Austral Gold Delivers Updated Mineral Reserve and Resource Estimates in Chile
MEDIA RELEASE
Austral Gold Limited 29 March 2022
Austral Gold Delivers Updated Mineral Reserve and Resource Estimates in Chile
Sydney, Australia (March 29, 2022) Austral Gold Limited (“Austral” or the “Company”) (ASX: AGD; TSX-V: AGLD) is pleased to announce the positive results of updated Mineral Reserve and Mineral Resource Estimates prepared by SLR Consulting (Canada) Ltd. (“SLR”) in accordance with CIM Definitions 2014, National Instrument 43-101 (“NI 43-101”) and Joint Ore Reserves Committee Code, 2012 (JORC 2012) for the Company’s 100% owned Guanaco- Amancaya Operation in Chile. The Guanaco-Amancaya Operation consists of the Guanaco Mine (Guanaco) and Inesperada satellite deposit (Inesperada), the Amancaya Mine (Amancaya), and the Guanaco heap leach pads (Heap Reprocessing project). The updated Mineral Reserve and Mineral Resource estimates will be supported by a technical report prepared in accordance with NI 43-101 that will be filed on SEDAR (www.sedar.com) within 45 days of this news release (the “Technical Report”).
Highlights:
- Proven and Probable Mineral Reserves for the Guanaco-Amancaya Operation are estimated
to be 12.1 Mt grading 0.84 g/t Au and 4.89 g/t Ag and containing 0.326 million ounces (Moz) Au and 1.91 M oz Ag. The Heap Reprocessing material provides the majority of the increase from previous estimates.
- Measured and Indicated Mineral Resources for the Guanaco-Amancaya Operation are
estimated to be 14.9 million tonnes (Mt) grading 1.03 g/t Au and 5.89 g/t Ag
- Inferred Mineral Resources are estimated to be approximately 2.4 Mt grading 1.18 g/t Au
and 3.93 g/t Ag
- After-Tax Net Present Value (NPV) at 6.89% discount rate is US$77.0 million
- Undiscounted pre-tax free cash flows of US$132.7 million (post tax US$102.6 million)
- All-in Sustaining Cost (AISC): US$1,050/oz Au
- The mine life is 12 years, based on Mineral Reserves.
- Combined estimated annual average production of 17,400 ounces recovered for gold and
52,800 ounces recovered for silver
- Mine life capital totals US$20.9 million, consisting of installation of a new crusher and heap
leach pad for heap reprocessing, capitalized waste stripping, and closure costs (offset by salvage value).
- Average operating cost over the mine life is $17.51 per tonne milled.
- Metallurgical recovery averages 60.4% for gold and 31.7% for silver over the LOM (the
average is highly influenced by the Heap Reprocessing material, higher-grade feed has higher recoveries).
- Metal prices: Life of Mine (“LOM”) average of US$1,686/oz gold and US$22.88/oz silver,
based on consensus of independent forecasts for annual prices.
*See tables below for assumptions used in the estimates.
Chief Executive Officer of Austral, Stabro Kasaneva commented, “We are excited at the prospect of continuing to increase shareholder value by extending the mine life of Guanaco-Amancaya. The Heap Reprocessing project is expected to utilize excess processing capacity to provide a solid long-term basis for mine operations, covering costs and providing a return at current financial inputs. Opportunities for higher-grade ore sources from exploration or acquisition could be easily integrated into the Life of Mine plan, and would benefit from lower unit costs.”
The updated estimates are based on Company infill drilling and exploration activities since the December 31, 2016 Technical Report filed on SEDAR, as well as metallurgical testwork and engineering studies on the Heap Reprocessing project.
Mining at Guanaco was discontinued in February 2020. Amancaya is currently in production, while Guanaco Heap Reprocessing and Inesperada are new projects that are anticipated to commence operations in 2023. Amancaya's Mineral Reserves are expected to be exhausted in 2023 when Inesperada commences production. It is anticipated that the Inesperada open pit Mineral Reserves will be exhausted by the end of 2025. Reprocessing of the heaps is scheduled to commence in 2023 and continue through to the end of mine life in 2033. Heaps I, II, and III are expected to be reprocessed in reverse order of their numbering, beginning with Heap III, continuing with Heap II, and finishing with Heap I. Approximately 15% of the Mineral Reserve contained ounces comes from Amancaya, 68% from Heaps Reprocessing, and 17% from Inesperada.
