ni 43-101 resources technical report el toro gold project - corporación del centro sac - perú

7/24/2019 NI 43-101 Resources Technical Report El Toro Gold Project - Corporacin del Centro SAC - Per

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Respectfully submitted to:Corporacion del Centro S.A.C.

By: SGS Canada Inc.

Yann Camus, Eng.

SGS Canada Geostat

Effective Date: October 28, 2014

NI 43-101 Resources Technical Report

El Toro Gold Project

Corporacin del Centro S.A.C.

Per


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Disclaimer:

This document is issued by SGS Canada Inc. under its General Conditions of Service accessible at

http://www.sgs.com/terms_and_conditions.htm . Attention is drawn to the limitation of liability,

indemnification and jurisdiction issues defined there in. Any holder of this document is advised that

information contained herein reflects the Companys findings at the time of its intervention only and

within the limits of the Clients instructions, if any. The Companys sole responsibility is to its Client

and this document does not exonerate parties to a transaction from exercising their rights and

obligations under the transaction documents. Any unauthorized alteration, forgery or falsification of

the content or appearance of this document is unlawful and offenders may be prosecuted to the

fullest extent of the law.


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DATE AND SIGNATURE PAGE

The effective date of the Report on the El Toro Gold Project of Corporacin del Centro SAC (CDC) isFebruary 27, 2015.

Prepared by:

(Original copy signed and sealed)

Yann Camus, Eng. Date


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1 Executive Summary

1.1 General Information

The El Toro Project is located 3,200 m above sea level in the vicinity of the city of Huamachuco, within

one of the districts of the Snchez Carrin province, and 180 km from the Department of Trujillo in

northwestern Peru. The company has offices in Trujillo and Lima. The project is located within sheet 16-G:

Cajabamba of the IGN (Instituto Geogrfico Nacional), and its central UTM coordinates are 9,134,814mN

and 829,083mE (WGS84). The project is comprised of 9 mining titles totaling 4,569.70 hectares. The land

surface on which the current operation is locatedconsists of 253.17hectares (Figure 4-2). CDC holds

100% of the Property titles (mining rights) of the project.

1.2 Geology and Mineralization

The gold mineralization in the region of Huamachuco occurs mostly at the intersection of the Andean

structural "train" NW to NE transfer; other conditions prevail locally, as in Tres Cruces area and Chapel.

The gold mineralization identified in the El Toro deposit is of the type of high sulfidation epithermal in

clastic sedimentary rocks, such as sandstones and quartzites of the Chimu Formation.

The genesis of this deposit is very similar to others in its class, such as La Virgen and Shahuindo. Gold is

hosted within oxidation fractures in siliciclastic rocks (sandstone, quartzite and quartz sandstones), in

cubic pyrite hosted in the dacitic prophyry and occasionally in the quartzites. El Toro was a very active

system with clear evidence of tectonic and volcanic activity represented by facies hydrothermal alteration,superimposed breccias and fracture systems. At surface these gaps are seen as feeders through to

amass mineralizing fluids. The sandstone and quartzite breccia zones exhibit strong oxidation in contact

with the intrusive dacite.

1.3 Exploration

Drilling and field mapping started on the project in 1995 by Barrick Gold Corp. and Oromin. Since then,

companies such as Miner North and Cambior have performed various studies including surface

geochemistry and drilling.

As of 2010 the company Carlos Alberto Daz Marios (CDM) continues to perform exploration campaigns

in El Toro, including geochemical prospecting work, lab work, specialized studies and diamond drilling.

These studies were developed in partnership with private entities Geoval SA., Ak Drilling, MYAP (Dra.

Gladys Ocharn) and GEOEXINPE SAC, SAC Geomechanics, etc. The work completed to date includes:

detailed geological mapping, surface geochemical channels, RC drilling, photogrammetric restitution, etc.


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1.4 Metallurgical Testwork

The 2001-2005 metallurgical testing concluded that El Toro ore samples seem amenable to heap leaching

cyanidation. Recovery is little affected by grinding and 79.9% to 90 % Au is recovered with the samplescrushed between 1 inch down to 80% minus 200 mesh. It was recommended to perform column

cyanidation tests with coarser samples in the 1-3 inch range but it was never done. No metallurgical

testing was done between 2005 and 2014. In 2014 CDC began acquiring columns to be able to conduct

tests on site. It is planned to add more testing facilities and to conduct additional metallurgical testwork in

2015.

1.5 Site Visit and Data Verification

The author, Yann Camus Eng. of SGS Canada Inc. visited the project from October 28 to 30 of 2014. Theauthor visited the geology office, operations, and core facilities.

The author concludes that the digital database for El Toro deposit is reliable for resource estimation.

The author reviewed the continuity between different sample types including production holes, face

samples and diamond drillhole (DDH) samples; as a result the data is deemed reliable.

Eighty-seven (87) check samples have been requested; at the date of compiling this report the samples

were still being processed.

1.6 Mineral Resource Estimate

SGS completed the resource estimation with the following steps: validation of the drillhole, production

holes, trenches and face samples database, studied the various gold sample types for biases, interpreted

mineralized oxide volumes in 3D, estimated a block model inside these volumes using capped

composites, optimized an open pit to constrain the resource and classified the resource into measured,

indicated and inferred categories.

Face samples were not used in the estimation as it was determined they are biased. Soluble gold was

available for production holes only and was used to assist in the modelling of the volumes but not included

in the estimation of the block model. Only total gold was estimated. The block size of 6 m x 6 m x 6 mcorresponds to the previous resource estimation by Geoval as well as the bench height used for

production since 2012. A gold price of 1,256 US$/oz was used for the optimization of the open pit. The

costs used derive from the 2014 life of mine and the resulting marginal cut-off grade (COG) is 0.16 g/t Au.

The current operational COG is 0.3 g/t Au. For this report, the COG of 0.16 g/t Au was used for the base

case of the resources presented in Table 1-1. Resources are also available at COGs of 0.2, 0.3 and 0.5

g/t Au in Table 14-9.


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Table 1-1: Base case mineral resource estimates for the El Toro project (all oxides no sulfides)

1.7 Mineral Reserves, Mining, Processing, Infrastructures, Environmental, Costs

and Economic Analysis

As the El Toro project has been in operation since 2012 and continued to produce during compilation of

this report, these topics were not addressed by SGS. SGS recommends that these subjects be covered in

the next NI 43-101 technical report for this project.

1.8 Recommendations

The El Toro property is promising. After more than 3 years of production with no exploration during that

time, resources should still stand for multiple years. Continued exploration work is warranted in order to

replace and possibly contribute to current resources. Continued definition drilling and technical-

economical studies are also warranted since measured and indicated resources are currently somewhat

limited.

Recommendations Regarding the Next Resource Update

Prior to a resource update, it is recommended that CDC completes the following actions :

o Drillholes to better define a minimum of the next year or two of production.

o Re-log and re-assay of available core from the Cambior diamond drilling to compensate

for the lack of QA/QC, analyze for soluble gold and also to have a more homogeneous

lithology, alteration and mineralization logging in the database.

Recommendations to realize an advanced NI 43-101 technical report

Since this NI 43-101 resource technical report includes most of the parts of an advanced technical

report, costs will be significantly reduced.

CategoryTonnage

(t)

Au Grade

(g/t)

Au

OuncesMeasured 5,660,000 0.36 65,000

Indicated 19,060,000 0.45 276,000

Measured + Indicated 24,720,000 0.43 340,000

Inferred 25,460,000 0.49 398,000 0.16 /

: 28, 2014

1256$/

2014


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The budget estimation for the completion of a complete report (including resource update) is of

$ 180,000 USD.

