EX-95.1 7 sodi_ex961.htm CERTIFICATION sodi_ex961.htm

EXHIBIT 96.1

 

S-K 1300 Technical Report Summary

Florida Canyon Zinc Project

 

Amazonas Department, Peru

 

Prepared for:

    

 

Solitario Zinc Corp

4251 Kipling Street Suite 390

Wheat Ridge, CO 80033

 

Effective Date: February 1, 2021

Report Date: March 15, 2022

 

Prepared by:

   

   

 200 Union Boulevard, Suite 440

Lakewood, CO 80228

 

Qualified Persons:

Donald E. Hulse, P.E., SME-RM

Sarah Milne, P.E., SME-RM

Additional Authors:

Christopher Emanuel, SME-RM

 

 

 

 

Company Name

i

Project Name

S-K 1300 Technical Report Summary

 

Table of Contents

 

1

 

 

Executive Summary

 

 

1

 

 

1.1

 

 

Property Summary and Ownership

 

 

1

 

 

1.2

 

 

Mineral Resource Statement

 

 

1

 

1.2.1

 

 

Mineral Resource Classification

 

 

2

 

1.2.2

 

 

Audit of Final Mineral Resource Estimate

 

 

3

 

1.2.3

 

 

Mineral Resource Tabulation

 

 

3

 

 

1.3

 

 

Geology and Mineralization

 

 

4

 

 

1.4

 

 

Exploration Status

 

 

4

 

 

1.5

 

 

Metallurgy and Mineral Processing

 

 

5

 

1.5.1

 

 

Recovery Methods

 

 

5

 

 

1.6

 

 

Mine Design, Optimization and Scheduling

 

 

5

 

 

1.7

 

 

Project Infrastructure

 

 

5

 

 

1.8

 

 

Material Development & Operations

 

 

6

 

 

1.9

 

 

Environment & Permitting

 

 

6

 

 

1.10

 

 

Capital Costs, Operating Costs and Financial Analysis

 

 

6

 

 

1.11

 

 

Conclusions

 

 

7

 

 

1.12

 

 

Recommendations

 

 

7

 

1.12.1

 

 

Metallurgy

 

 

7

 

1.12.2

 

 

Resource Conversion Drilling

 

 

8

 

1.12.3

 

 

Resource Expansion Drilling

 

 

8

 

2

 

 

Introduction

 

 

10

 

 

2.1

 

 

Terms of Reference and Purpose of the Report

 

 

10

 

 

2.2

 

 

Source of Data and Information

 

 

10

 

 

2.3

 

 

Details of Inspection

 

 

10

 

 

2.4

 

 

Previous Reports on Project

 

 

11

 

3

 

 

Property Description and Location

 

 

12

 

 

3.1

 

 

Location

 

 

12

 

 

3.2

 

 

Mineral Titles, Claims, Rights, Leases and Options

 

 

14

 

3.2.1

 

 

Mineral Rights in Peru

 

 

14

 

3.2.2

 

 

Mineral Titles

 

 

15

 

3.2.3

 

 

Nature and Extent of Issuer’s Interest

 

 

18

 

 

3.3

 

 

Sufficiency of Surface Rights

 

 

18

 

 

3.4

 

 

Environmental Impacts and Permitting

 

 

18

 

 

3.5

 

 

Other Significant Factors and Risks

 

 

19

 

 

3.6

 

 

Royalties, Taxes, and Agreements

 

 

19

 

 

 

 

Gustavson Associates, LLC

15 March 2022

 

 

 

 

Company Name

 

Project Name

S-K 1300 Technical Report Summary

     

3.6.1

 

 

Property Agreements

 

 

20

 

 

 

Accessibility, Climate, Local Resources, Infrastructure and Physiography

 

 

22

 

 

4.1

 

 

Topography, Elevation, and Vegetation

 

 

22

 

 

4.2

 

 

Accessibility and Transportation to the Property

 

 

22

 

 

4.3

 

 

Climate and Length of Operating Season

 

 

23

 

 

4.4

 

 

Infrastructure Availability and Sources

 

 

23

 

4.4.1

 

 

Existing Infrastructure

 

 

23

 

4.4.2

 

 

Proximity to Population Center

 

 

25

 

4.4.3

 

 

Power

 

 

25

 

4.4.4

 

 

Water

 

 

25

 

4.4.5

 

 

Personnel

 

 

26

 

5

 

 

History

 

 

27

 

 

5.1

 

 

Previous Operations

 

 

27

 

 

5.2

 

 

Historical Exploration & Development Results

 

 

27

 

 

5.3

 

 

Recent Work

 

 

28

 

 

5.4

 

 

Historical Mineral Resource Estimates

 

 

29

 

 

5.5

 

 

Historical Production

 

 

29

 

6

 

 

Geological Setting, Mineralization and Deposit

 

 

30

 

 

6.1

 

 

Regional Geology

 

 

30

 

 

6.2

 

 

Local Geology

 

 

35

 

6.2.1

 

 

Lithography & Stratigraphy

 

 

35

 

6.2.2

 

 

Structure

 

 

36

 

6.2.3

 

 

Alteration

 

 

37

 

6.2.4

 

 

Mineralization

 

 

38

 

 

6.3

 

 

Property Geology

 

 

38

 

 

6.4

 

 

Significant Mineralized Zone

 

 

40

 

 

6.5

 

 

Deposit Types

 

 

41

 

6.5.1

 

 

Mineral Deposit

 

 

41

 

7

 

 

Exploration

 

 

43

 

 

7.1

 

 

Surveys and Investigations

 

 

43

 

7.1.1

 

 

Relevant Exploration Work

 

 

43

 

7.1.2

 

 

Significant Results & Interpretation

 

 

43

 

 

7.2

 

 

Drilling Exploration

 

 

50

 

7.2.1

 

 

Procedures

 

 

52

 

7.2.2

 

 

Interpretation & Relevant Results

 

 

53

 

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Company Name

 

Project Name

S-K 1300 Technical Report Summary

  

8

 

 

Sample Preparation, Analysis and Security

 

 

54

 

 

8.1

 

 

Sampling Methods

 

 

54

 

8.1.1

 

 

Sampling for Geochemical Analysis

 

 

56

 

8.1.2

 

 

Sampling for Density Measurement

 

 

56

 

 

8.2

 

 

Security Measures

 

 

59

 

 

8.3

 

 

Sample Preparation for Analysis

 

 

59

 

 

8.4

 

 

QA/QC Procedures

 

 

61

 

8.4.1

 

 

Standards

 

 

63

 

8.4.2

 

 

Blanks

 

 

64

 

8.4.3

 

 

Duplicates

 

 

65

 

 

8.5

 

 

Opinion on Adequacy

 

 

66

 

9

 

 

Data Verification

 

 

67

 

 

9.1

 

 

Procedures

 

 

67

 

 

9.2

 

 

Opinion on Data Adequacy

 

 

68

 

10 

 

 

Mineral Processing and Metallurgical Testing

 

 

69

 

 

10.1

 

 

Metallurgical Test Work, 2010-2014

 

 

69

 

11

 

 

Mineral Resource Estimate

 

 

71

 

 

11.1

 

 

Geologic Model

 

 

71

 

 

11.2

 

 

Exploratory Data Analysis

 

 

73

 

 

11.3

 

 

Domains for Resource Estimation

 

 

77

 

 

11.4

 

 

Capping and Compositing

 

 

77

 

 

11.5

 

 

Geostatistics

 

 

79

 

 

11.6

 

 

Block Model Parameters

 

 

80

 

 

11.7

 

 

Block Grade Estimation Methodology

 

 

81

 

 

11.8

 

 

Resource Classification

 

 

81

 

   

 

 

Gustavson Associates, LLC

15 March 2022

 

 

 

 

Company Name

 

Project Name

S-K 1300 Technical Report Summary

  

 

11.9

 

 

Cutoff Grade

 

 

82

 

 

11.10

 

 

Development of Economic Shells for Reporting

 

 

83

 

 

11.11

 

 

Specific Gravity/Density

 

 

85

 

 

11.12

 

 

Validation of Resource Estimate

 

 

85

 

 

11.13

 

 

Audit of Final Mineral Resource Estimate.

 

 

86

 

 

11.14

 

 

Mineral Resource Tabulation

 

 

87

 

12

 

 

Mineral Reserve Estimate

 

 

89

 

13

 

 

Mining Methods

 

 

90

 

14

 

 

Processing and Recovery Methods

 

 

91

 

15

 

 

Project Infrastructure

 

 

92

 

16

 

 

Market Studies

 

 

93

 

 

16.1

 

 

Contracts and Status

 

 

93

 

17

 

 

Environmental Studies, Permitting and Social or Community Impact

 

 

94

 

 

17.1

 

 

Required Permits and Status

 

 

94

 

17.1.1

 

 

Required Exploration Permits and Status

 

 

94

 

17.1.2

 

 

Required Mining Permits

 

 

97

 

 

17.2

 

 

Environmental Monitoring Results

 

 

97

 

 

17.3

 

 

Groundwater

 

 

99

 

 

17.4

 

 

Environmental Issues

 

 

99

 

 

17.5

 

 

Mine Closure

 

 

100

 

17.5.1

 

 

Post Mining Land Use

 

 

100

 

17.5.2

 

 

Portals and Vents

 

 

100

 

17.5.3

 

 

Buildings and Infrastructure

 

 

100

 

17.5.4

 

 

Roads and Miscellaneous Disturbance

 

 

101

 

17.5.5

 

 

Tailings Facility

 

 

101

 

 

17.6

 

 

Post Closure Plans

 

 

102

 

 

17.7

 

 

Reclamation and Closure Cost Estimate

 

 

102

 

 

17.8

 

 

Post-Performance or Reclamations Bonds

 

 

102

 

 

17.9

 

 

Social and Community

 

 

103

 

18

 

 

Capital and Operating Costs

 

 

105

 

19

 

 

Economic Analysis

 

 

106

 

20

 

 

Adjacent Properties

 

 

107

 

21

 

 

Other Relevant Data and Information

 

 

108

 

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Company Name

 

Project Name

S-K 1300 Technical Report Summary

  

 

21.1

 

 

Mining Methods

 

 

108

 

21.1.1

 

 

Proposed Mining Methods

 

 

108

 

21.1.2

 

 

Optimization Parameters

 

 

109

 

21.1.3

 

 

Development Layout

 

 

111

 

21.1.4

 

 

Waste

 

 

112

 

21.1.5

 

 

Mine Production

 

 

113

 

 

21.2

 

 

Processing and Recovery Methods

 

 

113

 

21.2.1

 

 

Processing Projections and Methods

 

 

113

 

21.2.2

 

 

Consumables Requirement

 

 

113

 

 

21.3

 

 

Project Infrastructure

 

 

115

 

21.3.1

 

 

Infrastructure and Logistics Requirements

 

 

115

 

21.3.2

 

 

Project Logistics

 

 

120

 

21.3.3

 

 

Tailings Management

 

 

121

 

 

21.4

 

 

Capital and Operating Costs

 

 

121

 

21.4.1

 

 

Capital Cost Estimates

 

 

121

 

21.4.2

 

 

Operating Cost Estimates

 

 

125

 

 

21.5

 

 

Economic Analysis

 

 

126

 

21.5.1

 

 

External Factors

 

 

126

 

21.5.2

 

 

Main Assumptions

 

 

127

 

21.5.3

 

 

Taxes, Royalties and Other Interests

 

 

129

 

21.5.4

 

 

Results

 

 

129

 

22

 

 

Interpretation and Conclusions

 

 

134

 

 

22.1

 

 

Results & Comments

 

 

134

 

 

22.2

 

 

Significant Risks & Uncertainties

 

 

134

 

23

 

 

Recommendations

 

 

135

 

 

23.1

 

 

General Recommendations

 

 

135

 

23.1.1

 

 

Metallurgy

 

 

135

 

23.1.2

 

 

Drilling

 

 

136

 

23.1.3

 

 

Resource Conversion Drilling

 

 

136

 

23.1.4

 

 

Resource Expansion Drilling

 

 

137

 

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Company Name

 

Project Name

S-K 1300 Technical Report Summary

  

24

 

 

References

 

 

139

 

25

 

 

Reliance on Information Provided by Registrant

 

 

140

 

26

 

 

Glossary

 

 

141

 

 

26.1

 

 

Mineral Resources

 

 

141

 

 

26.2

 

 

Mineral Reserves

 

 

141

 

 

26.3

 

 

Glossary

 

 

143

 

 

26.4

 

 

Definition of Terms

 

 

144

 

27

 

 

Appendix A: Drill Hole Collars

 

 

147

 

28

 

 

Appendix B: QA/QC 2019 Laboratory Results

 

 

161

 

 

28.1

 

 

Coarse Blank Results – ALS Laboratory

 

 

161

 

 

28.2

 

 

Duplicate Results – ALS Laboratory

 

 

165

 

 

28.3

 

 

Standards Results – ALS Laboratory

 

 

177

 

 

28.4

 

 

External Check Results – Cert vs ALS Laboratory

 

 

189

 

29

 

 

Appexdix C: Sample Cumulative Frequency Plots

 

 

192

 

30

 

 

Appendix D: Cap-Composite Cum. Frequency Plots

 

 

194

 

31

 

 

Appendix E: Mineral Resource

 

 

198

 

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Company Name

 

Project Name

S-K 1300 Technical Report Summary

  

List of Tables

 

Table 1‑1 Mineral Resource Summary

 

 

3

 

Table 1‑2 Total Mineral Resource

 

 

3

 

Table 1‑3: Florida Canyon Mine Production Assumptions

 

 

6

 

Table 1‑4 Planned work program for 2021-2022

 

 

9

 

Table 3‑1 List of Minera Bongará Mineral Concessions

 

 

16

 

Table 3‑2 Marginal royalty rates for various operating margins

 

 

20

 

Table 5‑1 Campaign Summary - Florida Canyon

 

 

29

 

Table 7‑1 Summary of Total Surface Samples

 

 

46

 

Table 7‑2 Drilling Summary in Florida Canyon

 

 

50

 

Table 7‑3 Downhole Survey Data Point Spacing

 

 

52

 

Table 8‑1 Total number of Density Samples taken per year

 

 

57

 

Table 8‑2 Analytical Codes and Methods

 

 

59

 

Table 8‑3 Analyzed Elements and Method Detection Limits

 

 

61

 

Table 8‑4 QA/QC Insertion of Samples 2018-2019 Campaign

 

 

63

 

Table 8‑5 QA/QC Standard Bias % Results 2018-2019 Campaign

 

 

63

 

Table 8‑6 QA/QC Blanks Results 2018-2019 Campaign

 

 

64

 

Table 8‑7 QA/QC Duplicates Results 2018-2019 Campaign

 

 

65

 

Table 10‑1 Metallurgical Tests – Selected Results

 

 

70

 

Table 10‑2 Florida Canyon Metal Recoveries by Material Type

 

 

70

 

Table 11‑1 Deposit Stratigraphy

 

 

72

 

Table 11‑2 Description of Zone Codes for Statistics

 

 

74

 

Table 11‑3 Summary Statistics for Zinc by Zone (after Nexa)

 

 

75

 

Table 11‑4 Average Metal Grades by Area

 

 

76

 

Table 11‑5 Outlier Capping Values by Area (after Nexa)

 

 

78

 

Table 11‑6 Selected Variogram Parameters (after Nexa)

 

 

80

 

Table 11‑7 Block Model Parameters

 

 

80

 

Table 11‑8 Deswik Stope Parameters

 

 

84

 

Table 11‑9 Long term metal prices

 

 

84

 

Table 11‑10 Mineral Resource Summary

 

 

87

 

Table 11‑11 Florida Canyon Total Mineral Resources

 

 

87

 

Table 17‑1: Environmental Monitoring During Mining Exploration

 

 

98

 

Table 21‑1: Proposed Stope Dimensions

 

 

109

 

Table 21‑2: Expected Processing Recoveries

 

 

109

 

Table 21‑3: NSR Calculation Parameters for Stope Optimization

 

 

109

 

Table 21‑4: Operating Costs Used for Determining Potential Mining Shapes

 

 

110

 

Table 21‑5: Stope Optimization Parameters for Base Case Analysis

 

 

110

 

Table 21‑6: Mine Plan Resource Average Process Recovery

 

 

111

 

Table 21‑7: Development Design Assumptions

 

 

111

 

Table 21‑15: Florida Canyon Capital Estimate Summary

 

 

122

 

Table 21‑18: Florida Canyon Operating Costs Summary

 

 

125

 

Table 21‑19: Florida Canyon Price Assumptions

 

 

127

 

Table 21‑20: Florida Canyon Net Smelter Return Terms

 

 

127

 

Table 21‑21: Florida Canyon Product Logistics Cost

 

 

127

 

Table 21‑22: Florida Canyon Mine Production Assumptions

 

 

128

 

Table 21‑23: Florida Canyon Mill Production Assumptions

 

 

128

 

Table 21‑24: Florida Canyon Royalty Rates

 

 

129

 

Table 21‑25: Florida Canyon Indicative Operating Costs (Dry Basis)

 

 

130

 

Table 21‑26: Florida Canyon LoM Annual Production and Revenues

 

 

132

 

Table 21‑27: Florida Canyon Cash Costs

 

 

133

 

Table 23‑1 Planned work program for 2021-2022

 

 

138

 

Table 26‑1 Glossary

 

 

143

 

Table 26‑2 Abbreviations

 

 

144

 

  

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Company Name

 

Project Name

S-K 1300 Technical Report Summary

  

List of Figures

 

Figure 3‑1 Project Location Map

 

 

13

 

Figure 3‑2 Map of Mineral Claims and Mineral Occurrences

 

 

17

 

Figure 3‑3 Access road to the Florida Canyon Project (in construction)

 

 

21

 

Figure 4‑1 Photograph of the Florida Canyon Project Area

 

 

22

 

Figure 4‑2 Drill Support Camp

 

 

24

 

Figure 4‑3 Shipsabamba Project Camp

 

 

24

 

Figure 6‑1 Regional Geologic Map

 

 

32

 

Figure 6‑2 Legend of Regional Geology Map

 

 

34

 

Figure 6‑3 Project Area Stratigraphic Column

 

 

35

 

Figure 6‑4 Florida Canyon Project Geologic Map

 

 

39

 

Figure 6‑5 Cross Section of the Project Geologic Model

 

 

40

 

Figure 6‑6 Mississippi Valley-Type Deposit Schematic Model

 

 

42

 

Figure 7‑1 Florida Canyon Area Prospect and Geochemistry Map

 

 

46

 

Figure 7‑2 Regional Geochemical Results

 

 

48

 

Figure 7‑3 Florida Canyon Area Simplified Geology, Resource and Drillhole Map

 

 

49

 

Figure 7‑4 Drillhole Location Map

 

 

51

 

Figure 8‑1 Diamond Core Sampling Process

 

 

55

 

Figure 8‑2 Density Sample Distribution

 

 

58

 

Figure 8‑3 ALS Lab - Zn Standards Results

 

 

64

 

Figure 8‑4 ALS Lab - Zn Blanks Results

 

 

65

 

Figure 8‑5 ALS Lab - Zn Duplicate Results

 

 

66

 

Figure 9‑1: Photograph of Project Core Lithology Reference Sample Library

 

 

67

 

Figure 11‑1 Schematic of Local Stratigraphy

 

 

72

 

Figure 11‑2 Distribution of Mineralized Bodies

 

 

73

 

Figure 11‑3 Cumulative Frequency Curve for Zinc (Nexa)

 

 

74

 

Figure 11‑4 Histogram of Zinc in Mineral Zones

 

 

76

 

Figure 11‑5 Histogram of Silver in Mineral Zones

 

 

77

 

Figure 11‑6 Histogram of Lead in Mineral Zones

 

 

77

 

Figure 11‑7 Example Zinc Variogram for Manto Zones (after Nexa)

 

 

79

 

Figure 11‑8 Example Zinc Variogram for Feeder Zones (after Nexa)

 

 

79

 

Figure 11‑9 Distribution of Resource Classes (Source Nexa)

 

 

82

 

Figure 11‑10 Oxidation state of the mineral zones (Source Nexa)

 

 

83

 

Figure 11‑11 - Example Deswik Stope Shapes

 

 

84

 

Figure 11‑12 - Review of Estimates vs. Composites for Zinc in KM6-1

 

 

85

 

Figure 11‑13 - Review of Estimates vs. Composites for Silver in KM6-1

 

 

86

 

Figure 17‑1 Florida Canyon Expanded Exploration Footprint

 

 

95

 

Figure 17‑2 Florida Canyon Proposed Exploration

 

 

96

 

Figure 17‑3 Florida Canyon Long Section

 

 

96

 

Figure 21‑1: Plan View of Mining Blocks and Development Layout

 

 

112

 

Figure 21‑2: Florida Canyon Proposed Process Flow Sheet

 

 

114

 

Figure 21‑3: Florida Canyon Existing and New Road Construction

 

 

116

 

Figure 21‑4: Florida Canyon Site General Arrangement

 

 

118

 

Figure 21‑5: Port and Smelter Locations

 

 

120

 

Figure 23‑1 Future drilling and current and future underground exploration locations

 

 

137

 

Figure 23‑2 Northwest-Southeast long section of area shown in Figure 23‑1

 

 

138

 

    

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

1 Executive Summary

  

Gustavson Associates, LLC (Gustavson) was commissioned by Solitario Zinc Corporation (Solitario) to prepare an updated Mineral Resource Estimate for the Florida Canyon project in the Amazonas Department of Peru. The report was filed on May 10, 2021. This Amended Technical Report on Resources has been modified to include additional information from the Preliminary Economic Assessment of the Florida Canyon Project dated in August of 2017. The effective date of this report remains February 1, 2021, and the new publication date will be 27 May 2021. Material from the 2017 report has been summarized and added to sections 15 through 22.

 

The technical report presents the estimate in accordance with U.S. 17 CFR Part 229.1300 (SK-1300). This report was initially prepared by Gustavson and presented to Solitario on 27 May 2021. Additional mineral resources identified since 2017 have changed the proportions of the ore types from the Mineral Resources identified in the PEA, though the Mineral Resource Estimate increased from the 2017 PEA, the mining and mineral processing parameters are not materially affected or adversely impacted by the updated mineral resource estimate. Gustavson has audited the mining and mineral processing information and we judge that it remains current and applicable to the project. Due to the increase in the mineral resource estimate, additional metallurgical testing is recommended prior to advancing the project.

 

1.1 Property Summary and Ownership

 

The Florida Canyon Zinc Project is in the Eastern Cordillera of Peru in the upper Amazon River Basin. It is 680 km north-northeast of Lima and 245 km northeast of Chiclayo, Peru, in the District of Shipasbamba, Bongará Province, Amazonas Department (Figure 4 1). The central coordinates of the Project are approximately 825,248 East and, 9,352,626 North (UTM Zone 17S, Datum WGS 84). Elevation ranges from 1,800 meters to approximately 3,200 meters. The climate is classified as high-altitude tropical jungle and the annual rainfall average exceeds 1 m with up to 2 m in the cloud forest at higher elevations.

 

The mineral resources at Florida Canyon are located on sixteen contiguous mining concessions covering approximately 12,600 ha (Table 4 1, Figure 4 2). The concession titles are in the name of the Peruvian company Minera Bongará S.A. and are subject of the Minera Bongará joint venture agreement between Solitario and Nexa Resources. All concession titles are current.

 

Nexa, who acts as Operator of the joint venture companies Minera Bongará and Minera Chambará, entered into a surface rights agreement with the local community of Shipasbamba which controls the surface rights of the portion of the Project affected by planned development. This agreement provides for annual payments and funding for mutually agreed upon social development programs in return for the right to perform exploration work including road building and drilling as described in 4.5.1.

 

1.2 Mineral Resource Statement

 

An updated Mineral Resources Estimate for Florida Canyon was completed by Nexa Resources based on a data base available in July of 2020. The database included 545 drill holes with a total drilled length of nearly 137 km. The estimate was audited by Donald E. Hulse of Gustavson Associates LLC with the audit completed on February 1, 2021. Work was completed in Datamine Studio RM, Leapfrog Geo, and Snowden Supervisor.

 

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

Florida Canyon is a Mississippi Valley type deposit, dominated by lead and zinc sulfides. The minerals are disseminated within stratigraphically controlled dolomitization within the Chambara Formation of the late Triassic/early Jurassic. The Florida Canyon deposit has the form of a dome at regional scale. This may be due to a regional anticline. This trend was incorporated into the geological model with the interpretation of 84 mineralized structures. (70 mantos and 14 feeders). The bodies are grouped into four areas, labeled as 1021, Karen Milagros, San Jorge, and Sam.

   

There are subtle local differences between the bodies, although most behave statistically well with coefficients of variation less than two. Capping was performed area by area based on the shape of the cumulative frequency curve. Composites were nominal 2 meters long with some variability due to the thickness of the zone, with 88% of the composites approximately 2 meters. Variography was completed on each zone with sufficient samples to calculate experimental variograms. If there were insufficient samples the models used were from nearby zones with similar grades and shapes and were classified as inferred resource. In general, the mantos are slightly lower grade that the feeders with longer variogram ranges.

