 0.22% 1-6% Quartz Sericite
3 Diabase 0.2-1.0% 0.45% - Potassic
4 Aplite 0.2-0.25% 0.20% - Potassic
5 Quartz/Granodiorite 0.2-0.25% 0.22% 1-7% No alteration
The mineralogy of 35 samples classified as Ruin Granite/Quartz Monzonite was measured using
QEMSCAN. The modal mineralogy results are shown in Table 13.3. The major minerals in the
Ruin Granite/Quartz Monzonite ore are quartz, feldspars (both K and Na-rich species), and mica
(predominantly muscovite). Chalcopyrite is the predominant copper mineral.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 13-5
TABLE 13.3: MODAL MINERALOGY OF RUIN GRANITE/QUARTZ MONZONITE
Min.
10th Percen
tile
20th Percen
tile Median Avg.
80th Percen
tile
90th Percen
tile Max.
Chalcopyrite 0.243 0.410 0.550 0.844 1.095 1.743 1.850 2.453
Other Copper-Sulphides 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.001
Pyrite 0.011 0.048 0.076 0.270 0.608 0.678 2.070 3.763
Other Sulphides 0.002 0.004 0.006 0.011 0.021 0.021 0.037 0.170
Quartz 22.155 35.232 37.250 41.459 41.249 45.816 47.317 52.880
K-Feldspar 9.405 27.410 30.282 33.766 33.560 38.592 40.981 44.264
Plagioclase 0.216 1.097 2.053 4.147 4.710 7.348 8.592 12.811
Chlorites 0.018 0.054 0.167 0.491 0.870 0.877 2.200 6.051
Biotite/Phlogopite 0.126 0.618 0.769 1.548 2.544 2.733 3.472 28.248
Muscovite 3.693 5.146 5.316 8.420 9.236 11.608 13.882 24.638
Illite 0.948 1.807 1.965 2.873 3.170 4.170 4.962 5.876
Clays 0.068 0.081 0.097 0.148 0.148 0.172 0.193 0.496
Other Silicates 0.032 0.052 0.071 0.111 0.162 0.184 0.224 1.469
Fe/Ti-Oxides 0.223 0.399 0.441 0.593 0.840 0.921 1.305 4.724
Calcite 0.031 0.040 0.060 0.628 1.005 1.699 2.333 4.637
Other Carbonates 0.024 0.034 0.046 0.123 0.240 0.460 0.619 0.987
Apatite 0.060 0.108 0.147 0.271 0.287 0.367 0.459 0.948
Fluorite 0.000 0.000 0.000 0.001 0.152 0.033 0.059 2.615
Other 0.004 0.022 0.034 0.056 0.105 0.095 0.137 0.970
13.5 CRUSHABILITY
A small crushability dataset was created by conducting SMC tests on selected diamond drill core
samples. The results of these tests are summarized in Table 13.4. The crushability of the Pinto
Valley ore ranges from soft (DWi = 3.85 kWh/m3) to medium (DWi = 6.02 kWh/m
3). DDH-101
was a sample of Diabase, which was found to have a hard crushability with a DWi of 9.40
kWh/m3.
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TABLE 13.4: SMC TEST RESULTS ON PINTO VALLEY ORE
Sample DWi
kWh/m3
Mia
kWh/mt
Mic
kWh/mt A b Axb Category
t10 @ 1kWh/t SG ta
DDH 12-118 5.51 17.6 6.5 72.2 0.64 46.2 medium 34.1 2.55 0.47
DDH 12-79 6.02 17.9 6.7 69.5 0.64 44.5 medium 32.9 2.69 0.43
DDH 12-101 9.40 24.1 9.9 74.3 0.41 30.5 hard 25.0 2.85 0.28
DDH 12-145 3.50 12.2 4.1 66.0 1.11 73.3 soft 44.2 2.57 0.74
PV1 Comp 1 4.25 14.0 4.9 68.5 0.9 61.7 soft 40.6 2.61 0.61
PV1 Comp 4 3.85 13.2 4.5 67.9 0.98 66.5 soft 42.4 2.56 0.67
13.6 GRINDABILITY
The grindability of the major ore type, Ruin Granite/Quartz Monzonite, was measured by testing
35 samples selected from diamond drill core intervals. The modified Bond work index test was
used with a closing screen size of 212 µm. The results are shown in Figure 13-1. The grindability
of the Ruin Granite/Quartz Monzonite has low variability, ranging from 13.4 to 15.5 kWh/mt. A
single observation of 17.1 kWh/mt was recorded. This interval, as noted in the geological log,
contained some Diabase.
A small selection of modified Bond work index tests was conducted on the minor lithologies.
Two Granite Porphyry samples were tested and had results of 15.1 and 16.1 kWh/mt; this
indicates that this lithology is harder to grind than the Ruin Granite. Three samples of
Granodiorite were tested with results of 13.1, 12.5, and 13.9 kWh/mt; this indicates that the
Granodiorite may be softer than the Ruin Granite. Two samples of Diabase have been tested with
results of 17.0 and 17.3 kWh/mt; this indicates that the Diabase ore is significantly harder to grind
than the other lithologies. Three samples of Aplite have been tested with results of 13.5, 13.7 and
14.3 kWh/mt; this indicates that the Aplite is not significantly different from the Ruin Granite to
grind.
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FIGURE 13-1: RUIN GRANITE / QUARTZ MONZONITE MODIFIED BOND WORK INDEX (KWH/MT)
While there is some variability in the grindability of Pinto Valley ore, the test results indicate that
the variability is primarily controlled by the lithology, and that the variability is limited to the
minor lithology types. As these lithology types have relatively low proportions compared to the
Ruin Granite, it is likely that, when they are encountered in the pit, their impact on performance
will be able to be controlled with an appropriate blending strategy.
13.7 PINTO VALLEY RECOVERY
The long-term average of recovery for Pinto Valley is 86.0% from 1975 to 2008. During the
2006 start-up, the average Copper Recovery was slightly higher at 86.8%. The 12-month rolling
average Copper Recovery has been trending upwards throughout the life of the operation from
around 83% in 1990 up to 87% in mid-1996, as shown in Figure 13-2. There was a recovery
peak in 1992, and again in 1994, and then it hit a plateau at the highest value between April 1996
and January 1998. During the 2006-2008 restart, there was also a period of time from July 2008
until January 2009 where the plant sustained an average recovery of 89.7%.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
2
4
6
8
10
12
14
16
18
<13 13.5 14 14.5 15 15.5 16 16.5 17 17.5 More
Freq
uenc
y
Bin - Mod Bond Work Index (kWh/mt)
Frequency
Cumulative %
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
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FIGURE 13-2: PINTO VALLEY COPPER RECOVERY (1990 TO 1998)
The current block model recovery is 87.7%. This recovery was determined by using a fixed-tail
recovery equation with a tail value of 0.052% Cu and a recovery cap of 90.5%. The tail value of
0.052% Cu was sourced from historical plant data from between January 1975 and February
1998. Historical data also indicates that it is rare for Pinto Valley recovery to exceed 90.5% on a
monthly basis.
This recovery target, while higher than the long-term average for the operation, is consistent with
more recent results and the overall trend of increasing recovery.
13.8 FLOTATION
Within the current geometallurgical test program, a flotation variability study is being conducted
using a combination of rougher/cleaner kinetics tests and the Mineral Flotation Test (MFT). The
results of these tests will be used to develop a FLEET model which is able to simulate circuit
recoveries and concentrate grades. This work is currently in progress and is planned to be
completed by end of 2013 and will be the subject of an advanced study.
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14 MINERAL RESOURCE ESTIMATE
14.1 INTRODUCTION
The following sections detail the methods, processes, and strategies used to calculate the mineral
resource estimate for the Pinto Valley deposit.
14.2 DATA EVALUATION
A total of 1,031 drill holes were supplied for the Pinto Valley Project; however, 62 of those holes,
as of the effective date of this report, were pending and unavailable.
The drill hole database was supplied by BHP in an electronic format. This data included drill hole
collars, down hole surveys, lithology data, and assay data with downhole from and downhole to
intervals in imperial units. The assay data included total Cu% and Mo%.
Figure 14-1 shows a plan view for the drill holes used in the mineral resource estimate.
FIGURE 14-1: PLAN VIEW SHOWING DRILL HOLES USED IN RESOURCE ESTIMATE
14.3 COMPUTERIZED GEOLOGIC AND DOMAIN MODELING
Solids were supplied for the principal domains along with the main mineralized zones; these
included the following: 1, 2, 3, 4, 5, 6, 8, 10, and 11.
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The numeric coding for the zones are as follows:
1 West Ore Zone
2 Central Ore Zone
3 East Ore Zone
4 South of the South Fault
5 West of the Gold Gulch Fault
6 Diabase
8 East of the Jewel Hill Fault
10 Low Grade Quartz Monzonite
11 Castle Dome
The drill hole database was numerically coded by zone and solid: 1, 2, 3, 4, 5, 6, 8, 10, 11. The
solids were adjusted by moving the nodes of the triangulated domain solid to honour the drill hole
intercepts. Then the numeric codes that denote the zones within the drill hole database were
manually adjusted to ensure the accuracy of zonal intercepts. No assay values were edited or
altered.
Figure 14-2 shows a plan view of the West, Central, and East Ore Zone solids: 1, 2, and 3.
Extensive low grade zones are also defined in Figure 14-3; these are separated by the major
faults. Figure 14-4 shows a plan view of the solids with drill holes for Zone 4 (South of the South
Fault), Zone 5 (West of the Gold Gulch Fault), and Zone 8 (East of the Jewel Hill Fault) in blue,
light blue, and red, respectively. Zone 10 (Low Grade Quartz Monzonite) in pink underlies all of
the units. Note that in Figure 14-4, the West, Central and East Zones are combined and displayed
in red. Figure 14-5 shows a portion of the assay database with the percentages for copper and
molybdenum, the geology, mineralization, and column "XTRA1" which represents the adjusted
numeric coding for the mineralized solids (i.e., 1, 2, 3, 4, 5, 6, 8, 10, and 11).
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Note: West Ore Zone (1) in blue on left; Central Ore Zone (2) in light green in middle; East Ore Zone (3) in yellow on right.
FIGURE 14-2: PLAN VIEW SHOWING MINERALIZED SOLIDS
FIGURE 14-3: PLAN VIEW SHOWING MAJOR FAULTS
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Note: Zone 4 (South of the South Fault) in green, Zone 5 (West of the Gold Gulch Fault) in purple, Zone 8 (East of the Jewel Hill Fault) in blue, Zone 10 (Low Grade Quartz Monzonite) in (pink), and Combined Ore Zones 1, 2, and 3) in red.
.
FIGURE 14-4: PLAN VIEW DRILL HOLES WITH DOMAIN SOLIDS
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FIGURE 14-5: DRILL HOLE DATABASE SHOWING GRADES AND LITHOLOGY CODES
Simple statistics for copper and molybdenum assays, weighted by assay interval, are shown in
Table 14.1.
The assay statistics in Table 14.1 indicate that the copper and molybdenum data are reasonably
distributed. The mean grade is 0.427%, 0.383%, and 0.436% for copper and 0.009%, 0.011%, and
0.014% for molybdenum in the West, Central and East Ore Zone solids, respectively. Copper and
molybdenum grades for the combined ore zones are 0.415% and 0.011%, respectively. The mean
for all zones is 0.249% Cu and 0.006% Mo.
Copper and molybdenum assays have a relatively low coefficient of variation (CV) ranging from
0.37 to 0.45 for copper and moderately high CV ranging from 0.64 to 2.42 for molybdenum. The
overall CV within all zones is 0.87 for copper, and 2.07 for molybdenum. This indicates a
relatively low scatter of the raw data values for copper, but higher scatter values for molybdenum.
Zone 5 (West of the Gold Gulch Fault), exhibits high CV’s which appears to be due to some very
high grade intersections combined within what has been interpreted as a low grade volume.
Delineating and segregating these high grades would help to address this anomalous issue.
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The coefficient of variation is defined as CV = σ/m (standard deviation/mean), and represents a
measure of variability that is unit-independent. This is a variability index that can be used to
compare different and unrelated distributions.
TABLE 14.1: STATISTICS FOR TOTAL COPPER AND MOLYBDENUM PERCENTAGES
ZONE # Length MIN MAX Mean Median SD CV
1 TCU 10,155 69,128 0.00 5.404 0.427 0.404 0.19 0.44
MO 8,587 61,307 0.00 1.638 0.010 0.009 0.02 2.42
2 TCU 6,411 37,143 0.05 3.200 0.383 0.363 0.14 0.37
MO 6,399 37,083 0.00 0.064 0.011 0.011 0.01 0.64
3 TCU 3,442 19,939 0.00 2.528 0.436 0.412 0.20 0.45
MO 3,418 19,659 0.00 0.078 0.014 0.014 0.01 0.73
4 TCU 581 4,389 0.00 1.230 0.041 0.012 0.12 2.91
MO 456 3,233 0.00 0.014 0.002 0.001 0.00 1.15
5 TCU 3,793 32,138 0.00 6.540 0.098 0.037 0.24 2.44
MO 3,514 30,988 0.00 0.980 0.002 0.001 0.02 9.31
6 TCU 109 941 0.03 3.010 0.462 0.412 0.37 0.80
MO 109 941 0.00 0.016 0.003 0.001 0.00 1.13
8 TCU 568 3,473 0.00 1.168 0.046 0.020 0.09 2.05
MO 559 3,343 0.00 0.006 0.000 0.001 0.00 5.02
10 TCU 14,435 112,625 0.00 2.610 0.188 0.175 0.13 0.70
MO 14,303 111,551 0.00 1.200 0.006 0.004 0.02 2.86
11 TCU 29,316 193,317 0.00 8.160 0.276 0.200 0.27 0.99
MO 23,016 147,957 0.00 0.670 0.007 0.006 0.01 1.41
Total TCU 68,810 473,091 0.00 8.160 0.277 0.249 0.24 0.87
MO 60,361 416,060 0.00 1.638 0.007 0.006 0.02 2.07
All TCU 72,170 506,111 0.00 8.160 0.267 0.241 0.24 0.90
MO 63,718 448,935 0.00 1.638 0.007 0.006 0.01 2.10
Figures 14-6 and 14-7 shows representative contact plots between the various zones. In general
the values are either similar or transitional at the boundaries. At some boundaries the
molybdenum is more transitional than in other porphyry copper-molybdenum deposit zones.
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FIGURE 14-6: CONTACT PLOTS FOR COPPER
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FIGURE 14-7: CONTACT PLOTS FOR MOLYBDENUM
14.4 TOPOGRAPHY
The topography was obtained from a contour map, and digital solid surfaces were created. The
solids and contours were in good agreement with the drill hole collar data and are sufficiently
accurate to be used as the upper surface boundary surface of the deposit. Figure 14-8 shows the
contours in plan view and Figure 14-9 shows the gridded surface model.
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FIGURE 14-8: PLAN VIEW OF TOPOGRAPHIC SOLIDS WITH DRILL HOLES
FIGURE 14-9: PLAN VIEW 3D GRIDDED TOPOGRAPHY BY CONTOUR RANGE
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14.5 COMPOSITES
It was determined that a 45-foot composite length minimizes the smoothing of the grades, but
also reduces the influence of typically narrow, very high grade samples; this appears to be an
optimal interval length from the standpoint of regularization. The main justification to adopt the
45-foot composite length is because the mine has been using this length, and consistency with
past practices is desirable. In addition, it is reasonable that a 45-foot selective mining unit (SMU)
may be expected which is consistent with the bench height.
Table 14.2 shows the basic statistics for the 45-foot composites for copper and molybdenum. Box
plots for copper and molybdenum are shown in Figures 14-10 and 14-11, respectively.
The assay statistics shown in Table 14.2 indicate that the copper and molybdenum data are
reasonably distributed. The mean grade is 0.427%, 0.383%, and 0.436% for copper and 0.010%,
0.011%, and 0.014% for molybdenum in the West, Central and East Ore Zone solids,
respectively. The mean copper and molybdenum grades for the combined ore zones are 0.415%
and 0.011%, respectively. The mean for all zones is 0.268% Cu and 0.007% Mo.
The assay statistics in Table 14.1 indicate that the copper and molybdenum data are reasonably
distributed. The mean grade is 0.427%, 0.383%, and 0.436% for copper and 0.010%, 0.011%, and
0.014% for molybdenum in the West, Central and East Ore Zone solids, respectively. The mean
copper and molybdenum grades for the combined ore zones are 0.415% and 0.011%,
respectively. The mean for all zones is 0.267% Cu and 0.007% Mo.