General Recommendations

Current geology and technical team working at the El Toro operation should continue to study and

model the geology in order to understand how to better manage the production, the exploration

and also the resource estimation.

During exploration drilling, the QA/QC procedures should continue as done by CDM in 2013.

Verification of the documents and on site implementation by a QP will ensure procedures follow

industry standards to support future estimates and reports.

Repeats of whole sample batches should be requested from the laboratory if:

o A blank QA/QC sample returns more than 0.1 g/t Au

o One QA/QC standard failure is noticed

o Two QA/QC standard warnings are noticed

Option: Recommended Drilling to Extend Resources and Possibly Increase Open Pit Size and Resulting

Profitability

Areas with exploration potential that could materially affect the optimized open pit shell (see

Figure 1-1 to Figure 1-3). Areas with poor gold are sub-economical, some gold is slightly sub-

economical, good gold is sufficient for modelling and estimation and NA have laboratory results

missing from the database.

In order to drill potential areas visible in Figure 1-1, the recommended length of each drill hole

should be around 140 m on a drill grid of about 50 m x 100 m which delineates inferred resources.

According to the total size of the area with potential, it is recommended to have about 40

drillholes. The total meters drilled would therefore be about 5,600 m of drilling or a budget of

$ 1,000,000 USD. Drilling some of these holes in reverse circulation (RC) could reduce the budget

along with some of the time required to drill the 40 drillholes.

In order to drill additional potential areas visible in Figure 1-3, the recommended length of each

drill hole should be around 400 m. According to the total size of the area with potential, it is

recommended to complete 8 drillholes initially. The total meters drilled would therefore be about

3,200 m of drilling or a budget of $ 575,000 USD.


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Figure 1-1: Plan view with oxide body in red and potential areas for exploration in grey

Figure 1-2: Plan view of optimized pit shell and next figure section location


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Figure 1-3: Section of block model (black is not estimated), potential areas for exploration in grey

Optional: Recommendations Regarding the Exploration and Drilling of New Resources on the Property

(No budget)

Additional geophysics on the El Toro property is warranted. The principal actions could be to:

o Extend the deposit with resources.

o Find new targets for eventual drilling and resource development.

The El Toro property merits continued exploration work. Additional exploration drilling is therefore clearlywarranted on the Property.

While it was not in the current mandate, SGS noticed that process recoveries are not close to initial

testwork, a series of recommendations are listed here (No budget)

CDC should continue the construction of the metallurgical on site facility in order to do more tests.

A composite sample should be sent for gold mineralogy for metallurgical applications to better

understand how to unlock the gold from the ore. More testing may be advisable given the

complicated geological nature of the deposit but each sample requires a budget of about $ 9,000

USD.


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TABLE OF CONTENTS

1 Executive Summary ................................................................................................ iv1.1 General Information ....................................................................................................... iv

1.2 Geology and Mineralization ........................................................................................... iv

1.3 Exploration .................................................................................................................... iv

1.4 Metallurgical Testwork .................................................................................................... v

1.5 Site Visit and Data Verification ........................................................................................ v

1.6 Mineral Resource Estimate ............................................................................................. v

1.7 Mineral Reserves, Mining, Processing, Infrastructures, Environmental, Costs andEconomic Analysis .................................................................................................................. vi

1.8 Recommendations......................................................................................................... vi

2 Introduction .............................................................................................................. 1

2.1 General .......................................................................................................................... 1

2.2 Terms of Reference ........................................................................................................ 1

2.3 Currency, Units, Abbreviations and Definitions ............................................................... 1

2.4 NI 43-101 Disclosure ...................................................................................................... 2

3 Reliance on Other Experts ...................................................................................... 3

4 Property Description and Location ........................................................................ 4

4.1 Location .......................................................................................................................... 4

4.2 Ownership ...................................................................................................................... 6

4.3 Royalties......................................................................................................................... 6

4.4 Permits ........................................................................................................................... 6

4.5 Environmental Liabilities ................................................................................................. 6

5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ...... 7

5.1 Physiography .................................................................................................................. 7

5.2 Accessibility .................................................................................................................... 7

5.3 Climate ........................................................................................................................... 85.3.1 Precipitation ................................................................................................................................... 85.3.2 Wind ............................................................................................................................................... 8


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5.4 Local Resources and Infrastructure ................................................................................ 8

5.5 Surface Rights .............................................................................................................. 10

6 History .................................................................................................................... 11

6.1 Prior Ownership of the Property and Ownership Changes ............................................ 11

6.2 Past Mineral Exploration Work ...................................................................................... 116.2.1 Oromin Barrick (1995-1996) .................................................................................................... 11

6.2.1.1 Surface Geochemistry ............................................................................................................. 116.2.1.2 Drilling ....................................................................................................................................... 11

6.2.2 Company Minera North (1998-1999) ......................................................................................... 126.2.2.1 Surface Geochemistry: ............................................................................................................ 12

6.2.3 Cambior (2003-2005) .................................................................................................................. 126.2.3.1 Restitution aerial photography (topography) ......................................................................... 126.2.3.2 Surface Geochemistry ............................................................................................................. 12

6.2.4 Minera Santa Marina (2006) ....................................................................................................... 12

7 Geological Setting and Mineralization ................................................................. 14

7.1 Regional Geology ......................................................................................................... 14

7.2 Property Geology.......................................................................................................... 157.2.1 Alteration ...................................................................................................................................... 16

7.2.1.1 Silicification .............................................................................................................................. 16

7.2.1.2 Phyllic (Quartz-Sericite) .......................................................................................................... 167.2.1.3 Argillic ....................................................................................................................................... 167.2.1.4 Propylitic ................................................................................................................................... 16

7.3 Structural Control.......................................................................................................... 17

7.4 Lithology and Stratigraphy ............................................................................................ 187.4.1 Chicama Formation - Upper Jurassic ........................................................................................ 187.4.2 Lower Cretaceous ....................................................................................................................... 19

7.4.2.1 Chim Formation ..................................................................................................................... 197.4.2.2 Santa Formation ...................................................................................................................... 207.4.2.3 Carhuaz Formation .................................................................................................................. 207.4.2.4 Farrat Formation Lower Cretaceous ................................................................................... 20

7.4.3 Inca, Chulec and Pariatambo Formation - Middle Cretaceous ................................................ 207.4.4 Volcanic Calipuy Formation - Upper Cretaceous to Lower Tertiary ........................................ 207.4.5 Intrusive Rocks ............................................................................................................................ 21

7.5 Mineralization ............................................................................................................... 21

8 Deposit type ........................................................................................................... 23

8.1 Deposit Summary ......................................................................................................... 23


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8.2 Epithermal Deposits ..................................................................................................... 23

8.3 Geological Characteristics ............................................................................................ 24

8.3.1 High Sulfidation Type .................................................................................................................. 248.4 Mineralized High Sulfidation Systems ........................................................................... 26

8.4.1 Fluid Characteristics .................................................................................................................... 268.4.2 Permeability ................................................................................................................................. 278.4.3 Alteration ...................................................................................................................................... 278.4.4 Mineralization ............................................................................................................................... 29

9 Exploration ............................................................................................................. 30

9.1.1 Photogrammetric restitution ........................................................................................................ 309.1.2 Surface Geochemistry................................................................................................................. 30

9.1.3 Drilling .......................................................................................................................................... 3010 Drilling ................................................................................................................. 31

10.1 Oromin- Barrick Gold ................................................................................................. 32

10.2 Cambior..................................................................................................................... 32

10.3 Carlos Daz Marios (CDM)....................................................................................... 33

11 Sample preparation, Analyses and security..................................................... 34

11.1 Sample Preparation ................................................................................................... 34