Summary of Mineral Resources – December 31, 2021 Austral Gold Limited– Guanaco-Amancaya Operation
Grade Contained Metal Tonnes Classification (000 t)
(g/t Au) (g/t Ag) (000 oz Au) (000 oz Ag) Guanaco
Underground
| Measured | 581 | 2.61 | 12.67 | 48.7 | 236.6 |
| Indicated | 868 | 2.31 | 17.67 | 64.5 | 492.9 |
| M + I | 1,448 | 2.43 | 15.67 | 113.3 | 729.5 |
| Inferred | 250 | 3.42 | 6.26 | 27.6 | 50.4 |
Amancaya
Underground
| Measured | 49 | 7.96 | 16.60 | 12.6 | 26.4 |
| Indicated | 249 | 6.32 | 15.96 | 50.6 | 127.9 |
| M+I | 299 | 6.59 | 16.06 | 63.3 | 154.3 |
| Inferred | 61 | 5.05 | 11.02 | 9.9 | 21.5 |
Grade Contained Metal Tonnes Classification (000 t)
(g/t Au) (g/t Ag) (000 oz Au) (000 oz Ag)
Classification Tonnes Grade Contained Metal (000 t) (g/t Au) (g/t Ag) (000 oz Au) (000 oz Ag) Amancaya Julia and Cerro Amarillo Projects
Underground
| Measured | - | - | - | - | - |
| Indicated | 72 | 5.36 | 9.50 | 12.4 | 21.9 |
| M+I | 72 | 5.36 | 9.50 | 12.4 | 21.9 |
| Inferred | 91 | 5.80 | 13.04 | 16.9 | 38.0 |
Inesperada
Open Pit
| Measured | - | - | - | - | - |
| Indicated | 1,682 | 1.05 | 14.38 | 56.7 | 778.0 |
| M+I | 1,682 | 1.05 | 14.38 | 56.7 | 778.0 |
| Inferred | 74 | 0.91 | 12.40 | 2.2 | 29.5 |
Heap Leach Pads
| Measured | 11,417 | 0.67 | 3.10 | 247.5 | 1,139.1 |
| Indicated | - | - | - | - | - |
| M+I | 11,417 | 0.67 | 3.10 | 247.5 | 1,139.1 |
| Inferred | 1,907 | 0.55 | 2.64 | 33.6 | 161.8 |
| Total Measured 12,047 | 0.80 | 3.62 | 308.9 | 1,402.1 | |
| Total Indicated | 2,871 | 2.00 | 15.39 | 184.2 | 1,420.7 |
| Total M+I | 14,918 | 1.03 | 5.89 | 493.0 | 2,822.8 |
| Total Inferred | 2,383 | 1.18 | 3.93 | 90.1 | 301.3 |
Notes:
1. Mineral Resources followed CIM (2014) definitions and are compliant with the JORC Code.
2. Mineral Resources are reported on a 100% ownership basis.
3. Mineral Resources are inclusive of Mineral Reserves.
4. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
5. Mineral Resources are estimated at the following cut-off grades:
- Amancaya and Guanaco underground Mineral Resources: 2.90 g/t AuEq and 1.50 g/t AuEq, respectively.
- Inesperada open pit Mineral Resources: 0.38 g/t Au.
• Heap Leach Pads Mineral Resources: zero cut-off grade – the entire volume is included.
6. Mineral Resources at Guanaco and Amancaya are estimated using a long-term gold price of US$1,750/oz and a silver price of US$22/oz. Mineral Resources at Inesperada and Heap Leach Pads are estimated using a long-term gold price of US$1,750/oz.
7. Gold equivalency (AuEq) was calculated as follows:
- Guanaco: AuEq = Au + 0.0106 x Ag based on a gold and silver price of $1,750/oz and $22/oz respectively and recoveries of gold and silver of 95% and 80%, respectively.
- Amancaya: AuEq = Au + 0.0107 x Ag based on a gold and silver price of $1,750/oz and $22/oz respectively and recoveries of gold and silver of 93% and 79%, respectively.