 

The block model was estimated in Datamine software. The block size was 6x6x3m with a minimum sub-cell of 0.5m in each direction. Grades were estimated by Ordinary Kriging. The search distances were roughly ½ of the variogram range for Pass 1, the full variogram range for Pass 2, and a longer search was used for inferred to fill in between drill holes for the zone. A metallurgical recovery was assigned based on the oxidation state.

 

Density was calculated as a function of grade using an equation developed by SRK during the 2017 study. This relationship was not changed by Nexa during this study, and Gustavson judges that there was not sufficient additional data to change the equation.

    

1.2.1 Mineral Resource Classification

 

Mineral resource classification utilized criteria based on drill spacing and variogram ranges. Measured mineral resource required a spacing of 25x25m with at least 3 composites, indicated mineral resource, 50x50m with 3 composites, and inferred resource estimates required a spacing of 100x100m with at least 2 composites.

 

Using the estimated grade and recovery, economic stope shapes were developed using a “stope optimizer” tool in Deswik software. The limits for the stopes are summarized in Deswik Stope Parameters Table 14 8. The cutoff grade was established in net smelter return (NSR) for each mining method, Sublevel Stoping, Cut and Fill, and Room and Pillar. Only mineral resources within an economic stope shape were reported.

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

1.2.2 Audit of Final Mineral Resource Estimate

 

Gustavson audited the Nexa model by examining it in 3-dimensions in the Leapfrog software and by comparing the statistics of the samples in each zone with the modeled grades. Gustavson feels that this is a good representation of the volume of the mineralized material.

 

The grades reported have an implicit cutoff as part of the stope optimizer analysis in addition to the explicit cutoff applied to the composite data. The stope optimizer tends to select only the best grade where it is sufficiently continuous to allow development of a stope. For the Florida Canyon study, the prices used were very near to the market prices in December of 2020 when the study was finalized. Gustavson compared the statistics of samples within the stope shells with the reported mineral resources with a good correlation.

 

The mineral resource estimate is tabulated in Table 1‑1. Gustavson judges that the reported Mineral Resource Estimate meets the standard for reporting under SK-1300 (2018).

   

1.2.3 Mineral Resource Tabulation

 

The Mineral Resource by zone is shown in Table 1‑1 and the total Mineral Resource is shown in Table 1‑2.

    

Table 1‑1 Mineral Resource Summary

 

Zone

Classification

Sum of Tonnes

Zn %

Ag g/t

Pb %

Fe %

Karen Milagros

Measured

 328,254

9.07

9.77

1.34

1.53

Indicated

 913,273

7.65

10.41

1.36

1.35

Measured + Indicated

 1,241,527

8.03

10.24

1.35

1.39

Inferred

 7,072,315

8.82

10.55

1.20

1.57

San Jorge

Measured

 478,691

12.85

19.29

1.42

3.07

Indicated

 721,429

13.61

20.52

1.25

3.35

Measured + Indicated

 1,200,120

13.31

20.03

1.32

3.24

Inferred

 3,895,089

13.09

11.34

0.68

2.41

1021

Inferred

 3,291,937

6.71

13.58

1.77

2.65

Sam

Inferred

 599,392

12.78

6.99

2.96

0.93

 

Table 1‑2 Total Mineral Resource

 

Classification

Sum of Tonnes

Zn %

Ag g/t

Pb %

Fe %

Measured

806,945

11.32

15.42

1.39

2.44

Indicated

1,634,702

10.28

14.87

1.31

2.23

Measured + Indicated

2,441,647

10.62

15.05

1.33

2.30

Inferred

14,858,733

9.63

11.28

1.26

2.00

 

Mineral Resources are not Mineral Reserves and have not been demonstrated to have economic viability. There is no certainty that the Mineral Resource will be converted to Mineral Reserves. The quantity and grade or quality is an estimate and is rounded to reflect the fact that it is an approximation. Quantities may not sum due to rounding.

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

1.3 Geology and Mineralization

 

The Project is located within an extensive belt of Mesozoic carbonate rocks belonging to the Upper Triassic to Lower Jurassic Pucará Group and equivalents. This belt extends through the central and eastern extent of the Peruvian Andes for nearly 1000 km and is the host for many polymetallic and base metal vein and replacement deposits in the Peruvian Mineral Belt.

 

The Pucará Group is divided into 3 formations: Chambará (base), Aramachay (middle), and Condorsinga (top). The rocks of the Late Triassic-Early Jurassic Pucará Group that host the mineralized bodies were deposited along the coastal basin. The Chambará formation has an approximate thickness between 650 m and 750 m in the project area, and consists of crinoidal packstone, wackestones and rudstones. The bulk of known zinc mineralization is hosted in Chambará 2. The stratigraphy between the distinctive Coquina (CM) and Intact Bivalve (IBM) paleontological marker horizons in Chambará 2 define a sequence of permeable higher energy facies within the Chambará 2 that control much of the especially strong dolomitization within the sequence.

 

The structure at Florida Canyon is dominated by a N50º-60ºW trending domal anticline (or doubly plunging anticline). This domal anticline is cut on the west by the Sam Fault and to the east by the Tesoro-Florida Fault.

 

Because most of the work has concentrated further west on the San Jorge, Karen Milagros and Sam Fault areas there is little information on the Tesoro-Florida Fault. At both the Karen-Milagros and San Jorge areas, feeder structures have an important control on the mineralized mantos but also represent a significant portion of the resource as steeply dipping structural fillings and replacement. Pre-mineral karsting also played a role in controlling mineralization along with simple structural filling and passive replacement adjacent to conduits.

 

The zinc-lead-silver mineralization of the Florida Canyon deposit occurs as sulfides hosted in dolomitized zones of the Chambará 2 Formation. Dolomite paragenesis and later sulfide mineralization are controlled by a combination of porosity, permeability, and structural preparation. Metals occur in sphalerite and lesser galena, which contains silver. Minor mineralization is hosted in limestones, but the bulk of sphalerite and galena is hosted in dolomite.

 

1.4 Exploration Status

 

The Florida Canyon Project has identified and delineated mineral resources in the San Jorge, Sam, 1021, and Karen-Milagros areas. An extensive regional reconnaissance exploration program was also conducted over a large area throughout the Mesozoic carbonate belt to the north and south of the Property. Geochemical samples were collected of stream sediments, soils and rocks. During development of the San Jorge adit, Nexa completed geologic mapping and chip sampling of the underground workings.

 

The drill database includes 545 drillholes, with a total of 136,758.1 m drilled at the Florida Canyon Project (Table 10 1). All holes were diamond drilled, with 447 holes drilled from surface and 98 holes drilled from the San Jorge adit (underground). Drilling procedures meet industry best practice.

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

Exploration strategy for MVT deposits at the Florida Canyon project has been strongly influenced by the interpreted favorability of specific units of the stratigraphy of the region. Numerous occurrences of alteration and mineralization occur throughout the Pucara Group, but economic deposits have only been thus far located within the Triassic Chambará formation

 

1.5 Metallurgy and Mineral Processing

 

Limited test work undertaken on the sulfide samples from 2010 to 2014 indicated that a conventional polymetallic process flowsheet using standard chemical reagents will produce a marketable-grade zinc concentration (>50% Zn) with a projected recovery of 93% for sulfide only ore.

 

Historical test work completed was on oxide and mixed samples. The authors believe that the previous test work will need to be increased for the current mineral resource, however, based on the existing work, zinc recoveries are expected to be about 80% for partially oxidized material up to 93% for pure sulfide.

 

Therefore, a new metallurgical program has been proposed and is recommended for the sulfide samples acquired during the most recent drilling program to advance the project to the PFS level. No economic assessment of the project should be undertaken until this test work is completed.

   

1.5.1 Recovery Methods

 

The following material is summarized from the 2017 PEA prepared by SRK.

 

The Florida Canyon polymetallic zinc-lead-silver deposit can be processed using a conventional flotation plant consisting of three-stage crushing, grinding using ball mill, and differential flotation to produce two final products: a zinc concentrate, and a lead concentrate. Further metallurgical testing is proposed in this study to refine the parameters.

 

1.6 Mine Design, Optimization and Scheduling

 

The following material is summarized from the 2017 PEA prepared by SRK.

 

Depending upon the geometry of the mineralized zones, longhole stoping was selected for steeply dipping zones and mechanized drift-and-fill extraction methods in shallowly dipping mantos. Conventional room and pillar mining on a checkerboard pattern may be applicable to specific zones of the Florida Canyon project and should be considered in future trade-off studies at the prefeasibility level. Cemented paste backfill is planned for mined areas to increase mining recovery and to stabilize mined-out areas.

 

1.7 Project Infrastructure

 

The following material is summarized from the 2017 PEA prepared by SRK.

 

The Florida Canyon deposit is in steep terrain in a remote part of northern Peru with moderate to high rainfall. These geographic and climatic conditions pose challenges to both access and infrastructure development. A small hydroelectric plant is under construction near the site, offering a lower cost alternative to on-site power generation. Water supply for operations appears to be straight forward, with abundant surface water available for mineral processing and camp support. At this time tailings storage has been evaluated as a dry stack facility to maintain geotechnical stability and reduce the area requiring reclamation. Trade-off studies are warranted to optimize moisture content, binding characteristics, and placement and compaction methods during tailings placement.

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

1.8 Material Development & Operations

 

Exploration will continue at Florida Canyon to further expand and upgrade the mineral resources. Relationships with the Shipsabamba community will continue. Small upgrades to infrastructure will proceed pending a decision to move the exploration status to preproduction.

 

1.9 Environment & Permitting

 

The Ministry of Environment (MINAM) is the environmental authority in Peru. Its administrative department oversees compliance of environmental regulations for mineral exploration activities. Depending on the level of environmental impacts of a proposed exploration program the proponent will be required to prepare an environmental study to support an operating plan according to the following criteria.

 

A fully detailed Environmental Impact Study (Estudio de Impacto Ambiental Detallado or EIAD) must be presented for mine construction. The Florida Canyon Project currently works under an approved EIAsd which has been modified four times. A fifth modification of the EIAsd is in preparation which will permit more than 100 additional drill sites and provide for expanded underground exploration previously permitted in earlier modifications. The fifth modification is planned for submission in 2021.

 

Thirteen authorizations, permits, and licenses will be required for future mining include. Based on the relationship with both the government and the community, there is no reason to expect that these cannot be acquired.

 

1.10 Capital Costs, Operating Costs and Financial Analysis

 

The following material is summarized from the 2017 PEA prepared by SRK. The financial results presented here are based on annual inputs from the production schedule prepared by SRK in 2017. All financial data is second quarter 2017 and currency is in U.S. dollars (US$), unless otherwise stated. Florida Canyon does not hold contracts for the provision of its products. Terms and conditions, payables and penalties are based on generic agreements and common practice.

 

It is currently planned that the project will produce two products, a lead concentrate and a zinc concentrate. It is expected that the concentrates will be sold to Nexa’s Cajamarquilla smelter near Lima.

 

The pre-production period was estimated to be two years. Mine production is based on an average assumed LoM mine material movement of 2,358 t-ore/d (365 days/yr basis). Table 1‑3 presents the LoM mine assumptions.

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

Table 1‑3: Florida Canyon Mine Production Assumptions

 

Description

Value

Units

Mine Production

Underground Ore

11,187

kt

Total Material

11,187

kt

Avg. Daily Capacity

2,358

t per day

Stripping Ratio

N/A

w:o

RoM Grade

Silver

11.3

g/t

Lead

0.90%

%

Zinc

8.34%

%

Contained Metal

Silver

4,068

koz

Lead

222,347

klb

Zinc

2,057,796

klb

  

Source: SRK, 2017

 

The evaluation of the Florida Canyon Project as of 2017 economics, indicates that the Project has a potential present value of approximately US$198 million, with an Internal Rate of Return (IRR) of 25%, based on an 8% discount rate. The operation will have two years of negative free cash flow, as it has to be constructed in this period. Even with some of the capital spent in the first year of operation, it is projected that this year will have a positive free cash flow. This economic analysis indicates that the investment payback should occur 2.6 years from the start of the commercial production.

 

1.11 Conclusions

 

Florida canyon has long been recognized as a significant Mississippi Valley Type mineral resource for zinc. The work performed to complete this study demonstrates that Florida Canyon has sufficient zinc resources, with about 2.4 million tonnes of measured and indicated mineral resource and nearly 15 million tonnes of inferred, to warrant further work. These tonnages are representative of material that is both of sufficient grade, and sufficient continuity to form potential stope shapes, even though mineral resources are not mineral reserves.

 

A thorough understanding of the resource and the mineralogy will be needed. At least some of the mineralized material is in the form of carbonates or silicates which will require distinct treatment to recover the metal and produce a viable concentrate.

 

The project is in a remote area with challenging topography which will require upgrading of the local infrastructure for a commercial operation. Successful development and operation will require a strong commitment to the community to maintain the social license.

 

1.12 Recommendations

 

Gustavson has reviewed the technical studies completed by Nexa and its predecessor, Votorantim. Some of these studies have been sufficiently detailed to form the basis for feasibility investigations to support a production decision. To attain this level of project design detail, new studies will need to be completed based on current market conditions and mineral resource estimates to provide the foundation for future development. The following recommendations focus on the near-term recommendations for project development.

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

1.12.1 Metallurgy

 

The focus of this report is to update, restate and refine the resource estimation. The newly restated resources define a larger inventory of ore with a different mineralogy than the mineral resource previously used in the PEA. The increased proportion of sulfide ore with less impurities of oxidized zinc and lead minerals provides a significant opportunity, in comparison to the PEA, for lower processing costs, higher recoveries and increased concentrate grades. These more favorable operating parameters should have a significant favorable impact on project economics, particularly combined with the larger global resources base. However, the currently available metallurgical studies are inadequate to support an optimization study of processing options.

 

Therefore, a redesigned program of metallurgy is recommended, starting with more representative sampling of the ore deposit with variability testing in mind. Future studies by a reputable metallurgical firm should prioritize work on the most abundant and most profitable ore type, sulfide ore. Upon completion of a new metallurgical study and combined with the newly increased resource base, a new economic assessment may be warranted.

 

1.12.2 Resource Conversion Drilling

 

Recent drilling was very successful in defining new resources within the previously defined footprint of the deposit. Further additions by discovery of new bodies within the existing resource are probable but the primary emphasis of drilling in the core of the deposit should shift to resource conversion core drilling since the ratio of Measured/Indicated to Inferred resource is low. Mine planning suitable for mineral reserves definition should be supported by a higher proportion of measured and indicated mineral resources.

 

Underground drilling is recommended because the surface topography is challenging for the development of drill stations and the surface drilling season is short. The relative closeness of individual ore shoots also supports underground drilling, the access for which can be developed even with the steep terrain. It is likely that subsurface drilling will identify new zones that are not feasible to be tested from surface drill sites.

 

Permits will provide for underground drilling in both the northern and southern parts of the deposit.

    

1.12.3 Resource Expansion Drilling

 

Permitting is in progress to test several exploration targets that have been identified on the Minera Bongará Property. There are also surface drill sites that are currently permitted that can be used to test known targets.

 

A proposed work program is detailed in Table 1‑4.

  

 

 

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Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

Table 1‑4 Planned work program for 2021-2022

 

Florida Canyon Prefeasibility Technical Work

Task

Description

Quantity

Unit Cost US$

Est. Budget

Metallurgy

 

 

 

 

 

 

Sampling

20

 

$10,000

Test Work

20

 

$250,000

Underground

 

 

 

 

 

 

North Adit Development

1000 m

$2,000

$2,000,000

South Adit Development

250 m

$2,000

$500,000

Drilling

 

 

 

 

 

 

Underground Resource

15,000 m

$250

$3,750,000

Surface Resource

10,000 m

$300

$3,000,000

Support Cost

Camp, Oversight

-

 

$1,500,000

Total

 

 

 

$11,010,000

 

**

Assumes Road Access Complete. (Does not include project fixed costs)

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

2 Introduction

 

2.1 Terms of Reference and Purpose of the Report

 

Gustavson Associates, LLC (Gustavson) was commissioned by Solitario Zinc Corporation, (Solitario) to prepare an updated Technical Report on Mineral Resources for the Florida Canyon Zinc project.

 

This report was prepared to comply with public reporting obligations for the US Securities Exchange Commission, in 17CFR Part 229.1300 (SK-1300). The mineral resource estimate and interpretations and conclusions reported here are based on technical data available prior to the effective date of this report, February 1, 2021.

 

2.2 Source of Data and Information

 

The information, opinions, conclusions, and estimates presented in this report are based on the following:

 

·

Information and technical data provided by Solitario.

·

Review and assessment of previous investigations.

·

Assumptions, conditions, and qualifications as set forth in the report; and

·

Review and assessment of data, reports, and conclusions from other consulting organizations and previous property owners.

 

These sources of information are presented throughout this report and in Item 27 – References. The qualified persons are unaware of any material technical data other than that presented by Solitario.

 

Previous reports were reviewed by Gustavson to determine if the information were suitable to be used in this report and edited where necessary. Except for section 14 there were no material changes.

   

2.3 Details of Inspection

 

Due to COVID-19 travel protocols, no site visit to Florida Canyon was possible. It is currently not possible to safely review the underground workings, and no drilling or other surface activities were taking place during the preparation of the report.

 

The geological logging and data capture procedures were reviewed. Information was recorded on a laptop or tablet using the software DH Logger which was configured to capture data in a controlled manner on rock type, texture, structure, fossil occurrence and mineral content. The sampling methodology was consistent with industry best practice. The laboratory analyses were introduced directly into the Nexa company database by the designated database manager and a data export designed to extract all the drill hole data files relevant to the Florida Canyon project in a secure, and consistent manner.

 

A review of the sample handling protocols applied by Nexa at Florida Canyon in the collection and transport of samples to the laboratory and the QAQC methodology shows that the standard procedures are thorough and within industry standard practices.

   

2.4 Previous Reports on Project

 

This report amends the NI 43-101 Technical Report on Resources Florida Canyon Zinc Project, prepared by Gustavson Associates, LLC Inc. Dated April 5, 2021, Effective Date February 1, 2021. For some chapters, text and figures have been summarized from the 2017 Preliminary Economic Assessment Florida Canyon Zinc Project, Amazonas Department, Peru with Effective Date: July 13, 2017 and Report Date: August 3, 2017. This 2021 Technical Report update does not have a negative impact on or otherwise adversely affect the mineral resource inventory that formed the basis of the 2017 PEA. Some results and conclusions of the 2017 PEA are still considered current and therefore have been carried over for this Report.

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

3 Property Description and Location

 

3.1 Location

 

The Florida Canyon Zinc Project is in the Eastern Cordillera of Peru in the upper Amazon River Basin. It is 680 km north-northeast of Lima and 245 km northeast of Chiclayo, Peru, in the District of Shipasbamba, Bongará Province, Amazonas Department (Figure 3‑1). The Project area can be reached from the coastal city of Chiclayo by the paved Carretera Marginal highway. The central point coordinates of the Project are approximately 825,248 East and, 9,352,626 North (UTM Zone 17S, Datum WGS 84). Elevation ranges from 1,800 meters to approximately 3,200 meters. The climate is classified as high-altitude tropical jungle and the annual rainfall average exceeds 1 m with up to 2 m in the cloud forest at higher elevations.

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

  

Figure 3‑1Project Location Map

  

 

 

Gustavson Associates, LLC

15 March 2022

 

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

3.2 Mineral Titles, Claims, Rights, Leases and Options

 

3.2.1 Mineral Rights in Peru

 

Mining in Peru is governed by the General Mining Law, which specifies that all mineral assets belong to the Peruvian State. Mining concessions are granted to individuals or other entities of national or foreign origin and authorize the title holder to perform all minerals-related activities from exploration to exploitation. Once titled, concessions are irrevocable for so long as the fees are paid to the federal government and legal obligations are performed on time. A claim can be granted only in multiples of a cuadrícula, which is a 100-ha plot, up to a maximum size of 1,000 ha. Boundaries of newly granted claims are oriented north-south or east-west. No monumentation of the claim boundary in the field is necessary.

 

Concessions are real assets and are subject to laws of private property. Foreign entities have the same rights as Peruvians to hold claims except for a zone within 50 km of international borders. Title holders have a right of access and development of minerals, but an access agreement is required with private property surface rights owners and formalized “Communities”. To ratify an agreement with a Community, a majority of all community members must vote in favor of the agreement as written. A recently issued law (as modified) also requires formal consultation with federally recognized indigenous communities in certain areas.

 

To maintain mining concessions in good standing the owner must:

 

 

·

Pay annual license fees (“derechos de vigencia”), currently USD$3/ha. Fees are reduced for qualified “small miners” who pay USD$1/ha. The small miner is an individual or company owning no more than 2000 ha of mineral rights in Peru. Failure to pay the applicable license fees for any two consecutive years results in the cancellation of mining concessions.

 

·

Starting in year 11 after originally acquiring the concession, the owner must either meet minimum production levels or minimum expenditure commitments. If the concession owner does not meet expenditure or production commitments, then the owner must also pay an annual penalty as follows.

 

 

·

Minimum annual production (MAP) must have a value of one UIT (Unidad Impositiva Tributaria), equal to 4,400 Peruvian soles (approximately US$1200 in 2021) per hectare of the property. If the MAP is not achieved, then a penalty must be paid on a sliding scale escalating from 2% to 10% annually of the MAP. If the property is not in production by year 30 then the mineral rights are forfeited.

 

·

Minimum annual expenditure is defined as a value of ten times the value of the penalty as defined above.

 

·

Failure to pay applicable penalties for two consecutive years results in the cancellation of mining concessions.

 

 

 

Gustavson Associates, LLC

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Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

3.2.2 Mineral Titles

 

The mineral resources at Florida Canyon are located on sixteen contiguous mining concessions covering approximately 12,600 ha (Table 3‑1, Figure 3‑2). The concession titles are in the name of the Peruvian company Minera Bongará S.A. and are subject of the Minera Bongará joint venture agreement between Solitario and Nexa Resources. All concession titles are current.

 

The Minera Bongará concessions are surrounded by a second group of forty-eight contiguous mining concessions, covering approximately 36,080 ha (Table 3‑1, Figure 3‑2). These concession titles are held in the name of Minera Chambará, a Peruvian company that is party to a separate joint venture agreement between Nexa and Solitario. Of the forty-eight concessions, nine titles are pending.

 

According to Peruvian law, concessions may be held indefinitely, subject to timely payment of annual fees to the government. At the time of issuance of this study, annual concession payments to the Peru Ministry of Mines were current for the Minera Bongará and Minera Chambará claims. Fees payable in 2021 for the Minera Bongará property will total approximately US $613,000 (Table 3‑1).

 

Nexa, who acts as Operator of the joint venture companies Minera Bongará and Minera Chambará, entered into a surface rights agreement with the local community of Shipasbamba which controls the surface rights of the portion of the Project affected by planned development. This agreement provides for annual payments and funding for mutually agreed upon social development programs in return for the right to perform exploration work including road building and drilling as described in 3.6.1.

 

 

 

Gustavson Associates, LLC

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Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

Table 3‑1 List of Minera Bongará Mineral Concessions

 

Concession Name

Number

Status

Hectares

Claim Date

2021 Holding Fees (US$)

District

BONGARA CINCUENTICINCO

10233396

Titled

1,000

8/7/1996

26,561.64

FLORIDA/SHIPASBAMBA

BONGARA CINCUENTICUATRO

10233296

Titled

600

8/7/1996

15,936.99

FLORIDA/SHIPASBAMBA

BONGARA VEINTISIETE

10783595

Titled

300

6/26/1995

7,968.49

SHIPASBAMBA

DEL PIERO UNO

10338505

Titled

1,000

11/2/2005

26,561.64

FLORIDA/SHIPASBAMBA

DEL PIERO DOS

10338405

Titled

600

11/2/2005

13,280.82

FLORIDA/SHIPASBAMBA

DEL PIERO TRES

10338605

Titled

700

11/2/2005

15,936.99

FLORIDA/SHIPASBAMBA

DEL PIERO CUATRO

10000206

Titled

500

1/3/2006

26,561.64

FLORIDA/SHIPASBAMBA

DEL PIERO CINCO

10000306

Titled

1,000

1/3/2006

18,593.15

SHIPASBAMBA

DEL PIERO SEIS

10204507

Titled

1,000

3/23/2007

26,561.64

CAJARURO/FLORIDA

VM 42

10190507

Titled

1,000

3/21/2007

26,561.64

CAJARURO/FLORIDA/ SHIPASBAMBA

VM 74

10193707

Titled

1,000

3/21/2007

26,561.64

SHIPASBAMBA

VM 75

10193807

Titled

1,000

3/21/2007

26,561.64

SHIPASBAMBA

VM 94

10045708

Titled

900

1/28/2008

2,700.00

FLORIDA/SHIPASBAMBA

VM 95

10045808

Titled

500

1/28/2008

13,280.82

FLORIDA

VM 97

10046008

Titled

1,000

1/28/2008

26,561.64

FLORIDA/SHIPASBAMBA

VM 98

10046108

Titled

500

1/28/2008

13,280.82

FLORIDA/SHIPASBAMBA

Total

 

 

 

 

$613,408.00

 

 

Source: Solitario, 2021

 

 

 

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S-K 1300 Technical Report Summary

  

  

Figure 3‑2 Map of Mineral Claims and Mineral Occurrences

  

 

 

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Florida Canyon

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3.2.3 Nature and Extent of Issuer’s Interest

 

Minera Bongará

 

Minera Bongará S.A. is a Peruvian company formed in 2006 in accordance with the terms of a joint venture agreement between Votorantim Metais-Cajamarquilla S.A. (now Nexa Resources) and Solitario. Nexa is the operating partner of Minera Bongará and is responsible for keeping the property in good standing. Current shareholding ownership of Minera Bongará is 39% Solitario, 61% Nexa. Nexa will earn a 70% interest in Minera Bongará by continuing to solely fund all project expenditures through the completion of a positive feasibility study. Nexa is required to offer a loan facility at market rates for Solitario’s portion of construction capital to build a mine. Solitario will repay the loan through 50% of its project cash flow.