Copper and molybdenum composites have a relatively low coefficient of variation (CV) ranging
from 0.30 to 0.38 for copper, and a moderately high CV ranging from 0.61 to 1.61 for
molybdenum. The overall CV within all zones is 0.81 for copper, and 1.54 for molybdenum.
The mean grades of the composites are markedly similar to those of the assay data. However, the
CVs, for all three zones combined, have improved from 0.43 to 0.37 for copper, and 1.65 to 1.16
for molybdenum. Overall CVs have improved from 0.87 to 0.81 for copper, and 2.07 to 1.61 for
molybdenum.
Figures 14-10 and 14-11 show the box plots for copper and molybdenum, respectively; there is
essentially very little difference between the ore Zones 1, 2, and 3, with average grades and
distributions of spreads being very similar. In addition, Zone 6 (Diabase) is also quite similar to
the West, Central and East Ore Zones; however, this is a relatively small and isolated zone.
In addition, there is a significant difference between the data inside and the data outside of the
three domains which indicates that the solids are efficient with respect to segregating the low-
grade material from the high-grade material, as shown in the contact profiles (Figures 14-6 and
14-7) which compare the average grade of the samples at varying distances from a domain
contact.
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TABLE 14.2: COMPOSITE STATISTICS WEIGHTED BY LENGTH (BY ZONE)
ZONE # Length MIN MAX Mean Median SD CV
1 TCU 4,687 69,128 0.0 2.433 0.427 0.407 0.16 0.38
MO 4,153 61,307 0.0 0.558 0.010 0.008 0.02 1.61
2 TCU 2,531 37,143 0.1 1.563 0.383 0.369 0.12 0.30
MO 2,526 37,083 0.0 0.049 0.011 0.010 0.01 0.61
3 TCU 1,357 19,939 0.1 1.644 0.436 0.412 0.16 0.38
MO 1,336 19,659 0.0 0.073 0.014 0.013 0.01 0.71
4 TCU 305 4,389 0.0 0.857 0.041 0.008 0.12 2.80
MO 224 3,238 0.0 0.014 0.002 0.001 0.00 1.08
5 TCU 2,203 32,138 0.0 3.407 0.098 0.030 0.22 2.23
MO 2,121 30,978 0.0 0.333 0.002 0.000 0.01 5.21
6 TCU 65 941 0.0 2.226 0.462 0.423 0.32 0.70
MO 65 941 0.0 0.013 0.003 0.002 0.00 1.07
8 TCU 236 3,473 0.0 0.788 0.046 0.019 0.09 1.88
MO 227 3,343 0.0 0.006 0.000 0.000 0.00 4.85
10 TCU 7,692 112,625 0.0 1.859 0.188 0.181 0.12 0.66
MO 7,615 111,516 0.0 0.688 0.006 0.004 0.01 2.05
11 TCU 13,083 193,317 0.0 5.390 0.276 0.208 0.26 0.93
MO 9,995 147,481 0.0 0.339 0.007 0.004 0.01 1.28
Total TCU 32,159 473,091 0.0 5.390 0.277 0.251 0.23 0.81
MO 28,262 415,544 0.0 0.688 0.007 0.005 0.01 1.54
All TCU 34,077 501,111 0.0 5.390 0.268 0.240 0.23 0.84
MO 30,169 443,419 0.0 0.688 0.007 0.005 0.01 1.57
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FIGURE 14-10: BOX PLOT FOR COPPER COMPOSITES BY ZONE
FIGURE 14-11: BOX PLOT FOR MOLYBDENUM COMPOSITES BY ZONE
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14.6 OUTLIERS
Although there appear to be isolated, high grade outliers, there does not appear to be a separate
and distinct population that requires segregation or grade limiting. Figures 14-12 and 14-13 show
the cumulative frequency plots for Cu% and Mo% which illustrate one composite in each case
that would require special treatment. By virtue on compositing and then further smoothing during
the estimation process, the effects of the few high grade outliers are mitigated. However, it would
be prudent to perform further outlier studies as additional data is collected in addition to low of
metal analysis and comparisons of blast hole data against production to determine if further
actions are warranted.
FIGURE 14-12: CUMULATIVE FREQUENCY PLOT FOR COPPER (45-FT COMPOSITES)
FIGURE 14-13: CUMULATIVE FREQUENCY PLOT FOR MOLYBDENUM (45-FT COMPOSITES)
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14.7 TONNAGE FACTOR
The average bulk dry density for ore grade mineralized rock, primarily Lost Gulch Quartz
Monzonite, is 12.75 cubic feet per ton (ft3/T). Although the in-situ bulk dry densities for all Pinto
Valley rock types ranges from 12.1 ft3/T for Pinal Schist to 13.0 ft
3/t for White Tail
Conglomerate, 12.75 ft3/T is used for all reserve calculations. Although efforts to locate
supporting documentation for this density data were unsuccessful, personal communications with
a former employee indicate that detailed density studies had been done. Further, production
reconciliations tend to support the 12.75 ft3/T factor; it had been reported in production
comparisons that even though the block model under-predicted tonnage, the 12.75 ft3/T density
factor that was used still provided a reasonable estimate. They also stated that since the resources
remaining in the ground are geologically the same as the resources already mined from the
primary zone, it is reasonable to assume that this density will also provide globally reasonable
estimates of remaining resource tonnages.
14.8 BLOCK MODEL DEFINITION
The block model used to calculate the mineral resources was defined according to the limits
shown in Figure 14-14.
FIGURE 14-14: BLOCK MODEL BOUNDS
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The block model is orthogonal and non-rotated, reflecting the orientation of the deposit. Figure
14-14 shows the dimensions and Figure 14-15 shows the position and orientation of the block
model used for this study. The chosen block size was 100 x 100 x 45 m to roughly reflect the
available drill hole spacing and to adequately descretize the deposit.
FIGURE 14-15: LOCATION OF GRID AND MODEL LIMITS
14.9 VARIOGRAPHY
The degree of spatial variability and continuity in a mineral deposit depend on both the distance
and direction between points of comparison. Typically, the variability between samples is
proportionate to the distance between samples. If the variability is related to the direction of
comparison, then the deposit is said to exhibit anisotropic tendencies which can be summarized
by an ellipse fitted to the ranges in the different directions. The semi-variogram is a common
function used to measure the spatial variability within a deposit.
The components of the variogram include the nugget, the sill, and the range. Often samples
compared over very short distances (including samples from the same location) show some
degree of variability. As a result, the curve of the variogram often begins at a point on the y-axis
above the origin; this point is called the nugget. The nugget is a measure of not only the natural
variability of the data over very short distances, but also a measure of the variability which can be
introduced due to errors during sample collection, preparation, and assaying.
Typically, the amount of variability between samples increases as the distance between the
samples increase. Eventually, the degree of variability between samples reaches a constant or
maximum value; this is called the sill, and the distance between samples at which this occurs is
called the range.
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The spatial evaluation of the data was conducted using a correlogram instead of the traditional
variogram. The correlogram is normalized to the variance of the data and is less sensitive to
outlier values; this generally gives cleaner results.
Correlograms were generated for the distribution of gold in the various areas using the
commercial software package Sage 2001© developed by Isaacs & Co. Correlogram model data is
shown in Table 14.3.
TABLE 14.3: CORRELOGRAM MODEL DATA BY ZONE
ZONE C0 C1 C2 Range
Y Range
Y Range
Y Rotation
Z Rotation
Y Rotation
X
1 0.277 0.375 0.348 76.9 216.8 51.8 16 -14 -13
1127 1340.1 167.7 94 -3 -14
2 0.314 0.353 0.332 75.3 420.7 69.7 -14 0 -10
337.5 1063.4 188.3 -3 -18 -7
3 0.284 0.403 0.312 83.7 151.5 51.7 -9 -44 7
517.2 1633.4 238.8 -11 -12 -9
5 0.094 0.556 0.35 311.8 117.4 626.3 38 80 -77
129.4 2196.3 1422.1 91 -48 3
10 0.104 0.418 0.478 117.1 321.5 506.4 -20 25 23
1779.2 613.1 2068.9 21 -40 -59
11 0.149 0.41 0.442 231.5 124 108.3 11 35 -36
2148.2 2675.4 522.9 -69 -17 -23
The block model grades for gold were estimated using ordinary kriging. Estimates were validated
using the Hermitian Polynomial Change of Support model (Journel and Huijbregts, 1978), also
known as the Discrete Gaussian Correction. The ordinary kriging models were generated with a
relatively limited number of composites to match the change of support or Herco (Hermitian
correction) grade distribution. This approach reduces the amount of smoothing (also known as
averaging) in the model and, while there may be some uncertainty on a localized scale, this
approach produces reliable estimates of the potentially recoverable grade and tonnage for the
overall deposit. The interpolation parameters are summarized by domain in Table14.4.
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TABLE 14.4: INTERPOLATION PARAMETERS
ZONE RANGE RANGE RANGE ROTATION ROTATION ROTATION MIN MAX
MAX PER DDH
X (ft) Y (ft) Z (ft) Z Y X #
COMPS #
COMPS #
COMPS
1 500 500 350 130 0 0 4 15 3
2 500 500 250 90 0 0 4 15 3
3 1000 1000 250 345 -20 0 4 15 3
5 1000 1000 300 0 0 0 4 15 3
10 1000 1000 300 0 0 0 4 15 3
11 1000 1000 300 0 0 0 4 15 3
During grade estimation, search orientations were designed to follow the general trend of the
mineralization in each of the zone domains.
The estimation plan includes the following:
Store the mineralized zone code and percentage of mineralization.
Estimate the grades for each of the metals using ordinary kriging in a single pass.
Include a minimum of four composites and a maximum of fifteen, with a maximum
of three from any one drill hole.
The resulting block model is shown in plan and section, long section and plan view in Figures 14-
16 to 14-18, respectively.
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FIGURE 14-16: PLAN VIEW OF BLOCK MODEL SHOWING COPPER GRADE MODEL AT 3230 ELEVATION > 0.1%
FIGURE 14-17: PLAN VIEW OF BLOCK MODEL SHOWING MOLYBDENUM GRADE MODEL AT 3230 ELEVATION >
0.003%
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FIGURE 14-18: SECTION OF BLOCK MODEL WITH COPPER GRADES > 0.1%
SHOWN WITH GEOLOGY, TOPOGRAPHY, AND DRILL HOLES
14.10 MINERAL RESOURCE CLASSIFICATION
The spatial variation pattern incorporated in the variogram and the drill hole spacing can be used
to help predict the reliability of estimation for copper metal. (In this case there are at least two
potentially economic metals, but copper is likely the greatest contributor to net smelter return.
Therefore, copper variation will dominate estimation uncertainty, and ultimately determine drill
spacing.) The measure of estimation reliability or uncertainty is expressed by the width of a
confidence interval or the confidence limits. Then, by knowing how reliably metal content must
be estimated to adequately plan, it is possible to calculate the drill hole spacing necessary to
achieve the target level of reliability. For instance, Indicated resources may be adequate for
planning in most Pre-feasibility work. For feasibility studies, it is not uncommon to require
Measured resources to define the production within the payback period, and then Indicated
resources for scheduling beyond payback time.
In the case of the current deposit there is some information available from several domains and
the spacing between holes varies with much of the data at a spacing of about 200 ft. Results from
this study should be validated against current and future drilling.
Confidence Interval Estimation
Confidence intervals are intended to estimate the reliability of estimation for different volumes
and levels of drill hole spacing. A narrower interval implies a more reliable estimate and attempts
should be made to have enough closely spaced holes in the drilling to accurately determine the
spatial correlation structure of copper samples less than 200 ft apart.
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The study is based on the ideas outlined in the next several paragraphs. Using hypothetical,
regular drill grids and the variograms from the composited drill hole sample data, confidence
intervals or limits can be estimated for different levels of drill hole spacing and production
periods or equivalent volumes. The confidence limits for 90% relative confidence intervals
should be interpreted as follows:
If the limit is given as 8%, then there is a 90 percent chance the actual value (tons and grade) of
production is within ± 8% of the estimated value for a volume equal to that required to produce
enough ore tonnage in the specified period (e.g., quarter or year). This means it is unlikely the
true value will be more than 8% different relative to the estimated value (either high or low) over
the given production period.
The method of estimating confidence intervals is an approximate method that has been shown to
perform well when the volume being predicted from samples is sufficiently large (Davis, B. M.,
Some Methods of Producing Interval Estimates for Global and Local Resources, SME Preprint
97-5, 4p.) In this case, the smallest volume where the method would most likely be appropriate is
the production from one year. Using these guidelines, an idealized block configured to
approximate the volume produced in one month is estimated by ordinary kriging using the
idealized grids of samples.
Relative variograms are used in the estimation of the block. (Relative variograms are used rather
than ordinary variograms because the standard deviations from the kriging variances are
expressed directly in terms of a relative percentage.)
The kriging variances from the ideal blocks and grids are divided by twelve (assuming
approximate independence in the production from month to month) to get a variance for yearly
ore output. The square root of this kriging variance is then used to construct confidence limits
under the assumption of normally distributed errors of estimation. For example, if the kriging
variance for a block is 2
m then the kriging variance for a year is 2
y = 2
m/12. The 90 percent
confidence limits are then C.L. = ±1.645 x y.
The confidence limits for a given production rate are a function of the spatial variation of the data
and the sample or drill hole spacing.
Drill Hole Grid Spacing
For this exercise, the drill hole grids tested were 900 x 900 ft, 600 x 600 ft, 300 x 300 ft, and 150
x 150 ft.
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Further assumptions made for the confidence interval calculations are as follows:
The variograms are appropriate representations of the spatial variability for presence of
mineralization and metal grade.
The tonnage factor for the domains is 12.75 ft3/ton.
Most of the uncertainty in metal production within zones is due to the fluctuation of
metal grades and not to variation in the presence or absence of the unit.
The possible production rate is 52,000 stpd.
Confidence limits for copper metal production are shown in Figure 14-19. The curves show a
graphical representation of how the uncertainty decreases with decreased drill hole spacing.
FIGURE 14-19: RELATIVE CONFIDENCE LIMITS FOR THE 52,000 STPD PRODUCTION RATE
Indicator Variograms
The uncertainty calculation results above are consistent with the indicator variogram results that
accompany this report. The indicator variogram ranges show that most of the continuity in grades
above 0.2% is lost when reaching 800 ft or somewhat beyond. This does not mean that the
ultimate ranges have been achieved: it means that 80% to 90% of the total variation is reached at
separation distances in this range.
1000 800 600 400 200 0
Spacing ( m )
30
20
10
0
90%
Relative Confidence Lim
it (%
)
PV Copper Est im at ion Uncer t aint y by Dr ill Spacing
Year ly Uncer t aint y
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Classification of Resources
Indicated resources are estimated using the following criteria: the uncertainty of yearly
production must be no greater than ± 15% with 90% confidence, and Measured resources must be
estimated so the uncertainty of quarterly production is no greater than ± 15% with 90%
confidence.
The results presented above indicate that usual reliability targets can be reached at a spacing of
somewhere around 500 ft. This drill spacing produces sufficiently reliable estimates to classifying
resources as Indicated.
It should also be noted that the confidence limits only consider the variability of grade within the
veins. There may be other aspects of deposit geology and geometry, such as geological contacts
or the presence of faults or offsetting structures that may impact the drill spacing. These factors
should not be discounted or ignored when making a final choice concerning the drill grid.
The following details the grid spacing for each resource category to classify resources assuming
the 52,000 stpd production rate and based on the other assumptions that were discussed above:
Measured: Note that based on the CIM definitions, continuity must be demonstrated in the
designation of Measured (and Indicated) resources; therefore, no Measured resources can be
declared based on one hole. The uncertainty based on current information suggests a spacing of
150 ft may be required to classify Measured resources.
Indicated: Resources in this category could be delineated from multiple drill holes located on a
nominal 500 ft square grid pattern provided a yearly uncertainty of around 15% does not
significantly impact the potential viability of the project.
Inferred: Resources in this category include any material not falling in the categories above and
within a maximum 1000 ft of one hole.
The spacing distances are intended to define contiguous volumes and they should allow for some
irregularities due to actual drill hole placement. The final classification volume results typically
must be smoothed manually to come to a coherent classification scheme.
Conclusions and Recommendations
The study described above indicates a drill spacing of around 500 ft may be sufficient in
delineating Indicated resources at 52,000 short tons per day. The calculation of uncertainty should
be monitored as new drilling progresses.