11.2 Analyses.................................................................................................................... 3411.2.1 Laboratory Certification ............................................................................................................... 3411.2.2 Analytical Procedure ................................................................................................................... 34

11.3 Quality Control and Quality Assurance Programs ...................................................... 3611.3.1 Results of Quality Control and Quality Assurance Monitoring ................................................. 3711.3.2 Standards Statistics..................................................................................................................... 3711.3.3 Blanks Statistics .......................................................................................................................... 3911.3.4 Duplicate Sampling ..................................................................................................................... 40

11.4 Conclusion ................................................................................................................ 45

12 Data verification .................................................................................................. 46

12.1 Site Visit .................................................................................................................... 47

12.2 Standard Verification of the Geological Database ...................................................... 48

12.3 Verification of QAQC Results .................................................................................... 48

12.4 Verification of Ore Wireframe Shells .......................................................................... 48

12.5 Controls on Gold Grade ............................................................................................. 48


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15 Mineral Reserve Estimates ................................................................................ 86

16 Mining Methods .................................................................................................. 87

17 Recovery Methods .............................................................................................. 88

18 Project Infrastructure ......................................................................................... 89

19 Market Studies and Contracts ........................................................................... 90

20 Environmental Studies, Permitting and Social or Community Impact ........... 91

21 Capital and Operating Costs.............................................................................. 92

22 Economic Analysis ............................................................................................. 93

23 Adjacent Properties ............................................................................................ 94

23.1 Epithermal Gold Deposits in Sedimentary Rocks ....................................................... 9423.1.1 La Virgen Deposit ........................................................................................................................ 9423.1.2 La Arena Deposit ......................................................................................................................... 9523.1.3 Lagunas Norte- Barrick Gold Corp. ............................................................................................ 97

24 Other Relevant Data and Information ............................................................... 98

25 Interpretation and Conclusions ......................................................................... 99

26 Recommendations .............................................................................................100

27 References .........................................................................................................104

27.1 Web and Databases References ............................................................................. 104

28 Certificates of Qualified Persons .....................................................................105


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LIST OF FIGURES

Figure 1-1: Plan view with oxide body in red and potential areas for exploration in grey ____________ viiiFigure 1-2: Plan view of optimized pit shell and next figure section location _____________________ viiiFigure 1-3: Section of block model (black is not estimated), potential areas for exploration in grey _____ ixFigure 4-1: El Toro project location map _________________________________________________ 4Figure 4-2: Claims area of El Toro Project _______________________________________________ 5Figure 5-1: Landscape at the mine _____________________________________________________ 7Figure 5-2: Local infrastructures Huamachuco, as viewed from the mine site ____________________ 9Figure 5-3: Offices at the El Toro Project mine ____________________________________________ 9Figure 7-1: Regional geology ________________________________________________________ 14Figure 7-2: Contact between the sandstones from the Chim Formation and the dacitic porphyry_____ 16Figure 7-3: El Toro hydrothermal alteration zones ________________________________________ 17Figure 7-4: Regional structural interpretation ____________________________________________ 18Figure 7-5: Stratigraphic column (after V. Quirita, 2006) ____________________________________ 19Figure 7-6: Mineralization models (from CDC Gold Corp.) __________________________________ 22Figure 8-1: High sulfidation epithermal deposits model (modified from Hedenquist and Lowenstern) __ 23Figure 8-2: Conceptual model for styles of magmatic arc epithermal Au-Ag and porphyry Au-Cu (image

sourced from Corbett and Leach, 1998) ________________________________________________ 24Figure 8-3: Epithermal deposits global occurrences (image sourced from Corbett and Leach, 1998) __ 26Figure 8-4: Vuggy silica alteration of porphyritic fragments breccia matrix (Corbett, 2002) _________ 28Figure 8-5: Vuggy silica alteration of lapilli tuff (Corbett, 2002) _______________________________ 28Figure 8-6: Vuggy silica alteration of porphyry intrusion (Corbett, 2002) ________________________ 28Figure 11-1: Geoval Standard 201 OREAS samples ______________________________________ 37Figure 11-2: Geoval Standard 901 OREAS samples ______________________________________ 38Figure 11-3: CDM Standard 201 OREAS samples ________________________________________ 38Figure 11-4: CDM Standard 901 OREAS samples ________________________________________ 39Figure 11-5: Blanks Au (ppm) samples Geoval _________________________________________ 40Figure 11-6: Blanks Au (ppm) - CDM __________________________________________________ 40Figure 11-7: Geoval duplicates Au (ppm) _______________________________________________ 41Figure 11-8: Au original vs Au duplicates - Geoval sampling ________________________________ 41Figure 11-9: CDM duplicates Au (ppm)_________________________________________________ 42Figure 11-10: Au original vs Au duplicates CDM sampling _________________________________ 42

Figure 11-11: Au blasthole original vs duplicates _________________________________________ 43Figure 11-12: Au face samples original vs duplicates ______________________________________ 44Figure 12-1: Panorama of the office and workings ________________________________________ 47Figure 12-2: Core storage facility displaying proper storage _________________________________ 47Figure 13-1: Sample preparation _____________________________________________________ 53Figure 13-2: Sample preparation of composite sand-5 _____________________________________ 54Figure 13-3: Results of the bottle test for the intrusive sample _______________________________ 57Figure 13-4: Results of the bottle test for the Sand-5 sample ________________________________ 58Figure 14-1: Plan view of drillholes (DDH and RC) at the El Toro Project _______________________ 63Figure 14-2: Scatterplot of paired 6 m composites in DDHs vs BHs ___________________________ 64


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Figure 14-3: Au g/t histogram of 4,521 original assays from the mineralized zones (DDH, RC, TR) ____ 65Figure 14-4: Location of sections used for the ore-shell model _______________________________ 66Figure 14-5: Modeling of the sulfides on bench 3,499 mZ using solubility from production data_______ 67Figure 14-6: Modeling of the sulfides on bench 3505 mZ using solubility from production data _______ 67Figure 14-7: Interpretation of sulfides on Section 8.0 ______________________________________ 68Figure 14-8: Interpretation of oxides and sulfides on Section 8.0 _____________________________ 68Figure 14-9: Interpretation of sulfides on Section 11.0 _____________________________________ 69Figure 14-10: Interpretation of oxides and sulfides on Section 11.0 ___________________________ 69Figure 14-11: Interpretation of sulfides on Section 14.0 ____________________________________ 70Figure 14-12: Interpretation of oxides and sulfides on Section 14.0 ___________________________ 70Figure 14-13: Oblique view of the sectional interpretations for the oxides _______________________ 71Figure 14-14: Oblique view of the resulting solid wireframe for the oxides_______________________ 71Figure 14-15: Oblique view of the sectional interpretations for the sulfides ______________________ 72

Figure 14-16: Oblique view of the resulting solid wireframe for the sulfides ______________________ 72Figure 14-17: Oblique view of the solid wireframes for both the oxides and the sulfides ____________ 73Figure 14-18: Longitudinal view looking northeast displaying all composites used for the estimation ___ 74Figure 14-19: The best variogram produced using production composites alone__________________ 75Figure 14-20: Best continuity shown on bench 3,499 mZ with production drillholes ________________ 76Figure 14-21: Best continuity shown on Section 11.0 with production and exploration drillholes ______ 76Figure 14-22: Histogram of estimated capped gold in block model (one max grade at 2.93 g/t) _______ 78Figure 14-23: Plan view of the optimized pit shell _________________________________________ 82Figure 14-24: View in 3-D of optimized pit shell __________________________________________ 82Figure 14-25: Optimized open pit section showing the block classification and topography __________ 83