8. Metallurgical recoveries are 93% for gold and 79% for silver for Amancaya, 95% for gold and 80% for silver for Guanaco, 80% for gold for Inesperada, and 54%, 70%, and 46% for gold for Heaps I, II, and II, respectively.
9. A minimum mining width of 1.5 m is used for resource underground shapes for the Amancaya and Guanaco mines.
10. Bulk densities are 2.5 t/m3 for Amancaya and Guanaco, 2.44 t/m3 for Inesperada, and 1.77 t/m3 for Heap I, 1.50 t/m3 for Heap II, and 1.70 t/m3 for Heap III, respectively.
11. Numbers may not add due to rounding.
Guanaco-Amancaya Operation Mineral Reserves – December 31, 2021 Austral Gold Limited– Guanaco-Amancaya Operation
Grades Contained Metal Tonnes Category (000 t)
(g/t Au) (g/t Ag) (000 oz Au) (000 oz Ag) Underground (Amancaya)
| Proven | 47 | 5.74 | 11.51 | 9 | 17 |
| Probable | 251 | 5.01 | 12.95 | 40 | 105 |
| Subtotal Underground | 298 | 5.13 | 12.72 | 49 | 122 |
Open Pit (Inesperada)
| Proven | - | - | - | - | - |
| Probable | 1,607 | 1.05 | 14.39 | 54 | 744 |
| Subtotal Open Pit | 1,607 | 1.05 | 14.39 | 54 | 744 |
Guanaco Heap Leach Pads
| Proven | 10,240 | 0.68 | 3.17 | 223 | 1,043 |
| Probable | - | - | - | - | - |
| Subtotal Heap Leach Pads | 10,240 | 0.68 | 3.17 | 223 | 1,043 |
Total
| Proven Total | 10,287 | 0.70 | 3.21 | 232 | 1,060 |
| Probable Total | 1,859 | 1.58 | 14.2 | 95 | 848 |
| Total Proven + Probable | 12,146 | 0.84 | 4.89 | 326 | 1,909 |
Notes:
1. Mineral Reserves follow CIM (2014) definitions and are compliant with the JORC Code.
2. Mineral Reserves are reported on a 100% ownership basis and estimated at the following cut-off grades:
- Amancaya: break-even cut-off grade of 3.04 g/t AuEq, and marginal cut-off grades of 2.37 g/t AuEq and 1.37 g/t AuEq for SLS stopes and drifts respectively.
- Inesperada - pit discard cut-off grade of 0.40 g/t Au.
- Heap Leach Pads - Marginal cut-off grades for Heap Reprocessing have been estimated as 0.20 g/t Au and 0.15 g/t Au for Heaps I and Heap II respectively, and at zero cut-off for Heaps III.
3. Mineral Reserves are estimated using an average long term gold price of US$1,700/oz and silver price of US$22/oz. 4.
Amancaya AuEq was calculated as AuEq = Au + 0.0110 x Ag, based on prices of US$1,700/oz Au and US$22/oz Ag and recoveries of Au and Ag of 93% and 79%, respectively.
5. The following parameters were used for the Amancaya Mineral Reserve estimate:
- A minimum mining width of 1.5 m was used for SLS stopes and 3.5 m for drifts.
- Stope dilution: 0.5 m in the hanging wall and 0.5 m in the footwall (1.0 m total).
- Drift dilution: 0.25 m in each of the side walls (0.5 m total).
6. Metallurgical recovery is 93% for gold and 79% for silver.
7. Bulk density is 2.5 t/m3.
8. The following parameters were used for the Inesperada Mineral Reserve estimate:
- Dilution and mining recovery factors of 0% and 100% respectively were applied.
- Metallurgical recovery is 80% for gold.
- Bulk density is 2.44 t/m3.
9. The following parameters were used for the Mineral Reserve estimate for the Guanaco Heaps:
- Heap Leach Pad I: maximum of 5% dilution. The average dilution over the LOM is 3.5%. Dilution grades are 0.18 g/t Au and 1.50 g/t Ag.
• Heap Leach Pad II: maximum of 5% dilution. The average dilution over the LOM is 2.5%. Dilution grades are 0.13 g/t Au and 1.40 g/t Ag.