Estimation of confidence intervals for smaller volumes such as those for monthly or weekly
production requires the geostatistical procedure of conditional simulation (Davis, B. M., Some
Methods of Producing Interval Estimates for Global and Local Resources, SME Preprint 97-5,
4p.). The use of conditional simulation can help to assess uncertainty and risk in short term mine
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planning. Conditional simulation applications would typically not be appropriate until sometime
in the future when more drilling is available.
To further ensure confidence and continuity, the blocks were displayed at the chosen thresholds
of 150 ft and 500 ft to the nearest composite, and a boundary was digitized to create a smooth
surface and to reduce the “spotted dog” effect, as shown in Figure 14-20. A solid was then
created and coded back into the model by majority code, and using > 50% partials to be classified
as Measured or Indicated. The remainder that is greater than 500 ft, but not more than 100 ft from
nearest composite, was classified as Inferred.
FIGURE 14-20: DIGITIZED BOUNDARY BASED ON DISTANCE TO NEAREST COMPOSITE
(SHOWN AS DASHED GREEN POLYLINE)
14.11 MINERAL RESOURCES
The resources show reasonable prospects of economic extraction.
CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) define
a mineral resource as:
“[A] concentration or occurrence of diamonds, natural solid inorganic material, or natural solid
fossilized minerals in or on the Earth’s crust in such form and quantity and of such a grade or
quality that it has reasonable prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a mineral resource are known, estimated or
interpreted from specific geological evidence and knowledge.”
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The “reasonable prospects for economic extraction” requirement generally implies that quantity
and grade estimates meet certain economic thresholds and that mineral resources are reported at
an appropriate cut-off grade taking into account extraction scenarios and processing recovery.
The “reasonable prospects for economic extraction” were tested using floating cone pit shells as
shown in Figure 14-21 based on reasonable economic assumptions, shown in Figure 14-22. The
economic assumptions include the following: $3.30/pound Cu, $10.00 per pound Mo, 88% Cu
recovery, 50% Mo recovery, $1,50 per ton mining costs, $1.50 per ton G&A, $5.00 per ton
milling costs, and a pit slope of 45 degrees. The pit optimization results are used solely for the
purpose of testing the “reasonable prospects for economic extraction,” and do not represent an
attempt to estimate mineral reserves. The optimization results are used to assist with the
preparation of a Mineral Resource Statement and to select and appropriate reporting assumptions.
FIGURE 14-21: OPTIMIZED PIT WITH BLOCK MODEL
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FIGURE 14-22: PIT OPTIMIZATION FOR BLOCK MODEL
The mineral resources are listed in Table 14.5 for Cu% and Mo%. These mineral resources are
listed at a base case cut-off grade of 0.25% Cu. Tables 14-6, 14-7 and 14-8 list the resources at
varying cut-off grades for Measured, Indicated and Inferred, respectively. Note that Table 14.5 is
reported in the imperial measure of short tons.
TABLE 14.5: MINERAL RESOURCES
TOTAL CUT-OFF ORE Cu% Mo%
Cu% TONS
Measured 0.25 443,030,204 0.384 0.010
Indicated 0.25 623,458,863 0.331 0.008
Measured & Indicated 0.25 1,066,489,067 0.353 0.009
Inferred 0.25 49,285,298 0.326 0.009
As Capstone is a Canadian issuer and BHP (the seller) is an Australian company, the author is
reporting the resources in metric units for tonnes and copper grade. However, molybdenum is
reported in the most common unit of pounds as shown in Table 14.6.
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TABLE 14.6: MINERAL RESOURCES
Metric Copper Molybdenum Contained Contained
Tonnes (%) (%) Copper Molybdenum
(M) (k tonnes) (M lbs)
Measured (M) 402 0.38 0.01 1,544 89
Indicated (I) 566 0.33 0.008 1,870 99
Total M&I 968 0.35 0.009 3,414 188
Inferred 45 0.33 0.009 146 9 Notes: Mineral Resource Estimate, February 28, 2013, at a 0.25% COG. Any discrepancies in the
totals are related to rounding. This estimate has not been adjusted for the three months of mining
from date of start-up to February 28, 2013.
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TABLE 14.7: MEASURED MINERAL RESOURCES
(0.25% Cut-Off Grade is Base Case)
MEASURED CUT-OFF TONS Cu% Mo%
0.1 658,485,857 0.318 0.009
0.15 606,305,870 0.335 0.009
0.2 531,284,094 0.358 0.010
0.25 443,030,204 0.384 0.010
0.3 369,175,856 0.406 0.010
TABLE 14.8: INDICATED MINERAL RESOURCES
(0.25% Cut-Off Grade is Base Case)
INDICATED CUT-OFF TONS Cu% Mo%
0.1 2,001,540,875 0.222 0.006
0.15 1,517,545,777 0.253 0.006
0.2 1,057,168,839 0.287 0.007
0.25 623,458,863 0.331 0.008
0.3 348,123,236 0.378 0.009
TABLE 14.9: INFERRED MINERAL RESOURCES
(0.25% Cut-Off Grade is Base Case)
INFERRED CUT-OFF TONS Cu% Mo%
0.1 228,538,299 0.196 0.005
0.15 146,690,970 0.238 0.006
0.2 88,161,913 0.281 0.007
0.25 49,285,298 0.326 0.009
0.3 26,548,094 0.374 0.011
Mineral resources are not mineral reserves until they have demonstrated economic viability.
Mineral resource estimates do not account for a resource’s mineability, selectivity, mining loss, or
dilution. These estimates include Inferred mineral resources that are normally considered too
geologically speculative for the application of economic considerations; therefore, they are unable
to be classified as mineral reserves. Also, there is no certainty that these Inferred mineral
resources will someday be converted into Measured or Indicated resources as a result of future
drilling or after applying economic considerations.
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14.12 MODEL VALIDATION
A graphical validation was done on the block model. The purpose of the graphical validation is
to:
Check the reasonableness of the estimated grades, based on the estimation plan and the
nearby composites.
Compare the general drift and the local grade trends of the block model to the drift and
local grade trends of the composites.
Ensure that all required blocks are filled in.
Check that, within the model blocks, the topography has been properly accounted for.
Check the manual ballpark estimates for tonnage to determine reasonableness.
Inspect and explain, when necessary, the high-grade blocks created as a result of outliers.
A full set of cross-sections, long sections, and plans were used to check the block model on the
computer screen, showing the block grades and the composite. There was no evidence that any
blocks were wrongly estimated. It appears that every block grade can be explained as a function
of the following: the surrounding composites, the correlogram models used, and the estimation
plan applied.
These validation techniques include, but are not limited to, the following:
A visual inspection done on a section-by-section and plan-by-plan basis.
The use of grade tonnage curves.
Histograms of varying cut-off grades that demonstrate a relatively uniform, normal
distribution.
Swath Plots that compare the Ordinary Kriged blocks with the Inverse Distance and
Nearest Neighbour estimates.
Inspection of histograms to determine the distance of the first composite to the nearest
block and the average distance to blocks for all composites used.
An analysis of the Relative Variability Index that quantifies variability within the
deposit. The Analysis of Relative Variability Index may be used to quantify risk and
qualify resources for the purpose of classification in future studies.
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Model Checks for Change of Support
The relative degree of smoothing in the block estimates was evaluated using the Hermitian
Polynomial Change of Support model, also known as the Discrete Gaussian Correction. With this
method, the distribution of the hypothetical block grades can be directly compared to the
estimated ordinary kriging model through the use of pseudo-grade/tonnage curves. Adjustments
are made to the block model interpolation parameters until an acceptable match is made with the
Herco distribution.
In general, the estimated model should be slightly higher in tonnage and slightly lower in grade
when compared to the Herco distribution at the projected cut-off grade. These differences
account for selectivity and other potential ore-handling issues which commonly occur during
mining.
The Herco distribution is derived from the declustered composite grades which have been
adjusted to account for the change in support moving from smaller drill hole composite samples
to the larger blocks in the model. The transformation results in a less skewed distribution, but
with the same mean as the original declustered samples. Examples of Herco plots from some of
the models are shown in Figure 14-23.
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Error! Reference source not found.FIGURE 14-23: HERCO PLOTS
Overall, correspondence between models is relatively good.
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It should be noted that the change of support model is a theoretical tool intended to direct model
estimation. There is uncertainty associated with the change of support model, and its results should not be
viewed as a final or correct value. In cases where the model grades are greater than the change of support
grades, the model is relatively insensitive to any changes to the modelling parameters. Any extraordinary
measures to make the grade curves change are not warranted.
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Comparison of Interpolation Methods
For comparison purposes, additional grade models were generated using the inverse distance weighted
(ID2) and nearest neighbour (NN) interpolation methods. The nearest neighbour model was created using
data composited to lengths equal to the short block axis. The results of these models are compared to the
ordinary kriging (OK) models at various cut-off grades in a series of grade/tonnage graphs shown in
Figure 14-24. There is good correlation between models.
.
FIGURE 14-24: COMPARISON OF ORDINARY KRIGING (OK), INVERSE DISTANCE (ID2) AND NEAREST NEIGHBOUR
(NN) MODELS
Swath Plots (Drift Analysis)
A swath plot is a graphical display of the grade distribution derived from a series of bands, or
swaths, generated in several directions throughout the deposit. Using the swath plot, grade
variations from the ordinary kriging model are compared to the distribution derived from the
declustered nearest neighbour grade model.
On a local scale, the nearest neighbour model does not provide reliable estimations of grade, but,
on a much larger scale, it represents an unbiased estimation of the grade distribution based on the
underlying data. Therefore, if the ordinary kriging model is unbiased, the grade trends may show
local fluctuations on a swath plot, but the overall trend should be similar to the nearest neighbour
distribution of grade.
Swath plots were generated in three orthogonal directions that compare the ordinary kriging and
nearest neighbour estimates. Some examples of swath plots at various orientations are shown in
Figures 14-25 to 14-27.
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FIGURE 14-25: SWATH PLOTS
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FIGURE 14-26: COPPER SWATCH PLOTS
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FIGURE 14-27: MOLYBDENUM SWATH PLOTS
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15 MINERAL RESERVE ESTIMATES
The Pinto Valley Mine has no declared mineral reserve estimates as per CIM definitions. All
previous mineral reserve estimates for Pinto Valley are considered to be historical in nature, as
indicated in Section 6 of this report.
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16 MINING METHODS
The following subsections describe the mining strategy, mine plan, mine design, and mining
operations of the current Pinto Valley Operations during restart.
16.1 MINING STRATEGY
The objective of the proposed mining strategy is to deliver maximum value, with acceptable risk.
The restart provides immediate access to more than a 4-year’s supply of available mineralization
within the bottom of the current pit.
Operations at Pinto Valley have been on care and maintenance since January 2009 when sulphide
mining and milling was suspended due to depressed copper prices. The recent restart is aligned with
the recently implemented directional planning strategy, referred to as the “Optimized Potential Plan”
(OPP). The restart will provide a platform for additional development of Pinto Valley and an
opportunity to assess the viability of accessing additional mineral resources, potentially beyond a
projected 5-year mine plan.
16.2 MINE PLAN
The mine configuration, infrastructure, and site logistics required to mine the exposed ore in the pit
are the same as they were under previous operations. The mine plan dependencies have not changed
since operations were curtailed in January 2009. The mine plan is simple in scope: it only pertains to
the available resources at the bottom of the existing open pit.
All operations will take place on land tenured to Capstone. The land consists of patented mining
claims and fee lands totaling 7,177 acres (~2,900 hectares). The Pinto Valley Mine is 100% owned
by Capstone. There are no known issues with regard to tenure that will hinder or constrain the 5-
year mine plan.
Operations at Pinto Valley are established; processing facilities, shops, fuel bays, and other support
functions are all operational. Ramping-up capacities while further stabilizing these operations are
both critical measures for the success of the mining operation.
The main risks to the mine plan are related to pit slope stability, and these will be mitigated through
ongoing and active observations with ground and radar monitoring applications.
16.3 MINE DESIGN
The Life of Asset (LOA) mine plan was developed and initiated in the mid-1990s and was well into
execution when sulphide mining operations were curtailed in 1998. The LOA mine plan was
updated for the 2007 restart and included the continued mining of the bottom of the current design,
generally referred to as Slice 6.
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The Slice 6 design was created using a floating-cone algorithm and the 1996 resource model.
Stripping of the pushback for the Slice 6 design was completed before mining operations were
suspended. Therefore, the maximum pit limits were set using economic and physical parameters
prevalent at that time. Current economic and physical parameters now indicate that additional
resources could be mined; however, these resources are not considered part of the 2012 restart.
These additional mineral resources will be assessed in the current Prefeasibility Study and will be
advanced as quickly as technically feasible.
The Slice 6 design continues to mine the existing pit footprint until the ultimate depth (2,690 ft
elevation) is reached. The final pit walls in the Slice 6 design were established within the existing pit
perimeter. The design assumptions with respect to inter-ramp angles and pit perimeter have not
changed since the 1998 or 2007 restart. Consequently, the mine design associated with the proposed
project is limited by the scope of the 2012 restart in that only the resources in the bottom of the
current pit will be extracted. This requires continued excavation of the pit and the addition of
approximately 15 benches at 45 ft each.
During previous operations, minimal ore blending was required to achieve the designed mill
throughput rates. During operations, blending was, and will continue to be, used when diabase-
hosted mineralization is encountered because this material is oxidized and includes high-clay
content. This material is largely confined to the west wall of the pit in localized areas.
16.3.1 Pit Slope Angles
There are two areas of pit slope instability that developed during the 2007-2009 mining operations.
Specifically, the North wall, named the “Bummer” fault, and another failure in the South pit area.
The Bummer fault failure was an active area that was managed through radar monitoring during
previous operations. The Southern area represents more of a nuisance failure that is slow-moving
and manageable through conventional monitoring techniques, including prisms and extensometers.
The pit slope angles used and monitored in the mine plan confirm the overall design parameters. In
anticipation of a “worst case” scenario, the Slice 6 design and mine plan were modified by including
safety berms below the two areas discussed; these are shown as the highlighted areas in Figure 16-1.
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FIGURE 16-1: SAFETY BERM DESIGN CHANGE
The current slope angle in the Whitetail Conglomerate is 35° over a slope height of 400 ft (120 m).
The Gold Gulch fault is a 300-ft (100-m) zone of weak material immediately below Whitetail
Conglomerate.
If expansion is considered beyond the current mine plan, these zones will need to be reviewed again.
This will require updating, based on additional drilling data since 2008 and an improved
understanding of the geology of the area. A geotechnical drilling program is proposed to complete
the evaluation for expansion.
16.4 MINING OPERATIONS
The mining is executed as an owner/operator operation with a truck/loader fleet. The overall
dimensions of the mine’s mineral deposit, including already extracted ore, measures
7,500×3,500×1,600 ft (~2,300×1,050×500 m), elongating in an east-northeast direction. The ore
body outcrops at the bottom of the current mine surface. The operational mining fleet will consist of
the equipment shown in Table 16.1.
TABLE 16.1: MINE EQUIPMENT FLEET
Model Qty Equipment Type
994H 3 Loader
Cat 789D 15 Haul Truck
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Cat D10 4 Track Dozer
Cat 777 2 Water Truck
Cat 16M 2 Grader
Cat 834H 1 Tire Dozer
Cat MD6420 2 Rotary Blast hole Drill
Cat MD5150 1 Rotary Track Drill
The haulage fleet consists of 15 haul trucks. The waste dump design places material as close to the
pit rim as possible, directly south of the leach dumps. Compared to previous operations, this change
in dump location reduces the number of required trucks.
The planned mine production rate for ore and waste is 20.4 million mtpy, and 18.5 million mtpy of
ore to the concentrator. This aligns with the average concentrator production of 18.2 million mtpy
before sulphide operations were suspended in 2009. Ore control is completed using assays from blast
hole cuttings. Minimal waste mining is required because this phase, for the most part, will mine ore
that is already exposed in the pit.
The waste/ore strip ratio for the mine is low, 0.1:1. This mine plan generates approximately 4.5
million tonnes of material that is placed north of the pit in a catchment area that contains runoff;
there is no impact on ore mining rates.
An average tonnage factor (dry basis) of 2.5 tonnes per cubic metre is used for planning and
reporting purposes, established through reconciliation of plant feed and confirmed by wet and dry
weight analysis of whole core. The mill ore cut-off is variable, nominally set at 0.25% TCu.
Stockpile (leach) material-grade cut-off ranges from 0.10% to 0.20% TCu. Material between 0.20%
and 0.25% will be stockpiled for future processing.
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17 RECOVERY METHODS
The following subsections discuss the processing strategy, feed characteristics, test work, process
characteristics, and metallurgical performance of the process facilities at Pinto Valley.