Figure 14-26: Comparison of mineral resource estimates at varying cut-off grades ________________ 85Figure 23-1: Map of adjacent gold deposits _____________________________________________ 94Figure 26-1: Plan view with oxide body in red and potential areas for exploration in grey __________ 101Figure 26-2: Plan view of optimized pit shell and next figure section location ___________________ 102Figure 26-3: Section of block model (black is not estimated), potential areas for exploration in grey __ 102


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LIST OF TABLES

Table 1-1: Base case mineral resource estimates for the El Toro project (all oxides no sulfides) _____ viTable 2-1: List of abbreviations _______________________________________________________ 2Table 4-1: Summary of El Toro project mining claims _______________________________________ 5Table 6-1: Surface geochemistry work _________________________________________________ 13Table 6-2: Exploration work on the Property before CDC Gold Crop. __________________________ 13Table 8-1: Genetic types of epithermal gold deposits ______________________________________ 25Table 10-1: Drilling summary ________________________________________________________ 31Table 10-2: Drilling data verification ___________________________________________________ 32Table 11-1: Geochemistry analysis and detection limits (ICP12B) _____________________________ 35Table 11-2: Certified values, SDs, 95% confidence and tolerance limits for OREAS 201 ____________ 36Table 11-3: Certified values, SDs, 95% confidence and tolerance limits for OREAS 901 ____________ 37Table 11-4: Au blasthole statistics ____________________________________________________ 43Table 11-5: Au face samples statistics _________________________________________________ 44Table 13-1: Amenability of gold recovery by cyanidation (2011 tests) __________________________ 50Table 13-2: Bottle test results intrusive (2001) ___________________________________________ 51Table 13-3: Bottle test results sandstone (2001) __________________________________________ 51Table 13-4: Results of column cyanidation tests __________________________________________ 51Table 13-5: Identification of samples __________________________________________________ 52Table 13-6: Chemical assay of head samples ___________________________________________ 55Table 13-7: ICP scan of samples _____________________________________________________ 56Table 13-8: Summary of the cyanidation test results for the intrusive sample ____________________ 57Table 13-9: Summary of the cyanidation test results for the Sand-5 composite ___________________ 58Table 13-10: Summary of cyanidation test results for sample GR-28 __________________________ 59Table 14-1: Exploration and production holes summary ____________________________________ 62Table 14-2: QAQC samples completed by CDC gold ______________________________________ 62Table 14-3: Composite statistics______________________________________________________ 74Table 14-4: Variogram parameters used in the estimation __________________________________ 75Table 14-5: Search parameters for each of the 3 estimation passes ___________________________ 77Table 14-6: Density statistics (t/m

3) ___________________________________________________ 78

Table 14-7: Open pit optimization parameters ___________________________________________ 81Table 14-8: Base case mineral resource estimates for the El Toro Project (all oxides no sulfides) ___ 83

Table 14-9: Mineral resource estimates at varying cut-off grades (all oxides no sulfides) __________ 84Table 23-1: Regional stratigraphic column of La Arena and surrounding areas ___________________ 96Table 23-2: Barricks Reserve/Resources-2013 __________________________________________ 97Table 23-3: Epithermal gold deposits in the La Libertad Region gold zone (from SNL web site) _____ 97


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2 Introduction

2.1 General

SGS Canada Inc. (SGS) was contracted on August 18, 2014, by CDC Gold (CDC) to conduct a NI 43-

101 technical resource report on the El Toro project located in the town of Huamachuco in Northwestern

Peru.

This report presents a resource on the El Toro gold project. It has been prepared under the requirements

and following the guidelines of the Canadian National Instrument 43-101 (NI 43-101) for use by CDC

Gold.

2.2 Terms of Reference

SGS Canada Inc (SGS) has been retained by Corporacin del Centro S.A.C (CDC Gold) to prepare a

technical report and resource estimate of the El Toro Gold Project in accordance with the Canadian

National Instrument 43-101 (NI 43-101). The information disclosed in this report is derived from previous

technical reports, information provided by CDC, the internet, and three site visits to the project.

2.3 Currency, Units, Abbreviations and Definitions

All measurements in this report are presented in the metric system. Monetary units are in United Statesdollars (USD$) unless otherwise specified. The metric coordinate system is Universal Trans Mercator

WGS84.


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Table 2-1: List of abbreviations

Abbreviation Units Abbreviation Units

t Metric tonnes kg KilogramsMt Million tonnes g Grams

tpd Tonnes per day NSR Net Smelter Return

m Metres S South

cm Centimetres N North

mm Millimetre E East

km Kilometre W West

L Litre ha Hectare

mL Millilitre m Cubic metres

ppm Parts per million CAD$ Canadian Dollars

QA Quality Analysis QC Quality Control Degrees % Percent

C Degrees Celsius MMI Mobile Metal Ion

CoG Cut-Off Grade Fe Iron

Cu Copper Au or AuT Gold (total)

Pb Lead AuS Soluble gold

Zn Zinc AgT Total silver

As Arsenic AgS Soluble silver

Hg Mercury CDC Corporacin del Centro S.A.C.

Mo Molybdenum Ma Millions Years

2.4 NI 43-101 Disclosure

The technical information in this report has been prepared in accordance with Canadian regulatory

requirements by independent Qualified Persons, or under the supervision of, as set out in the National

Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).

The Mineral Resource estimates set out in this report were classified according to the CIM Definition

Standards - For Mineral Resources and Mineral Reserves (as adopted by CIM Council in November

2010). Readers are advised that Mineral Resources do not demonstrate economic viability. Mineral

Resource estimates do not account for mineability, selectivity, mining loss and dilution. These MineralResource estimates include Inferred Mineral Resources that are considered too geologically speculative to

contribute to economic studies and cannot be transferred to reserves. There is no certainty that Inferred

Mineral Resources will be converted to Indicated and Measured categories with further drilling, or into

Mineral Reserves, once economic considerations are applied. Technical information in this report was

reviewed and adopted by all Qualified Persons.


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3 Reliance on Other Experts

This report was prepared in accordance to the NI 43-101, for El Toro Gold Project of Corporacin del

Centro S.A.C. (CDC Gold).

Some information has been sourced from the previous Technical Report by GEOVAL (Terrones &

Castaeda, 2012).

SGS Qualified Persons were provided information, have drawn conclusions and made estimates to the

best of their knowledge, based upon reviewing;

Information provided by CDC Gold (CDC) and their technical staff;

Public information available at the time of preparation;

Personal inspections of the Project; External data;

Assumptions, conditions and qualifications established in this report.

Contributions by Oscar Fras (CDC), Alberto Velzquez (CDC), Walter Acero (CDC), Carlos Salinas

(CDC), Jess Dextre (CDC), Francisco Youpanqui (CDC), Enrique Lopez (CDC), Erikzon Catacora

(CDC), Jos A. Terrones (Geoval) and Rodrigo Carneiro (SGS) and their support in preparing the

resource estimation and technical report are duly noted and appreciated.


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4 Property Description and Location

4.1 Location

El Toro Project is located 3,200 m above sea level in the vicinity of the city of Huamachuco, within a

district of the Snchez Carrin province, at La Libertad Department and 180 km from the town of Trujillo in

northwestern Peru. The company has offices in Trujillo and Lima (Figure 4-1).

Figure 4-1: El Toro project location map

The project is located within sheet 16-G (Cajabamba) of the IGN (Instituto Geogrfico Nacional) and its

central UTM coordinates are 9,134,814mN and 829,083mE (WGS84).

El Toro Mine

Office


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The project is comprised of 9 mining titles totaling 4,569.70 hectares (Table 4-1).

Table 4-1: Summary of El Toro project mining claims

The land surface on whichthe current operationis locatedconsists of253.17hectares.CDC is presently

negotiating the purchase of additional land and while this addition may not be directly related to the

operation, it may holdfuturestrategic importance (Figure 4-2).

