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Resources

Resource Statement as at November 13 2020:

Resource Table

1 Notes to accompany Cu-Au Porphyry Resource table:

  1. Mineral resources are not confined by economic or mining parameters.
  2. Cut-off grades are for reporting purposes only and no economic conditions are implied.
  3. CuEq grades are calculated based upon a Cu price of $3.00 per pound, Au price of $1,800 per oz and Ag price of $25.00 per oz (all prices in US$). Minor discrepancies may exist due to rounding. Metal recoveries were not considered.
  4. Formula for CuEq% calculation: CuEq (%)=(Cu_ppm)/10,000+((Au(g/t)*(Au)price)/( 22.0462*31.0135*(Cu price ))+ ((Ag(g/t)*(Ag)price)/( 22.0462*31.0135*(Cu)price))
  5. Tonnage and grade estimates are in metric units. Contained gold ounces are reported as troy ounces.

2 Notes to accompany Epithermal Au Resource table:

  1. Mineral resources are not confined by economic or mining parameters.
  2. Cut-off grades are for reporting purposes only and no economic conditions are implied.
  3. Au equivalent grades are calculated based upon a Au price of $1,800 per oz and a Ag price of $25.00 per oz (all prices in US$). Minor discrepancies may exist due to rounding. Metal recoveries were not considered.
  4. Formula for AuEq calculation: AuEq (g/t)=Au(g/t)+((Ag(g/t)*(Ag)price)/(Au)price))
  5. Tonnage and grade estimates are in metric units. Contained gold ounces are reported as troy ounces.
  6. Estimated copper grades, at the 0.275 g/t cut-off grade, are 0.06%.

Resource Estimation Methodology

The Gold Oxide Resource Estimate is based upon 4,455 metres in 55 drill holes (1,148 metres in 19 diamond drill holes and 3,307 metres in 36 reverse circulation drill holes) from the 1990’s Barrick Gold Corp. (“Barrick”) and Phelps Dodge Corporation (“Phelps Dodge”) exploration programs and from Hochschild Mining plc’s (“Hochschild”) 2011 to 2013 drilling programs. A total of 2,209 composites were used in the estimation, virtually all 2 metres length. The resource estimation units are based on ATEX’s three-dimensional models for lithology and mineralization that were built using geological units from Hochschild’s core logging and taking into account structure controls and correlogram reach. The Gold Oxide Resource Estimate lies within the oxide 3-D shell and is confined to three volcanic and volcaniclastic units (sandstone, agglomerate and rhyolite). The majority of the Oxide Resource extends to depths of approximately 100 metres below surface, locally extending deeper. Within the rhyolite sequence, the Oxide Resource is restricted to upper 85 metres of the rhyolite unit as statistical analyses shows that the gold grade drops significantly below that horizon.

After geostatistical analysis of the gold grades within the 3-D estimation units, and prior to the resource estimation, mineralized versus non-mineralized material was defined by indicator kriging for each unit. Variography was analyzed by means of correlogram maps, down the hole correlograms and directional correlograms. Final results indicated an overall horizontal isotropy and vertical anisotropy. The resource was estimated via Ordinary Kriging in 4 passes. Samples assaying greater than 4.00 g/t Au in agglomerate, 1.65 g/t Au in upper rhyolite and 0.29 g/t Au in sandstone were capped. The resulting 10 x 10 x 10-metre block model was validated by means of global and conditional bias assessments as well as by drift analyses. The Copper Gold Porphyry Resource Estimate is based upon 2,701 metres of diamond drilling in four drill holes completed by Hochschild.  A total of 1,353 composites were used in the estimation, almost all with a length of 2 metres. 