17.1 PROCESSING STRATEGY
Pinto Valley processing strategy is described in the following subsections; a discussion regarding the
restart of existing facilities is included, as well as an overview of the processing configuration.
17.1.1 Restart Existing Facilities
The plant configuration and process design pertains to the existing facility. The existing concentrator
process equipment and instrumentation will be refurbished; therefore, no process flow sheet changes
are anticipated. The sulphide process flow sheet schematic is shown in Figure 17-1. The flow process
is conventional and consists of three crushing stages (primary, secondary, and tertiary), three copper
flotation stages (rougher, cleaner, and scavenger), a molybdenum flotation circuit, and associated
thickeners to control the density of concentrates and tailings.
Fresh water is drawn from a number of wells, as noted in Section 18 Project Infrastructure of this
report. As in all desert regions, water conservation is paramount. New makeup water at Pinto
Valley averages about 400 litres per tonne, which is within the capacity of the existing water sources.
Based on previous electrical load studies and utility billings, the average total load will be
approximately 52.6 MVA. This is well within the delivery capacity of the existing electrical system.
17.1.2 Primary Crusher
Run-of-mine ore is delivered by haul truck to a Fuller Traylor 60×89 in. gyratory primary crusher
(nominal capacity of 3,600 mtph). Haul trucks discharge directly into the crusher, set in a 250-tonne
dump pocket. The crusher setting is adjusted hydraulically from the control room, nominally at 175
mm. Ore is withdrawn from the 300-tonne surge pocket under the crusher by an 84 in. × 20 ft,
Stephens-Adamson apron feeder. The apron feeder discharges onto the primary conveyor and ore is
conveyed to the coarse ore stockpile with a nominal live capacity of 30,000 tonnes.
17.1.3 Fine Crushing Plant
The coarse ore is reclaimed from the coarse ore pile using six, variable frequency drives (VFD) for
42 in. × 15 ft Stephens-Adamson apron feeders which feed three coarse ore reclaim belts. Each
coarse ore reclaim belt discharges onto a 7×16 ft Simplicity double-deck, vibrating screen. Each
screen oversize feeds a secondary 7-ft Nordberg standard crusher. Open-circuit secondary crushing
of primary crusher product yields a -50-mm secondary crusher product. Product from all three
secondary crushers is forwarded via conveyors to the tertiary feed bin ahead of the tertiary crushers.
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Ore is withdrawn for the tertiary crushers by six, hydraulically powered feeder belts and sent to six,
8×20 ft Simplicity double-deck vibrating screens. Screen oversize is fed to 7-ft Nordberg shorthead
crushers.
Screened, undersized ore from the secondary and the tertiary screens is sent to fine ore storage, with
a nominal live capacity of 39,000 tonnes.
FIGURE 17-1: SULPHIDE PROCESS FLOW SHEET
17.1.4 Grinding Circuit
Fine ore is reclaimed by hydraulically driven feeder conveyor belts that discharge onto ball mill feed
belts, which, in turn, feed one of six primary ball mills. The primary grinding circuit consists of six,
18×21 ft Allis Chalmers overflow ball mills driven by a 4,000-hp motor through an air clutch. Each
mill is in closed-circuit with three, 33-in. Kreb cyclones. The cyclone feed pumps on all mills are
16×14 in. Warman-type pumps. The circulating load is approximately 350%, and the feed rate is
between 370 and 400 mtph. The approximate ore residence time in the mill is 10 minutes. Each mill
circuit has an on-stream particle size analyzer.
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17.1.5 Copper-Moly Flotation/Regrind
In the copper-moly flotation circuit, xanthate, dithiophosphates (DTP) collectors, frothers, and fuel
oil are added to the pulp slurry to prepare it for flotation. The rougher flotation circuit consists of
sixty-five, 1,000-ft3 Wemco cells configured in three circuits with two ball mills feeding each circuit.
The rougher concentrate is cycloned. The cyclone underflow is divided between two Fuller Traylor
regrind mills. The cyclone overflow feeds the four 8×40 ft column cells. The column cell
concentrate, the final Cu/Mo concentrate, contains 27% to 29% Cu and 0.35% to 0.7% Mo. A bank
of fifteen, 300-ft3 Wemco cleaner scavenger cells processes the column cell tails.
17.1.6 Moly Plant
The thickened copper-moly slurry is sent to four banks of Agitair rougher cells of six, 50-ft3 cells
each. Sodium hydrogensulphide (NaSH) is added to the slurry to depress the copper and iron
sulphides, which enables molybdenum to float. Fuel oil is added as a moly promoter. The moly
rougher concentrate is upgraded by three stages of cleaning using column cells. The rougher tailing
is the final copper concentrate reporting to two, 90-ft copper thickeners. The final molybdenum
product is thickened in a 26-ft moly thickener, dewatered on a disk filter, dried, and bagged for
shipment.
17.1.7 Concentrate Handling
The final copper concentrate is thickened to 60% solids and flows by gravity from the copper
thickeners to either of two, 900,000-litre copper slurry storage tanks. The slurry is pumped from the
storage tanks to the filter plant.
17.1.8 Tailings Disposal / Water Reclaim
Tailings from the copper-moly flotation feed three, 350-ft tailings thickeners, where water is
reclaimed, and the tails are thickened and sent onto the tailings dams. The No. 4 Tailings Dam is the
primary location for the disposal of tailings from the Pinto Valley Mill. The No. 3 Tailings Dam is
used only as an emergency disposal area if a problem arises with the No. 4 Tailings Dam delivery
system. It was also used for initial start-up. A booster station at the No. 4 Tailings Dam is required to
boost the tailings to the top of No. 4 Tailings Dam. This booster station consists of two trains of two
Warman 14/12 slurry pumps in series. The first stage pump has a 600-hp fixed-speed motor and the
second stage pump, with a 400-hp motor, is run through a VFD. In addition, there is a single
Warman pump in parallel with the two trains. This pump has a 400-hp motor run through a VFD.
At the tailings dam, the tailings will be cycloned to separate coarse material which will be used to
build the berm. To support the 1,350 L/s of water that is required to operate the mill, water is
reclaimed from each tailings dam through pumps located on barges.
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17.2 FEED CHARACTERISTICS
Feed characteristics, such as predicted ore and ore blends, as well as the impact of ore variability and
blending, are discussed in the following subsections.
17.2.1 Predicted Ore and Ore Blends
The primary ore type produced at Pinto Valley is quartz monzonite with minor amounts of diabase.
The primary copper mineral is chalcopyrite which occurs in veins or is finely disseminated
throughout the ore. The ore feed grade and mineral type is fairly constant, with chalcopyrite mineral
at 0.35% to 0.42% Cu.
17.2.2 Impact of Ore Variability and Blending
Ore blends with more than 15% to 20% diabase will negatively impact copper recovery. Excessive
diabase can also cause the transfer points to get plugged throughout the crushing and milling circuits.
Blending occurs at the primary crusher by managing the frequency and ratio of diabase ore to the
quartz monzonite ore placed in the dump pocket. Primary crusher operators are trained to recognize
diabase and have been given the authority to turn away material from the mine if the 15% to 20%
blend is exceeded. The process has been further optimized by installing air cannons at the major
transfer points in the fine crushing plant to mitigate the impacts of clay contained in the diabase.
17.3 TEST WORK
The following subsections discuss the processing test work for Pinto Valley, including a summary of
the extent of test work and an overview of the 2006 test work.
17.3.1 Extent of Test Work
The existing concentrator facility will be restarted, and no changes are planned in the flowsheet.
Also, no new test work was conducted for this restart. Sufficient test work was conducted to support
the 2006 restart and that data remains valid for the 2012 restart. In 2006, the ore had remained
undisturbed for more than eight years. The tests indicated that plant recovery would suffer initially
due to the oxidation of the sulphide minerals near the surface. Actual plant experience subsequently
confirmed this. With the 2012 restart, the ore has remained undisturbed for considerably less time
and should have significantly less oxidation than the initial ore processed during the 2006 restart.
17.3.2 Overview of 2006 Test Work
In 2006, two sets of samples were submitted to METCON Research, a metallurgical test laboratory
located in Tucson, Arizona. The first set consisted of samples taken from the broken ore available
from the bottom of the pit. The second set was taken from drill core samples which were stored on
site in a core shed since before the operations were suspended.
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17.3.3 Samples from the Pit Bottom and Core Shed
Samples from the bottom of the pit were tested: the objective was to measure the extent of oxidation
and its effect on metallurgical response. All samples, except one, were from backhoe pits with
depths ranging from 2 ft to 9 ft. The samples were predominantly mineralized quartz monzonite; one
sample was mineralized diabase. Detailed sample descriptions as well as photographs were
completed at each sample site. Based on visual observations, the samples which had the most oxide
most likely represented the worst-case scenario for near-surface chalcopyrite oxidation. These
samples were described as “chalcopyrite-pyrite (~1:1) in potassically-altered Oracle granite.” Assay
results provided by METCON Research indicate that these surface samples indicate a high degree of
oxidation. In some cases, the acid soluble content was as high as 18%, averaging 8.4%.
These tests represent open-cycle flotation tests. This means that the recovery would increase by 2%
to 4% when conducting a locked cycle test or operating in a plant environment. Also, the laboratory
tests did not include column cleaning. From the results, it was possible to draw the following
conclusions:
For an average head grade of 0.4% copper, Pinto Valley should be able to produce the
final target concentrate grade of 28% Cu.
Samples of broken ore taken from the pit bottom show inferior copper recoveries to an
expected average of between 86% and 87% in the final concentrate; these broken ore
samples, however, that consist of competent quartz monzonite, have generated final
copper recoveries in open-cycle tests of more than 65%, and up to 82%.
In contrast, metallurgical results from core samples that were stored in the core shed for more than
10 years indicated a copper acid solubility of 0.01% or less. Metallurgical results were consistent in
the +90% for copper recovery at target final concentrate grades. The implication of these tests, in
2006 and still today, is that by slightly modifying the operating conditions, any effect of oxidation of
the ore at the bottom of the pit can be largely mitigated. Because almost all of the partially oxidized
ore was processed during the ramp-up period when production was lower, changing the operating
conditions to improve the recovery as indicated is not an issue.
17.4 PROCESS PLANT DESIGN CRITERIA
The Pinto Valley concentrator is an existing facility that will be refurbished and restarted without
any substantial modifications to the design criteria. The original plant design was for 36,300 mtpd.
Because of past modifications to increase throughput, the current target throughput is 50,800 mtpd
(dry) post ramp-up. The target concentrate grade is 28% with a total copper recovery of 87.5%.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 18-1
18 PROJECT INFRASTRUCTURE
18.1 LOCATION
The proposed project involves restarting the existing facility located at Pinto Valley, Arizona. All
environmental permits are in place; there is adequate tailings disposal capacity, electric power, and
water. The facility is located on a State highway which provides easy in-and-out access for people,
materials, and products. Technical reviews of the existing infrastructure, including tailings facilities,
processing plant, pipelines, and utilities, consistently demonstrate that restarting the existing facility
is the most economic method of processing the five-year resource delineated for the project.
Extending mine life beyond project parameters also presents an opportunity to improve mechanisms
of operation, including semi-autogenous grinding milling and configuration optimization.
Consequently, changing the location would substantially diminish the project’s rate of return within
the scope of the current, planned operational life of the facility.
18.1.1 Battery Limits
The infrastructure battery limits are contained within the existing Pinto Valley Operations. Copper
Cities Unit and the Old Dominion sites are still owned by BHP Billiton, and Capstone has service
agreements for water from these respective sites. Logistical transport of product is covered in
another section of this report, but will be briefly described herein.
Infrastructure for Pinto Valley includes the existing maintenance shops, administration offices,
environmental facilities, water and electric distribution systems, and other miscellaneous facilities.
Off-site infrastructure includes the incoming electric power generation and transmission capacity
provided by the Salt River Project (SRP), the local highway system provided by state and federal
governments, the local transportation services provided by various contractors, and the telephone and
data communications systems.
18.2 OVERVIEW OF EXISTING INFRASTRUCTURE
The following subsections provide an overview of existing infrastructure, including electrical power,
water, sewage, fuels, storm water control, tailings disposal, buildings and support facilities,
maintenance support and shop, communications, and security.
18.2.1 Electric Power
The electric power for Pinto Valley is supplied by the existing SRP utility grid to the Pinto Valley
substation. The SRP 115-kV primary transmission line is connected to three 25-MVA transformers
which step down to 13.8 kV for site distribution at the substation. The existing contract with SRP for
electric power to operate the facility is limited to a maximum 50,000 kW, which is sufficient for
planned operation levels.
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18.2.2 Water
There are several types of water services provided at Pinto Valley which vary by water quality and
source. No changes are anticipated to any of these existing facilities. These water services, and
related infrastructure facilities, are discussed in this section.
Potable Water
The potable water supply for Pinto Valley is provided by four existing groundwater wells with a
combined capacity of approximately 6 L/s. The system facilities include water storage tanks, pumps,
distribution pipelines, valves, and control system. Water treatment facilities, which are licensed by
the State of Arizona and operated by licensed operators, include a reverse osmosis system and
secondary chlorination. To resume operations, an additional potable water supply well is available
and the water treatment facilities have been refurbished.
Service Water
High quality, non-potable service water is used throughout Pinto Valley for mill makeup water, fire
water, SX/EW makeup water, and pump gland water. Water for this system is supplied primarily via
the Peak Well system which delivers an average flow of 125 L/s during concentrator operation.
Service water system facilities include two, 3.8-million litre storage tanks located at the mill, three
service water pumps, distribution pipelines, and peripheral controls, valves, etc.
Process Water
Process water is lower quality than service water and is generally only used for mill makeup.
Process water consists of water supplied via the Old Dominion and East Side Wells, Pinal Creek
remedial water, and the Pinto Valley Pit. As noted, Capstone has a water service agreement with
BHPB as the Old Dominion is currently owned by BHPB. This water is stored in the mill water
tanks or Cottonwood Reservoir. During previous operations, the process water system delivered an
average of 190 l/s into the Pinto Valley concentrator. .
Reclaim Water
Reclaim water consists of process water that is recovered from Tailings Dams No. 3 and No. 4 after
the deposition of tailings. It is returned to the mill circuit as makeup water. This water is pumped
from Tailings Dams No. 3 and No. 4 and is also stored in the mill water tanks or Cottonwood
Reservoir.
Fire Water
The fire water distribution main lines and hydrants were upgraded and/or repaired during the 2006
restart effort.
18.2.3 Sewage
Sewage from Pinto Valley permanent facilities (offices, concentrator, lab, etc.) is processed through
the existing, licensed septic treatment facility. The existing chlorination system was designed for
95,000 litres per day. The existing septic facilities continue to service the SX/EW facility and the
North Barn area and are pumped on an as-needed basis by local, contracted service providers.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 18-3
18.2.4 Fuels
Diesel fuel and unleaded gasoline are delivered to existing fuel storage tanks by local fuel providers
from Phoenix and Tucson. Pinto Valley has no natural gas service. Propane gas continues to be used
as a means to heat cathode wash water at the existing SX/EW facility.
18.2.5 Storm Water Control
Storm water continues to be managed according to the existing Storm Water Pollution Prevention
Plan (SWPPP) and National Pollution Discharge Elimination System (NPDES) permits. These
permits were in place during previous operations and were maintained through the curtailment
period. No changes to the existing facilities are required to remain compliant with the existing
SWPPP and NPDES permits.
18.2.6 Tailings Disposal
Tailings are deposited in existing permitted tailings storage facilities using the same practices from
previous operations. The majority of the tailings are placed in Tailings Dam No. 4; Tailings Dam
No. 3 is used for tailings placement during maintenance activities at Tailings Dam No. 4. There is
no indication from the resource model that ore characteristics will change substantially during the
proposed completion of the Slice 6 design mine plan. The tailings that are currently deposited into
Tailings Dams No. 3 and No. 4 are not significantly different from the tailings during previous
operations. Therefore, closure plans completed to date are not significantly different. Tailings Dams
No. 3 and No. 4 have been continually monitored and inspected since the January 2009 suspension.
The annual inspection reports indicate no stability issues with the dams; however, the inspection
report recommends additional instrumentation for the dams prior to the addition of more tailings.