 

3.3 Sufficiency of Surface Rights

 

The Project concession package provides legal basis for entry, exploration and mining. However, agreements are required with local surface rights owners prior to surface disturbing activities. Through the exploration period conducted to date, Nexa has signed periodic surface rights agreements with the community of Shipasbamba which controls virtually all land for which Minera Bongará controls mineral rights. Small inliers of private surface rights exist for which agreements with individual landowners are required from time to time. Minera Bongará has sufficient right for surface for the foreseen footprint of the operation.

 

3.4 Environmental Impacts and Permitting

 

The Ministry of Environment (MINAM) is the environmental authority in Peru. Its administrative department oversees compliance of environmental regulations for mineral exploration activities. Depending on the level of environmental impacts of a proposed exploration program the proponent will be required to prepare an environmental study to support an operating plan according to the following criteria.

 

An Environmental Technical Report (Ficha Técnica Ambiental or FTA) is a study prepared for approval of exploration activities with non-significant environmental impacts and the applicant is seeking permission to construct less than 20 drill platforms. The environmental authority has 10 working days to approve or make observations to the FTA.

 

An Environmental Impact Declaration (Declaración de Impacto Ambiental or DIA) must be presented for Category I level exploration activities which have a maximum of 40 drill platforms or disturbance of surface areas of up to 10 ha. The environmental authority has 45 working days to make observations.

 

A semi-detailed Environmental Impact Study (Estudio de Impacto Ambiental Semi-Detallado or EIAsd) is required for Category II exploration programs which have between 40–700 drill platforms or a surface disturbance of more than 10 ha. The environmental authority has 96 working days to make observations. The total process including preparation of the study by a registered environmental consulting company can take 6–12 months not including potential baseline studies.

 

 

 

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A fully detailed Environmental Impact Study (Estudio de Impacto Ambiental Detallado or EIAD) must be presented for mine construction. The preparation and authorization of such a study can take as long as two years after preparation of the mine plan has been finalized.

 

Specific authorizations, permits and licenses required for future mining include, at a minimum:

 

 

·

EIA (as modified during the mine life);

 

·

Mine Closure Plan and Final Mine Closure Plan within two years of end of operation;

 

·

Certificate of Nonexistence of Archaeological Remains;

 

·

Water Use License (groundwater and/or surface water);

 

·

Water construction authorization;

 

·

Sewage authorization;

 

·

Drinking water treatment facility license;

 

·

Explosives use license and explosives storage licenses;

 

·

Controlled chemicals certificate;

 

·

Beneficiation concession;

 

·

Mining authorization;

 

·

Closure bonding; and

 

·

Environmental Management Plan approval.

 

 

 

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The Florida Canyon Project currently works under an approved EIAd which has been modified four times. A fifth modification of the EIAd is in preparation which will permit over 100 additional drill sites and provide for expanded underground exploration previously permitted in earlier modifications. The fifth modification is planned for submission in 2021.

 

3.5 Other Significant Factors and Risks

 

There are no known significant factors or risks affecting access, title or right or ability to perform work on the property that are not discussed herein. Common risks of service rights, negotiations and permitting are not expected to be significant.

 

The project is in a remote area with challenging topography which will require upgrading of the local infrastructure for a commercial operation. Successful development and operation will require a strong commitment to the community to maintain the social license.

 

3.6 Royalties, Taxes, and Agreements

 

Peru imposes a net smelter return royalty (NSR) on all precious and base metal production at a rate determined by the Operating Margin of a mining property. Table 3‑2 shows the marginal royalty rate for various operating margins reported by the operator. The minimum rate is 1%.

 

 

 

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Table 3‑2 Marginal royalty rates for various operating margins

 

Royalty

Operating Margin

Marginal Rate

1

0%

10%

1.00%

2

10%

15%

1.75%

3

15%

20%

2.50%

4

20%

25%

3.25%

5

25%

30%

4.00%

6

30%

35%

4.75%

7

35%

40%

5.50%

8

40%

45%

6.25%

9

45%

50%

7.00%

10

50%

55%

7.75%

11

55%

60%

8.50%

12

60%

65%

9.25%

13

65%

70%

10.00%

14

70%

75%

10.75%

15

75%

80%

11.50%

16

>80%

12.00%

 

Corporate income tax in Peru is charged at a flat rate of 29.5%. However, mining companies must also pay an additional “Special Mining Tax” (SMT) varying from 2 to 8.4% of net operating profit. The tax rate for the SMT is determined by the reported operating profit corresponding to one of 17 published tax brackets.

 

A Value added Tax of 18% is applied to the purchase prices of goods and services. However, certain geographical economic zones are excluded from the levy of this tax.

 

Since 2014, mining title holders are required to pay a contribution to the agencies in charge of regulatory oversight of mining activities: OEFA (environment); and OSINERGMIN (health and safety). The amount of the contribution is payable monthly and is calculated based on monthly sales at rates of 0.10% to OEFA and OSINERGMIN.

   

 

 

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3.6.1 Property Agreements

 

The local community of Shipasbamba is the owner of the surface rights of the Minera Bongará Property. Nexa, the operator of the joint venture company Minera Bongará, entered into a three-year surface rights agreement in 2018 with the community of Shipasbamba. The agreement is in effect until the end of 2021. This agreement provides for annual payments to the community and funding for mutually agreed upon social development programs in return for Minera Bongará’s right to perform exploration work including road building, underground exploration, and drilling. Under this agreement Nexa has obligations in 2021 as follows.

 

 

·

Pay to the community US $80,000

 

·

Improve and maintain the existing forty-two-kilometer road from the town of Shipasbamba to the project area and local communities (See Figure 3‑3)

 

·

Assist the community by surveying community boundaries

 

·

Provide the services of a veterinarian and a professional agronomist to assist community members with community projects.

 

Figure 3‑3 Access road to the Florida Canyon Project (in construction)

  

 

 

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4 Accessibility, Climate, Local Resources, Infrastructure and Physiography

 

4.1 Topography, Elevation, and Vegetation

 

The Project area elevation ranges between 1,800 and 3,200 m, with areas of steep topography consisting of prominent escarpments and deep valleys. Dense jungle or forest vegetation covers most of the area, as shown in Figure 4‑1.

 

 

Figure 4‑1 Photograph of the Florida Canyon Project Area

 

Source: Solitario, 2021

 

 

 

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4.2 Accessibility and Transportation to the Property

 

Road access to the Bongará province of Amazonas is provided primarily by the Carretera Marginal paved highway connecting the port city of Chiclayo to Pedro Ruiz Gallo, the largest town immediately adjacent to the project property. The road distance from Chiclayo to Pedro Ruiz is approximately 300 km and takes, on average, 6 hours by car. Pedro Ruiz is a regional commerce center with hotels, restaurants, communication, and a population estimated to be 10,000. The immediate Project area is not populated but there are several small villages nearby including the district capital of the Shipasbamba. Important smaller towns near the project are Florida and Nueva Cumba. A graded gravel road is maintained from Pedro Ruiz to Shipasbamba. Nexa is constructing a road that extends from Shipasbamba to local villages and the Project as discussed in 3.6.1 and shown on Figure 3‑3.

 

4.3 Climate and Length of Operating Season

 

The climate at the Project is high-altitude tropical jungle. The annual temperature at elevations between 1,000 m and 2,000 m averages around 25°C. Most precipitation occurs during the rainy season, generally from November to April. The annual rainfall average exceeds 1 m with up to 2 m in cloud forest at higher elevations. Although exploration can continue year-round, surface exploration is more difficult during the rainy season when visibility hampers helicopter supported programs and muddy conditions hinder ground travel and field work.

 

4.4 Infrastructure Availability and Sources

 

4.4.1 Existing Infrastructure

 

The Project area has little existing infrastructure with only the access road (under construction), several primitive drill camps (Figure 4‑2) and a number of drill pads. Drill camps provide support for drilling and technical crews, providing temporary housing, food preparation, mess halls, field offices and staging facilities during active drilling.

 

Surface drilling has been accomplished using helicopter support from Shipasbamba which lies 10 km to the southeast of the resource area. The Project core shed, heliport, sample preparation and sample storage facility are Shipasbamba (Figure 4‑3). Office space and storage is also maintained in Pedro Ruiz.

 

 

 

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Figure 4‑2 Drill Support Camp

 

Source: Solitario, 2020

 

 

Figure 4‑3 Shipsabamba Project Camp

  

Source: Solitario, 2020

 

 

 

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4.4.2 Proximity to Population Center

 

No commercial services are currently available at the project site. The small communities of Florida and Nueva Cumba are 1 to 2 km south of the Roso drill camp on the foot trail from Tingo on the Utcubamba River to the Project. The Project Road under construction will connect Shipasbamba with the Roso camp and the villages of Florida and Nueva Cumba.

 

Shipasbamba is the nearest town to the Project with current road access. A graded gravel Provincial road provides access from Pedro Ruiz on the Carretera Marginal. Scheduled minibuses travel this route and public transportation is also provided by taxis and mototaxis.

 

Pedro Ruiz is the nearest town with commercial services including retail, hotels, restaurants and maintenance services. The nearest largest cities to Pedro Ruiz with regular air service are Chiclayo, a coastal port city, Jaen, a small city approximately three hours by road and Bagua Grande, two hours from Pedro Ruiz on the Carretera Marginal road.

 

The small population near the Project is supported by subsistence farming. Saleable crops include coffee, rocoto pepper, yucca, fruit and vegetables. Cedar trees are also harvested and used in local construction.

 

4.4.3 Power

 

There is currently no line power near the site. The 2017 Florida Canyon PEA assumed completion of a proposed hydropower generation and transmission development project located in close proximity to the mine (Figure 3‑3). This planned project has now progressed to the detailed engineering phase by Energoret, a Private company with access to a mixture of government and private funding for hydroelectric projects. This Tingo hydroelectric complex near Florida Canyon is planned to be comprised of three separate hydroelectric plants along the Utcubamba River which will generate 400 MW. Power will be distributed to the national power grid by high voltage distribution lines. The closest point to the grid is seven kilometers south of El Roso camp on the Utcubamba River where a substation is planned for power distribution to the Project (Figure 3‑3). Nexa has entered into a Letter of Intent agreement with Energoret committing to use between 5 and 10 MW of available power. Current projections of power needs for a 2500 to 3000 tpd project at Florida Canyon is 7 to 8 MW.

 

The business arrangement between Energoret and Minera Bongará will be structured so that power rates would include repayment of capital to construct the powerline and substation.

 

4.4.4 Water

 

The operation will require water for use for processing, mining, dust suppression and potable consumption. The processing facility will utilize a combination of recycled water generated by dewatering of tailings and stormwater captured on site for the majority of the processing needs. It is anticipated that ground water will be encountered in the mine and captured in sumps for mine water needs. Excess water will be released after residence in settling ponds. The very low pyrite content of the ore and waste and its high buffering capacity strongly suggests that water treatment of mine and other contact water will not be required.

 

 

 

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Any additional water that will be required could be supplied by water well(s) developed on site.

 

Tesoro Creek, a small local drainage, has been used for domestic water supply by nearby residents. Treated water from this creek may be used for domestic requirements. It will be piped by gravity from the creek to a small treatment plant and a water storage tank.

 

Permits will be required from the Autoridad Nacional del Agua for industrial use, domestic use and treatment.

 

4.4.5 Personnel

 

Many local workers have been employed at the project since its inception and have been trained in specialized tasks relating to minerals exploration. The majority reside in the local villages and in Pedro Ruiz. In addition, untrained labor is readily available from local communities where few formal employment opportunities currently exist. However, Peru is a mature mining country with a mobile workforce and abundant trained labor in specialized mining and industrial fields.

 

 

 

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Florida Canyon

S-K 1300 Technical Report Summary

  

5 History

 

5.1 Previous Operations

 

Prior to the discovery of mineral occurrences by Solitario in 1994, no mineral prospecting had been done on the Property and no concessions had been historically recorded. In 1995 and later, Solitario staked many of the current mineral concessions in the Project area.

 

In 1996, Cominco Ltd. (Cominco) formed a joint venture partnership (JV) with Solitario. This agreement was subsequently terminated in 2000 and Solitario retained ownership of the property.

 

In 2006, Solitario formed two JV’s with Nexa as described in Section 3.2.3, for the exploration and possible development of the properties.

 

5.2 Historical Exploration & Development Results

 

In 1993 through 1995, Solitario executed a program of pitting and drilling at the previously known Mina Grande and Mina Chica oxide zinc prospects located 18 km northeast of the Project area. Solitario subsequently identified the Crystal prospect nearby and other oxidized zinc occurrences in the general area of the Yambrasbamba community. The geological studies and exploration work at these zinc deposits provided insights into the local stratigraphy and style of mineralization in the area. Comparisons with zinc occurrences elsewhere in Peru lead to the decision to undertake a regional exploration program to identify new occurrences of zinc in potentially more favorable stratigraphy.

 

The Florida Canyon zinc deposit was located through follow-up of an anomaly generated during a regional geochemical program in 1994.

 

Following formation of a JV with Solitario, Cominco Ltd., in conjunction with Solitario’s workers, completed various programs of field work at Florida Canyon in 1997 to 2000 including geologic mapping, geophysical surveys, surface soil and rock sampling, and diamond drilling. The scope of these programs is summarized below.

 

 

·

Geologic mapping at 1:1,000 scale covered 352 ha in the Project area. Mapping was conducted within Florida Canyon and its tributaries aided by hand-cut trails and clearing of vegetation-covered outcrops. This early mapping has been more recently validated in subsequent programs.

 

·

Mineralized outcrops identified in the Project area were cleaned of soil cover and sampled by chip channels for a total of total of 347 channel samples collected. This sampling consisted of individual samples of lengths of up to 2.0 m at non-regular spacing.

 

·

Stream sediment sampling of drainages was completed with consistent 500 m spacing along the gulches.

 

·

Soil samples were collected along topographic contour lines spaced vertically 50 m apart but with irregular lateral spacing. Part of this soil sampling followed the crests of hills, especially in the western part of Florida Canyon, mainly to identify mineralized linear structures. A total of 600 samples were collected.

 

·

An Induced Polarization (IP) geophysical survey in 3 lines covered 5.2 linear km. Two lines were located along the drainages A and B of the northern part of Florida Canyon with dipole-dipole spacing at 150 m, and a third line with dipole-dipole spacing a = 100 m along the southern sector of the Sam Fault target. Cominco also surveyed 6.5 km of radial lines from holes FC-41 and FC-47, drilled in 1999.

 

·

Diamond drilling between 1997 and 2000 totaled 82 holes and 24,781 m.

 

 

 

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Solitario continued field work at a reduced scale until forming the Minera Bongará and Minera Chambará JV’s in 2006 with a subsidiary of the private Brazilian mining company Votorantim Metais (now Nexa). Since that time Nexa increased the total number of exploration drill holes on the property to 545 comprising about 136,000 meters of core and completed about 700 meters of tunneling at the San Jorge deposit including 212 underground drill holes. Additionally, Nexa performed preliminary metallurgical work and various other engineering studies through 2017.

 

5.3 Recent Work

 

Since the issuance of the 2017 Florida Canyon PEA, drilling was conducted in 2018 and 2019 at the Florida Canyon Deposit, almost entirely within the known footprint of mineralization. This program consisted of 34 surface core holes totaling about 17,000 meters (Table 5‑1). The primary objective of this drilling was to increase sulfide-dominant zinc resources. Additionally, the global resource model was reexamined and refined as data was gathered from new drilling. These programs were designed to accomplish the following objectives.

 

 

a)

Verify the hypothesized steeply dipping replacement deposit, the 1021 (ten twenty-one) Zone in the northern part of Florida Canyon. This objective was successful and delineated the mineralized structure for a strike length of approximately 800 meters based on a 1st pass spacing of drill intercepts. This new zone added Inferred Resources to the project resource model.

 

b)

Extend the San Jorge Zone in the southern part of Florida Canyon along strike to the south. This zone was successfully enlarged, and additions increased Inferred Resources to the project resource.

 

c)

Test continuity of the known steeply dipping Sam replacement zone. New drilling at the Sam Zone limited the extent of mineralization where tested and resulted in a modest decrease in Inferred Resources.

 

d)

Test the inferred presence of a new Manto (zone SJ-1412) extending to the east of the San Jorge Zone which successfully added Inferred Resources.

 

e)

Expand several other minor Manto zones which with modest increases in resources.

 

f)

The program successfully increased sulfide resources as all the 2018-2019 drill intercepts were sulfide dominant. Drill targets for sulfides are, by nature, deeper due to the depth of oxidation induced by surface weathering. However, the desirability of sulfide ores is much higher due to more favorable metallurgical characteristics of the ore.

 

g)

The change in Inferred resources as a result of all drilling and net of adjustments to the resource model was an addition of 6,015,733 tons of Inferred Resources in comparison to the previously reported 43-101 Compliant Report.

 

 

 

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Florida Canyon

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Table 5‑1 Campaign Summary - Florida Canyon

 

Year

Drill Holes

Company

Meters

Type

Contractor

1997

34

Cominco

8,409.70

DDH

Boart Longyear

1998

8

Cominco

2,108.35

DDH

MDH Bradley

1999

9

Cominco

3,977.90

DDH

MDH Bradley

2000

31

Cominco

10,297.00

DDH

MDH Bradley

2006

26

Votorantim Metais

4,353.50

DDH

MDH Bradley

2007

33

Votorantim Metais

11,189.30

DDH

MDH Bradley

2008

54

Votorantim Metais

16,468.85

DDH

MDH Bradley

2009

13

Votorantim Metais

3,611.30

DDH

MDH Bradley

2010

42

Votorantim Metais

12,242.40

DDH

MDH Bradley

2011

44

Votorantim Metais

11,116.15

DDH

MDH Bradley

2012

110

Votorantim Metais

23,558.55

DDH

MDH Bradley

2013

102

Votorantim Metais

12,389.05

DDH

MDH Bradley

2018

5

Nexa Resources

2,202.90

DDH

Bretsa

2019

34

Nexa Resources

14,833.20

DDH

Bretsa

Total

545

 

136,758.15

 

 

  

5.4 Historical Mineral Resource Estimates

 

Two previous mineral resource estimates were completed for the property in 2014 and 2017 jointly by Votorantim and Solitario.

 

In 2014, SRK reported Measured and Indicated at 2.78 Mt of 12.77% Zn, 1.78% Pb, and 18.2g/t Ag and, Inferred at 9.07Mt of 10.87% Zn, 1.21% Pb and 12.2g/t Ag.

 

In 2017, SRK reported Measured and Indicated at 3.256 Mt of 12.2% Zn, 1.53% Pb, and 18.51g/t Ag, and Inferred at 8.843Mt of 10.15% Zn, 1.05% Pb and 13.21g/t Ag in an NI 43-101 compliant PEA. This study included stope optimization, development designs, ventilation layouts, life of mine scheduling, and economic analysis. The study concluded that underground operations would last for approximately 15 years with a positive net present value. Details of this work is shown in Section 21.

 

5.5 Historical Production

 

There has not been any commercial mining in the Project area. The only underground excavation has been 700 m of underground drifting by Nexa to provide drill platforms at the San Jorge area.

 

 

 

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6 Geological Setting, Mineralization and Deposit

 

Information presented herein is derived from material provided by Nexa and Solitario, including Cominco reports, supported by independent reports including a thesis by Isaac Robles Vega of the National University of Huancavelica, M&R Consultores, and by the Regional Government of Amazonas, prepared by Walter Castro Medina. The character of the mineralization in core was confirmed by Simon Mortimer, Principle QP Geologist at Atticus Consulting in Lima/Santiago, during a site visit in 2020.

 

The Project is located within an extensive belt of Mesozoic carbonate rocks belonging to the Upper Triassic to Lower Jurassic Pucará Group and equivalents. This belt extends through the central and eastern extent of the Peruvian Andes for nearly 1000 km and is the host for many polymetallic and base metal vein and replacement deposits in the Peruvian Mineral Belt. Among these is the San Vicente Mississippi Valley Type (MVT) zinc-lead deposit that has many similarities to the Florida Canyon deposit and other MVT occurrences in the Project area. A regional geologic map is shown in Table 5‑1.

 

6.1 Regional Geology

 

The Peruvian Andes are Northwest-Southeast trending. Reports by Megard (1979); Dalmayrac et al. (1988) and Benavides- Cáceres (1999) establish the regional geological studies related to the geological evolution of the Peruvian Andes. These include the basic tools that complement field data and geological context related to the occurrence of MVT mineralization.

 

The Marañón Complex of the Neoproterozoic Era forms the regional geological basement with a NW-SE orientation and consists of metasedimentary rocks (slate, quartzite, phyllite), schist, mica schist and gneiss. It outcrops in the Southwest sector of the quadrangle of Bagua and underlies the Mitu Group of the Permo-Triassic Period in an angular unconformity.

 

The Mitu Group is a typical molasse deposit (sandstones, shales, and conglomerates) of continental origin. It occurs in medium to thick layers and are differentiated by their reddish to pink colors. In the project area, it intercepts deep with drill holes V-46, V-36 and V37A. The most accessible outcrops are observed downstream of the Corontachaca bridge on the Utcubamba River (close to Pedro Ruiz). Along 10 km, there are red sandstone layers ranging from 0.30 m to 1 m in thickness. These layers are resistant to erosion and solidified the canyon morphology of the Utcubamba Valley. Overlying the Mitu Group outcrops the Upper Triassic to Lower Jurassic Pucará Group, which hosts the MVT mineralization of the Florida Canyon Project area.

 

The Pucará Group is divided into 3 formations: Chambará (base), Aramachay (middle), and Condorsinga (top). The rocks of the Late Triassic-Early Jurassic Pucará Group that host the mineralized bodies were deposited along the coast basin. Sedimentation was dominated by carbonate rocks along a coastal sabkha plain. Evaporites, primarily anhydrite, associated with the coastal sabkha plain, along with coarse marine anoxic silt-carbonated mudstone, provided most of the components needed to host the Florida Canyon zinc-lead ore bodies.

 

 

 

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1.

The Chambará Formation corresponds to a marine sedimentation developed in subtropical to tropical seas where terrigenous contribution was restricted. Due to its lithological and textural characteristics, the Chambará Formation represents lithofacies from the middle of the carbonated platform. In parts with shallow water features, such as coquina bioclastic limestone, the dolomitized levels are what host most of the MVT mineralization of Florida Canyon. In the Florida Canyon Project area, the Chambará Formation is composed of high energy carbonates of barrier environments with local reef development that are represented by floatstone, wackestone, packstone and rudstone textures. Dimond drilling confirms the presence of district continuity of biostratigraphic markers.

 

2.

The Aramachay formation is made up of a sequence of bituminous limestone with alternating silt and clay in thin layers, corresponding to basin levels, where rhythmic sedimentation predominates which resulted in flat, tabular and regular bedding in layers of 10-20 cm. These layers are dark gray to black in color and present an abundance of organic material with the presence of fossils.

 

3.

The Corontachaca Formation is made up of calcareous conglomerates and calcareous sedimentary breccias. The presence of the rock in this formation is limited in the project area. However, it outcrops on the high peaks of the Santa Catalina area near Shipasbamba and on the Corontachaca Bridge on the Utcubamba River. It is related to the uplift and intense erosion of the limestones of the Pucara Group that give rise to the accumulation of slope deposits which were cemented by their own calcium carbonate solutions.

 

 

 

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Figure 6‑1 Regional Geologic Map

 

Source: Solitario, 2020 (translated)

 

 

 

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Figure 6‑2 Legend of Regional Geology Map

 

Source: Solitario, 2020 (translated)

 

 

 

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6.2 Local Geology

 

6.2.1 Lithography & Stratigraphy

 

A schematic stratigraphic column developed by Cominco and refined by Nexa shows the major geologic rock units in the Project area (Figure 6‑3). The basement rocks are the Pre-Cambrian Marañón Complex consisting of gneisses, mica-schists, phyllites and quartzites. These are overlain by an angular unconformity with the overlying Permo -Triassic Mitu Group composed of a sequence of redbeds consisting of polymictic conglomerates interspersed with beds of fine-grained sandstones.