The Copper Gold Porphyry Resource Estimate is based upon 2,701 metres of diamond drilling in four drill holes completed by Hochschild. A total of 1,353 composites were used in the estimation, almost all with a length of 2 metres. The Porphyry Resource is limited to the zone of dominant chalcopyrite copper mineralization. The three-dimensional chalcopyrite model was built using Hochschild core logging information taking into account structure controls. The chalcopyrite 3D shell was separated in two units: 1) higher grade being hosted within the granodiorite porphyry and the south breccia (“Cpy_gd_bx”); and 2) moderate grade within all other intrusives, breccias and rhyolite host rock (“Cpy_other”). After geostatistical analysis of copper grades within the 3-D estimation units, and prior to the resource estimation/calculation, mineralized versus non-mineralized material was defined by indicator kriging for each unit. Variography was analyzed by means of correlogram maps, down the hole correlograms and directional correlograms.  Final results indicated an overall horizontal isotropy and vertical anisotropy.  The resource was estimated via Ordinary Kriging in 4 passes. Samples assaying greater than 1.2% Cu in Cpy_gd_bx and 1.0% Cu in Cpy_other were capped. Gold grades were capped in the chalcopyrite shell by host-rock: 0.80 g/t Au (granodiorite), 0.53 g/t Au (rhyolite, diorite porphyry & breccia) and 0.47 g/t Au (south breccia & PQDH). The resulting 10 x 10 x 10metre block model was validated by means of global and conditional bias assessments as well as by drift analyses.

No specific gravity measurements have been completed on mineralized material from either the oxide gold resource or the copper gold porphyry resource. An estimated specific gravity of 2.5 has been used for both resource estimates. Samples for specific gravity analyses are currently be collected from drill core from the 2012 – 2014 drilling program.

Given the current drill density for the Porphyry Resource, partial lack of data for complete QA/QC analyses in the Oxide Resource and absence of specific gravity data, both resource estimates have been classified as inferred.

Qualified Persons

SRK Consulting (Chile) SpA. undertook to prepare and is responsible for the resource estimate.  Joled Nur, Civil Mining Engineer, SRK Consulting (Chile) SpA and a member of the Public Register of Competent Persons in Mining Resources and Reserves of Chile, No. 181, is the independent qualified person (“QP”), as defined by National Instrument 43-101 Standards for Disclosure for Mineral Projects, who prepared the resource estimates.  Mr. Nur has reviewed and approved the disclosure related to the resource estimates within this press release. David Hopper, the independent QP for the Valeriano Project, is a Chartered Geologist of the Geological Society of London, Fellow No. 1030584.  Mr. Hopper has reviewed and approved the technical disclosure within this press release. 5 The Valeriano resource estimates have been prepared under Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards (2014).  

Quality Assurance / Quality Control

The diamond drilling core from Hochschild’s 2011 to 2013 drilling campaign were collected and sampled under the direct supervision of Hochschild’s staff.  Diamond drill core was placed in core boxes at the drill site, appropriately tagged, secured and transported to the Hochschild’s exploration camp.  Drill core was logged, marked, on average, at 2 metre intervals for sampling and split longitudinally with a diamond drill saw.  One half of the core was bagged and sample tags attached and the second half of the core was returned to the core boxes. All samples were appropriately labelled and transported by truck by Hochschild personnel to the ALS Chemex laboratory located in Coquimbo, Chile.  ALS Chemex-Coquimbo carried out preparation, chemical analyses and QA/QC. The preparation protocol (PREP-31B) consisted of crushing 70% to less than 2 mm (-10#), rotary split of 1 kg and pulverization to better than 85% passing 75 microns (-150#). Gold was analyzed via 50-gram fire assay and AA. Thirty-five additional elements, which included Cu, Ag, molybdenum and arsenic were assayed using aqua regia digestion and ICP-AES analysis (protocol ME-ICP41).

Hochschild´s QA/QC protocol for drill hole samples included field, coarse reject and pulp duplicates of samples, blanks, and Au and Cu standards. At least 20% of the samples were sent for assay comprised quality assurance duplicates, blanks and standards.