Figure 4-2: Claims area of El Toro Project

Code Name Zone Map Reference Holder Department Province District Area (Ha)

P63000311 ISABELITA 17 16-G CARLOS ALBERTO DIAS MARIOS LA LIBERTAD SANCHEZ CARRION HUAMCHUCO 63.50

15009015X01ROSA AMPARO

A.C.117 16-G CORPORACION DE L CE NTRO S .A .C LA LIBE RTAD S ANCHE Z CA RRION HUAMCHUCO 840.00


A.C.717 16-G CORPORACION DEL CENTRO S.A.C LA LIBERTAD SANCHEZ CARRION CURGOS/HUAMACHUCO 660.00







10138907 RODRIGO PRIM ERO 17 16-G CORPORACION DEL CENTRO S.A .C LA LIBERTAD SANCHEZ CARRION HUAM CHUCO 100.00


A.C.417 16-G CORPORACION DEL CENTRO S.A.C LA LIBERTAD SANCHEZ CARRION CURGOS/HUAMACHUCO 620.02


A.C.2 17 16-G CORPORACION DE L CE NTRO S .A .C LA LIBE RTAD S ANCHE Z CA RRION HUAMCHUCO 740.00

4,569.70TOTAL SURFACE (Ha)


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4.2 Ownership

CDC holds 100% of the property titles (mining rights) of the project.

4.3 Royalties

Since 2019, CDC Gold and Minera San Antonio S.R.LTDA have a contractual mineral royalty for the

production of processed ore mined and sold derived from the mining rights. The royalties are equivalent to

1% of the value of net sales of concentrates or metals obtained from the processing of minerals in the

mining rights.

4.4 Permits

CDM holds 100% of the mining permits. CDC is currently in the process of acquiring all permits relevant to

its mining operations presently owned by CDM. SGS has neither validated ownership of mining permits

nor has sufficient information to qualify this statement at this time; additional documents must be acquired

and reviewed in order to fully ascertain the validity of this affirmation.

4.5 Environmental Liabilities

The former owner declares that informal miners illegally invaded part of the mining rights and prevented

access to the holder for a period of approximately 6 years. Environmental authorities of the sector wereaddressed regarding this issue. As a result, the former owner was unable to perform environmental

rehabilitation and proper closure of the exploration work conducted years prior.


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5 Accessibility, Climate, Local Resources, Infrastructure and

Physiography

5.1 Physiography

The majority of the project area is relatively rugged with elevations ranging from sea-level to between

3,100 to 3,450 m. The rugged terrain can make access to certain parts of the project area problematic,

particularly in the wet season.

The study area is categorised by eroded moderate rocky hills and slopes and steep sided streams. The

landscape has also been reshaped from ongoing agricultural activities from centuries of human

occupation.

The study area is located in the Andes and vegetation is mainly grass. The near-absence of soils and light

organic matter coating and Andean floristic species spreads throughout the area.

Figure 5-1: Landscape at the mine

5.2 Accessibility

The nearest international airport to the project area is Lima. Trujillo can be reached by plane or by roads.

From Trujillo, the town of Huamachuco is accessed by paved roads (10A, & 3N); the El Toro project

facilities and infrastructure can be accessed from Huamachuco heading NE via an unpaved road easily

traversed using a 4x4.


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5.3 Climate

The climate in Peru typically varies from tropical in the east to dry desert in the west, and temperate to

frigid in the Andes. The terrain in Peru consists of the western coastal plain (costa), high and ruggedAndes in the center (sierra) and lowland jungle of the Amazon Basin (selva) in the east. Lima, the capital

of Peru, is located 480 km south of Huamachuco.

The climate of Huamachuco is temperate, moderately rainy, and temperature range is moderate. This is

an area identified as the floor of the Andean slope with altitudes varying from the 3,100 to 3,450 m.

Daytime temperatures in Huamachuco will generally reach highs of around 27C mostly between

February to March. The average minimum temperature drops down to around 15C at night. The coldest

temperatures occur between July and November. The Heat Index indicates no major discomfort given

average maximum temperatures and humidity levels.

5.3.1 Precipitation

The average rainfall in Huamachuco throughout the year is 3.7 days and can reach up to 15 from

February to March. A minimum of 0 days are generally observed from April to October. Small increases

are present in May and from July to august can reach 6 days. The rainy season from November to March

is defined as "winter" in Huamachuco, while from April to October is considered "summer" as

characterized by a lack of rain, very sunny days and very cold nights.The driest month is July. There is

only 11 mm of precipitation in July and most precipitation occurs in March. The cumulative annual average

is 905.50mm.

5.3.2 Wind

The yearly average daily wind speed is around 12 km/h (7 knots). In recent years the maximum sustained

wind speed has reached 93 km/h (50 knots).

5.4 Local Resources and Infrastructure

A regional airport in Trujillo and a local airport in Huamachuco are operational. Regional (paved) and local(unpaved) roads access the project easily. The national energy network, local labour, cellular and internet

coverage are present at the site.


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Figure 5-2: Local infrastructures Huamachuco, as viewed from the mine site

The population of the surrounding villages depends mainly on mining and agriculture. Traditional farming

is the main activity in the region. The mining activity is considered artisanal. Local workers have minimal

technical knowledge and lack ecological knowledge. Mineral exploitation by the local miners occurs

through conventional mining methods, without any mine planning or design, and has no environmental

impact studies and no mitigation plans. The Libertad and Cajamarca Departments are currently the main

producers of gold in the country. Specialized labour such as geology and mining would be availablemostly from greater populated and educated centers such as Lima.

The El Toro Project includes an operating mine with fully functional mining infrastructure. Additional

information of the mining methods, processing and infrastructure are briefly described in sections 16, 17

and 18 of this report.

Figure 5-3: Offices at the El Toro Project mine


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5.5 Surface Rights

CDC holds sufficient surface rights for mining operations. SGS has neither validated ownership of surface

rights nor has sufficient information to qualify the previous statement at this time; additional documentsmust be acquired and reviewed in order to fully ascertain the validity of this affirmation. It is strongly

recommended that a qualified person investigate this further, ideally an individual with sufficient

knowledge of surface rights in Peru and in the exact vicinity of the Project.


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6 History

6.1 Prior Ownership of the Property and Ownership Changes

El Toro is a historic gold deposit; residents of Trujillo formed the Minera San Antonio SRL. In 1995 they

signed an option agreement with companies Oromin and Barrick Gold Corporation, who explored the

deposit in 1995 and 1996.

Subsequently they agreed to transfer the property to North Compaa Minera SA., which performed

exploration programs during 1998 and 1999. Despite the maturity of the project the company decided to

stop the work program.

In October 2003 the project was optioned by Cambior, who executed exploration programs on theproperty for 2 years. In October 2005 Cambior informed Minera San Antonio SRL. of the suspension of

their obligations.

In mid 2006 Empresa Minera San Antonio S.R.L. entered in negotiations with Minera Santa Marina to

advance project development of the El Toro Project. As a result, Minera Santa Marina SA purchased

concessions from Minera San Antonio in June 2006. Minimal detail is available for this owner.

Currently, Corporacin del Centro (CDC) owns all concessions of the El Toro deposit.

6.2 Past Mineral Exploration Work

6.2.1 Oromin Barrick (1995-1996)

Between 1995 and 1996 the exploration companies Oromin and Barrick Gold Corporation signed an

option agreement with the owners of the project to carry out exploration on El Toro. Work on the property

included geological mapping, surface geochemistry and reverse circulation (RC) drilling.

6.2.1.1 Surface Geochemistry

A sampling program was completed on rock outcrops, soils and structures with filling (veins). A total of

994 samples were taken and the work grid almost entirely covered the El Toro project.