18.2.7 Tailings Dam No. 4
The available capacity was checked as part of the 2006 restart and was re-checked during the 2012
restart. Tailings Dam No. 4 was reviewed using existing topography from a November 2004 aerial
survey that estimated available volume. Tailings Dam No. 4 is bounded on the east by the property
boundary between Pinto Valley and the United States Forest Service (USFS). Pinto Valley has
unpatented mining claims east of this property boundary, but no operations plan currently exists with
the USFS for tailings deposition on USFS property. Therefore, the property boundary sets the limit
of tailings deposition at Tailings Dam No. 4. Digital terrain models were constructed using both the
2004 topography and the tailings design. AutoCAD software was used to calculate the volume
between the different topographic surfaces in cubic yards. The available volume was calculated as
76,910,000 m3. Cubic metres were then converted to tonnes. From the calculations, an estimated
capacity of 105,000,000 tonnes of tailings is available in Tailings Dam No. 4 without encroaching on
the property boundary. The Slice 6 design mine plan projects that 87,300,000 tonnes of ore will be
processed; therefore, Tailings Dam No. 4 will have an additional 17,700,000 tonnes of available
capacity after the Slice 6 design mine plan is complete.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 18-4
18.2.8 Tailings Dam No. 3
Tailings Dam No. 3 is used only when Tailings Dam No. 4 is taken off-line for maintenance
activities. The available capacity of Tailings Dam No. 4 has historically been about 95%. Therefore,
Tailings Dam No. 3 must currently contain only 5% of the planned tailings production, or
approximately 4.5-million tonnes of tailings. Tailings Dam No. 3 is bounded on the west by the
property boundary between Pinto Valley and the USFS. Pinto Valley has unpatented mining claims
west of this property boundary, but no operations plan currently exists with the USFS for tailings
deposition on USFS property.
18.2.9 Buildings and Support Facilities
Existing buildings will be used during the proposed restart. Existing on-site structures will service
construction and site operations for the life of the project. The following new buildings are planned
for Pinto Valley:
Core Storage Building (under construction)
Hazardous Waste Storage Building
Depot Office Building at San Manual
Locomotive Depot at San Manual
Shade over the Locomotive Inspection Pit
When operations were suspended, various buildings at the Pinto Valley site were placed in non-
operational status. Minor modifications to the entry points at the North Barn and Lower Truck Shop
Maintenance facilities are anticipated to accommodate large trucks to facilitate a more economic
mining operation. During refurbishment, the following components required some repairs: heating,
ventilation, air conditioning (HVAC) units, boilers, and piping.
18.2.10 Maintenance Support and Shop
All required maintenance support and shop infrastructure already exists. No additions are planned as
part of the proposed restart.
18.2.11 Communications
Existing communication systems will be used to an extent that is practical. The local area SAP and
document data transfer and storage processes will be upgraded to meet existing requirements so they
are able to provide adequate bandwidth for the operating facility; this includes a backup satellite
system if the primary fibre-optic system fails.
18.2.12 Security
Existing security facilities and procedures are adequate for the proposed restart. Additional security
staff and support vehicles will be incrementally introduced to meet the needs of the increased on-site
workforce.
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18.3 LOGISTICS AND TRANSPORT
Pinto Valley concentrate is loaded into highway trucks and transported 85 miles to the existing
Capstone storage/trans-load facility at San Manuel, Arizona. Up to fourteen, 24-ton trucks are
contracted to make three complete round trips per day each, Monday through Friday, with two
overlapping shifts per day. Concentrate can also be trucked directly from the Pinto Valley site to
local smelters.
San Manuel has a designed storage capacity of 36,000 tonnes. The Capstone-owned San Manuel
Arizona Railroad Company (SMARRCO) coordinates concentrate shipments and truck/trans-
load/rail-to-vessel loading in Guaymas, Mexico. Approximately 200 bottom-dump hopper railcars
are required for concentrate rail shipments from San Manuel to Guaymas: a fleet of 75 cars will be
required for the initial ramp-up, and then an additional 125 cars will be required to meet future,
increased production.
18.4 CONSIDERATIONS FOR INFRASTRUCTURE
Core drilling under the existing ore processing facility is recommended to fully exploit ore potential
before any significant infrastructure is built on site. Conceptual pit extensions in future studies could
compromise the southern water facility pipeline and pump stations, as well as the primary 13.8-kV
mine feed electrical loop infrastructure. The primary crusher could also be located within a future pit
setback. Historic tailings dams to the west of the pit may be encroached by setback at some date
beyond the current Slice 6 Mine Plan.
The SX/EW Pregnant Leach Solution pipeline and Gold Gulch 1A currently obstruct additional
tailings infill capacity in the Gold Gulch watershed, and future re-routing may be required. Existing
springs and seeps in the Gold Gulch watershed underlie future infill sites and must be managed to
enhance tailings deposition on the property. An extension of Tailings Dam No. 3 may impose Best
Available Demonstrated Control Technology (BADCT) lining requirements under a new footprint of
the dam. Reclamation of the face of Tailings Dam No. 3 reduces operating costs and environmental
exposures; a “reclaim as you go” approach will be used to build tailings dams.
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19 MARKET STUDIES AND CONTRACTS
Capstone will perform all marketing and sales administration. Based on the economic growth, port
location on the Pacific Ocean and the related-industry demand from Asia, it is expected that the
copper concentrates will be sold under long-term frame contracts to smelters in Asia. The expected
copper concentrate price is based on the published London Metals Exchange prices for the payable
metals, less treatment charges (TC) and refining charges (RC) incurred by the Pinto Valley Mine to
smelt and refine the sulphide concentrate to copper cathode. The TCs and RCs fluctuate with market
conditions. The molybdenum concentrate is pressure leached on site to reduce the residual copper
and then sold to roasters and merchants who currently ship it to Europe, North America and South
America. The concentrate price is based on the published price for molybdenum oxide, minus a
discount incurred by THVC to roast the sulphide concentrate to oxide. This discount fluctuates with
market conditions. It is anticipated that the copper cathode will be sold under annual contracts to
traders or refineries located in the United States at the prices published on the London Metals
Exchange. The prices for the resultant payable metals are published on the New York Mercantile
Exchange’s Commodity Exchange for payable metals, and be subject to a market premium.
It is expected that the majority of the copper concentrates will be sold under long-term contracts that
are considered within industry norms. Credits from the gold and silver are realized if the grades of
each metal in the copper concentrate exceed normal industry levels. Copper concentrates are
transported to the Port of Guaymas by rail using Capstone’s San Manuel Railroad and rolling fleet,
Union Pacific Railroad and Ferromex Railroad. The Pinto Valley Mine currently contracts out the
transportation of concentrate from the mine to the San Manuel Railroad. Before the concentrate is
loaded onto ocean-going vessels, it is unloaded from the railcars and stored in a warehouse in the
Port of Guaymas under a long-term port usage agreement with the Administración Portuaria Integral
de Guaymas. Ocean shipping to the smelting complexes is arranged by Capstone's mining marketing
group.
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20 ENVIRONMENTAL STUDIES AND SOCIAL
OR COMMUNITY IMPACT
No additional environmental or social impact assessments are required, other than those already in
place as a result of past operations. The Pinto Valley project consists of restarting a previously
operating facility, in the same location, and using the same processes.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 21-1
21 CAPITAL AND OPERATING COSTS
Capstone has invested a total of $650 million toward the purchase of the Pinto Valley Operation
from BHP Copper. In addition, BHP Copper has invested approximately $192 million in capital
improvements in preparation for start-up.
At the closing of the acquisition by Capstone on October 11, 2013, the Pinto Valley Operations was
approximately 10 months into its re-commissioning by BHP Copper after the January 20, 2009
shutdown, as discussed in Section 6 of this report. As part of the re-start of operations, BHP Copper
had completed a refurbishment program to prepare for the restart of operations.
The capital expenditure for the refurbishment program amounted to approximately $192 million in
total and included:
• approximately $60 million for a 28 vehicle mobile fleet, including loaders, haul trucks, drills,
dozers and graders;
• approximately $40 million to upgrade the processing operations, including the plant distributed
control systems and ball mill switch gear;
• approximately $10 million for a new 132 vehicle railcar fleet for SMARRCO; and
• the balance attributable to infrastructure, engineering and owners costs.
As at December 6, 2013, there are no contractual commitments for material capital expenditure
amounts at the Pinto Valley Operations. Pre-stripping has been completed for the five year mine
plan described in Subsection 16.2, and as a result it is not expected that significant sustaining or
expansion capital will be required over the coming five year period.
The forward looking capital plans for the mine as developed by BHP Copper and used by Capstone
in its financial analysis, included sustaining and mine development capital of approximately $150
million over the five year period following the restart of operations. Capstone anticipates that this
amount can easily be sustained by anticipated operating cash flows.
As at December 6, 2013, Capstone has owned the operation for approximately eight weeks and has
not yet completed the first full monthly close of the financial statements for the Pinto Valley
Operations under its ownership. As such, Capstone does not yet have information that it can report
on operating expenses. Additionally, the company does not have access to cost or operating data
predating its ownership. Even if that information were available, throughout 2013, the Pinto Valley
Operation has been in a start-up phase, with costs affected by transitional administrative support
arrangements with the former owner, production levels and efficiencies below name-plate levels, and
normal commissioning-related contractor costs. As a result, actual operating costs realized to date
are either not available or are not representative of the sustainable performance of the operations.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 21-2
Capstone is currently in the process of compiling accurate and reliable cost estimates and sustaining
capital estimates in preparation for the completion of a current feasibility study.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 22-3
22 ECONOMIC ANALYSIS
National Instrument 43-101 Standards of Disclosure for Mineral Projects, Item 22 Instruction (1),
states the following: Producing issuers may exclude the information required under Item 22 for
technical reports on properties currently in production unless the technical report includes a
material expansion of current production. As the Pinto Valley Mine is in production and this report
does not include a material expansion of the project, information in this section has been excluded.
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 23-1
23 ADJACENT PROPERTIES
The Pinto Valley Mine is adjacent to the Carlota Mine and near the Freeport-McMoRan Miami
Mine; Figure 15-1 shows the immediate mine location in relation to other operations/properties
within the Globe-Miami region. The author has not been able to verify the information in this section
and it should be noted that this information is not necessarily indicative of mineralization at Pinto
Valley. The sources of the information are from company websites and publically disclosed by
KGHM and Freeport McMorran.
FIGURE 23-1: PINTO VALLEY MINE AND ADJACENT PROPERTIES
23.1 CARLOTA MINE
The Carlota Mine is nearing closure and is currently in reclamation. Carlota was discovered in the
1990s and came to be one of the first copper mines designated and permitted under modern
environmental legislation. Owned entirely by KGHM International Ltd., the mine was
commissioned in late-2008 and has produced an average of 25 million pounds of cathode copper
annually for the last four years.
Carlota has been implementing a mine closure plan which optimizes cash flow while advancing
activities related to the winding down of operations. This plan is consistent with the life of mine
objectives as described in the Carlota permits which call for a staged closure plan during the last
years of mining. The mine’s timeline for closure is in accordance with current permits and
Arizona environmental regulations. Time, attention and money are spent on detailed closure plans
to ensure the mined land can be reclaimed and used for other purposes.
Carlota
Freeport
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CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 23-2
23.2 MIAMI MINE
The Miami Mine is a porphyry copper deposit that has leachable oxide and secondary sulphide
mineralization. The predominant oxide copper minerals are chrysocolla, copper-bearing clays,
malachite, and azurite. Chalcocite and covellite are the most important secondary copper sulphide
minerals.
Since about 1915, the Miami mining operation had processed copper ore using both flotation and
leaching technologies. Current operations include leaching by the solution extraction and electro-
winning (SX/EW) process. The design capacity of Miami's SX/EW plant is 200 million pounds of
copper per year.
The first prospecting expeditions visited the area in the 1860s. Copper was mined underground
until after World War II when the first open-pit mining began. Miami was among the first to
employ “vat leaching” (1926) and precipitation plants to recover oxide minerals. It did this in
conjunction with its flotation concentrator, which processed sulphide minerals. The plant’s
smelter was modernized in 1974 to meet Clean Air Act standards and was further modernized and
expanded in 1992. The success of an SX/EW plant commissioned in 1979 led to the demise of vat
leaching by the mid-1980s, and ultimately the concentrator in 1986. The rod mill was
commissioned in 1966 and the refinery in 1993; the refinery was permanently closed in 2005.
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24 OTHER RELEVANT DATA AND
INFORMATION
The author of this report is not aware of any other information that is relevant to this Technical
Report.
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25 INTERPRETATION AND CONCLUSIONS
The Pinto Valley Mine and Concentrator are located at the west end of the Globe-Miami district,
approximately six miles west of the town of Miami in Gila County, Arizona at an elevation of
approximately 4,000 ft. The Pinto Valley Mine, located within the Globe-Miami mining district of
central Arizona, which possesses other significant porphyry copper deposits associated with
Paleocene granodiorite to Granite Porphyry stocks. The Pinto Valley porphyry copper deposit has
been dismembered by faults and affected by later erosion and minor oxidation.
BHP is a large, well respected organization with well documented procedures which appear to be
adhered to although there may be room for increased confidence and continuous improvement. BHP
Copper denied the author certain information relating to its business matters that were deemed
confidential and industry-sensitive. BHP Copper, through legal counsel, determined what material
was sensitive and unavailable for release. Although it is believed that all information relevant to the
creation of this Technical Report has been disclosed, unrestricted and free access was not given to
the author due to constraints under the previously stated U.S. laws. The author is confident that all
necessary information and data was given so as not to be incorrect or misleading.
A total of 1,031 drill holes were supplied for the Pinto Valley Project; however, the assays for 62 of
those holes, as of the effective date of this report, were pending and unavailable. The drill hole
database was supplied by BHP in an electronic format. This data included drill hole collars, down
hole surveys, lithology data, and assay data with downhole from and downhole to intervals in
imperial units. The assay data included total Cu% and Mo%.
The purpose of this Technical Report was to present the resource estimate for the Pinto Valley
Deposit. Therefore, the primary interpretations and conclusions of this report are related to the data,
analysis and methods related to the calculation of the resource estimate.
In addition, this Technical Report serves as an update on the activities carried out in 2012-2013.
Based on a 0.25% Cu cut-off grade, Measured resources are 402 Mt at a grade of 0.38% Cu and
0.009% Mo, Indicated resources are 566 Mt tonnes at a grade of 0.33% Cu and 0.009% Mo, while
Inferred resources are 45 Mt at a grade of 0.33% Cu and 0.009% Mo. This resource is relatively
large, of significant grade, has favourable metallurgy, is near surface and is close to infrastructure.
In addition, the project area has further potential in the way of identified targets that warrant further
exploration.
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26 RECOMMENDATIONS
In order to further evaluate the resource potential of the Pinto Valley Project and advance the project
by evaluating its economic viability, the following recommendations should be considered in 2013:
Incorporate remaining assay data from 2012-2013 drilling campaign.
To increase confidence and upgrade resource classification.
Continue with the QA/QC of the master database.
Continue density measurements and analysis.
Revise solids based on the most current assay data.
Documentation and project map of all drill data.
Improve documentation of procedures and protocols.
Continue with advanced metallurgical studies.
Continue environmental studies.
Continue with activities related to and completion of Pre-feasibility Study.
Note that a budget for the above activities was not available due to on-going activities and
information being of a proprietary nature. BHP and Capstone are cooperating with respect to the
advancement of the mine and in particular the development of the advanced studies targeted for
completion in mid 2014.
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 27-2
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Wellmer, F.-W. 1998 Statistical Evaluations in Exploration for Mineral Deposits. Springer-
Verlag, Berlin Heidelberg.
Winant, A. R. and Seedorff, E., 2010, Sericitic and Advanced Argillic Mineral Assemblages and
Their Relationship to Copper Mineralization, Resolution Porphyry Cu - (Mo) Deposit, Superior
District , Pinal County, Arizona
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE 28-1
28 DATE AND SIGNATURES
I, Garth David Kirkham, P.Geo., do hereby certify that:
I am a consulting geoscientist with an office at 6331 Palace Place, Burnaby, British
Columbia.
1) This certificate applies to the entitled “Resource Estimate for the Pinto Valley Deposit NI
43-101 Technical Report” with amended date of 11th of December, 2013 (“Technical
Report”) prepared for Capstone Mining Corp., Vancouver, B.C .
2) I am a graduate of the University of Alberta in 1983 with a BSc. I have continuously
practiced my profession since 1988. I have worked on and been involved with NI43-101
studies on the Mineral Park, Halilağa, Ajax and Tres Chorreras porphyry deposits.
3) I am a member in good standing of the Association of Professional Engineers and
Geoscientists of BC (APEGBC) in addition to Ontario (APGO), Alberta (APEGGA),
Manitoba (APEGM), and the Northwest Territories and Nunavut (NAPEGG).
4) I have visited the property on May 14th, 2013.