• Heap Leach Pad III: All internal dilution within the heap limits was included.
10. Metallurgical recoveries for Heaps I, II, and II are 54%, 70%, and 46% for gold respectively.
11. Bulk density is 1.77 t/m3 for Heap I, 1.50 t/m3 for Heap II, and 1.70 t/m3 for Heap III.
12. Numbers may not add due to rounding.
There are no known legal, political, environmental, or other risks that could materially affect the potential development of the mineral resources or mineral reserves.
TECHNICAL CONTENT AND QUALIFIED PERSONS
The Technical Report for the Guanaco-Amancaya Operation referenced in this news release was prepared under the supervision of the following persons, each an Independent “Qualified Person” as defined by NI 43-101:
- Orlando Rojas, MAIG, SLR Associate Principal Geologist,
- Rodrigo Barra, MAIG, SLR Associate Principal Geologist,
- Stephan R. Blaho, MBA, P.Eng., SLR Principal Mining Engineer,
- Varun Bhundhoo, ing., SLR Project Mining Engineer,
- Andrew P. Hampton, M.Sc., P.Eng., SLR Principal Metallurgist, and
- Luis Vasquez, M.Sc., P.Eng, SLR Senior Environmental Consultant and Hydrotechnical Engineer
The technical content of this news release has also been reviewed and approved by the above Qualified Persons.
The Technical Report to support the updated Mineral Reserve and Mineral Resource estimates for the Guanaco-Amancaya Operation, prepared in accordance with NI 43-101, will be filed on SEDAR (www.sedar.com) within 45 days of this news release.
About Austral Gold
Austral Gold Limited is a growing gold and silver mining, development and exploration company whose strategy is to expand the life of its cash generating assets in Chile, restart its Casposo mine in Argentina and build a portfolio of quality assets in Chile, the USA and Argentina organically through a Tier 1 or 2 exploration strategy and via acquisitions and strategic partnerships. Austral owns a 100% interest in the Guanaco/Amancaya mine in Chile and the Casposo Mine (currently on care and maintenance) in Argentina, a non-controlling interest in the Rawhide Mine in Nevada, USA and a non-controlling interest in Ensign Gold which holds the Mercur project in Utah, USA. In addition, Austral owns an attractive portfolio of exploration projects in the Paleocene Belt in Chile (including those acquired in the 2021 acquisition of Revelo Resources Corp), a non-controlling interest in Pampa Metals and a 100% interest in the Pingüino project in Santa Cruz, Argentina. Austral Gold Limited is listed on the TSX Venture Exchange (TSX-V: AGLD) and the Australian Securities Exchange. (ASX: AGD). For more information, please consult Austral's website at www.australgold.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Release approved by the Chief Executive Officer of Austral Gold, Stabro Kasaneva.
For additional information please contact:
David Hwang Ben Jarvis
Company Secretary Director Austral Gold Limited Austral Gold Limited [email protected] [email protected] +61 (2) 9698 5414 +61 413 150 448
Forward Looking Statements
Statements in this news release that are not historical facts are forward-looking statements. Forward-looking statements are statements that are not historical and consist primarily of projections - statements regarding future plans, expectations and developments. Words such as "expects", "intends", "plans", "may", "could", “potential”, "should", "anticipates", "likely", "believes" and words of similar import tend to identify forward-looking statements. Forwardlooking statements in this news release include the intention to file the Technical Report within 45 days of the news release; the expectation of increased shareholder value from the extension of mine life; the expectation that the Heap Reprocessing project is expected to utilize excess processing capacity for stated benefits; and that stated opportunities can be integrated into the Life of Mine plan that would benefit from lower unit costs.
These forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied, including, without limitation, business integration risks; uncertainty of production, development plans and cost estimates, commodity price fluctuations; political or economic instability and regulatory changes; currency fluctuations, the state of the capital markets especially in light of the effects of the novel coronavirus, uncertainty in the measurement of mineral reserves and resource estimates, Austral’s ability to attract and retain qualified personnel and management, potential labour unrest, reclamation and closure requirements for mineral properties; unpredictable risks and hazards related to the development and operation of a mine or mineral property that are beyond the Company’s control, the availability of capital to fund all of the Company’s projects and other risks and uncertainties identified under the heading “Risk Factors” in the Company’s continuous disclosure documents filed on the ASX and on SEDAR. You are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Austral cannot assure you that actual events, performance or results will be consistent with these forwardlooking statements, and management’s assumptions may prove to be incorrect. Austral’s forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the date hereof and Austral does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change other than as required by applicable law. For the reasons set forth above, you should not place undue reliance on forward-looking statements.
JORC CODE (2012) TABLE 1
The following table provides a summary of important assessment and reporting criteria used at the Guanaco-Amancaya Operation for the reporting of Mineral Resources in accordance with the Table 1 checklist in The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition). Criteria in each section apply to all preceding and succeeding sections.
Reference is made to Competent Persons from SLR Consulting (Canada) Ltd. (SLR), namely:
- Orlando Rojas, MAIG (responsible for Sections 1.3.1, 1.3.2, 1.3.3, 1.3.4, 1.3.5, 4, 5, 6, 7, 8, 9, 10, 11, 12, 23 and contributions to Sections 2 and 27).
- Rodrigo Barra, MAIG (responsible for Sections 1.1.1.1, 1.1.2.1, 1.3.6, 14 (with the exception of Sections 14.5.10 and 14.5.14 (Heap III resources)), 25.1, 26.1, and contributions to Sections 2 and 27).
- Stephan R. Blaho, MBA, P.Eng. (responsible for Sections 1.2, 1.3.7.1, 1.3.7.2, 1.3.8.1, 1.3.8.2, 1.3.13, 14.5.10 and 14.5.14 (Heap III resources), 15.1, 15.2, 15.4, 16.1, 16.2, 16.4, 19, 21, 22, and 24 and contributions to Sections 1.1.1.2, 1.1.1.4, 1.1.2.2, 2, 3, 25.2, 25.4, 26.2, and 27 of the Technical Report).
• Varun Bhundhoo, ing. (responsible for Sections 1.1.1.4, 1.3.7.3, 1.3.8.3, 1.3.10, 15.3, 15.5, 15.6, 16.3, 18 (except 18.6) and contributions to Sections 1.1.1.2, 1.1.1.4, 1.1.2.2, 2, 25.2, 25.4, 26.2, and 27 of the Technical Report).
- Andrew P. Hampton, M.Sc., P.Eng. (responsible for Sections 1.1.1.3, 1.1.2.3, 1.3.9, 13, 17, 25.3, 26.3, and contributions to Sections 2 and 27 of the Technical Report).
- Luis Vasquez, M.Sc., P.Eng. (responsible for Sections 1.1.1.5, 1.1.2.4, 1.3.12, 18.6, 20, 25.5, 26.4, and contributions to Sections 2 and 27 of the Technical Report)
The Competent Persons (CP) prepared a NI 43-101 Technical Report (CPR) on the property, dated March 25, 2022.