 

  

Figure 6‑3 Project Area Stratigraphic Column

 

Source: Nexa, 2013b, translated by Solitario

 

Overlying the Mitu Group is the Pucará Group of Triassic - lower Jurassic age, which hosts the zinc-lead-silver mineralization of the Florida Canyon Project. The Pucará Group is divided into the Chambará Formation at the base, the Aramachay Formation in the middle and the Condorsinga Formation on top.

 

 

 

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The Chambará formation has an approximate thickness between 650 m and 750 m in the project area, and consists of crinoidal packstone, wackstones and rudstones. It is divided into three members in the Florida Canyon vicinity; from bottom to top, they are Chambará 1, Chambará 2 and Chambará 3. The bulk of known zinc mineralization is hosted in Chambará 2. The stratigraphy between the distinctive Coquina (CM) and Intact Bivalve (IBM) paleontological marker horizons in Chambará 2 define a sequence of permeable higher energy facies within the Chambará 2 that control much of the especially strong dolomitization within the sequence.

 

The Aramachay formation lies conformably on the Chambará with a variable thickness between 150 m and 250 m, consisting of a monotonous sequence of black and limonitic shales and bitumen with thin interbedded nodular limestones. The Condorsinga Formation concordantly lies above, with restricted outcrop distribution due to erosion. It consists of calcareous gray mudstones with thicknesses varying between 150 m and 300 m.

 

The Corontochaca Formation of Upper Jurassic age lies unconformably on the Pucará Group. It outcrops in erosional remnants and is locally more than 300 m thick consisting of a package of monotonous oligomictic and polymictic fluvial calcareous sediments and colluvial limestone breccias with local fragments of Paleozoic or Precambrian fragments.

 

The Goyllarisquizga Formation occurs in angular unconformity over the Corontochaca and Pucará Group and is present mainly in the eastern and western sections of the Project area. It consists of poorly sorted yellowish to white sandstone deposited in coastal marine to fluvial-deltaic environments. It also contains some thin, lenticular intercalations of siltstones and mudstones whitish to reddish. The thickness ranges from 300 to 400 m.

 

6.2.2 Structure

 

The following discussion of structural geology in the Project area is adapted in part from an internal report by Cominco (2000).

 

The structure at Florida Canyon is dominated by a N50º-60ºW trending domal anticline (or doubly plunging anticline) as defined from the base of Chambará 2 formation. This domal anticline is cut on the west by the Sam Fault and to the east by the Tesoro-Florida Fault. The Sam Fault, which has been defined by drilling, has a north-south to northeast trend and a steep 80 to 85º westerly dip. The Sam Fault has an apparent scissor dip-slip displacement of >120 m in the north and <50 m in the south. To the south its trace is uncertain and complicated by northwest and possibly east-west structures. This appears to have been a long-lived structure, with its last strike-slip displacement being dextral. A facies change in the Chambará 2 from high energy to the east of the fault to low energy to the west many be due to original depositional features during growth fault formation that has important exploration implications.

 

At Florida Canyon there are also well-defined northwest and northeast fracture systems, which appear to have important controls on the location of mineralization. Mineralized structures occur in conjugate fractures, with N10º-50ºE trends present at a number of mineralized surface outcrops while trends of N50º-80ºW are identified at other showings. Mineralization of mantos within the Karen-Milagros area appears to be preferentially controlled by northeast feeder structures.

 

 

 

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The Tesoro-Florida Fault defining the eastern limits of most drilling to date is a N15º-30ºW trending structure, part of a regional lineament, and defined by an escarpment. It is interpreted to have a steep dip, with its sense of motion not having been defined, but with the east block being structurally lower than the west block, which results in significantly deeper drilling on the east fault block to reach the Chambará 2 stratigraphy. Because most of the work has concentrated further west on the San Jorge, Karen Milagros and Sam Fault areas there is little information on the Tesoro-Florida Fault, but it likely has similarly complex splays as the Sam Fault and may be, like the Sam fault, a controlling feeder for untested mineral potential in the eastern area.

 

At both the Karen-Milagros and San Jorge areas, feeder structures have an important control on the mineralized mantos but also represent a significant portion of the resource as steeply dipping structural fillings and replacement. The displacement along these structures is not large although the exact throw is often difficult to ascertain due to the strong alteration and later mineralization. The interpretation of displacement is further obscured by likely subtle variation in thickness and lithology of local stratigraphic units on either side of structures due to growth faulting.

 

Pre-mineral karsting also played a role in controlling mineralization along with simple structural filling and passive replacement adjacent to conduits. Replacement of karst fragments and cave sediments are commonly observed in larger structurally controlled mineralized bodies. The configuration of mineralized structures as they control and merge with manto replacements often take the form of Christmas–tree breakthrough structures and will likely be shown to represent a larger proportion of the resource as more horizontally oriented drilling from underground workings supplants the dominantly high angle surface drilling performed to date.

 

Post mineral structure and karsting overprints earlier structural trends and controls in part oxidized remobilized mineralization.

 

6.2.3 Alteration

 

The alteration and solution overprints in the Florida Canyon deposit include dolomitization, pseudo brecciation and karstification, mainly affecting the limestones of Chambará 2 and locally Chambará 1 and 3. Dolomitization and karstification occurred in multiple events spatially overlapping the structural corridors Sam, San Jorge and Karen-Milagros. Dolomitization was an important control on the movement of mineralizing fluids and has been studied and logged in detail throughout all of the drilling campaigns. It is also modeled in this study as a limiting constraint on mineralization.

 

The alteration halo is open along structure in all directions and is especially pervasive in the stratigraphic interval lying between the paleontological marker horizons CM (Coquina Marker) and IBM (Intact Bivalve Marker) of the Chambará 2 formation. The alteration halo is composed mostly of medium and coarse-grained crystalline dolomite replacing calcareous packstone, rudstones, floatstones and wackestones. Mostly the dolomitic rudstones, and locally the packstones, transform laterally when in proximity of faults and major fractures (Sam, San Jorge and Karen-Milagros) to mineralized pseudobreccias and karst structures.

 

 

 

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6.2.4 Mineralization

 

The zinc-lead-silver mineralization of the Florida Canyon deposit occurs as sulfides hosted in dolomitized zones of the Chambará 2 Formation. Dolomite paragenesis and later sulfide mineralization are controlled by a combination of porosity, permeability, and structural preparation. Metals occur in sphalerite and lesser galena, which contains silver. Minor mineralization is hosted in limestones, but the bulk of sphalerite and galena is hosted in dolomite.

 

In a number of core samples, the mineralization has very sharp contacts along the dolomitization boundary. Characteristic mineralization textures include massive and disseminated mantos, mineralization in dissolution breccias, collapse breccias and pseudobreccias. The different breccias and vein types are structurally controlled by faults of north-south and northeast-southwest direction.

 

The mineralization is characterized by the presence of sphalerite, galena and locally pyrite. Sulfide replacements occur in dolomitized limestone of variable grain sized and in solution breccias with white dolospar and lesser amounts of late generation calcite. Pyrite content is generally low, with percentages averaging less than 2% by volume. Sphalerite in mineralized sections has variable grain size from 0.1 to greater than 5 mm, with colors ranging from dark brown through reddish brown to light brown. It occurs as individual crystals or in massive form, sometimes displaying colloform textures with bands of slightly differing color zoning, indicators of polyphase hydrothermal deposition.

 

Early fine-grained sphalerite has evidence of later deformation and reactions to secondary mineralizing fluids. A second phase of more massive sphalerite mineralization is observed within the core of the deposit. These crystals are coarse-grained, regular, euhedral and show very little evidence of any post-depositional deformation. The sphalerite is contemporaneous with fine to coarse grained galena and is often overprinted with a later stage coarse-grained, euhedral galena.

 

The presence of zinc oxides, locally to considerable depths, is due to syngenetic oxidation, with later contributions of basin-derived connate water and movement of rainwater through fractures that leached the limestones and formed significant karst cavities.

 

6.3 Property Geology

 

The areas of current exploration interest are the Karen/Milagros, San Jorge and Sam Fault deposits. These mineralized zones are hosted in the dolomitized Chambará 2 sub-unit of the Pucará Group carbonates, bracketed by the Coquina and Intact Bivalve Marker beds. Geologic mapping and modeling include refining the extents of Chambará 2, and further defining the steeply dipping feeder structures to predict additional zinc-lead-silver mineralization. The outcrop geology of the deposit area is shown in Figure 6‑4, with emphasis on the Chambará Formation.

 

 

 

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Figure 6‑4 Florida Canyon Project Geologic Map

 

Source: Nexa, 2020 (translated)

 

 

 

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6.4 Significant Mineralized Zone

 

Local and regional geologic mapping, geologic drillhole logs, and the dome-shaped geometry of the deposit suggest the mineralization is hosted in a broad anticline structure. Florida Canyon is the collective name of the deposits in the Project area in Florida Canyon, and includes the Karen-Milagros, San Jorge, Sam Fault zones and similar mineralized strata between these areas.

 

Modeled manto zones are between 1 m and 9 m thick and occur over an area of about 1 km x 3 km and are open in all directions. Unmineralized gaps exist within the mineralized manto zones, as is typical for hydrothermal replacement deposits. Irregular steeply dipping replacement bodies also occur, frequently at the intersection of vein-like feeder structures and in karst-controlled mineralization.

 

Mineralization outcrops locally in a number of areas and has been drilled at depths of up to about 450 m below ground surface. Figure 6‑5 is a west-facing cross section of the geologic model in the mineralized zone. Zinc mineralization occurs as massive sphalerite (ZnS) and is locally oxidized to smithsonite (ZnCO3) and hemimorphite (Zn4Si2O7 (OH)2). Lead occurs in galena (PbS), cerussite (PbCO3) and anglesite (PbSO4).

 

 

Figure 6‑5 Cross Section of the Project Geologic Model

 

Source: Nexa, 2013b

 

6.5 Deposit Types

 

MVT deposits are hosted in carbonate rocks and show cavity-filling or replacement-style mineralization. The characteristic minerals are sphalerite, galena, fluorite, and barite which provide clean concentrates of Zn and Pb. The host rock may be silicified, and common alteration minerals include dolomite, calcite, jasperoid and silica. MVT deposits are typically spatially extensive but limited by the permeability of the host rock units. This control makes them appear stratabound. Chemical and structural preparation are the main controls on permeability, and therefore, the extent of fluid migration and metal precipitation (Guilbert and Park, 1986).

 

Pb-Zn deposits in South America are hosted in the Mesozoic Carbonate sequence of the Pucará Group in the central Andes. In Peru, this type of deposit is represented mainly by the San Vicente and Shalipayco deposits (located in central Peru), and Florida Canyon, located in the Bongará Region of northern Peru.

 

The Florida Canyon Deposit is in the Eastern Cordillera of Peru within the limit of the Shipasbamba community of the Amazonas Department.

 

6.5.1 Mineral Deposit

 

An area of 20 km x 100 km extending from Mina Grande to north to 80 km south of the Florida Canyon deposit has become the focus of what is an emerging Mississippi-Valley Type (MVT) zinc and lead province, with many surface occurrences and stream sediment anomalies distributed throughout the Pucará Group. The main host rock of zinc and lead occurrences in the mineral district and Project area is dolomitized limestone, which may show karst or collapse breccia textures.

 

 

 

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Figure 6‑6 Mississippi Valley-Type Deposit Schematic Model

 

Source: Nexa, 2014a

 

 

 

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7 Exploration

 

7.1 Surveys and Investigations

 

7.1.1 Relevant Exploration Work

 

The Florida Canyon Project has identified and delineated mineral resources in the San Jorge, Sam, 1021, and Karen-Milagros areas.

 

In previous years, Cominco and Nexa executed detailed surface mapping and rock sampling programs of the areas near the reported resource. Stream sediment and soil samples were collected and analyzed as described in Section 5.2.

 

An extensive regional reconnaissance exploration program was also conducted over a large area throughout the Mesozoic carbonate belt to the north and south of the Property. Geochemical samples were collected of stream sediments, soils and rocks.

 

During development of the San Jorge adit, Nexa completed geologic mapping and chip sampling of the underground workings. Results were applied to the Project geologic model in support of resource estimation and continued exploration drillhole planning.

 

Sampling of drill core is described in detail in Section 8Error! Reference source not found.. The regional stream sediment program collected sediments that were screened to -80 mesh, crushed and analyzed for a multielement suite by ICP. Soil samples collected were composites of B horizon soils and C horizon when accessible.

 

Rock sample methodology varied according to location. Grab samples were taken where outcrops were found that showed evidence of dolomitization of carbonate beds. Mineralized outcrops were cleared manually with machetes and shovels and systematically chip channeled. Channels were oriented perpendicular to bedding to most accurately represent stratigraphic thickness. Channel samples were limited to 2 m in length by Cominco and 1 m by Nexa. Most of the chip channel sampling of higher-grade mineralization has been conducted in the Karen Milagros zone and other areas in the central part of the Property where outcrops of mineralization are most common, as illustrated in Figure 7‑1.

 

7.1.2 Significant Results & Interpretation

 

Exploration strategy for MVT deposits at the Florida Canyon project has been strongly influenced by the interpreted favorability of specific units of the stratigraphy of the region. Numerous occurrences of alteration and mineralization occur throughout the Pucara Group, but economic deposits have only been thus far located within the Triassic Chambará formation (Figure 6‑2). More specifically the middle member of the Chambará Formation (Chambará 2) has been found to host the most persistent and highest grade manto deposits due to its higher permeability and susceptibility to altering and mineralizing fluids. Synsedimentary structures, formed during or slightly after sedimentation, controlled the flow of basinal brines that dolomitized and subsequently mineralized the carbonates. The mineral rich fluids migrated from these “feeders” laterally into the stratigraphic column to form mantos.

 

 

 

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Economic resources have been delineated in both the stratigraphically controlled mantos as well as the feeders, such as the San Jorge and Sam mineralized bodies. The higher angle structures have also been subject to karst formation that further enhanced fluid flow and are themselves often well mineralized with higher grade wider mineralization e.g. San Jorge.

 

Particularly prospective locations to explore for these high grade, high tonnage deposits exist along the northeast trending lineaments (drainages) immediately north and south of Karen Milagros where outcropping massive mineralization may be expressions of breakthrough structures. These locations have not been adequately tested to date due to the difficult access for helicopter supported drilling. The completion of road access will facilitate testing of these targets.

 

 

 

 

 

Figure 7‑1 Florida Canyon Area Prospect and Geochemistry Map

 

 

 

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These steeply dipping bodies occur over stratigraphic intervals that extend upwards into the Chambará 3, Aramachay and Condorsinga formations. The depth extent of mineralization in the feeders is currently unknown. These conduits enabled metal rich fluids to enrich the overlying stratigraphy and provide potentially important evidence for exploration.

 

Geochemical samples were collected at different stages during the life of the project. Information on sampling methods and results are scarce. Table 7‑1 is a summary table on the surface sampling in the Project area.

 

Table 7‑1 Summary of Total Surface Samples

 

Year

Company

Rocks

Soils

Stream Sediment

1996

Solitario

 

507

 

1997

Cominco

1,240

2,361

3,426

1998

Cominco

1,404

3,821

1,773

1999

Cominco

380

1,752

491

2000

Cominco

155

 

26

2008

Votorantim

5

123

12

2009

Votorantim

77

 

20

2011

Votorantim

2

 

 

2012

Votorantim

83

16

72

2019

Nexa

3

 

 

TOTAL

 

3,349

8,580

5,820

 

Geochemical prospecting is very effective in locating the leakage halos in overlying stratigraphy around these structures. Initially stream sediments were used to identify geochemically enriched drainages and were followed up with prospecting and soil surveys to pinpoint mineralized centers. Although no detailed mapping has been done over much of the property, geologists made observations of the stratigraphic location within areas of high geochemical response.

 

Figure 7‑2 shows the results of the regional geochemistry program. The area in the immediate vicinity of the Florida Canyon resource exhibits very high base metal content in stream sediment, soils and rocks. Only a small area of Chambará 2 crops out in this area as shown in orange color on the geologic map of the Florida/Tesoro vicinity (Figure 7‑3). Outcropping high grade mineralization in this window of Chambará led to the initial discovery of the known Florida Canyon deposits.

 

Nearby, there are significant soil anomalies in higher stratigraphy that warrant future exploration drilling. These anomalies occur in undrilled areas within the horst that hosts the current resources as well as to the west of the Sam Fault and East of the Tesoro Fault.

 

Further to the north two very large and strong soil anomalies have been defined by the regional geochemical sampling program (Figure 7‑2). The San Jose soil anomaly is of similar size and grade to that at Florida Canyon, however; it is untested with drilling. Based on the clear relationship between surface geochemistry and subsurface mineralization at Florida Canyon, drilling is warranted in the San Jose and Naranjitos areas.

 

 

 

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Figure 7‑2 Regional Geochemical Results

 

 

 

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Figure 7‑3 Florida Canyon Area Simplified Geology, Resource and Drillhole Map

  

 

 

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7.2 Drilling Exploration

 

The database used for modeling and estimation of mineral resources includes 545 drillholes, with a total of 136,758.1 m drilled at the Florida Canyon Project (Table 7‑2). The full collar database is listed in Appendix A. All of the holes were diamond drilling, with 447 holes drilled from surface and 98 holes drilled from the San Jorge adit (underground). Drilling began in 1997 by Cominco, followed by Votorantim between 2006 and 2013, and the last campaign was carried out by Nexa in 2018 and 2019. The drilling was completed by contracting companies Boart Longyear in 1997, MDH Bradley from 1998-2013, and Bresta from 2018-2019. Figure 7‑4 is a map of the drillhole locations at the project.

 

Table 7‑2 Drilling Summary in Florida Canyon

 

Surface

San Jorge Adit

Total

Year

Number

Meters

Type

Number

Meters

Type

Number

Meters

Type

1997

34

8,409.70

DTH

 

 

 

34

8,409.70

DDH

1998

8

2,108.35

DDH

 

 

 

8

2,108.35

DDH

1999

9

3,977.90

DDH

 

 

 

9

3,977.90

DDH

2000

31

10,297.00

DDH

 

 

 

31

10,297.00

DDH

2006

26

4,353.50

DDH

 

 

 

26

4,353.50

DDH

2007

33

11189.3

DDH

 

 

 

33

11,189.30

DDH

2008

54

16,468.85

DDH

 

 

 

54

16,468.85

DDH

2009

13

3,611.30

DDH

 

 

 

13

3,611.30

DDH

2010

42

12,242.40

DDH

 

 

 

42

12,242.40

DDH

2011

25

8,168.60

DDH

19

2,947.55

DDH

44

11,116.15

DDH

2012

59

14,163.00

DDH

51

9,395.55

DDH

110

23,558.55

DDH

2013

74

9,120.70

DDH

28

3,268.35

DDH

102

12,389.05

DDH

2018

5

2,202.90

DDH

 

 

 

5

2,202.90

DDH

2019

34

14,833.20

DDH

 

 

 

34

14,833.20

DDH

Total

447

121,146.70

 

98

15,611.45

 

545

136,758.15

 

 

 

 

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Figure 7‑4 Drillhole Location Map

 

Source: Nexa, 2020 (translated)

 

 

 

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7.2.1 Procedures

 

Drilling procedures were coordinated and supervised by Cominco and Nexa geologists and were approved by the Exploration Manager. Diamond drillhole targeting is prepared by the geologists. Coordinates and orientation of the drillhole collars are communicated to a surveying supervisor who positions the drill precisely which is then validated by the geologist.

 

Cominco surface drilling was executed with a helicopter-supported LD-250 diamond core rig operated by Bradley Bros. Limited. Sermin completed the underground development and also completed drilling from the San Jorge adit with a LM-70 electric diamond core rig.

 

Drilling was performed on two 12-hour shifts with full 24-hour geological supervision by a geologist. The rig geologist role included:

 

 

·

Coordination and communication between the drilling contractor and Nexa;

 

·

Monitoring drilling procedures and inspecting the core extraction for sample quality;

 

·

Boxing the core;

 

·

Measuring and recording core recovery and Rock Quality Designation (RQD); and

 

·

Completing a preliminary geological log.

 

Downhole surveys were completed with a Reflex EZ-Shot survey tool by the drillers at varying spacing, as summarized in Table 7‑3. The survey records are stored digitally at the core facility. Drillhole collar locations were surveyed by Nexa with a GPS-based instrument.

 

Table 7‑3 Downhole Survey Data Point Spacing

 

Drilling Program

(Year)

Survey Spacing

(m)

2010

100

2011

50

2012 to 2013

20

2018

25

2019

5

 

The identification of each drillhole was generated in a systematic and specific format which includes the camp, mining unit, year and sequential drillhole number. Basic drill information is entered into the database and archived within four days after the completion of the drillhole.

 

Drilling information was stored in a structured directory and was backed up to the central server in Brazil in the case of Nexa and in Vancouver for drilling conducted by Cominco. The information available in the drillhole database includes Collar, Survey, Assay and Lithology.

 

Surface drilling normally began with a HQ-diameter core (65mm) and is reduced to a NQ-diameter (45mm) hole if poor ground conditions necessitated.

 

 

 

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After a drillhole is completed, the boxes were taken to a logging room where a logging and sampling was performed by a company or a contracted geologist. A photo was taken of each box for all holes and is stored on the server. Geologic logging was performed according to Cominco or Nexa Resources standards using geological, lithological, mineralogical and alteration terms. Logging was recorded digitally using the software DH Logger, which is imported directly into Fusion Data Management Software. Fusion Software manages the database and automatically incorporates core and sample logging. The database administrator is responsible for verifying and validating the data and combining it into a series CSV files to later import into geological modeling software programs.

 

7.2.2 Interpretation & Relevant Results

 

The geologic logging and analytical data were added to the Project database after validation and applied to modeling and resource estimation. The modeling and resource estimation are discussed in detail in Section 14 (Mineral Resources). The true thickness of the mineralized intercepts varies from 80 to 100% of the drilled length and varies with the orientation of the drillhole.

 

Nexa’s documentation of drilling procedures indicate that there is little or negligible sampling bias introduced during drilling. Nexa specifically analyzed the data for bias and the results are very appropriate with very low bias.

 

Gustavson considers the drilling and sample handling procedures to be appropriate for the geology, conducted according to industry best practice and standards, and the relevant results are sufficient for use in resource estimation.

 

 

 

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8 Sample Preparation, Analysis and Security

 

8.1 Sampling Methods

 

Sampling procedures at the Florida Canyon Project are preformed according to the Nexa Procedure (PS-EXP-GTO-009-PT9).

 

Geologic core sampling was carried out from 0.3 m to 2.0 m, except when encountering mineralogical, structural, or lithological contacts. For these cases, one sample was taken per domain, either lithological, structural, or mineralogical. All massive sulfides were sampled, and additional “support” samples were taken on both sides of the core box that are within the surrounding carbonate rocks to ensure that the entire mineralized zone is sampled.

 

Sampling was done under the supervision of the lead geologist who defined the length of the sample and cut line. Core was sampled by sawing. If a sample was severely fractured, 50% of the fragmented material was taken as a sample, stored in a prelabeled bag, and sent to ALS laboratory, while the remaining sample is kept as back up. Figure 8‑1 shows the process for core sampling.

 

 

 

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Figure 8‑1 Diamond Core Sampling Process

 

Source: Nexa, 2020 (translated)

 

 

 

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8.1.1 Sampling for Geochemical Analysis

 

After photographing the core and completing geotechnical and geologic logging, a geologist marked the core for sample intervals that averaged 100 cm long. Samples had a minimum length of 30 cm and a maximum of 150 cm but were defined so that 100 cm samples were maintained as much as possible. Cut lines parallel to the core axis were drawn by the logging geologist, to ensure nearly symmetrical halves and minimal sampling bias relative to any visible mineralization. The core was cut on a rock saw with a 40 cm blade, under supervision of a Project geologist. After the core was cut, both halves were replaced in the core box.

 

Samples were always taken from the left side of the saw-cut core, double bagged and marked with sample numbers in two places. These were transported in larger bags containing seven samples each by Mobiltours freight company to the ALS Minerals laboratory in Trujillo or Lima, operated by ALS Minerals. Prior to 2012, analysis was completed in Trujillo. Since then, it was done in Lima.

 

Cominco also split the core samples and sampled half for geochemical analysis. Sample breaks were determined by geologic criteria. Cominco core samples were analyzed by Acme Labs, in Lima, Peru.

 

8.1.2 Sampling for Density Measurement

 

Specific gravity (SG) measurements were completed on site by Nexa on every sample obtained from the 2018-2019 core. SG measurements were completed on all mineralized intervals. Three SG measurement methods were used:

 

·

Volume displacement;

·

Hydrostatic; and

·

A mesh method for broken material.