5) In the independent report titled entitled “Resource Estimate for the Pinto Valley Deposit
NI 43-101 Technical Report” with amended date of 11th of December, 2013, I am
responsible for all Sections on the Technical Report. I am also responsible for overall
study management and compilation.
6) I have not had prior had involvement with the property.
7) I am independent of Capstone Mining Corporation as defined in Section 1.5 of National
Instrument 43-101.
8) I have read the definition of “qualified person” set out in National Instrument 43-101 and
certify that by reason of education, experience, independence and affiliation with a
professional association, I meet the requirements of an Independent Qualified Person as
defined in National Instrument 43-101.
9) I am not aware of any material fact or material change with respect to the subject matter
of the technical report that is not reflected in the Technical Report and that, at the
effective date of the Technical Report, to the best of my knowledge, information and
belief, this technical report contains all scientific and technical information that is
required to be disclosed to make the technical report not misleading.
10) I have read National Instrument 43-101, Standards for Disclosure of Mineral Projects and
Form 43-101F1. This technical report has been prepared in compliance with that
instrument and form.
Dated this 11th day of December, 2013 in Burnaby, British Columbia
“Garth Kirkham” {signed and sealed}
Garth Kirkham, P.Geo.
Kirkham Geosystems Ltd.
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE B-1
APPENDIX A: PERMITS
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-1
Permits, licenses and authorizations for the Pinto Valley Project
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-2
APPENDIX B: CLAIMS AND TENURE
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-2
Unpatented Mining Claims and Mill Sites
BLM Serial
Number
Name of Claim Docket Book or
Document No.
Page
1 AMC 7735 Mary 1 426 246
2 AMC 7736 Mary 2 426 247
3 AMC 7737 Mary 3 426 248
4 AMC 7738 Mary 4 426 249
5 AMC 7739 Mary 5 426 250
6 AMC 7740 Mary 6 426 251
7 AMC 27738 Cowboy No. 1 amended 42 127
8 AMC 27739 Cowboy No. 2 amended 42 128
9 AMC 27740 Cowboy No. 3 amended 42 129
10 AMC 27741 Rita 47 150
11 AMC 27742 Copper Site amended 42 124
12 AMC 27743 Pine Tree amended 42 126
13 AMC 384552 BOB #1 2007-011669
14 AMC 384553 BOB #2 2007-011670
15 AMC 384554 BOB #3 2007-011671
16 AMC 384555 BOB #4 2007-011672
17 AMC 384556 BOB #5 2007-011673
18 AMC 384557 BOB #6 2007-011674
19 AMC 27747 Hammer 47 147
20 AMC 27748 Joan 47 148
21 AMC 27749 Southern Cross 47 151
22 AMC 27750 Midnight Test amended 42 125
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-3
23 AMC 27751 Copper Bottom No. 1 amended 42 195
24 AMC 27752 Copper Bottom No. 6 amended 42 194
25 AMC 27753 Copper Bottom No. 8 47 385
26 AMC 27754 Copper Bottom No. 9 47 386
27 AMC 27755 Copper Bottom No. 10 47 387
28 AMC 27757 Hill No. 2 280 10
29 AMC 27758 Hill No. 3 280 11
30 AMC 27759 Hill No. 4 280 12
31 AMC 27760 Hill No. 5 280 13
32 AMC 27761 Hill No. 6 280 14
33 AMC 27762 Hill No. 7 280 15
34 AMC 27763 Hill No. 8 280 16
35 AMC 27764 Hill No. 9 280 17
36 AMC 27765 Hill No. 10 280 18
37 AMC 27994 Tunnel 10 502
38 AMC 28023 Peak No. 3 333 331
39 AMC 28025 Peak No. 7 333 333
40 AMC 28026 Peak No. 8 333 334
41 AMC 28027 Peak No. 9 335 703
42 AMC 28028 Peak No. 10 335 704
43 AMC 28031 Peak No. 14 367 606
44 AMC 28032 Peak No. 15 367 607
45 AMC 28033 Peak No. 17 367 608
46 AMC 28036 Peak No. 22 390 9
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-4
47 AMC 28037 Peak No. 24 402 700
48 AMC 28038 Peak 25 405 974
49 AMC 28040 Peak 28 414 719
50 AMC 28059 Zee No. 2 284 855
51 AMC 35792 Quartz Site (A) 466 191
52 AMC 35793 Quartz Site No. 2 (A) 466 190
53 AMC 35794 Quartz Site No. 3 (A) 466 189
54 AMC 35800 Quartz Site No. 9 (A) 466 183
55 AMC 35801 Quartz Site No. 10 (A) 466 182
56 AMC 35806 Quartz Site No. 15 (A) 466 177
57 AMC 35807 Quartz Site No. 16 (A) 466 176
58 AMC 35808 Quartz Site No. 17 (A) 466 175
59 AMC 35809 Quartz Site No. 18 (A) 466 174
60 AMC 35810 Quartz Site No. 19 (A) 466 173
61 AMC 35811 Quartz Site No. 20 (A) 466 172
62 AMC 35812 Quartz Site No. 21 (A) 466 171
63 AMC 35813 Quartz Site No. 22 (A) 466 170
64 AMC 35814 Quartz Site No. 23 (A) 466 169
65 AMC 35815 Quartz Site No. 24 (A) 466 168
66 AMC 35816 Quartz Site No. 25 (A) 466 167
67 AMC 35820 Quartz Site #28 (A) 466 165
68 AMC 35821 Silver Bell (A) 466 192
69 AMC 35824 Janie No. 1 (A) 466 194
70 AMC 35825 Janie No. 2 (A) 466 195
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-5
71 AMC 35830 Copper Bottom #2 (A) 466 202
72 AMC 35831 Copper Bottom #5 (A) 466 215
73 AMC 35832 Copper Bottom #7 (A) 466 201
74 AMC 35833 Copper Bottom #11 (A) 466 216
75 AMC 35834 Copper Bottom #12 (A) 466 217
76 AMC 35835 Copper Bottom #13 (A) 466 218
77 AMC 40744 East Water 469 458
78 AMC 97644 Peak 34 493 567
79 AMC 129535 Peak 94 534 775
80 AMC 138512 K1 542 700
81 AMC 138513 K2 542 702
82 AMC 138514 K3 542 704
83 AMC 138515 K4 542 706
84 AMC 138516 K5 542 708
85 AMC 138517 K6 542 710
86 AMC 138518 K7 542 712
87 AMC 138519 K8 542 714
88 AMC 138520 K9 542 716
89 AMC 138521 K10 542 718
90 AMC 138522 K11 542 720
91 AMC 138523 K12 542 722
92 AMC 138524 K13 542 724
93 AMC 138525 K14 542 726
94 AMC 138526 K15 542 728
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-6
95 AMC 138527 K16 542 730
96 AMC 138528 K17 542 732
97 AMC 138529 K18 542 734
98 AMC 138530 K19 542 736
99 AMC 138531 K20 542 738
100 AMC 138532 K21 542 740
101 AMC 138533 K22 542 742
102 AMC 138534 K23 542 744
103 AMC 138535 K24 542 746
104 AMC 138536 K25 542 748
105 AMC 138537 K26 542 750
106 AMC 138538 K27 542 752
107 AMC 138539 K28 542 754
108 AMC 138540 K29 542 756
109 AMC 138541 K30 542 758
110 AMC 138542 K31 542 760
111 AMC 138543 K32 542 762
112 AMC 138544 K33 542 764
113 AMC 138545 K34 542 766
114 AMC 138546 K35 542 768
115 AMC 142565 M1 549 363
116 AMC 215329 D1 606 157
117 AMC 215330 D2 606 159
118 AMC 215331 D3 606 161
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-7
119 AMC 215332 D4 606 163
120 AMC 215333 D5 606 165
121 AMC 215334 D6 606 167
122 AMC 215335 D7 606 169
123 AMC 215336 D8 606 171
124 AMC 215337 D9 606 173
125 AMC 215338 D10 606 175
126 AMC 215339 D11 606 177
127 AMC 215340 D12 606 179
128 AMC 215341 D13 606 181
129 AMC 215344 D16 606 187
130 AMC 215345 D17 606 189
131 AMC 319065 Hill No. 11 855 828
132 AMC 319066 Hill No. 12 855 830
133 AMC 319067 Hill No. 13 855 832
134 AMC 327204 P1 93 634671
135 AMC 327205 P2 93 634672
136 AMC 327206 P3 93 634673
137 AMC 327207 P4 93 634674
138 AMC 327208 P5 93 634675
139 AMC 327209 P6 93 634676
140 AMC 327210 P7 93 634677
141 AMC 327211 P8 93 634678
142 AMC 327212 P9 93 634679
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
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143 AMC 327213 P10 93 634680
144 AMC 327214 P11 93 634681
145 AMC 327215 P12 93 634682
146 AMC 327216 P13 93 634683
147 AMC 327217 P14 93 634684
148 AMC 327218 P15 93 634685
149 AMC 327219 P16 93 634686
150 AMC 327220 P17 93 634687
151 AMC 327221 P18 93 634688
152 AMC 364145 E-1 2005 510
153 AMC 364146 E-2 2005 511
154 AMC 364147 E-3 2005 512
155 AMC 364148 E-4 2005 513
156 AMC 370110 RJ #1 2006 3905
157 AMC 370111 RJ #2 2006 3906
158 AMC 370112 RJ #3 2006 3907
159 AMC 370113 RJ #4 2006 3908
160 AMC 370114 RJ #5 2006 3909
161 AMC 370115 RJ #6 2006 3910
162 AMC 370116 RJ #7 2006 3911
163 AMC 370117 RJ #8 2006 3912
164 AMC 370118 RJ #9 2006 3913
165 AMC 370119 RJ #10 2006 3914
166 AMC 370120 RJ #11 2006 3915
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-9
167 AMC 370121 RJ #12 2006 3916
168 AMC 370122 RJ #13 2006 3917
169 AMC 370123 RJ #14 2006 3918
170 AMC 370124 RJ #15 2006 3919
171 AMC 370125 RJ #16 2006 3920
172 AMC 370126 RJ #17 2006 3921
173 AMC 370127 RJ #18 2006 3922
174 AMC 370128 RJ #19 2006 3923
175 AMC 370129 RJ #20 2006 3924
176 AMC 370130 RJ #21 2006 3925
177 AMC 370131 RJ #22 2006 3926
178 AMC 370132 RJ #23 2006 3927
179 AMC 370133 RJ #24 2006 3928
180 AMC 370134 RJ #25 2006 3929
181 AMC 370135 RJ #26 2006 3930
182 AMC 370136 RJ #27 2006 3931
183 AMC 370137 RJ #28 2006 3932
184 AMC 370138 RJ #29 2006 3933
185 AMC 370139 RJ #30 2006 3934
186 AMC 370140 RJ #31 2006 3935
187 AMC 370141 RJ #32 2006 3936
188 AMC 370142 RJ #33 2006 3937
189 AMC 370143 RJ #34 2006 3938
190 AMC 370144 RJ #35 2006 3939
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-10
191 AMC 370145 RJ #36 2006 3940
192 AMC 370146 RJ #37 2006 3941
193 AMC 370147 RJ #38 2006 3942
194 AMC 370148 RJ #39 2006 3943
195 AMC 370149 RJ #40 2006 3944
196 AMC 370150 RJ #41 2006 3945
197 AMC 370151 RJ #42 2006 3946
198 AMC 370152 RJ #43 2006 3947
199 AMC 370153 RJ #44 2006 3948
200 AMC 370154 RJ #45 2006 3949
201 AMC 370155 RJ #46 2006 3950
202 AMC 370156 RJ #47 2006 3951
203 AMC 370157 RJ #48 2006 3952
204 AMC 370158 RJ #49 2006 3953
205 AMC 370159 RJ #50 2006 3954
206 AMC 370160 RJ #51 2006 3955
207 AMC 370161 RJ #52 2006 3956
208 AMC 370162 RJ #53 2006 3957
209 AMC 370163 RJ #54 2006 3958
210 AMC 370164 RJ #55 2006 3959
211 AMC 370165 RJ #56 2006 3960
212 AMC 370166 RJ #57 2006 3961
213 AMC 370167 RJ #58 2006 3962
214 AMC 370168 RJ #59 2006 3963
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-11
215 AMC 370169 RJ #60 2006 3964
216 AMC 370170 RJ #61 2006 3965
217 AMC 370171 RJ #62 2006 3966
218 AMC 370172 RJ #63 2006 3967
219 AMC 370173 RJ #64 2006 3968
220 AMC 384697 RJ #65 2007 12073
221 AMC 384698 RJ #66 2007 12074
222 AMC 384699 RJ #67 2007 12075
223 AMC 384700 RJ #68 2007 12076
224 AMC 384701 RJ #69 2007 12077
225 AMC 384702 RJ #70 2007 12078
226 AMC 384703 RJ #71 2007 12079
227 AMC 384704 RJ #72 2007 12080
228 AMC 393547 TOE 20 2008 9417
229 AMC 422569 CWL 1 2013 3544
230 AMC 422570 CWL 2 2013 3545
231 AMC 422571 CWL 3 2013 3546
232 AMC 422572 CWL 4 2013 3547
233 AMC 422573 CWL 5 2013 3548
234 AMC 422574 CWL 6 2013 3549
235 AMC 422575 CWL 7 2013 3550
236 AMC 422576 CWL 8 2013 3551
237 AMC 422577 CWL 9 2013 3552
238 AMC 422578 CWL 10 2013 3553
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-12
239 AMC 422579 CWL 11 2013 3554
240 AMC 422580 CWL 12 2013 3555
241 AMC 422581 CWL 13 2013 3556
242 AMC 422582 CWL 14 2013 3557
243 AMC 422583 CWL 15 2013 3558
244 AMC 422584 CWL 16 2013 3559
245 AMC 422585 CWL 17 2013 3560
246 AMC 422586 CWL 18 2013 3561
247 AMC 422587 CWL 19 2013 3562
248 AMC 422588 CWL 20 2013 3563
249 AMC 422589 CWL 21 2013 3564
250 AMC 422590 CWM 1 2013 3565
251 AMC 422591 CWM 2 2013 3566
252 AMC 422592 CWM 3 2013 3567
253 AMC 422593 CWM 4 2013 3568
254 AMC 422594 CWM 5 2013 3569
255 AMC 422595 CWM 6 2013 3570
256 AMC 422596 CWM 7 2013 3571
257 AMC 422597 CWM 8 2013 3572
258 AMC 422598 CWM 9 2013 3573
259 AMC 422599 CWM 10 2013 3574
260 AMC 422600 CWM 11 2013 3575
261 AMC 422601 CWM 12 2013 3576
262 AMC 422602 CWM 13 2013 3577
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-13
263 AMC 422603 CWM 14 2013 3578
264 AMC 422604 CWM 15 2013 3579
265 AMC 422605 CWM 16 2013 3580
266 AMC 422606 CWM 17 2013 3581
267 AMC 422607 CWM 18 2013 3582
268 AMC 422608 CWM 19 2013 3583
269 AMC 422609 CWM 20 2013 3584
270 AMC 422610 CWM 21 2013 3585
271 AMC 422611 CWM 22 2013 3586
272 AMC 422612 CWM 23 2013 3587
273 AMC 422613 CWM 24 2013 3588
274 AMC 422614 CWM 25 2013 3589
275 AMC 422615 CWM 26 2013 3590
276 AMC 422616 CWM 27 2013 3591
277 AMC 422617 CWM 28 2013 3592
278 AMC 422618 CWM 29 2013 3593
279 AMC 422619 CWM 30 2013 3594
280 AMC 422620 CWM 31 2013 3595
281 AMC 422621 CWM 32 2013 3596
282 AMC 422622 CWM 33 2013 3597
283 AMC 422623 CWM 34 2013 3598
284 AMC 422624 CWM 35 2013 3599
285 AMC 422625 CWM 36 2013 3600
286 AMC 422626 CWM 37 2013 3601
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-14
287 AMC 422627 CWM 38 2013 3602
288 AMC 422628 CWM 39 2013 3603
289 AMC 422629 CWM 40 2013 3604
290 AMC 422630 CWM 41 2013 3605
291 AMC 422631 CWM 42 2013 3606
292 AMC 422632 CWM 43 2013 3607
293 AMC 422633 CWM 44 2013 3608
294 AMC 422634 CWM 45 2013 3609
295 AMC 422635 CWM 46 2013 3610
296 AMC 422636 CWM 47 2013 3611
297 AMC 422637 CWM 48 2013 3612
298 AMC 422638 CWM 49 2013 3613
299 AMC 422639 CWM 50 2013 3614
300 AMC 422640 CWM 51 2013 3615
301 AMC 422641 CWM 52 2013 3616
302 AMC 422642 CWM 53 2013 3617
303 AMC 422643 CWM 54 2013 3618
304 AMC 422644 CWM 55 2013 3619
305 AMC 422645 CWM 56 2013 3620
306 AMC 422646 CWM 57 2013 3621
307 AMC 422647 CWM 58 2013 3622
308 AMC 422648 CWM 59 2013 3623
309 AMC 422649 CWM 60 2013 3624
310 AMC 422650 CWM 61 2013 3625
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
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311 AMC 422651 CWM 62 2013 3626
312 AMC 422652 CWM 63 2013 3627
313 AMC 422653 CWM 64 2013 3628
314 AMC 422654 CWM 65 2013 3629
315 AMC 422655 CWM 66 2013 3630
316 AMC 422656 CWM 67 2013 3631
317 AMC 422657 CWM 68 2013 3632
318 AMC 422658 CWM 69 2013 3633
319 AMC 422659 CWM 70 2013 3634
320 AMC 422660 CWM 71 2013 3635
321 AMC 422661 CWM 72 2013 3636
322 AMC 422662 CWM 73 2013 3637
323 AMC 422663 CWM 74 2013 3638
324 AMC 422664 CWM 75 2013 3639
325 AMC 422665 CWM 76 2013 3640
326 AMC 422666 CWM 77 2013 3641
327 AMC 422667 CWM 78 2013 3642
328 AMC 422668 CWM 79 2013 3643
329 AMC 422669 CWM 80 2013 3644
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-16
Patented and Fee Properties
(Including Tract and Homestead Entry Surveys)
No. Tax Parcel No. Description/Location
204-10-007E Tract 40, according to Map 474, Gila County, Arizona
204 10 007A Part of Tract 40, according to Map #474, Gila County, Arizona
204 10 007B A parcel of land within Tract 40 according to Map #474, Gila
County, Arizona
204 10 004 Tract 41, according to Map #474, Gila County, Arizona
204-10-006 A portion of Homestead Entry Survey No. 71, as shown on plat
on file in the B.L.M. as granted by Patent recorded in Book 21, Page 465 , Gila County, Arizona
204-10-005 Layton Ranch consisting of 27.570 acres, being part of
Homestead Entry Survey No. 71, as shown on plat on file in the B.L.M. as granted by Patent recorded in Dkt 57, Page 314, Gila
County, Arizona
204-10-002 Homestead Entry Survey 441, as shown on plat on file in the
B.L.M. as granted by Patent recorded in Dkt 57, Page 314, Gila County, Arizona
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-17
Patented Mining Claims
NO NAME MINERAL SURVEY NO.