JORC Code Table 1 – March 25, 2022 1
Section 1 – Sampling Techniques and Data
| Criteria | Commentary |
| Sampling Techniques | Guanaco • From project inception, staff employed by the respective project owners were responsible for sample collection, core splitting, density determinations, sample storage, and sample security. • Every underground face advance (3.5 m average) is channel-sampled. The channel-sample length ranges from 0.4 m to 1.0 m in mineralized portions. No fixed lengths have been established for samples in barren zones. The intervals between marks are sampled by chipping the walls with a chisel and a hammer on a 20 cm to 30 cm width. The sample weight is 5 kg to 8 kg on average. • Previous owners (1980 to 2000) collected reverse circulation (RC) samples at 1 m, 1.5 m, and 2.0 m intervals. • Guanaco Compañía Minera SpA (GCM) RC samples were collected every 1.5 m in 2004, and every one metre or two metres in the 2006– 2021 drilling campaigns. A riffle splitter was installed just below the cyclone to divide the whole sample. The sample was split and collected in two metallic trays. One portion was selected for analysis and the second was retained for back up. A small portion of the sample was collected by a spoon and placed in a chip sample tray for geological logging. Samples were weighed and bagged into pre-labelled plastic bags. The average estimated sample weights were 52 kg and 26 kg for 2 m and 1 m samples, respectively. • GCM diamond-drill sampling from the 2015-2021 campaigns consisted of splitting the core in half using a manual splitter, and following a line marked by the logging geologists. Amancaya • Recent Amancaya sampling was completed in three main phases: 1. Yamana Gold Inc. (Yamana) trenching and RC drilling – 2004 to 2008 2. Grupo Minero Las Cenizas S.A. (Cenizas) resampling of trenches and drilling – 2009. 3. Austral Gold Limited (Austral Gold) diamond drilling – 2015 and 2021. • Yamana trench samples were collected by channel sampling of freshly exposed bedrock in surface trenches. The channel samples were a standard one metre in length, however, they were occasionally shorter depending on geological boundaries. Standards, blanks, and duplicate chip samples were inserted into the sample stream. • For Yamana and Cenizas RC drilling, two chip samples were collected using a cyclone, one to be sent for analysis and one to be saved as a reject sample. Sample intervals were generally two metres, but occasionally one metre, and the size of collected sample ranged from eight kilograms to ten kilograms. A sample number was assigned to each sampled interval. Quality Assurance (QA) and Quality Control (QC) samples were inserted into the sampling stream for each vein intersection. Sample intervals were determined by both lithology and a visual estimate of quartz veining and quartz stockworks/breccia. Sampling of mineralized zones was generally on one metre intervals, however, mineralized contacts were also considered. |
JORC Code Table 1 – March 25, 2022 2
| Criteria | Commentary |
| • For Cenizas diamond drilling, half core samples over two metres were taken where mineralization or alteration was visible, respecting lithological contacts identified in the diamond drill core. Core was split using a hydraulic splitter. Minimum sample length within the mineralized veins was 0.20 m. Unaltered and unmineralized half core samples were taken at three metre intervals, with some compositing of samples up to nine metres performed after sample preparation. QA and QC samples were inserted into the sampling stream for each vein intersection. • For Austral Gold half core samples over 1.5 m were taken where mineralization or alteration was visible, respecting lithological contacts identified in the diamond drill core. Core was split using a hydraulic splitter. Minimum sample length within the mineralization veins was 0.30 m. Unaltered and unmineralized half core samples were also taken at 1.5 m intervals. Quality Assurance (QA) and Quality Control (QC) samples were inserted into the sampling stream for each vein intersection. Drill core was collected at the drill site by a company truck. • Sample collection is described in CPR Section 11. Inesperada • 2020 RC samples were collected using a cyclone and then split in a riffle twice if the sample was one metre long and three times if the sample was two metres long. The purpose was to reduce the mass from 60 kg to 7.5 kg. Two samples were collected, one to be sent for analysis and one to be saved as a reject sample. A sample number was assigned to each sampled interval. Samples were collected at the drill site by a truck contracted by the assay laboratory. • Half core samples were taken at lengths that ranged from 20 cm to 3.3 m, averaging 1.2 m, respecting contacts identified in the diamond drill core drilled in 2019 to 2021. Core was split using a core saw. Drill core was collected at the drill site by a company truck. | |