 

These techniques were designed and implemented by Inspectorate Services Peru SAC. A group of samples was also sent to an external lab to validate the results in the field. Table 8‑1 shows the number of density samples taken per year by different campaigns. Figure 8‑2 is a map displaying the distribution of the density samples.

 

 

 

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Table 8‑1 Total number of Density Samples taken per year

 

Campaign

Type of Sample

No. Samples

CO1997

Drill Holes

194

CO1998

Drill Holes

8

CO1999

Drill Holes

10

CO2000

Drill Holes

44

VM2006

Drill Holes

124

VM2007

Drill Holes

233

VM2008

Drill Holes

258

VM2009

Drill Holes

177

VM2010

Drill Holes

264

VM2011

Drill Holes

792

VM2012

Drill Holes

2,024

VM2013

Drill Holes

4,077

NEXA2018

Drill Holes

111

NEXA2019

Drill Holes

879

Total

 

9,195

 

 

 

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Figure 8‑2 Density Sample Distribution

 

Source: Nexa, 2020 (translated)

 

 

 

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8.2 Security Measures

 

During the site visit, the observed sample storage was secure, and provided adequate protection from rainfall. Sample security and chain of custody were maintained while the samples were transported from the core shed in Shipasbamba to Lima. Assay certificates are retained in the Nexa office in Lima. Analytical data is loaded directly from the laboratory results files to the drillhole database, to minimize the risk of accidental or intentional edits.

 

8.3 Sample Preparation for Analysis

 

ALS Minerals (ALS) in Trujillo or Lima, Peru, completed sample preparation and analysis for all Nexa core samples. ALS is an independent, global analytical company with ISO certifications in Peru, Brazil, Chile and Argentina (ALS Minerals, 2014a).

 

Upon delivery at the lab, bar coded sample identification labels were scanned, and the samples were registered to the Laboratory Information Management System (LIMS). Samples were weighed, and then air-dried in ambient conditions. Excessively wet samples were dried in an oven at a maximum 120°C. The sample preparation and analysis procedures used are summarized in Table 8‑2. Specific analytical procedures and method detection limits for elements in the suite are reported in Table 8‑3.

 

After analysis was complete, the remaining coarse reject and pulp samples were returned to the Florida Canyon core shed for storage.

 

Cominco analyzed samples with visible zinc or lead mineralization by atomic absorption spectrophotometry. All samples containing greater than 10,000 ppm zinc and lead were then analyzed by wet chemistry and the latter results were recorded in the data base.

 

Table 8‑2 Analytical Codes and Methods

 

Procedure Code

Description

Sample Prep

CRU-31

Crush to 70% less than 2 mm.

SPL-21

Riffle split off 1kg and retain the coarse reject.

PUL-32

Pulverize split to better than 85% passing 75 microns.

Multi-Element Methods

ME-ICP61, -a

Multi-element Inductively Coupled Plasma method with Atomic Emission Spectroscopy analysis. Includes 4-acid, “near-total” digestion of 0.5 g sample.

(+)-AA62

HF, HNO3, HClO4 digestion, HCl leach and Atomic Absorption Spectroscopy analysis.

(+)-VOL70

Volumetric titration for very high-grade samples.

XRF10

X-Ray fluorescence on fused pellet, 5 g sample.

Element-Specific Methods

Au-AA23

Gold by fire assay and Atomic Absorption Spectrometry, 30 g sample.

Au-AA25

Ore-grade gold by fire assay and Atomic Absorption Spectrometry, 30 g sample.

Au-GRA21

Gold by fire assay and gravimetric finish, 30 g sample.

Hg-CV41

Trace level mercury by aqua regia and cold vapor/AAS.

Hg-ICP42

High grade mercury by aqua regia and ICP-AES.

In-MS61

Multi-element Inductively Coupled Plasma method with Mass Spectrometry detection.

Includes 4-acid, “near-total” digestion of 0.5 g sample.

S-IR08

Total sulfur by Leco furnace.

 

Source: ALS Minerals, 2014b,

 

 

 

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Table 8‑3 Analyzed Elements and Method Detection Limits

 

Element

Symbol

Method

Unit

Lower MDL

Upper MDL

Overlimit Method

Unit

Lower MDL

Upper MDL

Overlimit Method

Unit

Lower MDL

Upper MDL

Silver

Ag

ME-ICP61

ppm

0.5

100

Ag-AA62

ppm

1

1,500

 

 

 

 

Aluminum

Al

ME-ICP61

%

0.01

50

 

 

 

 

 

 

 

 

Arsenic

As

ME-ICP61

ppm

5

10,000

 

 

 

 

 

 

 

 

Barium

Ba

ME-ICP61

ppm

10

10,000

ME-ICP61a

ppm

50

50,000

XRF10

%

0.01

50

Beryllium

Be

ME-ICP61

ppm

0.5

1,000

 

 

 

 

 

 

 

 

Bismuth

Bi

ME-ICP61

ppm

2

10,000

 

 

 

 

 

 

 

 

Calcium

Ca

ME-ICP61

%

0.01

50

 

 

 

 

 

 

 

 

Cadmium

Cd

ME-ICP61

ppm

0.5

1,000

Cd-AA62

%

0.0005

10

 

 

 

 

Cobalt

Co

ME-ICP61

ppm

1

10,000

 

 

 

 

 

 

 

 

Chromium

Cr

ME-ICP61

ppm

1

10,000

 

 

 

 

 

 

 

 

Copper

Cu

ME-ICP61

ppm

1

10,000

 

 

 

 

 

 

 

 

Iron

Fe

ME-ICP61

%

0.01

50

 

 

 

 

 

 

 

 

Gallium

Ga

ME-ICP61

ppm

10

10,000

 

 

 

 

 

 

 

 

Potassium

K

ME-ICP61

%

0.01

10

 

 

 

 

 

 

 

 

Lanthanum

La

ME-ICP61

ppm

10

10,000

 

 

 

 

 

 

 

 

Magnesium

Mg

ME-ICP61

%

0.01

50

 

 

 

 

 

 

 

 

Manganese

Mn

ME-ICP61

ppm

5

100,000

 

 

 

 

 

 

 

 

Molybdenum

Mo

ME-ICP61

ppm

1

10,000

 

 

 

 

 

 

 

 

Sodium

Na

ME-ICP61

%

0.01

10

 

 

 

 

 

 

 

 

Nickel

Ni

ME-ICP61

ppm

1

10,000

 

 

 

 

 

 

 

 

Phosphate

P

ME-ICP61

ppm

10

10,000

 

 

 

 

 

 

 

 

Lead

Pb

ME-ICP61

ppm

2

10,000

Pb-AA62

%

0.001

20

Pb-VOL70

%

0.01

100

Sulfur

S

ME-ICP61

%

0.01

10

S-IR08

%

0.01

50

 

 

 

 

Antimony

Sb

ME-ICP61

ppm

5

10,000

 

 

 

 

 

 

 

 

Scandium

Sc

ME-ICP61

ppm

1

10,000

 

 

 

 

 

 

 

 

Strontium

Sr

ME-ICP61

ppm

1

10,000

 

 

 

 

 

 

 

 

Thorium

Th

ME-ICP61

ppm

20

10,000

 

 

 

 

 

 

 

 

Titanium

Ti

ME-ICP61

%

0.01

10

 

 

 

 

 

 

 

 

Thallium

Tl

ME-ICP61

ppm

10

10,000

 

 

 

 

 

 

 

 

Uranium

U

ME-ICP61

ppm

10

10,000

 

 

 

 

 

 

 

 

Vanadium

V

ME-ICP61

ppm

1

10,000

 

 

 

 

 

 

 

 

Tungsten

W

ME-ICP61

ppm

10

10,000

 

 

 

 

 

 

 

 

Zinc

Zn

ME-ICP61

ppm

2

10,000

Pb-AA62

%

0.001

30

Zn-VOL70

%

0.01

100

Gold

Au

Au-AA23

ppm

0.005

10

Au-AA25

ppm

0.01

100

Au-GRA21

ppm

0.05

1,000

Indium

In

In-MS61

ppm

0.005

500

 

 

 

 

 

 

 

 

Mercury

Hg

Hg-CV41

ppm

0.01

100

Hg-ICP42

%

0.1

10

 

 

 

 

 

Source: Nexa (2014b),

 

8.4 QA/QC Procedures

 

Nexa has a well-established QA\QC protocol established in 2007 for core samples from operating mines and brownfield/greenfield projects. Nexa uses a corporate database (GDMS Fusion) from Datamine, linked with several laboratory packages, specific for different Business Units (ore deposit types/countries) with pre-defined preparation and assay methods, reporting units and over-limit methods. All assay dispatches follow the same protocols for each medium type (core, rock, soil, stream sediment samples). All written protocols are in a corporate internal system that requires revision and update every three years.

 

 

 

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Nexa’s Quality Control includes three types of duplicates (pulp, coarse rejects and ½ core duplicates), blank controls and certified standards. Inter-laboratory checks are also carried out in annual basis at certified laboratories. Each mine and advanced project provides a detailed QA\QC report at least once a year and they are appended into Mineral Resource update Technical Reports.

 

For assay report import procedures into the GDMS Fusion database there is a well-defined policy established by Nexa using the available lab import profile tools from Fusion. There are customized lab import profiles for each laboratory used by Nexa. These templates account for standardized unit definition for each metal (g/t, ppm, %) and automatic built in overlimit assay methods. Assay imports into Fusion are carried out by a designated Qualified Person.

 

The 2018-2019 quality assurance/quality control (QA/QC) program at the Florida Canyon Project and its processes complies with current industry best practices. A total of 1,177 greenfield exploration samples were analyzed at an ALS laboratory (Appendix B). 187 control samples were inserted, making up 15.9% of the total samples analyzed. The results of the processing and evaluation of QC data are as follows:

 

 

·

Coarse blanks show no evidence of contamination during the laboratory sample preparation and analysis process. ALS performed ICP MS analysis for all samples.

 

·

Twinned samples indicate an acceptable error rate (<10%).

 

·

Coarse and fine duplicates indicate an acceptable error rate (<10%). Apart from coarse duplicate (RG) in Zn, 2 out of 11 samples failed in low grades.

 

·

The standards show acceptable accuracy in all of the elements evaluated (Ag, Cu, Pb, Zn).

 

·

The external check validated the accuracy between the secondary laboratory (Certimin) and the primary laboratory (ALS) (<5.0% variation).

 

Overall, coarse blanks, duplicates, and standards results are considered acceptable and valid. A summary of the results is in Table 8‑4.

 

 

 

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Table 8‑4 QA/QC Insertion of Samples 2018-2019 Campaign

 

Control Type

No. Samples

Insertion Ratio

Blanks

Coarse

23

1.95%

Standards

Low Grade (SPY-01)

19

1.61%

Medium Grade (SPY-02)

19

1.61%

High Grade (SPY-03)

20

1.70%

Duplicates

Coarse Duplicate (RG)

11

0.93%

Twin Duplicate (RP)

11

0.93%

Fine Duplicate (DP)

58

4.93%

External Check (DC)

26

2.21%

TOTAL

1,177

15.89%

 

8.4.1 Standards

 

Summaries of the Standard Reference Material (SRM) certified values and analytical results for silver, copper, lead and zinc are shown in Table 8‑5. The certified Standard Reference Material, ST800044B. Other, lower-grade reference materials made from Florida Canyon core were also included. Example lab results for Zn Standards are shown in Figure 8‑3.

 

Table 8‑5 QA/QC Standard Bias % Results 2018-2019 Campaign

 

Lab

Element

SPY-01

SPY-02

SPY-03

Comments

n

Bias %

n

Bias %

n

Bias %

 

ALS

Ag ppm

19

-1.69

19

2.53

20

6.25

 

Cu %

19

-9.5

19

-3.6

20

-2.19

Very low Cu grade in standard SPY-01

Pb %

19

2.2

19

-0.96

20

0.36

 

Zn %

19

-1.41

19

0.83

20

-0.82

 

0 - 5% bias

Excellent

>10% bias

Reject

5 - 10% bias

Attention

STD Bias % = (average/certified value) - 1

 

 

 

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Figure 8‑3 ALS Lab - Zn Standards Results

 

8.4.2 Blanks

 

There were no contamination issues with blanks (Table 8‑6). Example lab results for Zn Blanks are shown in Figure 8‑4.

 

Table 8‑6 QA/QC Blanks Results 2018-2019 Campaign

 

Lab

Element

HILBG

Comments

n

Failure %

ALS

Ag ppm

23

0

 

Cu %

23

0

 

Pb %

23

0

 

Zn %

23

0

 

Limit 5% failure

Blank Failure = (failed/total samples)

 

 

 

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Figure 8‑4 ALS Lab - Zn Blanks Results

 

8.4.3 Duplicates

 

Duplicate samples were evaluated with the hyperbolic method and the results were good. A summary of all duplicate sample pairs is shown in Table 8‑7Error! Reference source not found.. Example lab results for Zn Duplicates are shown in Figure 8‑5.

 

Table 8‑7 QA/QC Duplicates Results 2018-2019 Campaign

 

Lab

Element

DP - Pulp duplicates

RG - Coarse Rejects

RP - Core duplicate

Comments

n

Failure %

n

Failure %

n

Failure %

 

ALS

Ag ppm

58

0

11

0

10

0

 

Cu %

58

0

11

0

10

0

 

Pb %

58

0

11

0

10

0

 

Zn %

58

0

11

18.18

10

0

2 failed in RG, low grade in Zn

Limit 10% failure

 Duplicates Failure % - (failed/total samples)

 

 

 

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Figure 8‑5 ALS Lab - Zn Duplicate Results

 

8.5 Opinion on Adequacy

 

The assay QC database is organized well and has an extremely low error rate. Nexa maintains the assay QC data well and analyzes it in real time to address any issues promptly. There were no systematic issues apparent in the results available to review.

 

Gustavson considers the sample preparation and analysis procedures to comply with industry best practice. The QA/QC methods and results adequately verify the analytical database as sufficient for use in resource estimation.

 

 

 

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9 Data Verification

 

9.1 Procedures

 

All analytical data is checked by the on-site and Lima-based geologists before it is added to the database. This includes review of standard, blank and duplicate sample results for outliers, and requesting re-analysis if necessary. Final analytical data is appended to the database by the Sao Paulo office staff after additional verification. The checking procedures are well documented and conform to best industry practice.

 

During the site visit, the geologic database was checked for its consistency to a) logged core, b) logging sheets and sample records and c) database provided. All aspects of the data capture and storage were seen to be in good order. The core sample library in the core shed (Figure 9‑1) helps to make the logged geology consistent and for the purposes of developing a consistent geological model.

 

  

Figure 9‑1: Photograph of Project Core Lithology Reference Sample Library

 

Source: SRK, 2014

 

Drillhole collar locations are verified against topography and compared with the survey reports. Downhole survey data are reviewed by an on-site geologist to verify the results.

 

 

 

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9.2 Opinion on Data Adequacy

 

Nexa geologists have an extensive quality control program, including not only standard check samples, but numerical checks of sample bias for each metal. The data controls are complete and compliant with industry best practice.

 

The Project geologists and support staff were diligent about data verification and the quality of the drillhole database. Database validation in preparation for resource estimation has been done by Nexa. Gustavson has reviewed their internal audit trail. We believe the degree of organization of the data base and the measures in place to minimize errors in data that the database is adequate for mineral resource estimation.

 

 

 

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10 Mineral Processing and Metallurgical Testing

 

A 43-101 PEA report was written in 2017 for the Florida Canyon Zinc Project. The report summarized the metallurgical studies performed on the samples from the prospect undertaken in 2010, 2011 and 2014. Since then, additional drilling has resulted in expansion of the sulfide resource which is the primary objective of this technical report.

 

10.1 Metallurgical Test Work, 2010-2014

 

Smallvill S.A.C. of Lima, Peru (Smallvill) performed metallurgical studies on Florida Canyon mineralization types in 2010, 2011 and 2014. The drilling completed in 2018 and 2019 has increased the proportion of mineral resources to be dominated by sulfide lead-zinc material. This changes the character of the proposed mineral processing.

 

Since no metallurgical studies have been performed on the recent drilling samples a summary of historical work is presented here for reference:

 

 

·

Most earlier metallurgical studies were performed on oxide and mixed ores. Limited test work has been completed on sulfide samples.

 

·

Some of the composite samples classified as sulfides should have been designated as mixed ore because of presence of significant amounts of oxide zinc (Table 10‑1).

 

·

The Bond’s crusher work index (Wi of 8.54 kwh/t) indicates that the sulfide ore is soft.

 

·

The conventional flotation scheme for polymetallic ores and reagents employed in the test work did produce marketable-grade zinc concentrate (±50% Zn).

 

·

The selected test results, reported by SRK in the 2017 PEA, indicates zinc recovery of 80% to 90.1% for samples with a variable proportion of oxide minerals. For pure sulfides, the results project a maximum recovery of 93%. The concentrates produced are at a concentrate grade of 50% to 55% Zn.

 

·

Some of the results reported in Table 10‑1 are not correct. For example, San Jorge sample assayed 0.41% ZnOx and 7.63 ZnTotal. Hence, it contained 5.4% of zinc as oxide. The recoveries reported in zinc concentrate are 90.1% for ZnTotal and 83.5% for ZnS. Even if all the oxide was recovered, the ZnS recovery should be 84.7%.

 

·

The early logging of core from the project estimated visually the content of oxidized zinc minerals. Later, Nexa reanalyzed the mineralized core for zinc contained in sulfides vs. oxidized species. The visually estimated ratio of sulfide/oxide zinc was adjusted upward based on this study and current data reflects this adjustment.

 

·

SRK projected recovery of metals by material type in the 2017 PEA (Table 10‑2). Zinc recovery was projected to be 93% for the sulfide ores. The authors agree with the projection based on their extensive experience in polymetallic processing and the test work completed to date.

 

 

 

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Drilling completed in 2019-20 has verified that the sulfide ore component of the deposit is greater than previously assumed.

 

Table 10‑1 Metallurgical Tests – Selected Results

 

Report

Sample

Sample Type

Head Grade

Date

Zn Total

ZnOx

ZnS

ZnOx/

ZnT

Pb Total

Pb S

Pb Ox

Ag g/t

2010 Apr

Core composite

Sulfide

7.52%

1.40%

6.10%

0.19

1.72%

1.26%

0.46%

11.6

2011 Jul

Core composite

Oxide

18.36%

18.40%

0.00%

1

2011 Aug

Core composite

Mixed

31.25%

13.20%

18.10%

0.42

2.38%

26.5

2011 Aug

Core composite

Sulfide

31.68%

0.98%

30.70%

0.03

3.88%

56.19

2011 Aug

Core composite

Mixed

31.25%

13.20%

18.10%

0.42

2.38%

26.5

2014 Feb

San Jorge

Sulfide

7.63%

0.41%

7.22%

0.05

0.65%

2014 Feb

Karen Milagros

Sulfide

5.70%

0.00%

5.70%

0

1.12%

  

Source: SRK, 2017

 

Table 10‑2 Florida Canyon Metal Recoveries by Material Type

 

Parameter

Material Type

Sulfide

Mixed

Oxide

ZnOx/ZnT Ratio

<=0.2

0.2 to 0.8

>=0.8

Zn Recovery

93%

(-0.8833 (ZnOx/ZnT) + 1.1067) * 100

40%

Pb Recovery

84%

(-0.7333 (ZnOx/ZnT) + 0.9867) * 100

40%

Ag Recovery

56%

(-0.4 (ZnOx/ZnT) + 0.64) * 100

32%

 

 

 

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11 Mineral Resource Estimate

 

An updated Mineral Resources Estimate for Florida Canyon was completed by Nexa Resources based on a data base available in July of 2020. The database included 545 drill holes with a total drilled length of nearly 137 km.

 

The estimate was audited by Donald E. Hulse of Gustavson Associates LLC with the audit completed on February 1, 2021. Work was completed in Datamine Studio RM, Leapfrog Geo, and Snowden Supervisor. The models were reviewed by Gustavson using Leapfrog Geo for 3-dimensional geological models, Micro Model software for statistics and geostatistics, and Datamine RM for validation of the estimate. The Nexa database was reviewed, and statistical analysis was completed to validate the Nexa QA/QC results. Gustavson supports the use of the database for mineral resource estimation.

 

Geological modeling in Leapfrog utilized geological sections developed based on lithology, alteration, and mineralization to interpret a 3-dimensional geological model with 73 unique mineralized structures. Each of these structures was analyzed with classical statistics and geostatistics to estimate grades for zinc, lead, silver, and iron. Mineral resource classification utilized criteria based on drill spacing and variogram ranges. Measured mineral resource required a spacing of 25x25m with at least 3 composites, indicated mineral resource, 50x50m with 3 composites, and inferred resource estimates required a spacing of 100x100m with at least 2 composites. In addition, estimation required the demonstration of geological continuity within the Florida horizon as well as dolomitic alteration.

 

11.1 Geologic Model

 

Florida Canyon is considered to be a Mississippi Valley type deposit, dominated by lead and zinc sulfides. The minerals are disseminated within stratigraphically controlled dolomites within the Chambara Formation of the late Triassic/early Jurassic. The deposit is in karstic terrane and due to the local percolation of meteoric water, shallow mineralization has locally oxidized into silicates and carbonates (smithsonite, hemimorphite, and cerussite) collectively referred to as “oxides”.

 

The mineralization occurs in both sub horizontal “mantos”, and steeply dipping feeders. The mantos are stratigraphically controlled within the Florida horizon of the Chambara formation. The stratigraphy in the area is composed of the layers shown in Table 11‑1. Within the Florida, the Coquina and IBM fossil beds were used as markers in the logging.

 

A schematic of the local stratigraphy is shown in Figure 11‑1. The high grade Pb-Zn mineralization occurs in dolomitized material within the calcites of the Florida horizon.

 

 

 

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Table 11‑1 Deposit Stratigraphy

 

Soils

Aramachay Formation

CMWCH Horizon

Florida Horizon

CDMWS Horizon

Mitu Group

 

 

Figure 11‑1 Schematic of Local Stratigraphy

 

The Florida Canyon deposit has the form of a dome at regional scale. This may be due to a regional anticline. This trend was incorporated into the geological model with the interpretation of 84 mineralized structures. (70 mantos and 14 feeders). The distribution of the mineral bodies is shown in Figure 11‑2. The bodies are grouped into four areas, labeled as 1021, Karen Milagros, San Jorge, and Sam. The Sam bodies are associated with the Sam fault to the south west of the area. The extent of these bodies is currently limited by drill data.

 

 

 

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Figure 11‑2 Distribution of Mineralized Bodies

 

11.2 Exploratory Data Analysis

 

The database consists of 545 drill holes, measuring a total of 136,758.15m. The Exploratory Data Analysis (EDA) was performed on raw data (drill samples), composites, and capped values. Histograms and cumulative frequency diagrams were created for Zn, Pb, Ag and Fe. Summary examples of raw data, composite and capped cumulative frequency diagrams are in Appendix C and D.

 

For grade estimation, only samples within the solids defining the mantos and feeders were utilized. All drill and composite intervals were coded with the appropriate geological code. An example cumulative frequency curve is shown in Figure 11‑3.

 

 

 

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Figure 11‑3 Cumulative Frequency Curve for Zinc (Nexa)

 

The statistics were analyzed for each of the 74 bodies. The domains are referenced in the included Table 11‑2 by a three-part code. The first part is the area, the second part defines if it is a manto or a feeder zone, and the third part is a unique sequence number to identify separate zones in each area.

 

Table 11‑2 Description of Zone Codes for Statistics

 

Areas

Code

Description

 

D21

1021

 

KM

Karen Milagros

 

SJ

San Jorge

 

Sam

Sam

 

 

 

Type

F

Feeder

 

M

Manto

 

There are subtle local differences between the bodies, although most behave statistically well with coefficients of variation less than two. This indicates that the distributions are not highly skewed. Since there is insufficient drilling to connect all bodies, the spatial separation led to estimating each body as a separate zone. Summary zinc statistics for the principal zones are shown in Table 11‑3.