ATEX reviewed QA/QC data obtained during Hochschild’s 2011-2013 drilling campaigns. A total of 7,397 drillhole samples were collected in holes VALDD-01 through VALDD-16.  Details are as follow:

Overall conclusions drawn from the QA-QC analyses are as follows:

The overall conclusion is that the available QA-QC data generated by Hochschild for the Valeriano drill program meets acceptability criteria for the stage of the project and the exploration data can be used for modeling and estimation of inferred resources.

There is no QA/QC data available from the Phelps Dodge drilling program.  From drill logs, it is apparent that diamond core was sampled based upon geological controls in areas of potential mineralization and was sampled and assayed at 1-metre intervals in areas of no apparent mineralization.  Drill core recovery appears to have been good.  The sampling protocol resulted in variable sample lengths in areas of interest typically from 10 to 50 centimeters.  In the case of reserve circulation drill holes, sampling was completed at 1-metre intervals and the entire drill hole was sampled and assayed. There is no information available regarding the sample preparation or assaying methods used by Phelps Dodge.

There is no QA/QC data available and little sample or assaying methodology information available from the Barrick reverse circulation drilling program other than sampling was undertaken at 1-metre intervals and sampling commenced at the beginning of the drill holes. 

Considering the seniority of the companies and the professionals involved at the time, there is no apparent reason to question the validity of the Phelps Dodge or Barrick assaying information.  The assay results are internally consistent within the oxide resource area, geologically reasonable for the type of deposit and intensity of mineralization and are comparable to the assay results returned by Hochschild drilling in the same area. It is therefore considered reasonable that these results be included in the estimation of an inferred resource on an early stage exploration property.

Details of historical exploration, including drilling, sampling and assaying, together with ATEX’s QA-QC analysis and commentary are available in the “NI 43-101 TECHNICAL REPORT ON THE VALERIANO PROJECT, ATACAMA REGION, CHILE” dated November 25, 2020 and filed at www.sedar.com.

Sensitivity Tables to Resource Estimates

Valeriano Copper-Gold Porphyry Resource Estimate – Inferred Category

Cut-off Cu
(%)
Tonnes
(millions)
Grade Contained Metal
Cu
(%)
Au
(g/t)
Ag
(g/t)
Cu Eq.
(%)
Cu
(tonnes)
Au
(oz)
Ag
(oz)
Cu Eq.
(tonnes)
0.2 684.58 0.49 0.163 0.91 0.64 3,321,772 3,590,244 20,039,444 4,374,922
0.3 645.33 0.50 0.167 0.91 0.66 3,225,909 3,473,140 18,882,439 4,242,805
0.4 515.43 0.53 0.180 0.97 0.70 2,746,126 2,986,710 16,030,960 3,619,818
0.5 297.30 0.59 0.193 0.90 0.77 1,766,743 1,844,884 8,621,904 2,301,579
0.6 142.93 0.65 0.198 0.81 0.83 926,661 908,024 3,730,162 1,187,958
0.7 15.74 0.73 0.235 0.91 0.95 115,180 118,723 458,731 149,235

Valeriano Gold Oxide Epithermal Resource Estimate – Inferred Category

Cut-off Au
(g/t)
Tonnes Grade Contained Ounces
Au
(g/t)
Ag
(g/t)
Au Eq.
(g/t)
Au Ag Au Eq.
0.200 62,819,175 0.395 2.16 0.425 797,662 4,361,385 858,244
0.225 51,842,530 0.434 2.22 0.464 722,647 3,691,909 773,917
0.250 41,119,097 0.485 2.32 0.517 641,089 3,065,582 683,664
0.275 34,435,360 0.528 2.40 0.561 584,684 2,653,895 621,539
0.300 28,900,615 0.574 2.44 0.608 533,581 2,269,764 565,106
0.350 20,891,789 0.670 2.56 0.706 450,033 1,719,813 473,922
0.400 15,750,241 0.767 2.61 0.804 388,574 1,321,227 406,924

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