| Drilling Techniques | Guanaco • A total of 331,186 m in 2,309 RC, core, and mixed holes (RC/core) have been drilled on the Guanaco property from 1980 to December 31, 2021. Of these drill holes, the majority are RC (2,143 holes, totalling 299,797 m). • There is no information regarding the type of rig used, hole diameters, and sample collection techniques used in holes drilled before 1991. • Amax Gold Inc. (Amax) drilled 1,055 holes totalling 144,578 m between 1991 and 1997. Most of these holes were drilled using RC rotary drills (only four were diamond drill holes) and comprised exploration, condemnation, and infill drill holes. The first 175 rotary holes were drilled with 5¼ inch bits, except for the top three metres to six metres of each hole, which was drilled with seven inch bits to allow installation of the casing. The majority of drilling was accomplished using conventional pneumatic hammers, but 15% to 20% of the meterage was drilled with tricone bits. Approximately 1% to 2% of the drill holes were drilled with an open-face hammer bit. • Compañía Minera Kinam Guanaco (Kinam) drilling programs (1999-2000) consisted of 193 RC drill holes totalling 33,875 m. In addition, three diamond holes were completed during the Kinam exploration program totalling 572.65 m. Tricones with 5½" or 5¾" diameter were used so that each sample would weigh approximately 58 kg to 64 kg. • GCM campaigns from 2004 to 2021 consisted of 145 diamond drill holes totalling 24,206 m, 697 RC drill holes totalling 108,243 m, and 14 RC/core drill hole totalling 6,451 m: |
JORC Code Table 1 – March 25, 2022 3
| Criteria | Commentary |
| o Diamond drill holes during 2004 were completed by Major Drilling Ltda. (Major), a local contractor. Major used UDR-650 and UDR- 1000 rigs. No documentation on hole diameter was available. Major was also the drilling contractor used during the 2008 drilling campaign. o During 2006, GCM contracted Boart Longyear to carry out drilling of leach pads using the sonic drilling method. This method provides highly representative, continuous core samples of unconsolidated material and is particularly effective for sampling leach pads. o During 2006 and 2007, RC drilling was conducted by Harris. The drill used was a Schramm rig boring a 5½ in. to 5¾ in. (140 mm to 146 mm) diameter hole with 5¼ in. (133 mm) rotary tricone drill bits. Dust collection systems were installed consisting of a cyclone, hoses, and a 2.5 m long vent over the cyclone for improved dust recovery. A riffle splitter was installed just below the cyclone opening to divide the whole sample. o During 2008 to 2011, drilling was carried out by Major with UDR-1000 and Schramm 1050 rigs. The drilling diameters were 53/ 8 in., 5½ in., 55/ in., and 5¾ in. (136 mm, 140 mm, 143 mm, and 146 mm) and the drilling runs were six metres long. 8 o During 2012, RC and diamond drilling was carried out by Major, using Scramm 1050, Schramm 1350, Major 50 and EDM 2000 rigs and drilling diameters of 53/ in., 5½ in., and 55/ in. (135 mm, 140 mm, and 143 mm). Drilling runs were six metres long for RC holes and 3.05 8 8 m long for core holes. o During 2013, RC/core drilling was executed by Major, with drilling diameters of 57/ 16 in. and 5½ in. (138 mm and 140 mm). Drilling runs were six metres long for RC holes and 3.05 m long for core holes. o During the 2014 to 2015 campaign, Greencore (for RC drilling) and PFS Drilling (for diamond drilling) were used as drilling contractors. The RC hole diameter was 5¼ in. (133 mm) and diamond drilling core size was NQ (46.7 mm). o Since 2018, drilling has been carried out by Drillex and has consisted of RC drilling, diamond drilling, and RC/core drilling. RC drilling employed an RC-50 drill rig, and diamond drilling and combined RC/core drilling, an EDM-2000 and ED-710 drill rigs. Diamond drilling generally used HQ (63.5 mm) diameter, however, due to operating conditions, it was reduced to NQ. Amancaya • Amancaya drilling was completed in three main phases: 1. Yamana – 2004 to 2008. 2. Cenizas – 2009. 3. Austral Gold – 2015 and 2021. 4. Yamana completed 54,782 m of 201 RC holes. • Cenizas completed 3,958 m of RC/core drilling in 20 drill holes and 555.25 m of core drilling in three holes. All target depths were drilled using diamond drills with HQ diameter core, however, 20 holes were pre-collared using RC drills. • Austral Gold completed seven oriented HQ3 (61.1 mm core diameter) diamond drill holes for geotechnical purposes during 2015 and 402 infill drill holes since 2016 for a total of 51,399.5 m. The drilling was targeted on approximately 30 m centres and consisted of RC drilling |
JORC Code Table 1 – March 25, 2022 4
| Criteria | Commentary |
| (198 drill holes totalling 13,537 m), diamond drilling (75 drill holes totalling 14,988 m) and mixed drilling (136 drill holes totalling 23,645 m), using RC for the collars and upper part of the hole and HQ core drilling through the mineralized portion of the holes. Drill collars were positioned using a differential global positioning system (GPS) unit and downhole gyro surveys were completed in all holes. Final drill collar positions were surveyed using a total station instrument. • Drilling techniques are described in CPR Section 10. | |