 

 

 

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Table 11‑3 Summary Statistics for Zinc by Zone (after Nexa)

 

Zone Code

Zone

N-Samp

Min

Max

Mean

CV

1107

d21m1

12

0.06

29.2

5.34

1.35

1108

d21m2

34

0.04

49.58

8.23

1.55

1109

d21m3

17

0.04

9.53

2.39

1.26

1110

d21m4

12

0.01

13.6

1.5

2.08

1111

d21m7

17

0

36.58

9.77

1.15

1204

km3_10

33

0

39.24

7.97

1.36

1206

km1

48

0.01

37.66

6.66

1.32

1207

km2_1

56

0.01

42.6

8.83

1.29

1208

km2_3

13

0.96

40.49

14.01

1.04

1209

km3_1

27

0.09

40.31

8.8

1.28

1211

km3_4

22

0

30

8.2

1.24

1212

km3_5

72

0.01

44.41

7.9

1.37

1213

km3_7

32

0.02

39.37

5.03

1.93

1214

km3_8

16

0.26

34.64

10.21

1.21

1215

km3_9

4

1.27

39.76

13.62

1.27

1216

km3_2

144

0

46.63

6.54

1.56

1217

km4_1

27

0.08

28.91

3.22

1.8

1218

km4_2

16

0.08

41.39

7.43

1.45

1219

km4_3

134

0

45.48

5.88

1.63

1220

km4_5

15

0.02

11.4

2.42

1.13

1221

km4_7

41

0.47

32.7

6.87

1.33

1223

km6_2

30

0.15

32.99

6.77

1.31

1224

km6_3

14

0.34

39.64

4.77

1.52

1225

km6_5

36

0.02

40.24

11.51

1.13

1226

km6_6

9

1.23

39.27

13.46

1.04

1227

km6_9

76

0

41.58

8.17

1.29

1228

km7_1

89

0.18

49.06

9.31

0.97

1229

km7_2

16

0.01

15.45

3.54

1.19

1230

km7_3

4

0.25

1.59

0.83

0.7

1231

km10

42

0

39.31

6.26

1.57

1232

km13

29

0.1

35.15

5.65

1.51

1233

km15

22

0

35.01

9.54

1.24

1234

km6_4

56

0.22

36.05

12.19

0.84

1405

sjm1

21

0.07

25.7

7.25

1.3

1406

sjm2

42

0.01

40.68

6.27

1.72

1407

sjm3

40

0.01

44.09

9.07

1.33

 

 

 

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Although there are differences in the grade from zone to zone, the overall behavior of the different areas is shown in Table 11‑4

 

Table 11‑4 Average Metal Grades by Area

 

Samples

Avg Zn

Avg Ag

Avg Pb

Karen Milagros

Mantos

711

8.190

11.952

1.320

Karen Milagros

Feeders

98

11.351

18.866

2.590

San Jorge

Mantos

249

7.459

8.007

0.410

San Jorge

Feeders

306

10.607

16.154

0.724

1021

Mantos

25

5.066

9.542

0.709

1021

Feeders

117

6.378

13.646

1.373

Sam

Mantos

95

5.584

6.198

1.257

 

The overall distribution of the metal grades in the deposit is shown in the histograms in Figure 11‑4, Figure 11‑5 and Figure 11‑6. Although the distributions for zinc and silver are slightly skewed, reflecting a log normal population, the overall behavior is good. This presents evidence that if the infill drilling connects these bodies, that the mineralization may develop as local zoning within a large continuous mineralized body. This is common in other MVT deposits, including the namesake deposits in the central USA.

 

  

Figure 11‑4 Histogram of Zinc in Mineral Zones

  

 

 

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Figure 11‑5 Histogram of Silver in Mineral Zones

 

    

Figure 11‑6 Histogram of Lead in Mineral Zones

 

11.3 Domains for Resource Estimation

 

The domains or zones were defined in the EDA step of the study. Further drilling will support if these are unique pods of mineralization, or parts of a larger body. Due to the changing orientation identified in the Leapfrog model and the overall anticlinal shape, each zone was estimated with unique search parameters.

 

11.4 Capping and Compositing

 

Capping was performed area by area based on the shape of the cumulative frequency curve. Composites were nominal 2 meters long with some variability due to the thickness of the zone, with 88% of the composites approximately 2 meters. Capping values for key areas are shown in Table 11‑5.

 

 

 

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Table 11‑5 Outlier Capping Values by Area (after Nexa)

 

Area

COD_OB

Zn Cap

Pb Cap

Fe Cap

Ag Cap

d21f1

2101

32

6

22

50

d21f2

2102

42

30

22

160

d21f3

2103

42

30

22

160

d21f4

2104

32

6

22

50

d21f5

2105

32

6

22

50

d21f6

2106

21

21

12

58

kmf1

2201

40

15

11

120

kmf2

2202

45

17

22

100

kmf3

2203

45

17

22

100

sam

2301

28

8

2.5

20

km3_10

1204

20

10

7

52

d21m1

1107

-

-

-

-

d21m2

1108

27

7

-

60

d21m3

1109

27

7

-

60

d21m4

1110

-

-

-

-

d21m7

1111

27

7

-

60

km1

1206

25

12

6

60

km2_1

1207

37.3

15

11

100

km2_3

1208

40

13

17

81

km3_1

1209

35

4

8

51

km3_3

12102

40

13

17

81

km3_4

1211

38

19

15

120

km3_5

1212

38

19

15

120

km3_7

1213

37.3

15

11

100

km3_8

1214

37.3

15

11

100

km3_9

1215

37.3

15

11

100

km3_2

1216

34

9

-

40

km4_1

1217

18

3.5

-

20

km4_2

1218

37.3

15

11

100

km4_3

1219

28

10

5

100

km4_5

1220

10

7

-

-

km4_7

1221

38

19

15

120

km6_1

12221

38

19

15

120

km6_2

1223

38

19

15

120

km6_3

1224

18

3.5

-

20

km6_4

1234

-

10

7

52

km6_5

1225

-

6

-

-

km6_6

1226

-

6

-

-

km6_9

1227

35

4

8

51

 

 

 

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11.5 Geostatistics

 

Variograms were calculated in each of the zones. Variograms for the manto and feeder zones are shown in Figure 11‑7 and Figure 11‑8. Overall, the variograms are characterized by a relatively low nugget with about 20% of the total variance, a short spherical structure with about one half of the total variance, and a longer spherical structure with about 30% of the total variance.

 

  

Figure 11‑7 Example Zinc Variogram for Manto Zones (after Nexa)

 

  

Figure 11‑8 Example Zinc Variogram for Feeder Zones (after Nexa)

 

 

 

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Generally, the variograms are similar in size and anisotropy, with variable orientations. Key variogram parameters are shown in Table 11‑6.

 

Table 11‑6 Selected Variogram Parameters (after Nexa)

 

 

Structure 1

Structure 2

Zone

Variable

Rotation

Dip

Plunge

Nugget(C0)

Max

Int

Minor

Sill(C1)

Max

Int

Minor

Sill(C2)

d21f6

AG_CAP

33.78

-83.58

0

0.1

28

10

2

0.56

121

53

13

0.34

d21f6

ZN_CAP

33.78

-83.58

0

0.13

16

17

4

0.4

83

104

11

0.47

d21f6

PB_CAP

33.78

-83.58

0

0.15

9

18

3

0.56

83

92

11

0.3

d21f6

FE_CAP

33.78

-83.58

0

0.16

9

23

2

0.32

114

136

13

0.52

d21m1

AG_CAP

-49.91

-4.33

-177.5

0.3

24

18

6

0.54

82

74

25

0.16

d21m1

ZN_CAP

-49.91

-4.33

-177.5

0.26

24

18

4

0.55

82

76

11

0.19

d21m1

PB_CAP

-49.91

-4.33

-177.5

0.18

25

22

3

0.49

107

70

36

0.32

d21m1

FE_CAP

-49.91

-4.33

-177.5

0.35

20

18

4

0.39

147

76

11

0.27

d21m2

AG_CAP

120.07

-4.7

-178.29

0.3

24

18

6

0.54

82

74

25

0.16

d21m2

ZN_CAP

120.07

-4.7

-178.29

0.26

24

18

4

0.55

82

76

11

0.19

d21m2

PB_CAP

120.07

-4.7

-178.29

0.18

25

22

3

0.49

107

70

36

0.32

d21m2

FE_CAP

120.07

-4.7

-178.29

0.35

20

18

4

0.39

147

76

11

0.27

d21m3

AG_CAP

120.07

-4.7

-178.29

0.3

24

18

6

0.54

82

74

25

0.16

d21m3

ZN_CAP

120.07

-4.7

-178.29

0.26

24

18

4

0.55

82

76

11

0.19

d21m3

PB_CAP

120.07

-4.7

-178.29

0.18

25

22

3

0.49

107

70

36

0.32

d21m3

FE_CAP

120.07

-4.7

-178.29

0.35

20

18

4

0.39

147

76

11

0.27

d21m4

AG_CAP

-145.44

-7.05

174.89

0.3

24

18

6

0.54

82

74

25

0.16

d21m4

ZN_CAP

-145.44

-7.05

174.89

0.26

24

18

4

0.55

82

76

11

0.19

d21m4

PB_CAP

-145.44

-7.05

174.89

0.18

25

22

3

0.49

107

70

36

0.32

d21m4

FE_CAP

-145.44

-7.05

174.89

0.35

20

18

4

0.39

147

76

11

0.27

d21m7

AG_CAP

120.07

0.7

-178.29

0.3

24

18

6

0.54

82

74

25

0.16

d21m7

ZN_CAP

120.07

0.7

-178.29

0.26

24

18

4

0.55

82

76

11

0.19

d21m7

PB_CAP

120.07

0.7

-178.29

0.18

25

22

3

0.49

107

70

36

0.32

d21m7

FE_CAP

120.07

0.7

-178.29

0.35

20

18

4

0.39

147

76

11

0.27

  

11.6 Block Model Parameters

 

The block model was estimated in Datamine software. The block size was 6x6x3m with a minimum sub-cell of 0.5m in each direction. General parameters are shown in Table 11‑7.

 

Table 11‑7 Block Model Parameters

 

Parameters

 East (m)

 North (m)

 Elev (m)

 Minimum

823,700

9,351,680

1,550

 Maximum

825,650

9,354,422

3,161

 Block dimension

6

6

3

 Minimum sub-cell

0.5

0.5

0.5

 

 

 

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11.7 Block Grade Estimation Methodology

 

Grades were estimated by three methods, Ordinary Kriging, Inverse Distance to a Power, and Nearest Neighbor. For economic stope design, the OK values were used.

 

The search distances were roughly ½ of the variogram range for Pass 1, the full variogram range for Pass 2, and a longer search was used for inferred to fill in between drilling for the zone. For Pass 1 and 2, a minimum of 6 composites were required and a maximum of 16 were used, for Pass 3, a minimum of 2 and a maximum of 8 were used.

 

Nearest neighbor estimates were used to check the unbiased average of each zone before applying a cutoff grade.

 

 

11.8 Resource Classification

 

Mineral resource classification utilized criteria based on drill spacing and variogram ranges. Measured mineral resource required a spacing of 25x25m with at least 3 composites, indicated mineral resource, 50x50m with 3 composites, and inferred resource estimates required a spacing of 100x100m with at least 2 composites. In addition, estimation required the demonstration of geological continuity within the Florida horizon as well as dolomitic alteration. In Figure 11‑9 mineral resource classes are shown with Measured Resources shown in blue, Indicated in green and Inferred in red.

 

 

 

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Figure 11‑9 Distribution of Resource Classes (Source Nexa)

 

11.9 Cutoff Grade

 

Based on metallurgical test work, mineral types were assigned for sulfides, oxides, and mixed mineral based on the relation of oxide zinc with total zinc, and based on these criteria, a metallurgical recovery was assigned to each block. The blocks were coded with the most prominent oxidation state. Oxides are shown in orange, mixed material in yellow and sulfides in blue.

 

 

 

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Figure 11‑10 Oxidation state of the mineral zones (Source Nexa)

 

11.10 Development of Economic Shells for Reporting

 

A recovery was assigned based on the oxidation state. Using the estimated grade and recovery, economic stope shapes were developed using a “stope optimizer” tool in Deswik software. The limits for the stope are summarized in Table 11‑8. The cutoff grade was established in net smelter return (NSR) for each mining method, Sublevel Stoping, Cut and Fill, and Room and Pillar. Only mineral resources within an economic stope shape were reported.

 

 

 

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Table 11‑8 Deswik Stope Parameters

 

Sublevel Stoping

Cut and Fill

Room and Pillar

Stope Length (m)

4

3

Room 5.5x5.5 and Pillar 6x6

Stope Height (m)

16

3

4 to 20

Minimum Stope Width (m)

3

3

4

Minimum Waste Pillar Width (m)

3

3

6

Dip

50°/90°

20°/50°

20°/20°

Cut-Off (NSR)

41.4

42.93

40.61

 

Long term metals prices used for calculation of NSR are in Table 11‑9.

 

Table 11‑9 Long term metal prices

 

Metal

$US/tonne

$US/lb

Zn

2.816

1.27

Pb

2.249

1.02

Ag

 

19.40 / OzT

 

An example of the stope shapes used to declare a mineral resource is shown in Figure 11‑11. Gustavson feels that the stope shells are a good estimate of the economic potential of the material, and that the parameters used are sufficiently developed to meet the definition of mineral resource estimate of the CIM.

 

 

Figure 11‑11 - Example Deswik Stope Shapes

 

 

 

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11.11 Specific Gravity/Density

 

Density was calculated as a function of grade using the following equation.

 

 

The equation was developed by SRK during the 2017 study. SRK determined that the expected error of using this equation for density was about 0.01%, and that there is no material effect or bias on the mineral resource estimate from this method.

 

11.12 Validation of Resource Estimate

 

The estimate was validated by statistical comparison of the three estimates, and by visual inspection of cross sections of estimates against composites. At this time the classification was reviewed based on the average drill density. Inspection plots for zinc and silver are shown in Figure 11‑12 and Figure 11‑13.

 

 

Figure 11‑12 - Review of Estimates vs. Composites for Zinc in KM6-1

 

 

 

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Figure 11‑13 - Review of Estimates vs. Composites for Silver in KM6-1

 

11.13 Audit of Final Mineral Resource Estimate.

 

Gustavson audited the Nexa model by examining it in 3-dimensions in the Leapfrog software and by comparing the statistics of the samples in each zone with the modeled grades. The Leapfrog work appears to have been done carefully, based on the limits of the dolomite zone within the Chambara formation where lead, zinc, and silver grades are concentrated. Gustavson feels that this is a good representation of the volume of the mineralized material.

 

The grades reported have an implicit cutoff as part of the stope optimizer analysis in addition to the explicit cutoff applied to the composite data. The stope optimizer tends to select only the best grade where it is sufficiently continuous to allow development of a stope of a defined size. This is a direct comparison to an economic pit limit analysis used in open pit mining to define an “in pit resource”. In both cases, the use of the economic mining limit implies the potential for future economic extraction.

 

For the Florida Canyon study, the prices used were very near to the market prices in December of 2020 when the study was finalized. Gustavson was able to compare the statistics of samples within the stope shells with the reported mineral resources and found a generally good correlation. Some of the stope shapes were formed largely on inferred material with limited drilling, and correlations were most precise between stope grades and composite grades when sampling was most regular.

 

 

 

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The mineral resource estimate is tabulated in Table 11‑10 Mineral Resource Summary. Gustavson feels that the reported Mineral Resource Estimate meets the standard for reporting under CIM (2019). The Mineral Resource Estimate separated by zone and mantos vs feeder is in Appendix E.

 

11.14 Mineral Resource Tabulation

 

The Mineral Resource by zone is shown in Table 11‑10.

 

Table 11‑10 Mineral Resource Summary

 

Zone

Classification

Sum of Tonnes

Zn %

Ag g/t

Pb %

Fe %

Karen Milagros

Measured

 328,254

9.07

9.77

1.34

1.53

Indicated

 913,273

7.65

10.41

1.36

1.35

Measured + Indicated

 1,241,527

8.03

10.24

1.35

1.39

Inferred

 7,072,315

8.82

10.55

1.20

1.57

San Jorge

Measured

 478,691

12.85

19.29

1.42

3.07

Indicated

 721,429

13.61

20.52

1.25

3.35

Measured + Indicated

 1,200,120

13.31

20.03

1.32

3.24

Inferred

 3,895,089

13.09

11.34

0.68

2.41

1021

Inferred

 3,291,937

6.71

13.58

1.77

2.65

Sam

Inferred

 599,392

12.78

6.99

2.96

0.93

 

The total Mineral Resource at Florida Canyon is shown in Table 11‑11.

 

Table 11‑11 Florida Canyon Total Mineral Resources

 

Classification

Sum of Tonnes

Zn %

Ag g/t

Pb %

Fe %

Measured

 806,945

11.32

15.42

1.39

2.44

Indicated

 1,634,702

10.28

14.87

1.31

2.23

Measured + Indicated

 2,441,647

10.62

15.05

1.33

2.30

Inferred

 14,858,733

9.63

11.28

1.26

2.00

 

Mineral Resources are not Mineral Reserves and have not been demonstrated to have economic viability. There is no certainty that the Mineral Resource will be converted to Mineral Reserves. The quantity and grade or quality is an estimate and is rounded to reflect the fact that it is an approximation. Quantities may not sum due to rounding.

 

 

·

CIM (2014) standards for mineral resources were followed.

 

·

The effective date of the Mineral Resource Estimate is February 1st, 2021.

 

·

The mineral resources are reported using a cutoff of US $41.40/t NSR for the sub-level, US $42.93/t for the cut and fill, and US $40.61/t for the room and pillar areas of the mine.

 

·

The minimum thickness was 3 m for sub-levels in cut and fill, and 4 m for stopes and pillars.

 

·

Mineral resources are reported exclusive of mineral reserves.

 

·

Mineral resources are not mineral reserves and have not demonstrated economic feasibility.

 

·

Numbers may not sum correctly due to rounding.

 

Estimates for mineral resources are based on drill results received up to 30 October 2020, with 545 holes and a total length of 136,758.15 m stope shapes for support of economic potential were developed using the stope optimizer tool of Deswik (DSO).

 

 

 

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12 Mineral Reserve Estimate

 

This section does not apply because the Report does not include Mineral Reserves.

 

 

 

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13 Mining Methods

 

SRK completed a 2017 Preliminary Economic Assessment Florida Canyon Zinc Project, Amazonas Department, Peru with Effective Date: July 13, 2017 and Report Date: August 3, 2017. This report was contracted by and supplied to Gustavson by Solitario Zinc. The 2021 TRS as described in this report does not have a negative impact on or otherwise adversely affect the mineral resource inventory that formed the basis of the 2017 PEA. The Inferred Mineral Resource estimate was increased by extending the known mineralized bodies. The results and conclusions of the 2017 PEA are discussed in Section 21.

 

 

 

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14 Processing and Recovery Methods

 

SRK completed a 2017 Preliminary Economic Assessment Florida Canyon Zinc Project, Amazonas Department, Peru with Effective Date: July 13, 2017 and Report Date: August 3, 2017. The 2021 Mineral Resource update as described in this report does not have a negative impact on or otherwise adversely affect the mineral resource inventory that formed the basis of the 2017 PEA. In general, the mineralogy of the newly delineated resource is predominantly more sulfides than the resource considered in the 2017 report, which may simplify flotation processing. The results and conclusions of the 2017 PEA are discussed in Section 21.

 

 

 

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15 Project Infrastructure

 

SRK completed a 2017 Preliminary Economic Assessment Florida Canyon Zinc Project, Amazonas Department, Peru with Effective Date: July 13, 2017 and Report Date: August 3, 2017. The 2021 TRER update as described in this report does not have a negative impact on or otherwise adversely affect the mineral resource inventory that formed the basis of the 2017 PEA. As the additional resources estimated are extensions of previously known bodies, and the estimated production rate has not changed, the infrastructure is expected to be similar to that in the 2017 report. The results and conclusions of the 2017 PEA are discussed in Section 21.

 

 

 

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16 Market Studies

 

No specific market study has been conducted for this study. Lead and zinc are publicly traded and for this mineral resource estimate the market prices when the estimate was completed in December 2020, have been used. Gustavson believes that since the two metals have limited volatility, that this adequately supports an analysis of potential for eventual economic extraction.

 

16.1 Contracts and Status

 

The Florida Canyon Project is a green field lead-zinc deposit that currently has no contracts that cover the sales of the projected lead and zinc concentrate production.

 

 

 

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17 Environmental Studies, Permitting and Social or Community Impact

 

17.1 Required Permits and Status

 

The 2021 Mineral Resource update as described in this report does not have a negative impact on or otherwise adversely affect the mineral resource inventory that formed the basis of the 2017 PEA. In general, the planned operation and infrastructure is similar to that considered in the 2017 report and environmental impacts should be similar. The results and conclusions of the 2017 PEA are still considered current and therefore have been carried over for this Report.

 

17.1.1 Required Exploration Permits and Status

 

Environmental permits for mineral exploration programs are divided into two classes. Class I permits allow construction and drilling for up to 20 platforms with a maximum disturbance of 10 ha. A Class II permit provides for more than 20 drill locations or for a disturbance area of greater than 10 ha.

 

Class I permits require little more than a notification process for approval. Class II drilling permits require an environmental impact declaration (DIA), a permit for harvesting trees (if applicable), an archeological survey report (CIRA), a water use permit (ALA) and a Closure Plan.

 

Nexa has previously filed applications for and received Class II permits for various phases of the Project and has filed and received the required associated permits. The 2017 review of existing exploration permit status indicates that only the archeological permits and the latest tree harvesting permit are still valid.

 

During exploration, Nexa has developed a Social Management Plan with several programs ongoing in the community including:

 

 

·

Communication, Information and Coordination Program with Residents;

 

·

Attention to Concern, Claims and Conflict Resolution Program;

 

·

Support Program for Participatory Environmental Monitoring and Information Workshops;

 

·

Recruitment and Training Program for Local Labor;

 

·

Support Program for Sustainable Socioeconomic Development; and

 

·

Community Support Program in Education and Training.

 

Past exploration programs have been permitted by approval of Class II permits and an Environmental Impact Assessment (EIA) administered under and approved by the Peru Ministry of Energy and Mines. The current exploration program is permitted by the Fourth Modification of the EIA which has enabled surface drilling and underground development at the Florida Canyon deposit within an area of approximately ten square kilometers. In addition to permitted drilling at Florida Canyon itself, the area known as Florida Sur (South Florida) is planned for surface drilling in 2024 under the Fourth Modification as shown in Figure 17‑1.

 

 

 

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Figure 17‑1 Florida Canyon Expanded Exploration Footprint

 

A Fifth Modification of the EIA will be submitted in mid-2022 to greatly enlarge the permitted area for surface drilling and permit the construction of a second underground exploration drift in the northern part of the property to allow more closely spaced underground drilling. The proposed modified area of exploration will encompass approximately 25 square kilometers and proposes the area for approximately ninety new surface drill sites. This will enable testing of newly identified outcropping mineralization to the south, southeast and east of Florida Canyon in the same host rock as current resources as shown on Figure 17‑2. Figure 17‑3 illustrates the geology in cross section showing subsurface mineralization at Florida Canyon and the interpreted location of the favorable horizon that hosts mineralization at Florida.

 

 

 

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Figure 17‑2 Florida Canyon Proposed Exploration

 

 

 Figure 17‑3 Florida Canyon Long Section

 

 

 

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17.1.2 Required Mining Permits

 

Permitting requirements for mining include an Estudio de Impacto Ambiental (EIA) that describes in detail the mining plan and evaluates the impacts of the plan on environmental and social attributes of the property. Baseline studies include air quality, surface and groundwater quality, flora and fauna surveys, archeological surveys, and a study of the social conditions of the immediate property and an area of interest that includes local communities. Many of the baseline studies required for mining have been completed by Nexa. Public meetings are required in order that local community members can learn about and comment on the proposed operation. Social outreach has been clearly demonstrated during Nexa’s exploration efforts as described above.

 

Specific authorizations, permits and licenses required for future mining include:

 

 

·

EIA (as modified during the mine life);

 

·

Mine Closure Plan and Final Mine Closure Plan within two years of end of operation;

 

·

Certificate of Nonexistence of Archaeological Remains;

 

·

Water Use License (groundwater and/or surface water);

 

·

Water construction authorization;

 

·

Sewage authorization;

 

·

Drinking water treatment facility license;

 

·

Explosives use license and explosives storage licenses;

 

·

Controlled chemicals certificate;

 

·

Beneficiation concession;

 

·

Mining authorization;

 

·

Closure bonding; and

 

·

Environmental Management Plan approval.

 

Information on environmental monitoring was limited in the SRK document review. Nevertheless, the need for additional monitoring in at least one dry and one wet period will be required for the EIA including terrestrial and aquatic fauna and flora and groundwater level and quality.

 

17.2 Environmental Monitoring Results

 

Environmental monitoring has been performed per the requirements to obtain the exploration permits, including the variables listed in the Table 17‑1.

 

 

 

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Table 17‑1: Environmental Monitoring During Mining Exploration

 

Factor

Legal Norm

Variables

Frequency

Surface water quality (14 to 18 monitoring stations)

Environmental standards for surface water quality as to D.S. Nº 002-2008-MINAM

Temperature,

Conductivity,

pH,

Total Suspended Solids (TSS),

Oils and Grease,

Cyanide – Total,

Arsenic,

Cadmium,

Chromium VI,

Copper,

Iron,

Lead,

Mercury,

Zinc,

Sulphur,

Nitrates,

Phenols

Dissolved oxygen

thermotolerant coliforms

total coliforms

Quarterly

Air quality (4 to 5 monitoring stations)

Environmental standards for air quality:

PM10, NO2, CO and O3 as to D.S. Nº 074-2001-PCM

PM2,5 and SO2 as to D.S. N° 003-2008-MINAM

lead in PM10, D.S. Nº 085-2003-PCM

PM10-PM2.5-lead in PM 10- arsenic in PM10- gases.