6.2.1.2 Drilling

The drill program was carried out between December and June of 1995 and 1996 and 50 drillholes

totaling 3,994.50 m were drilled. The technique used for drilling was reverse circulation (RC) with

FOREMOST W750 drills, having a capacity of 250.00 m/day. A total of 3,995 samples were taken

systematically from each 1.50 m drilled.


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6.2.2 Company Minera North (1998-1999)

North executed exploration during 1998 and 1999 with the goal of developing an operation. They

completed geological mapping, surface geochemistry, and a geophysical survey.

6.2.2.1 Surface Geochemistry:

The surface geochemistry program consisted of sampling outcrops. This campaign was developed within

a program of regional geochemical reconnaissance. A total of 233 samples were collected on the

property.

In August 1999North conducted ageophysical helimagnetic survey. The purposeof this studywas to

attempt toidentify aporphyriticintrusive bodythat could containCu-Au mineralization.

6.2.3 Cambior (2003-2005)

In 2003, Cambior acquired the El Toro Project. The following two years consisted of advanced exploration

work including: Photographic Restoration (2,000 ha), geological mapping (500 ha), surface geochemistry

and drilling. In October 2005, Cambior informed Minera San Antonio SRL. of the suspension of its

obligations.

6.2.3.1 Restitution aerial photography (topography)

In May 2004, Eagly MAPPING completed an aerial photograph of 2,000 ha (5 x 2 km) from the central

area of the El Toro Project. Georeference points and a baseline were also surveyed in order to perform

the mapping, sampling and drilling.

6.2.3.2 Surface Geochemistry

Surface geochemistry work consisted of geochemical stream sediment sampling, soil, and rock outcrop

trenches totalling 1,834 samples.

6.2.4 Minera Santa Marina (2006)

At the time this report was written, no information was available regarding this owner.


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Table 6-1: Surface geochemistry work

Sample Type Number of Samples

Rock 1004

Soils 159

Sediments 53

Trench 618

Total of Samples 1834

Table 6-2: Exploration work on the Property before CDC Gold Crop.

Type of geological work Unit of measure Planned Actual

Geological prospecting at 1:10,000 scale

Radiometric surveys Line km 18.0 18.0

Excavation of pits Line m 55.0 55.0

Geochemical sampling around aureoles of secondarydispersion

Sample 750.0 748.0

Geochemical sampling of outcrops Sample 0.0 55.0

Geochemical channel-sampling of pits Sample 55.0 55.0

Geochemical channel-sampling of outcrops Sample 0.0 15.0

Line cutting Line km 17.0 13.4

Pegging profiles and baselines at 25 m intervals Line km 20.4 21.0

Research at 1:50,000 scale

Research traverse Line km 25.0 25.0

Geochemical sampling of outcrops Sample 0.0 22.0

Litho-geochemical investigation following the traces of

dispersion

Sample 100.0 122.0


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7 Geological Setting and Mineralization

7.1 Regional Geology

The regional geology is dominated by a thick sequence of Mesozoic marine clastic and carbonate

sedimentary rocks, which are bound to the west by the Mesozoic to Early Tertiary Coastal Batholith and to

the east by the Paleozoic metamorphic fringe. This zone covers part of the eastern sector of the Tertiary

volcanics and also a part of the western sector of the Mesozoic sedimentary fringe. Sedimentary rocks are

represented by pelitic sequences from the Upper Jurassic age, considered as the base of the stratigraphic

column in the region (Chicama Formation), followed by Cretaceous sequences of predominantly clastic

silty sand at the bottom (Chim formation) and muddy -calcareous rocks at the top (Chim, Santa,

Carhuaz and Farrat formations) (Figure 7-1).

Figure 7-1: Regional geology

The sedimentary units are covered by Tertiary volcanic rocks of predominantly andesitic lavas alternating

with dacitic pyroclastic horizons (Calipuy Group). K-Ar radiometric dating performed by Cambior, indicates

that the superior level of these volcanics present in the Quesquenda area have ages of 18 million years

(Ma) for andesitic lavas and 16 Ma for the dome andesitic volcanic porphyry Sulcahuamga in the area of

Alto Chicama.


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The intensely folded and faulted sedimentary series are cut by hypabyssal intrusions of Tertiary age,

apparently related to the occurrence of dome landforms, and preferably emplaced within the NW SE

structural corridor. These intrusive rocks are usually emerging as small stocks isolated in or on the

periphery of the dome landforms. At depth, these stocks seem to merge and form a more intrusive body,as in the " Huamachucos Dome " and "Algamarcas Dome". Peripheral intrusions surround select domes

in laccolithic forms, such as La Arena and Toro. The composition of intrusive domes varies from porphyry-

diorite to andesitic-dacitic porphyry to quartzite. Radiometric dating done by Cambior indicates several

generations of intrusives, whose range of ages is between 25 to 18 Ma. In the highlands and on the

slopes to the east and west of the "Cordillera del Huaylillas" (Dome of Huamachuco), thick accumulations

of glacial material (100 m) are observed.

7.2 Property Geology

The El Toro deposit consists of disseminated gold (Au) located in the sandstones of the Chim Formation.

The orebody is located within the mineralized fringe of northern Peru consisting of gold deposits hosted in

Cretaceous sedimentary rocks and associated with deep sub-volcanic intrusions. The metallotect is the

Chim Formation, which consists of sandstone, quartzite, quartz sandstone, coal and clay siltstones with

lenticular facies that pinch out laterally (Rivera 1980).

The El Toro deposit lies within a large mineralized corridor and the genesis of this deposit is very similar to

others of its class, such as La Virgen and Shahuindo. Gold is hosted in the oxidation fractures within

siliciclastic rocks (sandstone, quartzite and quartz sandstones) and cubic pyrite hosted in the dacitic

prophyry and occasionally in the quartzite. El Toro was a very active system with clear evidence of

tectonic and volcanic activity represented by hydrothermal alteration facies, superimposed breccias, andfracture systems. These facies provided conduits for mineralized fluids. The sandstone and quartzite

breccia zones exhibit strong oxidation (jarosite, goethite and hematite) in contact with the intrusive dacite.

The intrusion, a dacitic porphyry, is located in the central part of the recumbent anticline orientated to the

west. The fracture-hosted economic gold mineralization displays strong oxidation in the stockwork,

suggesting decent grades.

In the northwest side of the hill there is a stock from a dacitic porphyry which cuts the sedimentary

sequence trending northeast. This sedimentary sequence presents a strong argillitic alteration with a

system of stockwork veins. Strong argillic alteration is also observed at the contact between the daciticintrusive and the sandstones, sometimes reaching up to 20 m wide The breccia matrix constitutes either

intrusive or sandstone and hosts gold veinlets. Intense fracturing areas are observed that give a "sugary"

texture. These areas do not have economic gold (Au), but localized moderate sericite alteration can be

considered as an economic gold anomaly. Areas of compaction within the sandstone offer zones of

enrichment between bedding planes, allowing for mineralized lenses to form. The minerals consist of

goethite, jarosite and hematite, and range in thickness from 0.5 to 0.25 m. The greatest potential resource

lies within the sandstones. The local geology and stratigraphy is shown in Figure 7-5).


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Figure 7-2: Contact between the sandstones from the Chim Formation and the dacitic porphyry

7.2.1 Alteration

The sandstones display silicification, typical of hydrothermal breccias, with localized phyllic alteration

(sericite) and intense fracturing. The alteration of the porphyry is moderate to strong along the peripheral,

and gradually decreases to propylitic and / or chloritic towards the center (Figure 7-3).