| Drill Sample Recovery | Guanaco and Inesperada • Recoveries for the 2012 to 2021 campaigns were recorded as 95%–100% for diamond drilling and 80% to 100% for RC drilling. In some areas of structural complexity, the recovery average for core drilling could be about 80%. • In the CP’s opinion, the splitting of the core and its replacement in the core boxes have been done to industry standards. • No significant correlation of grade bias attributed to lower sample recovery was noted. Amancaya • Core recovery is generally very good and would not impact sample integrity. The recovery rate is above 95% in hard rock segments. Core recoveries were calculated prior to logging. • SLR examined mineralized core from twenty-four Austral Gold drill holes and nine Cenizas drill holes. In the CP’s opinion, the splitting of the core and its replacement in the core boxes have been done to industry standards. • SLR noted no significant correlation of grade bias attributed to lower sample recovery. |
| Logging | Guanaco and Inesperada • Standardized logging forms and geological legends were developed by GCM for the deposits based on the mining operations and drilling completed. The geological legend is partly built on historical observations of the local geology. • Geological logging was performed digitally for all GCM programs. Data recorded lithology, structures (faults, fracturing, fault angle respect core axis), alteration (advanced argillic, argillic, siliceous, vuggy silica, propylitic, and fresh rock), ore minerals (oxide iron, oxide copper, sulphur, pyrite, and mineralization style). Mineral zones are not explicitly included but are generally marked by the loggers. • Logging was generally quantitative in nature with the exception of structural and geotechnical measurements and the estimation of recoveries. • The CP is of the opinion that the core handling, logging, splitting, and sampling procedures are of sufficient quality to support Mineral Resource and Ore Reserve estimates. Amancaya • Diamond drill core was geologically logged using predefined logging codes for lithological, mineralogical, and physical characteristics. • Logging was generally quantitative in nature with the exception of structural and geotechnical measurements and the estimation of recoveries. |
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| Criteria | Commentary |
| • Drill core was photographed and digitally stored for visual reference. • The CP is of the opinion that the core handling, logging, splitting, and sampling procedures are of sufficient quality to support Mineral Resource and Ore Reserve estimates. | |
| Sub-Sampling Techniques and Sample Preparation | Guanaco and Inesperada • RC samples were collected every 1.5 m in 2004, and every one metre or two metres in the 2006–2021 drilling campaigns. • A riffle splitter was installed just below the dust collector opening (cyclone) to divide the whole sample. The sample was split and collected in two metallic trays. One portion was selected for analysis and the second was retained for back up. A small portion of the sample was collected by a spoon and placed in a chip sample tray for geological logging. • Samples were weighed and bagged into pre-labelled plastic bags. The average estimated sample weights were 52 kg and 26 kg for two metres and one metre samples respectively. • Diamond drill sampling since 2015 campaign has consisted of splitting the core in half using a manual splitter, and following a line marked by the logging geologists. • The sample preparation techniques were appropriate for the sample type. Preparation techniques vary but usually comprised oven drying, crushing, and pulverizing samples to established parameters: • During the 2009–2013 GCM drill programs, sample preparation at Acme Analytical Laboratories in Santiago, Chile (Acme) was as follows: o Weighing. o Drying at 105°C on stainless steel trays. o Crushing to 85% minus 2 mm with a jaw crusher with a 10 mesh vibrating screen. o Homogenization and splitting to obtain three sub-samples of 1 kg each. o Pulverizing of the collected sub-sample to 85% minus 0.106 mm in an LM-2 pulverizer. o Homogenization and splitting to obtain an approximately 250 g subsample. o Gold was assayed by fire assay (FA) and atomic absorption spectroscopy (AAS) finish in 25 g aliquots. The lower detection limit was 0.005 g/t Au. • During the 2014–2015 drilling programs, sample preparation at Geoanalítica Ltda. (Geoanalítica) was as follows: o Drying at 105°C on stainless steel trays. o Crushing to 85% minus two millimetres with a jaw crusher with a ten mesh vibrating screen. o Homogenization and splitting to obtain about a 1,000 g subsample. o Pulverizing of the collected sub-sample to 95% minus 0.105 mm in an LM-2 pulverizer. |
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