Quarterly

Noice (2 monitoring stations)

D.S. Nº 085-2003-PCM

Sound pressure

Quarterly

Terrestrial fauna and flora

D.S. Nº 004-2014

IUCN 2014

CITES

various

variable

Soil quality

Environmental standards for soil quality, D.S. N°002-2013 MINAM

As, Ba, Cd,

Hg, Free CN

variable

 

SRK, 2017

 

 

 

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Information that SRK was able to review in the database was limited. Nevertheless, the need for additional monitoring in at least one dry and one wet period will be required for the EIA-d including terrestrial and aquatic fauna and flora and groundwater level and quality.

 

17.3 Groundwater

 

Groundwater has been studied by Hydro-Geo Consultores (2010) and Klohn Crippen Berger (2013). The mine is in a high rainfall environment. Infiltration of surface water persists to approximately 50 m depth and recharges groundwater via structural pathways and interconnected karst features in dolomitized and de-dolomitized carbonate stratigraphy. The potentiometric surface has been determined by a series of piezometers. This groundwater surface follows the south-southwest flow direction of Florida Canyon and daylights at the river level in the canyon. Most of the planned mining of the flat mantos will occur above the water table. Steeper zones of mineralization, such as San Jorge and Sam will occur below the water table as will parts of the Karen Milagros mantos to the north. Local inflows may be encountered when crossing faults or intercepting karst features.

 

Impact to groundwater is expected to be minimal as underground surface exposures are minor and exposed sulfides are not acid generating. There are no groundwater wells required for processing or potable water supply. These needs will be met by surface water available from nearby Tesoro Creek.

 

17.4 Environmental Issues

 

The proposed underground mining operation is expected to have a small disturbance footprint compared to other mining methods. Waste rock from underground mining will be crushed and conveyed to the tailing storage facility (TSF) for use in construction of the tailings embankment. A small percentage of the waste rock will be used as underground backfill. As a result, there will be little, or no surface area disturbance related to waste rock placement.

 

Waste rock generated from the mine and used in the tailings facility construction is composed of limestone and dolomite with a high neutralizing capacity. Most waste rock has very low sulfide content so the potential for acid generation and metals leach is judged to be low. Nevertheless, waste rock characterization study is recommended for future work.

 

The primary area of surface disturbance is related to tailings placement. As shown in Figure 18-3, the final tailings placement will have an area of 23.5 ha. Tailings also require geotechnical and geochemical stabilization during placement and closure.

 

Water for processing is expected to be collected from surface streams and reclaimed from filtered tailings. There will be no need for groundwater consumption in the current processing plan. Groundwater will be intersected in deeper reaches of the underground mine. Most of this water will be used for dust suppression or piped to the mill to support comminution and flotation.

 

 

 

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17.5 Mine Closure

 

A conceptual closure plan was developed to facilitate the calculation of the reclamation and closure costs to include in the PEA economic analysis. Closure designs and costs are based primarily on closure actions typically performed at similar sites.

 

17.5.1 Post Mining Land Use

 

Closure Design Objectives for Mine Tailings

 

 

·

Promote positive and controlled drainage off the tailings surface and away from the dam face;

 

·

Maintain an erosional and geotechnically stable landform;

 

·

Promote native vegetation growth on the tailings surface, and

 

·

Create a closed facility that minimizes long-term monitoring and maintenance.

 

17.5.2 Portals and Vents

 

Closure Design Objectives

 

 

·

Prevent public access to underground workings.

 

·

Maintain an erosional and geotechnically stable landform.

 

·

Create a landform that visually approximates the surrounding landscape.

 

·

Promote native vegetation growth on the disturbed surface.

 

·

Create a closed facility that minimizes long-term monitoring and maintenance.

 

Closure Tasks

 

 

·

Portals and vents will be decommissioned by filling with waste rock or capping with a concrete bulkhead. Disturbed areas will be revegetated with native species.

 

17.5.3 Buildings and Infrastructure

 

Closure Design Objectives

 

 

·

Remove any facilities not needed for future use.

 

·

Maintain an erosional and geotechnically stable landform.

 

·

Create a landform that visually approximates the surrounding landscape.

 

·

Promote native vegetation growth on disturbed surfaces.

 

·

Create a closed facility that minimizes long-term monitoring and maintenance.

 

Closure Tasks

 

 

·

Buildings with no identified post-mining land use will be demolished and the debris will be hauled to the permitted landfill onsite.

 

·

Mill and conveyor parts with useful remaining life will be removed from the site and sold. The rest of the structure will be demolished, and recyclable materials hauled offsite and the rest hauled to the permitted landfill onsite.

 

 

 

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17.5.4 Roads and Miscellaneous Disturbance

 

Closure Design Objectives

 

 

·

Maintain an erosional and geotechnically stable landform.

 

·

Create a landform that visually approximates the surrounding landscape.

 

·

Promote native vegetation growth on the disturbed surface.

 

·

Create a closed facility that minimizes long-term monitoring and maintenance.

 

Closure Tasks

 

 

·

Roads not needed for an identified post-mining land use will be regraded to approximately original contours and revegetated with native plant species.

 

·

The main access roads and some internal mine roads may remain. Roads might be reconstructed to be smaller in width and include water control features to prevent erosion of the roadbed.

 

·

Miscellaneous disturbance around other facilities will be regraded to approximately original contours and revegetated with native plant species.

 

17.5.5 Tailings Facility

 

Closure Design Objectives

 

 

·

Promote positive and controlled drainage off the tailings surface and away from the dam face.

 

·

Maintain an erosional and geotechnically stable landform.

 

·

Promote native vegetation growth on the tailings surface.

 

·

Create a closed facility that minimizes long-term monitoring and maintenance.

 

Closure Tasks

 

The tailings dam face will be constructed of waste rock at either 2:1H:V or 3:1 H:V. As long as stormwater is directed away from the dam face and the slopes are not changed from design the facility will be erosionally and geotechnically stable. No further reclamation will be performed. Tailings operations and closure involve:

 

 

·

During operations, at the end of mine-life, deposit tails such that the surface slopes up to 1% toward the center of the tailings;

 

·

Place 0.5 m of growth media on the tailings surface;

 

·

Construct a stormwater channel in the center of the tailings to convey water to the southwest corner upstream from the dam into native ground;

 

·

Construct a stormwater channel in native ground from the southwest corner of the tailings surface to spill into the natural drainage to the south;

 

·

Decommission the stormwater drain on the north side of the tailings facility and direct flow onto the tailings surface to be captured by the center stormwater ditch; and

 

·

Revegetate the tailings surface.

 

 

 

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17.6 Post Closure Plans

 

Post mining land use will approximate a natural park setting which could be used for livestock grazing and visually appears like the surrounding landscape. Generally, disturbed areas will be physically reclaimed and revegetated to approximate surrounding landforms. Disturbed areas will also be revegetated with native species. Some facilities may remain in place to support future access for exploration and/or further mineral development.

 

SRK recommends in future studies to design the tailings surface and spillway stormwater structure and evaluate options to reduce or eliminate the long-term obligation for monitoring and maintenance.

 

17.7 Reclamation and Closure Cost Estimate

 

Closure costs were calculated using the Standardized Reclamation Cost Estimator (SRCE) 2.0. The SRCE is a spreadsheet model that uses a first principles approach to calculate lengths, areas and volumes of common mine facilities and apply productivities for common mine equipment to estimate the time required. Unit costs for labor, materials and equipment are then applied to estimate a total cost.

 

Unit costs were as follows:

 

 

·

Labor costs were factored from Nevada labor used by the Nevada Division of Environmental Protection (NDEP) for financial surety by multiplying by 40%.

 

·

Equipment and material costs were used without factoring from the NDEP costs used for financial surety; and

 

·

A fuel cost of US$1.24 per liter was used from the PEA documentation.

 

Closure cost includes provision for General and Administrative, closure planning and engineering and staff oversite during the active closure. Provision is also included for monitoring and maintenance.

 

The estimated cost to close the mine is US$4,920,000 which will be spent over the two years following the end of mining. An additional long-term monitoring and maintenance expense of US$830,000 will be required spread over 50 years starting in 2034. The total estimated closure cost is US$5,750,000.

 

17.8 Post-Performance or Reclamations Bonds

 

Reclamation bonds have not yet been defined or posted for the project.

 

 

 

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17.9 Social and Community

 

From the social point of view, the Florida Canyon Project is developed on lands of the Community of Shipasbamba, located in the district of the same name, in the province of Bongará in the department of Amazonas. This community was registered in the Directory of Peasant Communities by R.S. 49 on December 17, 1959 (220 families).

 

To develop its exploration work, Nexa – Cajamarquilla S.A., has signed with the CC of Shipasbamba, biannual agreements from 2009 to 2017 for the use of 12,500 ha. In summary, Nexa - Cajamarquilla has performed the following actions with the:

 

Government

 

 

·

Comply with the requirements demanded by the sector to obtain the necessary environmental permits to carry out its exploration activities.

 

·

In this context, it has developed several Citizen Participation Mechanisms in which the population has been informed about the objectives and scope of the Project and the type of relationship with the community that will be developed through its Community relations office.

 

Community

 

 

·

Agreements for the use of Surface Lands

 

 

·

From the point of view of social responsibility Nexa - Cajamarquilla, in order to be able to operate in the area in harmony with the local inhabitants, has signed bi-annual agreements for the Use of Land;

 

·

These establish the commitments and counter-commitments to which both parties are bound (company and community);

 

·

The last agreement signed by both parties expired in July 2017, and

 

·

The revised documents state that the necessary steps were being taken to sign the Convention for the period 2016-2018.

  

 

·

Community Relations:

  

 

·

Nexa - Cajamarquilla has developed a Social Management Plan with several Programs, on which detailed information is not available. It is assumed, from the photos included in a review of the company’s activities that the programs are developing normally and are accepted by the community. These Programs are:

 

·

Social Management Plan and Community Relations;

 

·

Communication, Information and Coordination Program with Residents;

 

·

Attention to Concern, Claims and Conflict Resolution Program;

 

·

Support Program for Participatory Environmental Monitoring and Information Workshops;

 

·

Recruitment and Training Program for Local Labor;

 

·

Support Program for Sustainable Socioeconomic Development; and

 

·

Community Support Program in Education and Training.

 

 

 

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18 Capital and Operating Costs

 

SRK completed a 2017 Preliminary Economic Assessment Florida Canyon Zinc Project, Amazonas Department, Peru with Effective Date: July 13, 2017 and Report Date: August 3, 2017. The 2021 Mineral Resource update as described in this report does not have a negative impact on or otherwise adversely affect the mineral resource inventory that formed the basis of the 2017 PEA. In general, the planned operation and infrastructure have not changed as compared to the 2017 report. There was insufficient work performed in the 2021 Mineral Resource Estimate to re-estimate the costs, since the balance of the mineralogy has shifted to a dominant sulfide mineral resource. These inputs will need to be updated in the future however current commodities pricing is generally above the estimates used in the 2017 PEA. Operating and capital cost estimates from 2017 are still appropriate at a PEA level of study and are summarized in Section 21.

 

 

 

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19 Economic Analysis

 

SRK completed a 2017 Preliminary Economic Assessment Florida Canyon Zinc Project, Amazonas Department, Peru with Effective Date: July 13, 2017 and Report Date: August 3, 2017. The 2021 Mineral Resource update as described in this report does not have a negative impact on or otherwise adversely affect the mineral resource inventory that formed the basis of the 2017 PEA. The planned operation is similar to that considered in the 2017 report, although the balance of the mineralogy has shifted to a dominant sulfide mineral resource. There was insufficient work performed in the 2021 Mineral Resource Estimate to re-estimate the costs, though a review of operating and capital cost estimates by Gustavson shows that they are still appropriate at a PEA level of study. These inputs will need to be updated in the future however current commodities pricing is generally above the estimates used in the 2017 PEA. The results and conclusions of the 2017 PEA are summarized in Section 21.

 

 

 

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20 Adjacent Properties

 

The Minera Bongará concessions are surrounded by concessions held by Minera Chambará. Minera Chambará, as discussed in Section 4, is also a joint venture between Solitario and Nexa. The mineralized area as currently drilled is well within the limits of the Bongará concessions.

 

 

 

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21 Other Relevant Data and Information

 

The 2017 PEA report, prepared for Votrantim by SRK for the project, included detailed optimization, design, scheduling, and economic analysis. The results of this study are summarized below.

 

21.1 Mining Methods

 

21.1.1 Proposed Mining Methods

 

Regions within the deposit are to be mined using three underground techniques:

 

 

·

Sublevel Stoping (Longhole Stoping) for the steeply dipping bodies identified as F1 and SAM.

 

·

Mechanized Cut and Fill for the moderate dipping bodies.

 

·

Drift and Fill for the flat to moderate dipping bodies where more than one cut is required due to the width of the zone. Primary cuts are back filled with cemented paste or rock fill and secondaries are mined and backfilled with unconsolidated waste rock or paste.

 

The geotechnical characterization work for the project was performed by Klohn Crippen Berger (KCB) and documented in a geotechnical report dated October 2013 (KCB, 2013a).

 

21.1.1.1 Cut and Fill

 

KCB recommended 35m length and 2.5 to 3.0m wide and high cut dimensions with 16m sill pillars every 35m vertically. SRK has recommended 100m vertical distance between sill pillars based on paste fill and hanging wall competency.

 

21.1.1.2 Sublevel Stoping

 

Table 21‑1 lists the recommended stope dimensions for varying drift sizes. These are appropriate at a PEA level. Detailed stope sequencing and stress analysis is recommended for a feasibility level study and final mine design. A 30m crown pillar has been used in designs to ensure that stope openings approach the surface. Further study should be done to determine if economic materials in the crown pillar could be recovered.

 

 

 

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Table 21‑1: Proposed Stope Dimensions

 

Sizes

w x h (m)

Mz Zone

HR

Width

(m)

Height

(m)

Length

(m)

Area

(m2)

Perimeter

(m)

Maximum Height

Allowed (m)

2.5 x 2.5

Wall

16

6.5

300

1,950

613

36

Back

13

2.5

6.5

16.25

18

NA

2.5 x 3.0

Wall

16

7

300

2,100

614

36

Back

13

3

7

21

20

NA

3.0 x 2.5

Wall

16

6.5

300

1,950

613

36

Back

13

2.5

6.5

16.25

18

NA

3.0 x 3.0

Wall

16

7

300

2,100

614

36

Back

13

3

7

21

20

NA

 

Source: KCB (2014a)

 

Sill pillars are planned at 35m interval in shallow dipping areas (less than 45°) and every 96m in steeply dipping areas. Current assumption is that 50% of sill pillars can be recovered on retreat. Further optimization should be done to determine optimal backfill material, stope sequencing and placement of pillars.

 

Based on experience in the exploration drift and rock mass classification, SRK has determined that 75-90% of the ground will not need ground support. The remaining areas are likely to need mesh, bolts, and 50mm of shotcrete. Friction bolts may be used in short term drifts while long term drifts would have grouted bolts.

 

21.1.2 Optimization Parameters

 

SRK used the Alford Stope Optimizer in Vulcan Mining Software to create its mining shapes. Block sizes are 6m x 6m x 3m and evaluated on their Net Smelter Return (NSR).

 

Table 21‑2: Expected Processing Recoveries

 

Parameter

Alteration State

Sulfide

Mixed

Oxide

ZnOx/ZnT Ratio

<= 0.2

0.2 to 0.8

>= 0.8

Zn Recovery

93%

(-0.8833 (ZnOx/ZnT) + 1.1067) *100

40%

Pb Recovery

84%

(-0.7333 (ZnOx/ZnT) + 0.9867) *100

40%

Ag Recovery

56%

(-0.4 (ZnOx/ZnT) + 0.64) *100

32%

 

Source: SRK, 2017

 

Table 21‑3: NSR Calculation Parameters for Stope Optimization

 

Parameter

Unit

Value

Metal Prices

Zn price

US$ / lb Zn

$1.20

Pb price

US$ / oz Ag

$1.00

Ag price

US$ / oz Ag

$17.50

Recovery to Concentrate

Zn

%

40% to 93%

Pb

%

40% to 84%

Ag

%

32% to 56%

Concentrate Grade

Zn

%

50%

Pb

%

50%

Moisture Content

%

9%

Transportation and Treatment/Refining Charges

Transportation Charge

US$/t concentrate

$70.00

Zn treatment charge

US$/t concentrate

$115.00

Pb treatment charge

US$/t concentrate

$100.00

Zn refining charge

US$/lb Zn

$0.115

Pb refining charge

US$/lb Pb

$0.100

 

Source: SRK, 2017

 

 

 

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Based on a 2,500 tpd operation, SRK used the following for its operating costs

 

Table 21‑4: Operating Costs Used for Determining Potential Mining Shapes

 

Item

Cost (US$/t)

Longhole

Cost (US$/t)

Drift and Fill/

Cut and Fill

Mining

24.40

25.93

Processing

12.00

12.00

G&A

5.00

5.00

Total

$41.40

$42.93

 

Source: SRK, 2017

 

NSR values were calculated using the parameters described herein for material classified as Measured, Indicated or Inferred. All other blocks are assumed to be waste with NSR and grade values of zero. Isolated blocks were removed as well as a small number of blocks were also removed in manto areas near the F1 longhole blocks to mitigate the impacts of mining induced stresses between the zones.

 

Table 21‑5: Stope Optimization Parameters for Base Case Analysis

 

Mining Method

Longhole

Drift and Fill/

Cut and Fill

Minimum Stope Width (m)

3

3

Minimum Waste Pillar Width (m)

3

3

Stope Height (m)

16

3

Cut-off (NSR)

US$41.40

US$42.93

 

Source: SRK, 2017

 

A mining recovery of 90% is assumed for longhole areas and 95% for drift and fill and cut and fill areas. Additional dilution beyond that internal to the mining shapes is not assumed.

 

NSR is calculated using variable recoveries based on sulfide/oxide ratios (recovery ranging from 32%-93%), a Zn price of US$1.20/lb, a Pb price of US$1.00/lb, an Ag price of US$17.50/oz. The transportation charge is US$70.00/t conc, Zn treatment charge of US$115/t conc, Pb treatment charge of US$100/t conc, Zn refining charge of US$0.115/lb Zn, and Pb refining charge of US$0.1/lb Pb. These factors were used for mine planning in the PEA and are not representative of the current mineral resource model.

 

ZnEq estimate is based on a NSR value of US$19.62 per 1% Zn. The US$19.62 is calculated using a Zn price of US$1.20/lb, a Pb price of US$1.00/lb, an Ag price of US$17.50/oz. The ZnEq also includes TC/RC and transportation costs and assumes an average Zn recovery of 78.15% which differs somewhat from that presented in the economic model. An example of the NSR to ZnEq calculation is (148.16/19.62)/0.7815

 

 

 

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Large karst caverns have been encountered during the excavation of the San Jorge adit, and karstic features have been observed in drilling. Additional geotechnical and hydrogeological information and study is required to better understand the potential impact on mining and risk mitigation measures that may be required to ensure a safe working environment.

 

The tonnes and grade of the resource material contained within the mining blocks from the PEA, adjusted by recovery and dilution was presented in the 2017 PEA, and consists of a total of 11.2 Mt with an average grade of 8.34% Zn, 0.90% Pb, and 11.3 g/t Ag, and is made up of Measured, Indicated, and Inferred material. Estimated average dilution, processing recoveries and the ZnOx/ZnT ratio is also provided. Average process recovery and dilution for the mine plan resource are shown in Table 21‑6

 

Table 21‑6: Mine Plan Resource Average Process Recovery

 

 

 

Process Recovery

ZnOx/ZnT Ratio

Dilution

Ag (%)

Pb (%)

Zn (%)

Mine Plan Resource

51.7

74.3

79.8

0.26

34%

 

The PEA is preliminary in nature, that it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

 

21.1.3 Development Layout

 

Access is through 3 main portals with an additional portal for ventilation. The mine design assumptions are listed in Table 21‑7

 

Table 21‑7: Development Design Assumptions

 

Parameter

Value

Maximum Ramp Gradient (Primary Ramps)

12%

Maximum Gradient (Stope Access, Attack Ramps)

15%

Primary Development Dimensions (w x h)

4 m x 5 m

Secondary Development Dimensions (w x h)

4 m x 4 m

Primary Ventilation Raise (diameter)

4 m

Ventilation Raise Between Levels (diameter)

3 m

Ore Pass (diameter)

2 m

 

Source: SRK, 2017

 

Source: SRK, 2017

  

 

 

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Source: SRK, 2017

 

Figure 21‑1: Plan View of Mining Blocks and Development Layout

 

21.1.4 Waste

 

Development waste excavated during the two-year pre-production period will be hauled to surface and used as construction materials. Following this waste will be placed as backfill underground. Future studies should be done to determine acid generating potential of these materials.

 

A mix of material will be used to backfill stopes including cemented paste tailings, cemented rockfill, and RoM development waste. The cement content will vary based on the type of waste and where it will be placed.

 

 

·

Primary paste fill cement content: 6% by weight;

 

·

Primary rock fill cement content: 4% by weight; and

 

·

Secondary paste fill cement content (to prevent liquefaction): 2% by weight.

 

 

 

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21.1.5 Mine Production

 

A production rate of 2,500 t/d has been selected to mine 912,500 mineralized tonnes per year. This has not been updated for the new mineral resource estimate.

 

21.2 Processing and Recovery Methods

 

21.2.1 Processing Projections and Methods

 

The mill will process 2,500 t/d of fresh mineralized material, and produce approximately 287 t of zinc concentrate grading 50% Zn, 1% Pb, and 0.6 g/t Ag and approximately 46 t of lead concentrate grading 50% Pb, 8.4 g/t Ag, and 6% Zn.

 

The flotation process will include two multi-stage flotation circuits, the first will produce a lead concentrate. The second multi-stage flotation circuit, the zinc circuit, receives tails from the lead circuit to produce a zinc concentrate. Both final concentrates will be transferred to its respective thickeners and then filtered (10 m2 filtration area for lead concentrate, and 60 m2 filtration area for zinc concentrate) to approximately 9% moisture before being trucked offsite to smelters.

 

Tailings from the flotation plant will be thickened to approximately 50% solids by weight. A fraction of the tails representing approximately 60% of the solids will be piped to a filtration plant (600 m2 tails filtration area) located by the tailings storage area and then dry stacked at a moisture of approximately 17% by weight. Water recovered in the tails filter will be recycled to the process plant. The remaining 40% of the solid’s stream will be transferred to a backfill plant to be used in the underground operation.

 

The proposed process flow sheet for the 2017 Florida Canyon PEA is shown in Figure 21‑2

 

21.2.2 Consumables Requirement

 

The power requirements for the projected milling operation are estimated at maximum 3.5 MW. Power for milling operations will be supplied by a third-party as line power at an estimated cost of US$0.084/kWh.

 

The water requirement for the mill at a capacity of 2,500 t/d is estimated at maximum 20 liters per second. Water for processing will be acquired from surface water sources and as recycled water from tailings dewatering operations.

 

All the consumables will be supplied by road from Lima (Callao) and stored in the mill complex. It is estimated that a supply of 5 days of consumption will maintain a continuous supply to the operation. Typical flotation reagents include: Lime, NaCN, Zn Sulfate, Sodium Isopropyl Xanthate, Aerophine 3418, MIBC, Cu Sulfate, Sodium Isopropyl Xanthate (Z11), MIBC, and flocculants. Grinding media (steel balls) could arrive by sea via Callao, or on trucks from northern Chile.

 

 

 

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Figure 21‑2: Florida Canyon Proposed Process Flow Sheet

 

Source: SRK, 2017

 

 

 

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21.3 Project Infrastructure

 

21.3.1 Infrastructure and Logistics Requirements

 

Florida Canyon is a greenfield site with minimal infrastructure currently available. The operation is in north central Peru approximately 700 km north of the (capital, Lima. The Project is in a sparsely populated area approximately 39 km northwest of Pedro Luis Gallo (population approximately 3,000), the largest town with any infrastructure near the Project. There are several smaller communities located nearer to the proposed operation, but they have no developed infrastructure to support the project. A camp for employees and contractors will be required.

 

Access to the site is by paved road from Chiclayo (population approximately 740,000) located on the Pacific coast approximately 380 km to the west of Pedro Ruiz Gallo. A dirt road connects Pedro Ruiz with the district capitol of Shipasbamba where the project office and core storage facility is located. A 26 km newly constructed road connects Shipasbamba to the project area. This existing section of road will require upgrade to support construction and Project logistics including concentrate transport. Approximately 24 km of new road at the site will be required to allow access to the facilities and infrastructure. Figure 21‑3 shows the planned roads in the highlighted area near the Project. New road construction is in fairly rugged topography and in an area of high rainfall that will require construction during the drier months to be efficient.

 

 

 

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Source: SRK, 2017

 

Figure 21‑3: Florida Canyon Existing and New Road Construction

 

21.3.1.1 Site Water Management

 

The operation will require water for use for processing, mining, dust suppression and potable consumption. The processing facility will utilize recycled water from the tailings facility and rainfall shed from the tailings for the processing needs. It is anticipated that there will be some ground water that will be encountered in the mine and captured in sumps and decantation basins for mine water needs.