(on file with BLM)
BOOK
(Mining Deeds)
PAGE
Lime Bluff 3667 14 341
Kahn Spring 3667 14 341
King of Gold Gulch 3667 14 341
White Eagle 3667 14 341
Arizona 3667 14 341
East End 3667 14 341
Anna 3667 14 341
Anna No. 2 3667 14 341
Katy 3667 14 341
Proxy 3609 14 322
Bingo 3570 14 272
Blind Tiger No. 1 3570 14 272
Blind Tiger No. 2 3570 14 272
Blind Tiger No. 3 3570 14 272
North Star 3570 14 272
Brunton 3570 14 272
Pick 3570 14 272
Axe 3570 14 272
Wedge 3570 14 272
Oversight 3570 14 272
Little Annie 3570 14 272
Glory 3570 14 272
Czar 3570 14 272
Owl 3570 14 272
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-18
NO NAME MINERAL SURVEY NO.
(on file with BLM)
BOOK
(Mining Deeds)
PAGE
Grey Eagle 3570 14 272
Laurel 3570 14 272
Forgotten 3570 14 272
Bell 3570 14 272
Castle Dome 3570 14 272
Peerless 3570 14 272
Gladiator 3570 14 272
Turquois No. 1 3570 14 272
Turquois No. 2 3570 14 272
Belle of the Brambles 3570 14 272
Humbolt 3570 14 272
Emma 3570 14 272
Virginia 3570 14 272
First Choice 3570 14 272
Monastic 3570 14 272
Little Doris 3821 14 455
Alice 3821 14 455
Copper Belt No. 2 3821 14 455
Central Pacific 2806 11 141
South Pacific 2806 11 141
Railroad 2806 11 141
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-19
NO NAME MINERAL SURVEY NO.
(on file with BLM)
BOOK
(Mining Deeds)
PAGE
Tunnel 2756 11 173
Badger 2756 11 173
Dewey 2756 11 173
North Pacific 2756 11 173
Hobo 2756 11 173
96 2756 11 173
Baltimore 2756 11 173
Summit 2756 11 173
Bear 2756 11 173
Bull 2756 11 173
Boston 2756 11 173
Argus 2756 11 173
Standard 2756 11 173
Director 2756 11 173
Selby 2756 11 173
United States Fraction 2756 11 173
Indicator 3563 14 260
Sulphide 3561 14 262
Central Star Lode 3561 14 262
Copper Queen 2767 14 143
Copper Prince 2767 14 143
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-20
NO NAME MINERAL SURVEY NO.
(on file with BLM)
BOOK
(Mining Deeds)
PAGE
Copper Cave Lode 2767 14 143
Scorpion 3562 14 263
Continental (Lot 37A) General No. 110 1 507
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-21
Patented Mill Sites
Tax
Parcel
NAME PATENT
NO.
MINERAL SURVEY
NO.
BOOK PAGE RECORDING
DATE
1. 204-08-003 Peak No.1 2860024 4831 669 858 4/15/86
2. 204-08-004 Peak No. 2 2860025 4832 669 862 4/15/86
3. 204-08-005 Peak No. 6 2860026 4833 669 866 4/15/86
4. 204-08-006 Peak No. 11 2860027 4834 669 870 4/15/86
5. 204-08-007 Peak No.13 2860028 4835 669 874 4/15/86
6. 204-08-008 Peak No. 18 2860029 4836 669 878 4/15/86
7. 204-08-009 Peak No. 21 2860030 4837 669 882 4/15/86
8. 204-08-009 Peak No. 26 2860031 4838 669 886 4/15/86
9. 204-08-010 Peak No. 70 2860032 4840 669 890 4/15/86
10. 204-08-010 Peak No. 74 2860033 4841 669 894 4/15/86
11. 204-10-011 Peak No. 75 2860034 4842 669 898 4/15/86
12. 204-10-012 Peak No. 77 2860035 4843 669 902 4/15/86
13. 204-10-007D Pinto Valley No. 1 02-77-0009 4686 427 419 6/2/77
14. 204-10-007D Pinto Valley No. 2 02-77-0009 4686 427 419 6/2/77
15. 204-10-007D Pinto Valley No. 3 02-77-0009 4686 427 419 6/2/77
16. 204-10-007D Pinto Valley No. 4 02-77-0009 4686 427 419 6/2/77
17. 204-10-007D Pinto Valley No. 5 02-77-0009 4686 427 419 6/2/77
18. 204-10-007D Pinto Valley No. 6 02-77-0009 4686 427 419 6/2/77
19. 204-10-007D Pinto Valley No. 7 02-77-0009 4686 427 419 6/2/77
20. 204-10-007D Pinto Valley No. 8 02-77-0009 4686 427 419 6/2/77
21. 204-10-007D Pinto Valley No. 9 02-77-0009 4686 427 419 6/2/77
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-22
Tax
Parcel
NAME PATENT
NO.
MINERAL SURVEY
NO.
BOOK PAGE RECORDING
DATE
22. 204-10-007D Pinto Valley No. 10 02-77-0009 4686 427 419 6/2/77
23. 204-10-007D Pinto Valley No. 11 02-77-0009 4686 427 419 6/2/77
24. 204-10-007D Pinto Valley No. 12 02-77-0009 4686 427 419 6/2/77
25. 204-10-007D Pinto Valley No. 13 02-77-0009 4686 427 419 6/2/77
26. 204-10-007D Pinto Valley No. 14 02-77-0009 4686 427 419 6/2/77
27. 204-10-007D Pinto Valley No. 15 02-77-0009 4686 427 419 6/2/77
28. 204-10-007D Pinto Valley No. 16 02-77-0009 4686 427 419 6/2/77
29. 204-10-007D Pinto Valley No. 17 02-77-0009 4686 427 419 6/2/77
30. 204-10-007D Pinto Valley No. 18 02-77-0009 4686 427 419 6/2/77
31. 204-10-007D Pinto Valley No. 19 02-77-0009 4686 427 419 6/2/77
32. 204-10-007D Pinto Valley No. 20 02-77-0009 4686 427 419 6/2/77
33. 204-10-007D Pinto Valley No. 21 02-77-0009 4686 427 419 6/2/77
34. 204-10-007D Pinto Valley No. 22 02-77-0009 4686 427 419 6/2/77
35. 204-10-007D Pinto Valley No. 23 02-77-0009 4686 427 419 6/2/77
36. 204-10-007D Pinto Valley No. 24 02-77-0009 4686 427 419 6/2/77
37. 204-10-007D Pinto Valley No. 25 02-77-0009 4686 427 419 6/2/77
38. 204-10-007D Pinto Valley No. 26 02-77-0009 4686 427 419 6/2/77
39. 204-10-007D Pinto Valley No. 229 02-77-0009 4686 427 419 6/2/77
40. 204-10-007D Pinto Valley No. 231 02-77-0009 4686 427 419 6/2/77
41. 204-10-007D Pinto Valley No. 232 02-77-0009 4686 427 419 6/2/77
42. 204-10-007D Pinto Valley No. 233 02-77-0009 4686 427 419 6/2/77
43. 204-10-007D Pinto Valley No. 234 02-77-0009 4686 427 419 6/2/77
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE A-23
Tax
Parcel
NAME PATENT
NO.
MINERAL SURVEY
NO.
BOOK PAGE RECORDING
DATE
44. 204-10-007D Pinto Valley No. 235 02-77-0009 4686 427 419 6/2/77
45. 204-10-007D Pinto Valley No. 236 02-77-0009 4686 427 419 6/2/77
46. 204-10-007D Pinto Valley No. 237 02-77-0009 4686 427 419 6/2/77
47. 204-10-007D Pinto Valley No. 238 02-77-0009 4686 427 419 6/2/77
48. 204-10-007D Pinto Valley No. 239 02-77-0009 4686 427 419 6/2/77
49. 204-10-007D Pinto Valley No. 240 02-77-0009 4686 427 419 6/2/77
50. 204-10-007D Pinto Valley No. 241 02-77-0009 4686 427 419 6/2/77
51. 204-10-007D Pinto Valley No. 242 02-77-0009 4686 427 419 6/2/77
52. 204-10-007D Pinto Valley No. 243 02-77-0009 4686 427 419 6/2/77
53. 204-10-007D Pinto Valley No. 244 02-77-0009 4686 427 419 6/2/77
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-1
APPENDIX C: DRILL HOLE COLLARS
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-2
HOLE # EAST NORTH ELEV AZ DIP DEPTH
1 -10128 7326 4378 0 -90 608
2 -10042 6935 4378 0 -90 1193
3 -9892 6520 4368 0 -90 823
4 -15146 4502 4083 0 -90 2293
5 -10193 6461 4369 0 -90 851
6 -9541 6643 4412 0 -90 950
7 -9679 6206 4302 0 -90 670
8 -10192 7530 4379 0 -90 1710
9 -8937 6730 4506 0 -90 1083
10 -9644 5609 4172 0 -90 1011
11 -10532 5349 4105 0 -90 1230
12 -10879 6328 4337 0 -90 985
13 -11189 7236 4357 0 -90 1666
14 -8661 5809 4254 0 -90 444
15 -12130 7131 4365 0 -90 1592
16 -11392 8226 4415 0 -90 1842
17 -10491 8472 4543 0 -90 1669
18 -8972 7957 4713 0 -90 940
19 -8051 7065 4526 0 -90 1624
20 -7710 6121 4442 0 -90 798
21 -15003 5629 4230 0 -90 1542
22 -14408 3689 3872 0 -90 818
23 -14582 4757 4063 0 -90 1463
24 -12230 5507 4060 0 -90 845
25 -13113 4164 3993 0 -90 1075
26 -14353 3420 3878 0 -90 1435
27 -14211 3702 3844 0 -90 40
28 -14325 3838 3888 0 -90 1314
29 -14365 3215 3839 0 -90 1210
30 -15948 7610 3762 0 -90 1137
31 -15125 3081 3950 0 -90 1032
32 -14525 8832 4161 0 -90 1200
33 -11323 6066 4149 0 -90 500
34 -11174 5899 4152 0 -90 500
35 -11130 6119 4249 0 -90 600
36 -15130 3089 3950 0 -90 2136
37 -11279 6285 4262 0 -90 632
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-3
38 -10937 6171 4307 0 -90 660
39 -11455 6548 4312 0 -90 802
40 -11648 6495 4282 0 -90 1091
41 -18006 6859 3680 0 -90 2170
42 -11835 6445 4321 0 -90 1130
43 -12034 6390 4388 0 -90 1006
44 -12198 6345 4469 0 -90 912
45 -12420 6284 4513 0 -90 1013
46 -12603 6234 4554 0 -90 1009
47 -12832 6275 4635 0 -90 1360
48 -11087 6338 4330 0 -90 830
49 -12665 6424 4548 0 -90 1543
50 -13051 6319 4710 0 -90 1840
51 -12472 6477 4494 0 -90 1669
52 -11166 6627 4358 0 -90 1173
53 -10973 6680 4363 0 -90 1358
54 -10587 6786 4277 0 -90 1272
55 -10394 6838 4290 0 -90 1240
56 -10201 6891 4298 0 -90 1113
57 -10780 6733 4350 0 -90 1390
58 -9815 6997 4451 0 -90 1356
59 -9622 7049 4507 0 -90 1322
60 -11218 6820 4358 0 -90 1443
61 -10674 6347 4336 0 -90 1061
62 -11060 6241 4311 0 -90 1216
63 -11007 6049 4250 0 -90 840
64 -10481 6400 4331 0 -90 1011
65 -11271 7013 4358 0 -90 1443
66 -9710 6611 4383 0 -90 928
67 -9324 6716 4490 0 -90 1125
68 -11324 7206 4359 0 -90 1489
69 -9131 6769 4528 0 -90 1118
70 -13344 6252 4751 0 -90 1926
71 -11990 6609 4357 0 -90 1442
72 -12766 6397 4594 0 -90 1679
73 -12043 6802 4371 0 -90 1411
74 -13533 6187 4715 0 -90 1935
75 -12815 6591 4552 0 -90 1547
76 -15077 5765 4213 0 -90 1793
77 -12096 6995 4375 0 -90 1325
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-4
78 -12867 6784 4512 0 -90 1552
79 -12201 7381 4443 0 -90 1393
80 -13741 6130 4599 0 -90 1639
81 -14884 5817 4251 0 -90 1291
82 -12920 6977 4511 0 -90 1551
83 -10447 7031 4317 0 -90 1357
84 -14691 5870 4260 0 -90 1300
85 -13890 6089 4512 0 -90 1552
86 -10343 6650 4278 0 -90 1183
87 -12973 7170 4502 0 -90 1317
88 -14498 5923 4313 0 -90 1353
89 -10236 6260 4404 0 -90 1039
90 -14112 6029 4430 0 -90 1470
91 -10429 6207 4339 0 -90 974
92 -14305 5976 4392 0 -90 1432
93 -13595 6377 4674 0 -90 1714
94 -10622 6154 4328 0 -90 963
95 -14744 6063 4264 0 -90 1304
96 -14358 6169 4379 0 -90 1329
97 -13657 6568 4674 0 -90 1714
98 -10814 6101 4310 0 -90 945
99 -14799 6259 4275 0 -90 1315
100 -13692 6766 4646 0 -90 1686
101 -14411 6362 4379 0 -90 1419
102 -10043 6312 4383 0 -90 1018
103 -14463 6555 4418 0 -90 1458
104 -9850 6365 4327 0 -90 872
105 -9657 6418 4357 0 -90 902
106 -14849 6449 4313 0 -90 947
107 -13972 6274 4490 0 -90 1395
108 -13761 5503 4129 0 -90 1169
109 -14025 6467 4505 0 -90 1455
110 -12372 6505 4463 0 -90 1502
111 -13708 5310 4130 0 -90 765
112 -13134 5483 4130 0 -90 540
113 -12419 6699 4431 0 -90 1156
114 -13200 6485 4672 0 -90 1396
115 -12481 6889 4427 0 -90 1152
116 -13249 6675 4625 0 -90 1350
117 -12534 7082 4455 0 -90 1180
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-5
118 -13296 6874 4594 0 -90 1319
119 -14078 6660 4513 0 -90 1238
120 -14638 5677 4265 0 -90 990
121 -14995 5372 4225 0 -90 950
122 -14922 5198 4175 0 -90 900
123 -14866 4993 4036 0 -90 761
124 -15266 4884 4121 0 -90 846
125 -15190 4697 4116 0 -90 841
126 -13217 5029 4127 0 -90 852
127 -13603 4924 4129 0 -90 539
128 -15093 4309 4071 0 -90 796
129 -15637 4782 3877 0 -90 332
130 -15532 4396 3866 0 -90 591
131 -15640 4750 3877 0 -90 602
132 -14041 5011 4128 0 -90 853
133 -15658 5191 3868 0 -90 593
134 -13024 5082 4120 0 -90 530
135 -15748 5581 3827 0 -90 552
136 -11604 6715 4320 0 -90 1045
137 -14418 4493 4090 0 -90 500
138 -14621 5060 4037 0 -90 762
139 -11657 6908 4324 0 -90 1049
140 -13936 4625 4224 0 -90 634
141 -11710 7100 4353 0 -90 1078
142 -13901 5257 4130 0 -90 540
143 -15185 5527 4213 0 -90 938
144 -10833 6926 4297 0 -90 1022
145 -13410 4977 4128 0 -90 538
146 -10885 7119 4358 0 -90 1083
147 -13159 4817 4133 0 -90 543
148 -13359 7064 4573 0 -90 1253
149 -13812 3415 3844 0 -90 569
150 -13413 3317 3843 0 -90 748
151 -13653 2841 3871 0 -90 281
152 -13706 3029 3841 0 -90 746
153 -14092 2924 3842 0 -90 1062
154 -13869 3651 3880 0 -90 1100
155 -13425 3516 3935 0 -90 1155