7.2.1.1 SilicificationSilicification is the dominant alteration observed in the deposit. It can be difficult to clearly identify the

silicification in siliciclastic rocks but it usually generates a massif texture. This alteration is restricted in

proximity to the mineralization ducts.

7.2.1.2 Phyllic (Quartz-Sericite)

This alteration is present in the sandstones along the border of the silicification zones. Interstitial sericite is

generally present in low to moderate quantities but is occasionally pervasive in fractured areas of the

sandstone.

7.2.1.3 Argillic

This hydrothermal alteration is dominant in the dacitic porphyry. It obliterates primary textures when thealteration is strong. In cases where the alteration is not very invasive, original porphyritic textures are

observed with a white-beige color indicative of the argillic presence.

7.2.1.4 Propylitic

This hydrothermal alteration is generated as distal halo argillic alteration, identified as phenocrysts

replacement by chlorite in the dacite porphyry. The rock is a greenish color with disseminated pyrite

mineralization in the fractures of the well preserved porphyritic rock.


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Figure 7-3: El Toro hydrothermal alteration zones

7.3 Structural Control

The North Peruvian Andes show remarkable and complete Cretaceous siliciclastic sedimentation and

accumulated in a carbonate platform followed bya major subsidencewhich, during the Cenozoic, was

affected bya compressivetectonic phase. The result isasystem of foldsandthrust faultsconvergingto

the east.

The high-angle AndeanNW-SE fault system is the main control on the trend of the Arena and La Virgen

deposits. This in turn intersected other subsidiary structural systems trending NE-SW, EW and NS,

generating excellent areasof weakness to host economic mineralization. This whole system is cut by


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numerous stocks and sub-volcanic porphyry domes with felsic compositions, which were a source of

mineralizingfluidsfor differentmineralized areasin the rangecovered by theChimFormation.

Figure 7-4: Regional structural interpretation

7.4 Lithology and Stratigraphy

7.4.1 Chicama Formation - Upper Jurassic

The Chicama Formation comprises thinly interbedded mudstone, bituminous mudstone, siltstone, and

minor sandstone with local intercalations of clay and reworked tuffaceous material. These terrigenous

sediments were deposited in a shallow, inland-sea basin flanked to the east by the emerged continent and

to the west by a volcanic arc. The sediments eroded from the continental side are mainly quartz sands,

while the sediments derived from the volcanic arc are typically clay-rich and tuffaceous material. The

shallow, restricted nature of this basin resulted in the development of a reducing environment, which

favoured the formation of organic deposits. These organic deposits are present as bituminous or

anthracitic coal beds. Regionally within the Chicama formation, small gold mineralization structures


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associated with stocks and sills of dacitic composition have been recognized. Usually they possess

irregular amounts of polymetallic elements (Hg-As-Ag-Cu-Zn-Pb) as well.

7.4.2 Lower Cretaceous

The Lower Cretaceous is characterized by clastic sedimentation in a highly oxygenated sea environment.

To the east, the continent was affected by continuous uplift concurrent with basin subsidence. These

conditions resulted in a significant accumulation of detrital sediments. Additionally during this period, the

island arc to the west of the sedimentary basin was subjected to intense erosion due to a reduction in

magmatic activity. This resulted in the formation of a highly oxygenated, open sea environment as

opposed to the reducing conditions created by the inland sea during the Jurassic.

7.4.2.1 Chim Formation

The Chim Formation consists of a sequence of alternating sandstones, quartzites with shales at the

bottom. The upper part consists of a sequence of white quartzite. This unit conformably overlies the

Chicama unit. In the lower and intermediate levels of the Chim formation, occurrence of gold

mineralization is frequent in the contact breccias. Several gold deposits hosted within the Chim

Formation have been identified in the recent exploration boom, Chim such as La Arena, La Virgen and

the Santa Rosa mine (Comarsa) (Figure 7-5). The La Arena site is located at the base of the Chim

Formation sediments.

Figure 7-5: Stratigraphic column (after V. Quirita, 2006)


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7.4.2.2 Santa Formation

This unit is characterized by shales, marly limestones and dark gray interbedded sandstones. The Santa

Carhuaz Formation overlies the Chim and records sediment deposition during a relatively passive

tectonic period.

7.4.2.3 Carhuaz Formation

The Carhuaz Formation consists of grey, dirty sandstone with a red and purple hue interbedded with grey

mudstone. White quartzite beds are interbedded with sandstone and mudstone in the upper portion of this

sequence. Alternations of shales and gray, reddish to pink sandstones are also observed, occasionally

alternating with white quartzite at the top of the beds.

7.4.2.4 Farrat Formation Lower Cretaceous

The Farrat Formation consists of thick, white sandstone beds that commonly display planar cross

stratification and local pebble conglomerates. The Farrat Formation is similar to the Chim Formationhowever, the Farrat Formation lacks the coal beds and grey colour observed in the latter.

During the Upper Cretaceous and part of the Lower Tertiary, extensional tectonism facilitated the

emplacement of plutons along the length of the coast, culminating in the emplacement of the Coastal

Batholith west of the Project area.

The sequence consists of white sandstone and medium to coarse grained quartzite, approximately 500 m

thick. This formation conformably overlies the Carhuaz formation. The clastic horizons of the Farrat

sequence are considered excellent hosts for disseminated gold mineralization due to their permeability, as

is observed in the El Toro deposit.

7.4.3 Inca, Chulec and Pariatambo Formation - Middle Cretaceous

The units consist of alternating sandstones, shales and limestones. No occurrence of gold mineralization

is known in these formations.

7.4.4 Volcanic Calipuy Formation - Upper Cretaceous to Lower Tertiary

During the Tertiary, the magmatic arc migrated further east initiating the onset of continental volcanism

and the development of small volcanic arcs oriented in a south-southwest/north-northeast direction. Thisevent resulted in the present day alignment of the volcanic structures of the Calipuy in the area southwest

of Huamachuco, east of the deposit area. The Calipuy Group rocks are calc-alkaline in composition and

are predominately andesite, with lesser dacite and rhyolite observed. The volcanic structures are

predominantly domes or dome complexes.

The bottom consists of a thick sequence of rhyolitic, rhyodacitic and dacitic lavas. In both areas of the

edge, it has been possible to recognize subvolcanic structures associated with hydrothermal activity.

Based on field observations, these volcanics have been assigned to the upper Cretaceous to Lower


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Tertiary. Recent K-Ar radiocarbon dating results from Geochron Cambior Laboratories (July 1998)

reported ages of 16.5 Ma to 18.9 Ma (middle Miocene) for samples taken from the top of the sequence.

7.4.5 Intrusive Rocks

In the region between Huamachuco and Cajabamba, hypabyssal intrusive bodies of tertiary age have

been recognized and are related to the presence of dome forms, emplaced within a NW-SE structural

corridor, cutting Mesozoic sedimentary formations. Usually, these intrusives emerge as small stocks

isolated in or on the periphery of the domes landform. Their compositions vary from diorite porphyry

andesitic, dacitic porphyry and quartzite porphyry. At depth, these stocks seem to unite and form one

larger intrusive body, as in the "Domo Huamachuco" and "Domo Algamarca". Certain sub-volcanic

hypabyssal domes have laccolithic peripheral intrusions with a strong NW-SE structural control, such as

La Arena and Virgen. Other intrusions associated with minor dome forms are located in the Cochapampaarea. These intrusions represent the southern periphery of the Algamarca Dome, which has a central

dacitic composition that changes gradationally to andesitic at its limits. Between the towns of Marcabal

and Purumarca, hypabyssal intrusive outcrops of intermediate composition have also been identified,

covering areas up to 4 x 2 kilometers, cutting the Chicama shales and sandstones of the Chim formation.

Radiometric ages, with the exception of the Florida deposit, clearly indicate that the hypabyssal intrusions

predate Calipuy volcanics.

7.5 Mineralization

The gold mineralization in the region of Huamachuco occurs mostly at the intersection of Andeanstructural "train" NW to NE transfer. Structural factors related to the transfer affected alignment of the

volcanic centers and dome complexes during emplacement.

In sedimentary environments, permeable characteristics of clastic rocks combined with faulting, intrusions,

and the degree of fracturing and / or brecciation, present the ideal conditions of formation of gold deposits,

such as La Virgen, La Arena, Shahuindo and Santa Rosa. Finally, the lithological composition of the

intrusive (preferably intermediate to felsic) and degree of fracturing in the stockwork is crucial to the

formation of Cu-Mo-Au porphyry deposits.

There is a direct genetic relation between the Cu-Mo porphyry systems, epithermal sediment-hosted Au,

and polymetallic veins that occur in the periphery of the hypabyssal intrusive, as is observed in the Arena

and Shahuindo deposits in Algamarca.

At the El Toro site, economic Au mineralization is hosted in quartzites and sandstones, which are strongly

fractured and the fractures are filled with iron oxides (goethite, jarosite and hematite). In various El Toro

breccias (hydrothermal, contact and tectonic types), Au grade varies according to the fluid origins and

host rock composition. Breccia thicknesses range from 0.05 to 2 m. Pyrite is the most abundant sulfide

and is found mainly in the dacitic intrusive. Chalcopyrite, bornite, chalcocite and covellite are also

observed, mainly at the dacitic porphyry intrusive contact with the sandstones.


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Figure 7-6: Mineralization models (from CDC Gold Corp.)


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8 Deposit type

8.1 Deposit Summary

The gold mineralization type identified in the El Toro deposit is of the high sulfidation epithermal in clastic

sedimentary rocks, such as sandstones and quartzites of the Chimu Formation. The volcanic

assemblages epithermal acid-sulfate alteration is not well documented, and is presented with varying

intensities and dimensions regarding its lateral and vertical zonation. The deposit shows a clear structural

control, which is characteristic of these deposits; its tectonic setting is determined by the interaction of

faults. The principal tectonic event generated an opportunity for the development of cortical dacitic sub-

volcanic rocks flanking the anticline.

8.2 Epithermal Deposits

Epithermal gold ( Cu & Ag) deposits form at shallower crustal levels than porphyry Cu-Au systems, and

are primarily distinguished as low or high sulfidation using a criteria of varying gangue and ore mineralogy,

deposited by the interaction of various ore fluids with host rocks and groundwater. High sulfidation

systems vary with depth and permeability control, and are distinguished from several styles of barren acid

alteration.

Figure

8-1: High sulfidation epithermal deposits model (modified from Hedenquist and Lowenstern)


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8.3 Geological Characteristics

Crustal level and ore fluid characteristics provide the first and second order distinctions in the classification

of Pacific Rim magmatic arc gold deposits.

Figure 8-2: Conceptual model for styles of magmatic arc epithermal Au-Ag and porphyry Au-Cu (image sourced from

Corbett and Leach, 1998)

8.3.1 High Sulfidation Type

Although termed acid sulphate in the early geological literature (Heald et al., 1987), high sulfidation

systems are now well defined by characteristic alteration and mineralization (Corbett and Leach, 1998;

Sillitoe, 1999; White and Hedenquist, 1995). The term acid sulphate is now preferred for alteration formed

by collapsing surficial cooler acidic waters (Corbett and Leach, 1998), typically within low sulfidation

systems. High sulfidation gold deposits are the major producers in the Andes of South America (e.g.

Yanacocha, Pierina, El Indio, La Coipa), and represent some significant undeveloped resources (e.g.,

Pascua-Lama-Veladero, Chile-Argentina).


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Table 8-1: Genetic types of epithermal gold deposits

High sulfidation (HS) Low sulfidation (LS)

Genetically related

volcanic rocks

Mainly andesite- rhyodacite Andesite- rhyodacite- rhyolite

Deposit form Disseminated: dominant

replacement: common

stockwork: minor

Open-space veins: dominant

stockwork: common

disseminated & replacement: minor

Alteration Zone Aerially extensive & visuallyprominent

Commonly restricted and visuallysubtle

Quartz gangue Fine-grained, massive, mainly

replacement origin; residual,

slaggy (vuggy) quartzcommonly

hosts ore

Chalcedony &/or quartz displaying

crustiform, colloform, bladed,

cockade & carbonate-replacement

textures; open space filling

Carbonate gangue Absent Ubiquitous, commonlymanaganoan

Other gangue Barite widespread with ore;native

sulfur commonly fills openspaces

Barite & (or) fluorite present locally;

barite commonly above ore

Sulfide abundance 10-90 vol% mainly fine-

grained,partly laminated pyrite

1-20 vol%, but typically


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Figure 8-3: Epithermal deposits global occurrences (image sourced from Corbett and Leach, 1998)

8.4 Mineralized High Sulfidation Systems

Mineralized high sulfidation epithermal gold deposits predominantly occur in younger, poorly eroded

magmatic arcs (e.g., Andes of South America), although some are noted on the older arcs of eastern

Australia. Thus, most occur in volcanic host rocks and demonstrate associations with sub-volcanicintrusions, particularly flow dome complexes. Most are also commonly localised by similar major structural

corridors to those which host porphyry Cu-Au deposits, where more deeply eroded.

8.4.1 Fluid Characteristics

High sulfidation deposits are typically derived from fluids enriched in magmatic volatiles, which have

migrated from intrusion source rocks at depth to elevated epithermal crustal settings, with only limited

dilution by groundwater or interaction with host rocks. Major dilatant structures or phreatomagmatic

breccia pipes provide conduits for rapid fluid ascent, facilitating the evolution of the characteristic high

sulfidation fluid. As the rapidly rising fluid becomes depressurised, magmatic volatiles (dominantly SO2butalso HCL, CO2, & HF) come out of solution and react with water (magmatic and groundwater) and oxygen

to produce increasing concentrations of H2SO4. Under lower temperature conditions (


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Leach, 1998), in which this alteration results from the interaction with host rocks of the more rapidly

migrating volatile rich-component of the high sulfidation fluid, while the subsequent liquid-rich component

deposits sulfides and Au-Ag-Cu mineralization.

8.4.2 Permeability

Dilatant structures or phreatomagmatic breccia pipes commonly provide conduits for the rapid introduction

of hot acidic fluids into the epithermal environment where they react with host rocks to produce

characteristic alteration. Most ore systems display elements of structural, breccia, or lithological control

(Sillitoe, 1999; Corbett and Leach, 1998). In many instances structural controls predominate in the deeper

portions and pass upwards to a lithological control. Dilatant subsidiary structures with angular

relationships to major structural corridors host ore and facilitate rock reaction, while elsewhere permeable

host rock lithologies may control fluid flow. At the Maragorik deposit in Papua New Guinea, fluids whichproduced alteration are interpreted to pass from structures to permeable lithologies, but later

mineralization is only well developed at the intersection of structures and lithology (Corbett and Hayward,

1994).

Diatreme flow dome complexes are the most important breccia control (e.g. Pascua, Wafi, Yanacocha,

Veladero), particularly at the contact between the diatreme and brecciated host rocks, although phreatic

breccias are locally recognised. Many deposits are associated with dome margins (Gray and Coolbaugh,

1994). The rapid fluid depressurisation associated with violent diatreme eruptions facilitates dissociation

of acid-bearing fluids resulting in initiation of high sulfidation alteration, and als

ni 43-101 resources technical report el toro gold project - corporación del centro sac - perú

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