156 -13288 3144 4023 0 -90 388
157 -14033 2709 3974 0 -90 834
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-6
158 -13986 2535 4060 0 -90 380
301 -12772 7950 4358 0 -90 453
302 -12719 7757 4285 0 -90 290
303 -12825 8143 4375 0 -90 470
304 -12561 7179 4453 0 -90 458
305 -13403 7985 4197 0 -90 382
306 -14096 8242 4099 0 -90 419
307 -14412 8642 4037 0 -90 357
308 -13952 3169 4048 0 -90 773
309 -14150 3892 3907 0 -90 272
310 -13698 3757 3874 0 -90 194
311 -14110 3748 3870 0 -90 190
312 -13812 3415 4034 0 -90 309
313 -14005 3362 4003 0 -90 323
314 -14055 3547 3993 0 -90 313
315 -13859 3614 3947 0 -90 267
316 -14140 3118 3975 0 -90 295
317 -13846 2784 4122 0 -90 397
318 -13873 2880 4099 0 -90 419
319 -14092 2924 3998 0 -90 318
320 -14338 3064 3895 0 -90 260
321 -14198 3310 3921 0 -90 241
322 -13373 3328 4039 0 -90 359
323 -14250 3503 3922 0 -90 242
324 -14039 2731 4029 0 -90 349
325 -14054 2830 4038 0 -90 358
326 -13619 3468 4027 0 -90 302
327 -14212 3098 3945 0 -90 265
328 -13706 3029 4181 0 -90 501
329 -14191 2864 3948 0 -90 268
330 -14258 3086 3926 0 -90 291
331 -13513 3082 4205 0 -90 525
332 -14303 3695 3842 0 -90 162
333 -14443 3450 3839 0 -90 159
334 -13665 2879 4180 0 -90 500
335 -14136 2704 3976 0 -90 296
336 -14165 2800 3975 0 -90 295
337 -13461 2889 4167 0 -90 352
338 -13425 3497 3998 0 -90 318
339 -13180 3381 4007 0 -90 552
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-7
340 -13321 3135 4131 0 -90 451
341 -13270 2949 4174 0 -90 134
342 -13233 3573 3978 0 -90 298
343 -13479 3714 3928 0 -90 248
344 -13202 3167 4065 0 -90 250
345 -13036 3420 4069 0 -90 209
346 -12698 3513 4195 0 -90 560
347 -14531 3011 3868 0 -90 548
348 -11661 5026 4060 0 -90 470
349 -12169 4610 4010 0 -90 500
350 -12847 4434 4027 0 -90 500
501 -12105 5514 3622 0 -90 191
502 -12131 5607 4269 0 -90 274
503 -12156 5698 4313 0 -90 408
504 -12187 5812 4382 0 -90 297
505 -12172 5930 4452 0 -90 727
506 -12218 5925 4455 0 -90 325
507 -12257 6069 4558 0 -90 518
508 -12297 6214 4590 0 -90 190
509 -11946 5688 4265 0 -90 180
510 -11972 5785 4265 0 -90 225
511 -11753 5741 4265 0 -90 225
512 -11779 5837 4265 0 -90 225
513 -11805 5934 4310 0 -90 270
514 -11832 6030 4310 0 -90 270
515 -11481 5504 4126 0 -90 176
516 -11507 5601 4163 0 -90 213
517 -11533 5697 4208 0 -90 258
518 -11560 5794 4240 0 -90 290
519 -11585 5885 4275 0 -90 280
520 -11586 5890 4274 0 -90 279
521 -11612 5987 4290 0 -90 295
522 -11639 6083 4282 0 -90 287
523 -11665 6180 4260 0 -90 265
524 -11692 6276 4234 0 -90 194
525 -11744 6469 4260 0 -90 355
526 -11409 5939 4169 0 -90 219
527 -11147 5803 4130 0 -90 180
528 -11200 5996 4150 0 -90 200
529 -11253 6189 4220 0 -90 180
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-8
530 -11306 6382 4280 0 -90 195
531 -10819 6119 4155 0 -90 160
532 -10077 5681 4225 0 -90 185
533 -10130 5874 4360 0 -90 230
534 -10168 6050 4458 0 -90 373
535 -10262 6356 4275 0 -90 235
536 -14899 4569 4229 0 -90 459
537 -15009 4815 4214 0 -90 444
538 -15029 5073 4190 0 -90 510
539 -15090 5295 4191 0 -90 466
540 -14627 4739 4318 0 -90 503
541 -14667 4894 4384 0 -90 569
542 -14828 5472 4300 0 -90 215
543 -14721 5090 4331 0 -90 516
544 -14779 5302 4322 0 -90 417
545 -14251 4565 4157 0 -90 387
546 -14313 4794 4285 0 -90 335
547 -14351 4931 4367 0 -90 327
548 -14389 5069 4426 0 -90 566
549 -14429 5216 4453 0 -90 368
550 -14453 5315 4310 0 -90 270
551 -14495 5457 4343 0 -90 393
552 -14547 5647 4265 0 -90 270
553 -14234 4958 4310 0 -90 270
554 -14260 5055 4310 0 -90 270
555 -14313 5248 4310 0 -90 270
556 -14359 5349 4435 0 -90 665
557 -14366 5441 4310 0 -90 270
558 -14392 5537 4311 0 -90 271
559 -14073 4899 4357 0 -90 452
560 -14176 5069 4470 0 -90 610
561 -14178 5285 4537 0 -90 677
562 -14223 5449 4452 0 -90 502
563 -14309 5703 4320 0 -90 235
564 -14424 6182 4266 0 -90 226
565 -14043 5402 4390 0 -90 305
566 -14091 5572 4430 0 -90 345
567 -13895 5235 4487 0 -90 357
568 -13935 5382 4559 0 -90 609
569 -14010 5409 4583 0 -90 588
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-9
570 -13661 4746 4253 0 -90 258
571 -13784 4962 4358 0 -90 633
572 -13835 5016 4310 0 -90 225
573 -14113 5566 4470 0 -90 610
574 -14014 5672 4487 0 -90 627
575 -14089 5932 4481 0 -90 261
576 -13495 4919 4238 0 -90 288
577 -13547 5097 4310 0 -90 180
578 -13554 5220 4420 0 -90 470
579 -13625 5384 4551 0 -90 511
580 -13678 5577 4607 0 -90 342
581 -13197 4957 4217 0 -90 402
582 -13243 5126 4307 0 -90 492
583 -13284 5276 4402 0 -90 497
584 -13319 5404 4480 0 -90 530
585 -13349 5512 4552 0 -90 287
586 -13388 5656 4630 0 -90 545
587 -13099 5432 4380 0 -90 340
588 -13150 5618 4502 0 -90 642
589 -12863 5082 4193 0 -90 243
590 -12805 5038 4175 0 -90 135
591 -12929 5322 4287 0 -90 382
592 -12937 5313 4287 0 -90 337
593 -12979 5506 4389 0 -90 439
594 -13019 5654 4485 0 -90 535
595 -13074 5851 4611 0 -90 661
596 -12983 5907 4605 0 -90 700
597 -12981 6442 4648 0 -90 428
598 -12558 5313 4236 0 -90 196
599 -12585 5410 4266 0 -90 271
600 -12611 5506 4299 0 -90 259
601 -12641 5615 4345 0 -90 305
602 -12654 5778 4415 0 -90 510
603 -12727 5933 4523 0 -90 618
604 -12760 6052 4602 0 -90 202
605 -12867 6784 4492 0 -90 317
606 -13594 3288 4102 0 -90 422
607 -13805 3222 4098 0 -90 283
608 -13875 3009 4098 0 -90 373
609 -14481 3628 3851 0 -90 126
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-10
610 -14461 3134 3869 0 -90 54
611 -14516 3663 3851 0 -90 36
612 -14551 3629 3844 0 -90 74
613 -14427 3229 3876 0 -90 61
614 -14446 3267 3872 0 -90 57
615 -14465 3302 3870 0 -90 55
616 -14403 3288 3880 0 -90 65
617 -14481 3252 3872 0 -90 57
618 -13552 7011 4489 0 -90 314
619 -14753 6475 4279 0 -90 239
620 -14435 3037 3878 0 -90 108
116A -13249 6675 4624 0 -90 1350
143A -15186 5531 4213 0 -90 938
155-6 -13425 3516 3935 0 -90 646
16-X -11393 8826 4415 0 -90 383
21-6 -15003 5629 4222 0 -90 400
26-6 -14353 3420 3878 0 -90 1338
27A -14211 3702 3844 0 -90 1221
52-6 -11166 6627 4356 0 -90 1135
53-6 -10973 6680 4358 0 -90 1205
71-6 -11990 6609 4357 0 -90 870
85-6 -13890 6089 4512 0 -90 1354
90-6 -14112 6029 4430 0 -90 1227
97-01 -8737 6092 4323 0 -90 400
97-02 -8834 5922 4284 0 -90 310
97-03 -9457 5933 4263 0 -90 520
97-04 -9739 6040 4266 0 -90 540
97-05 -10117 5822 4172 0 -90 300
97-06 -10750 5702 4086 0 -90 460
97-07 -15360 5773 3319 0 -90 250
97-08 -15000 6026 3321 0 -90 250
97-09 -14979 6129 3317 0 -90 250
97-10 -9885 5731 4213 0 -90 300
97-11 -13616 6459 3322 0 -90 360
97-12 -12840 6678 3321 0 -90 320
97-13 -14477 6090 3319 0 -90 490
97-14 -10325 5785 4173 0 -90 500
97-16 -13048 6771 3319 0 -90 80
99A -14799 6259 4275 0 -90 1315
A08-1 -17535 1240 3897 0 -90 72
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-11
A08-2 -18403 1809 3898 0 -90 49
A08-3 -19044 4926 3896 0 -90 127
A08-4 -19759 4856 3888 0 -90 120
AD-001 -8775 6282 4370 0 -90 640
AD-002 -8940 6202 4334 0 -90 750
AD-003 -9168 6098 4415 0 -90 785
AD-004 -9417 6280 4405 0 -90 800
AD-005 -9719 5890 4267 0 -90 800
AD-006 -9600 6124 4275 0 -90 700
AD-007 -10480 5738 4171 0 -90 300
AD-008 -11392 5949 3778 0 -90 360
AD-009 -11615 6000 3776 0 -90 500
AD-010 -9074 6504 4431 0 -90 800
AD-012 -12288 6175 3496 0 -90 410
AD-013 -12478 6107 3452 0 -90 430
AD-014 -12629 6674 3372 0 -90 620
AD-016 -12817 6631 3373 0 -90 600
AD-017 -12839 5930 3455 0 -90 540
AD-018 -13022 6580 3374 0 -90 380
AD-018B -12999 6579 3374 0 -90 730
AD-020 -13220 5811 3453 0 -90 530
AD-021 -13393 6357 3324 0 -90 670
AD-023 -13433 5834 3452 0 -90 560
AD-024 -13747 6224 3321 0 -90 760
AD-026 -13519 4916 3655 0 -90 859
AD-028 -13831 5273 3449 0 -90 910
AD-029 -13990 5570 3452 0 -90 700
AD-030 -14064 6039 3286 0 -90 130
AD-030B -14064 6039 3286 0 -90 950
AD-031 -14219 5397 3222 0 -90 500
AD-032 -14293 5934 3263 0 -90 710
AD-051 -13595 5681 3455 0 -90 620
AD-053 -11628 6815 3435 0 -90 540
AD-054 -13009 4812 4000 0 -90 1050
AD-055 -12313 6948 3494 0 -90 750
AD-060 -14543 5319 3135 0 -90 500
AD-061 -14714 5189 3138 0 -90 650
AD-062 -14519 4500 3140 0 -90 550
AD-063 -14916 5300 3139 0 -90 750
AD-064 -15128 5296 3099 0 -90 710
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-12
AD-065 -14976 4765 3096 0 -90 750
AD-103 -15813 3662 3894 0 -90 720
AD-105 -15774 4131 3778 0 -90 600
AD-106 -16024 4201 3820 0 -90 700
AD-107 -16204 4609 3818 0 -90 840
AD-108 -16251 5027 3772 0 -90 800
AD-109 -16023 5611 3686 0 -90 900
AD-110 -15940 5945 3642 0 -90 800
AH04T1211P -16499 1958 3914 0 -90 80
AH04T1213P -19921 3442 3850 0 -90 63
AH04T3-15P -21674 7075 3716 0 -90 160
AH04T3-17P -22410 7952 3718 0 -90 220
APP-4 -24605 9869 3256 0 -90 153
APP-5A -19721 -15 3468 0 -90 35
APP-5B -19712 -18 3472 0 -90 200
APP-6 -18873 -787 3516 0 -90 135
B08-01 -15801 2259 3989 0 -90 99
B08-02 -16487 3157 3997 0 -90 89
B08-02A -16492 3168 3997 0 -90 118
B08-03 -17628 5364 4068 0 -90 91
B08-04 -17366 6696 4053 0 -90 238
B08-05 -15935 7369 4094 0 -90 96
B08-06 -14804 8686 4196 0 -90 46
B08-07 -17316 8181 4074 0 -90 121
B08-08 -16318 9520 4193 0 -90 180
B08-09 -15250 9504 4249 0 -90 177
B08-10 -18673 5065 3880 0 -90 6
B08-10A -18671 5062 3880 0 -90 4
B08-11 -17691 2743 3908 0 -90 6
B08-12 -15960 1885 3910 0 -90 14
B08-13 -15449 1258 3916 0 -90 6
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-13
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-14
DOMESTIC5 -18450 -500 3687 0 -90 520
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-15
E-33 -13817 7179 4226 0 -90 813
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-16
GTI-MW-3 -15374 126 3879 0 -90 79
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MW-04-03 -17545 -584 3582 0 -90 90
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-17
MW-04-05 -16808 3297 3976 0 -90 210
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-18
PZ-08-08 -14820 8630 4192 0 -90 1517
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-19
R-32 -10981 5864 4198 0 -90 300
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-20
R-72 -12929 5683 4175 0 -90 350
R-73 -12643 5761 4170 0 -90 400
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-21
SHOPSITE1 -14451 -322 3888 0 -90 100
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-22
T1-I-02 -19012 321 3670 0 -90 120
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-23
T2-PP5 -19984 5917 3782 0 -90 100
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W6D -12086 5442 4174 0 -90 134
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-24
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G-5A -15179 3677 3547 62 -65 153
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DDH-10-6 -15493 4166 3433 231 -54 1076
DDH-10-7 -11263 5057 4090 92 -89 2112
KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-25
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-26
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KIRKHAM GEOSYSTEMS LTD. DECEMBER 2013
CAPSTONE MINING CORP. NI 43-101 TECHNICAL REPORT PINTO VALLEY PROPERTY PAGE C-27
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