 

 

 

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Tesoro Creek, a small local drainage, has been used for domestic water supply by nearby residents. Clean water from this creek may be used for make-up process water, for fire suppression and for domestic requirements. It will be piped by gravity from the creek to a water storage tank. A small treatment plant will be utilized for potable water needs for the Project camp and other support areas.

 

Surface water control is discussed in the tailings Section 21.3.3.

 

21.3.1.2 Project Facilities

 

The project support infrastructure is shown in Figure 21‑4. The facilities include the processing plant and associated infrastructure, mining infrastructure with portals, vent holes, road access to portals, tailings storage area, and support infrastructure including fuel storage, security, camp, power supply and distribution, and water supply and storage. Waste rock will be consumed in the construction of the tailings embankment so no separate waste rock storage is required.

 

The production-related project elements include a mine office, mine dry, and mine maintenance shops near the plant location to support the underground operations. A backfill plant to supply needs for paste and cemented rock fill is anticipated. A small, cemented rock fill plant for two production periods when cemented rock fill is required for secondary stopes is included.

 

The infrastructure at the process facilities includes the plant, mill feed stockpile, secondary crusher, supply conveyors, primary crushers at the portals and an office/maintenance building. The plant facilities are discussed in Section 21.2.

 

The Project requires a camp to support the operation as it is remote. A 400-person camp with a cafeteria and recreation center will be required. Additional support facilities include a rescue and first aid building, warehouse, health/safety/environmental office, security gate house, truck scale, truck wash, laboratory, septic, and incinerator system. Two 50,000-liter fuel tanks and associated pump facilities will store fuel for use by the Project.

 

 

 

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Source: SRK, 2017

 

Figure 21‑4: Florida Canyon Site General Arrangement

 

FLORIDA CANYON PROJECT

 

 

 

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21.3.1.3 Power Supply and Distribution

 

There is currently no substantive line power near the site. SRK considered a diesel-powered generator option for power supply. However, a third-party supplier, Energoret S.A.C, has a hydropower generation and transmission development project that will be located in close proximity to the mine. The Energoret system will generate 20 MW of power from a plant on a tributary to the Utcubamba River. Energoret indicates that half of the project, approximately 10 MW, has already been committed. The plant is designed to provide power to the city of Bagua Grande, west of their project, and to Pedro Ruiz to the east of the Project. Energoret indicates that it will invest in a transmission line to the Florida Canyon mine site and a substation on site. Their capital estimate is US$25 million.

 

 

 

 

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21.3.2 Project Logistics

 

The Project will generate both lead and zinc concentrates which will be shipped by 30 t over-the-road trucks to market.

 

SRK has considered shipping to the ports at Paita, Chiclayo (Pimental), and Lima (Callao) as well as direct shipping to Nexa’s Cajamarquilla Smelter near Lima. A high-level trade-off study of concentrate transportation was prepared by SRK considering truck haulage, capital cost for additional port and/or handling facilities, and ocean freight/handling charges. This study indicated that the direct shipping option to Cajamarquilla was most cost effective. Figure 21‑5 shows the locations of ports and the Cajamarquilla smelter.

 

 

Source: SRK, 2017

 

Figure 21‑5: Port and Smelter Locations

 

 

 

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21.3.3 Tailings Management

 

The tailings storage facility (TSF) is planned in the valley to the south of the process plant as shown in Figure 21‑4: Florida Canyon Site General Arrangement. The tailings will be filtered at the plant site to a “dry stack” condition (i.e. typical moisture content less than 20%). From the plant site, tailings will be transported to the TSF via overland conveyors.

 

An upstream diversion will be constructed to manage stormwater during operations and convey it downstream to be released beyond the toe of the dam. This diversion will consist of a 2 m deep and 5 m wide channel cut into native ground and lined with 300 mm rip rap.

 

21.4 Capital and Operating Costs

 

In the 2017 PEA SRK prepared an estimate of both capital and operating costs associated with the designed mineable resources production schedule. Gustavson has reviewed these and believes that they are sufficient for a determination of potential eventual economic extraction. Details these estimates of Capital Expenditure and Operating Expenditure are presented herein. All estimates are based on yearly inputs of physicals and all financial data is second quarter 2017 and currency is in U.S. dollars (US$), unless otherwise stated.

 

The use of “ore” in the summary of tables of this PEA is a relative mineable material estimated. Ore, by definition, can only be ascribed to economic mineralization supported by Mineral Reserves.

 

21.4.1 Capital Cost Estimates

 

The Florida Canyon Project is a green field lead-zinc deposit and the estimate of capital includes both an estimate of initial capital investment to install and commission the mine and a sustaining capital to maintain the equipment and expanding any supporting infrastructure necessary to continue running the project until the end of the projected production schedule. The estimate of capital was broken down into the following main areas:

 

 

·

Mining areas access development and vent raises;

 

·

Underground Mining Equipment;

 

·

Surface crushing and conveying systems;

 

·

Offsite Infrastructure;

 

·

Site Facilities;

 

·

Process Plant;

 

·

Power Supply;

 

·

Water Supply;

 

·

Backfill Infrastructure;

 

·

Cement Rockfill Infrastructure;

 

·

Tailings Storage Facility;

 

·

Owner’s Cost; and

 

·

Closure and Post-Closure Monitoring.

 

 

 

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The capital cost estimates developed for this study comprise the costs associated with the engineering, procurement, construction, and commissioning required for all items. The cost estimate was based SRK’s experience with similar projects installed in the region or estimates of cost specifically prepared for the project under a first principles basis. The work indicates that the project will require an initial capital of US$213.7 million and a sustaining capital of US$81.9 million Table 21‑8 summarizes the estimate of capital.

 

Table 21‑8: Florida Canyon Capital Estimate Summary

 

Description

Initial

(US$000’s)

Sustaining

(US$000’s)

LoM

(US$000’s)

Development

12,293

35,741

48,033

Vent Raises

686

672

1,358

Underground Mining Equipment

24,625

2,474

27,099

Surface Crushing & Conveying

1,430

0

1,430

Offsite Infrastructure

16,227

0

16,227

Site Facilities

14,697

0

14,697

Process Plant

60,000

0

60,000

Power Supply

2,472

0

2,472

Water Supply

250

0

250

Backfill Infrastructure

13,200

0

13,200

Cement Rockfill Infrastructure

200

0

200

Tailings Storage Facility

12,854

11,814

24,668

Owner’s

14,595

0

14,595

Contingencies

40,138

0

40,138

Sustaining Capital

0

26,272

26,272

Closure

0

4,920

4,920

Post-Closure Monitoring

0

830

830

Total Capital

$213,667

$82,722

$296,389

 

Source: SRK, 2017

 

21.4.1.1 Basis for Capital Cost Estimates

 

The cost associated with mining area access development and the construction of vent raises was based on the preparation of a mineable resources production schedule that included a design of meters of development and meters of vent raises, these were combined with the following unit costs to result in the cost estimate:

 

 

·

Development: US$1,500/m; and

 

·

Vent Raises: US$2,200/m.

 

These unit costs are based on data from comparable underground mines also located in Peru or other South American areas with similar mining conditions.

 

The process plant cost estimate is based on data from similar flotation plants with the same capacity and same region. This investigation resulted in an estimate of about US$60 million.

 

 

 

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The cost associated with the required surface crushing and conveying was based on required distances and elevation gain to cover. These include the movement of mineralized material from three mine portals to the plant feed area and some waste material that will be used to build the embankment for the tailings storage facility. This investigation resulted in an estimate of around US$1.4 million.

 

Offsite-infrastructure, site infrastructure, power supply, water supply and backfill infrastructure cost estimates were prepared based the required structures costs from comparable operations. It should be noted that this study assumes that a third-party is planning to build a hydro power plant that will provide power to the project. A company has approached Solitario to offer this option, including the construction of the transmission line and project substation. Error! Reference source not found. summarizes the basis of these cost estimates.

 

 

 

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Cement will be added to underground waste rock and used to fill designated primary fill areas; this will be done by underground installed facilities that are estimated to cost roughly US$200,000.

 

In 2017, SRK prepared a preliminary design for a dry stack tailings storage facility to contain all the filtered tailings generated by the lead and zinc concentrates production. The cost estimate included the preparation of a stage construction using borrow material from the underground mine and construction area. This resulted in a total cost of US$24.7 million, which is split US$12.9 million initial capital and US$11.8 million sustaining capital. The relevant section of this report contains more details about this tailings storage facility design.

 

Closure costs were estimated by SRK as US$4.9 million for the actual closure and about US$830,000 for post closure site monitoring. Details of this estimate can be found in the relevant section of this report.

 

Other capital cost estimates include the following:

 

 

·

Owner’s cost: Estimate of about 10% of initial capital, excluding development and vent raises;

 

·

Sustaining Capital: 2% of initial capital, excluding development, vent raises and owner’s costs; and

 

·

Contingencies: 25% contingencies were applied to initial capital, excluding development and vent raises and owner’s costs.

 

21.4.2 Operating Cost Estimates

 

SRK prepared the estimate of operating costs for the associated mineable resources production schedule. These costs were subdivided into the following categories:

 

 

·

Mining Operating Expenditure;

 

·

Processing Operating Expenditure; and

 

·

G&A Operating Expenditure.

 

The resulting LoM cost estimate is presented in Table 21‑9.

 

Table 21‑9: Florida Canyon Operating Costs Summary

 

Description

LoM

(US$000’s)

LoM

(US$/t-Ore)

LoM

(US$/lb-Zn)

Underground Mining

228,547

20.43

0.16

Process

144,063

12.88

0.10

G&A

39,153

3.50

0.03

Total Operating

411,764

36.81

0.29

 

Source: SRK, 2017

 

 

 

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21.4.2.1 Basis for Operating Cost Estimates

 

The prepared estimates that compose the operating costs consist of domestic and international services, equipment, labor, etc. Where required value added tax, freight, and duty were included

 

No specific work schedule has been defined for the mine, plant and site operations.

 

All of the operating cost estimates are based on the quantities associated with the production schedule, including run of mine, primary and secondary backfill, and plant feed.

 

Unit costs from similar projects in the same region or in the Americas, adjusted for labor and consumables differences, were used to estimate the LoM operating costs. All operating costs include supervision staff, operations labor, maintenance labor, consumables, electricity, fuels, lubricants, maintenance parts and any other operating expenditure identified by contributing engineers. The following unit costs were used to calculate the operating costs:

 

 

·

Underground Mining: US$ 15.30/t-RoM;

 

·

Primary Cement Rockfill: US$22.18/m3;

 

·

Primary Cement Pastefill: US$26.23/m3;

 

·

Secondary Cement Pastefill: US$18.13/m3; and

 

·

Processing: US$12.00/t-Feed.

 

General and Administration costs were considered as 10% of the other operating costs, which resulted in a unit rate of US$3.50/t-RoM.

 

21.5 Economic Analysis

 

The financial results presented here are based on annual inputs from the production schedule prepared by SRK. All financial data is second quarter 2017 and currency is in U.S. dollars (US$), unless otherwise stated.

 

21.5.1 External Factors

 

Florida Canyon does not hold contracts for the provision of its products. The costs and discounts associated with the sales of the products are based on recent information from similar operations. This study was prepared under the assumption that the project will sell lead concentrate and zinc concentrate. It was also considered that the lead concentrate also contains payable amounts of silver.

 

Assumed prices are based on current market spot prices. Table 21‑10 presents the prices used in the cashflow model, which were also used for mineable resource calculations.

 

 

 

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Table 21‑10: Florida Canyon Price Assumptions

 

Description

Value

Unit

Silver

16.50

US$/oz

Lead

1.00

US$/lb

Zinc

1.20

US$/lb

 

Source: Solitario, 2017

 

Treatment charges and net smelter returns (NSR) terms for each type of product are summarized in Table 21‑11.

 

Table 21‑11: Florida Canyon Net Smelter Return Terms

 

Description

Value

Units

Lead Concentrate

Treatment Charges

210.10

US$/t-conc.

Payable Lead

95.0%

No deducts

Silver Smelting & Refining Charges

1.50

US$/oz-Ag

Payable Silver

95.0%

No deducts

Zinc Concentrate

Treatment Charges

203.00

US$/t-conc.

Payable Zinc

85.0%

No deducts

 

Source: SRK, 2017

 

It was assumed that zinc concentrates will be trucked to the Cajamarquilla smelter owned by Nexa near Lima, Peru. Lead concentrates will be trucked to the Port of Callao near Lima and shipped overseas to a lead smelter. It was assumed that the concentrates will have an average moisture content of 8%. Table 21‑12 presents the calculated transportation costs considered for each product.

 

Table 21‑12: Florida Canyon Product Logistics Cost

 

Items

Value

Unit

Lead Concentrate

87.05

US$/t

Zinc Concentrate

51.08

US$/t

 

Source: SRK, 2017

 

21.5.2 Main Assumptions

 

Common prices for consumables, labor, fuel, lubricants and explosives were used by all engineering disciplines to derive capital and operating costs. Included in the labor costs are shift differentials, vacation rotations, all taxes and the payroll burdens. All currency is in U.S. dollars (US$) unless otherwise stated.

 

The pre-production period was estimated to be two years. This should be enough to develop access to mining areas, install and commission the plant and site infrastructure. Mine production is based on an average assumed LoM mine material movement of 2,358 t-ore/d (365 days/yr basis). The mine schedule does not include stockpiling as all blending of run of mine (RoM) is done in the mine. Table 21‑13 presents the LoM mine assumptions.

 

 

 

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Table 21‑13: Florida Canyon Mine Production Assumptions

 

Description

Value

Units

Mine Production

Underground Ore

11,187

kt

Total Material

11,187

kt

Avg. Daily Capacity

2,358

t per day

Stripping Ratio

N/A

w:o

RoM Grade

Silver

11.3

g/t

Lead

0.90%

%

Zinc

8.34%

%

Contained Metal

Silver

4,068

koz

Lead

222,347

klb

Zinc

2,057,796

klb

 

Source: SRK, 2017

 

The average mill feed is also 2,358 t/d (365 days/yr basis) over the LoM. The mill feed has an average head grade of 11.3 g/t Ag, 0.90% Pb and 8.34% Zn. The processing circuit is designed to recover a lead concentrate and a zinc concentrate, the lead concentrate also contains payable amounts of silver. Table 21‑14 presents the projected LoM plant production.

 

Table 21‑14: Florida Canyon Mill Production Assumptions

 

Description

Value

Units

RoM Ore Milled

11,187

kt

Daily Capacity

2,358

tperday

Lead Concentrate

Moisture Content

8%

Concentrate Silver Grade

436

g/t

Concentrate Lead Grade

50%

%

Concentrate Zinc Grade

0%

%

Recovery

Silver

52%

Lead

74%

Zinc

0%

Concentrate Yield

150

kt(dry)

Zinc Concentrate

Moisture Content

8%

Concentrate Silver Grade

0

g/t

Concentrate Lead Grade

0.0%

%

Concentrate Zinc Grade

50%

%

Recovery

Silver

0%

Lead

0%

Zinc

80%

Concentrate Yield

1,491

kt(dry)

 

Source: SRK, 2017

 

 

 

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21.5.3 Taxes, Royalties and Other Interests

 

The analysis of the Florida Canyon Project includes a total of 30% of income taxes over taxable income. Losses carried forward are used when possible, limited to 50% of profits. A depreciation schedule was calculated by SRK assuming a ten-year straight-line depreciation.

 

The Project includes payment of two types of governmental royalties, the first called a mining royalty and the second called a special mining tax. Both royalties are calculated as a rate depending on the ratio between the Earnings Before Interest and Taxes (EBIT) and the Net Revenue. This rate is applied on top of the EBIT, with the difference that the mining royalty can be replaced by a minimum rate of 1% over the net revenue, in case this 1% is higher than the mining royalty rate over the EBIT. The rates for each royalty are presented in Table 21‑15.

 

Table 21‑15: Florida Canyon Royalty Rates

 

EBIT (%)

Special Mining Tax

Mining Royalty

Marg. (%)

Cum. (%)

Marg. (%)

Cum. (%)

0.00

0.00

0.00

0.00

0.00

10.00

2.00

0.20

1.00

0.10

15.00

2.40

0.32

1.75

0.19

20.00

2.80

0.46

2.50

0.31

25.00

3.20

0.62

3.25

0.48

30.00

3.60

0.80

4.00

0.68

35.00

4.00

1.00

4.75

0.91

40.00

4.40

1.22

5.50

1.19

45.00

4.80

1.46

6.25

1.50

50.00

5.20

1.72

7.00

1.85

55.00

5.60

2.00

7.75

2.24

60.00

6.00

2.30

8.50

2.66

65.00

6.40

2.62

9.25

3.13

70.00

6.80

2.96

10.00

3.63

80.00

7.60

3.70

11.50

4.74

85.00

8.00

4.10

12.00

5.34

90.00

8.40

4.52

12.00

5.34

 

Source: SRK, 2017

 

21.5.4 Results

 

The valuation results of the Florida Canyon Project indicate that the Project has a potential for a positive and attractive present value. Indicative economic results are presented in Table 21‑16, the table demonstrates that zinc is responsible for the majority of the revenue generation and the underground mining cost is the heaviest burden on the operation, followed by the mineral processing cost as a far second.

 

 

 

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Table 21‑16: Florida Canyon Indicative Operating Costs (Dry Basis)

 

Description

Value

Units

Market Prices

Silver

16.50

US$/oz

Lead

1.00

US$/lb

Zinc

$1.20

US$/lb

Estimate of Cash Flow (all values in US$000s)

Concentrate Net Return

$/oz-Ag

Silver Sales

 

$0.02

Lead Sales

 

$0.11

Zinc Sales

 

$1.20

Total Revenue

 

$1.34

Treatment, Smelting and Refining Charges

 

Freight, Impurities & Third Parties

 

($0.07)

Gross Revenue

 

Royalties

 

($0.04)

Net Revenue

 

Operating Costs

 

Open Pit Mining

 

$0.00

Underground Mining

 

($0.16)

Process

 

($0.10)

G&A

 

($0.03)

Ordinary Rights

 

$0.00

Total Operating

 

($0.29)

  

Source: SRK, 2017

 

Table 21‑17 shows annual production and revenue forecasts for the life of the project. All production forecasts, material grades, plant recoveries and other productivity measures were developed by SRK and Solitario.

 

 

 

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Table 21‑17: Florida Canyon LoM Annual Production and Revenues

 

Period

RoM

(Mt)

Plant

Feed

(Mt)

Lead Conc.

(kt)

Zinc Conc.

(kt)

Free

Cash Flow

(US$ millions)

Discounted

Cash Flow

(US$ millions)

-2

0.00

0.00

0.00

0.00

(72)

(72)

-1

0.00

0.00

0.00

0.00

(103)

(96)

1

0.73

0.73

9.06

95.86

2

2

2

0.91

0.91

11.07

119.02

50

40

3

0.91

0.91

14.87

180.57

78

57

4

0.91

0.91

17.73

161.95

80

54

5

0.92

0.92

14.78

191.19

92

58

6

0.91

0.91

15.26

181.90

84

49

7

0.91

0.91

15.80

138.77

68

37

8

0.91

0.91

12.22

80.34

36

18

9

0.92

0.92

11.73

79.35

31

14

10

0.91

0.91

11.24

83.01

35

15

11

0.92

0.92

4.82

69.77

18

7

12

0.91

0.91

7.76

81.33

28

10

13

0.40

0.40

3.53

27.54

14

5

14

0.00

0.00

0.00

0.00

0

0

15

0.00

0.00

0.00

0.00

(3)

(1)

16

0.00

0.00

0.00

0.00

0

0

17

0.00

0.00

0.00

0.00

0

0

Total

11.19

11.19

150

1,491

437

198

 

Source: SRK, 2017

 

The Florida Canyon project is mainly a zinc project, as this metal represents roughly 90% of the total projected revenue. The remainder of the revenue is related to lead and silver, where both these metals are by-products, as none represent a minimum of 20% of the revenue projection.

 

Project cash costs are reported under an equivalent zinc production. All-in costs for zinc, including initial and sustaining capital costs, are estimated at US$0.73/Zn-lb. Considering byproduct credits for lead and silver, all-in zinc cost is US$0.47/Zn-lb. Table 21‑18 presents the composition of the Florida Canyon cash costs.

 

 

 

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Table 21‑18: Florida Canyon Cash Costs

 

Cash Costs

US$000’s

Direct Cash Cost

Underground Mining Cost

$228,547

Process Cost

$144,063

Site G&A Cost

$39,153

Ordinary Rights

$0

Treatment Charges

$334,080

Smelting & Refining Charges

$2,996

Freight

$96,935

By-Product Credits

($189,894)

Direct Cash Costs

$655,881

US$/t-ore

$58.63

US$/lb-Zn

$0.47

Indirect Cash Cost

Royalties

$61,734

Exploration Expense

$0

Social Responsibility/Community Relations Expense

$0

Indirect Cash Costs

$61,734

US$/t-ore

$5.52

US$/lb-Zn

$0.04

Direct + Indirect Cash Costs

$717,615

US$/t-ore

$64.15

US$/lb-Zn

$0.51

Sustaining Capital Cash Cost

Sustaining Capital

$82,722

Sustaining Cash Costs

$82,722

US$/t-ore

$7.39

US$/lb-Zn

$0.06

All-In Sustaining Cash Costs

$800,337

US$/t-ore

$71.54

US$/lb-Zn

$0.57

Initial Capital Cash Cost

Initial Capital

$213,667

Initial Capital Cash Costs

$213,667

US$/t-ore

$19.10

US$/lb-Zn

$0.15

All-In Cash Costs

$1,014,004

US$/t-ore

$90.64

US$/lb-Zn

$0.73

 

Source: SRK, 2017

 

 

 

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22 Interpretation and Conclusions

 

22.1 Results & Comments

 

Florida Canyon has long been recognized as a significant Mississippi Valley Type mineral resource for zinc. The work performed to complete this study demonstrates that Florida Canyon has sufficient zinc resources to warrant further work, with about 2.4 million tonnes of Measured and Indicated mineral resource and nearly 15 million tonnes of Inferred. These tonnages are representative of material that is both of sufficient grade and sufficient continuity to form potential stope shapes, even though mineral resources are not mineral reserves.

 

In the area of historical drilling the steep topography has made drill site construction difficult without road access. All drilling to date has been completed with helicopter support. This has resulted in gaps in drill coverage and, in some cases, gaps in modelled ore shapes that are likely to be continuous. An access road to the site, to be completed in 2021, will provide better sites for surface drilling, support for underground development and logistical support. Permitting, currently in progress, will provide future road-accessible work areas south of the current resources.

 

22.2 Significant Risks & Uncertainties

 

A thorough understanding of the resource and the mineralogy will be needed. The majority of the ore is judged to be of favorable metallurgy as well as being amenable to producing a high quality and marketable concentrate. A subordinate quantity of the ore consists of variable amounts of the zinc minerals in the form of carbonates or silicates which may require distinct treatment to result in good recovery and produce a viable concentrate. The highest priorities for future work are to better quantify the metallurgy and to convert at least a portion of the resource from the Inferred to Indicated category so that reserves may be quantified for the completion of a Feasibility Study.

 

The project is in a remote area with challenging topography which will require upgrading of the local infrastructure for a commercial operation. Although the mine will be underground, with a relatively small surface footprint, the challenges of working in the area will require a strong attention to environmental sensitivities and a commitment to the community to maintain the social license.

 

 

 

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23 Recommendations

 

23.1 General Recommendations

 

Gustavson has reviewed the technical studies completed by Nexa and its predecessor, Votorantim. Some of these studies have been sufficiently detailed to form the basis for feasibility investigations to support a production decision. To attain this level of project design detail, new studies will need to be completed based on current market conditions and mineral resource estimates to provide the foundation for future development. The following recommendations focus on the near-term recommendations for project development.

 

23.1.1 Metallurgy

 

The focus of this report is to review a new resource estimation by Nexa which updates, restates, and refines the 2017 resource estimation. The newly restated resources define a significantly larger inventory of ore with a very different mineralogical composition and metallurgical character than that previously described in the PEA. The increased proportion of sulfide ore with less oxidized zinc and lead minerals provides a significant opportunity, in comparison to the PEA, for:

 

 

1.

Lower processing costs,

 

2.

Higher metal recoveries,

 

3.

Increased concentrate grades,

 

4.

Lower transportation costs,

 

5.

Decreased average smelter charges, and

 

6.

Lower cutoff grade.

 

These more favorable operating parameters should have a significant impact on project economics, particularly combined with the larger global resource base. The currently available metallurgical studies conducted by Smallvill S.A. are inadequate to support an optimization study of processing options for the updated mineral resource estimate. It is important to note that none of the historical studies have tested pure sulfide ore. Therefore, a new program of metallurgy is strongly recommended, starting with more representative sampling of the ore deposit with variability testing in mind. Planned studies should prioritize work on sulfide ore so that it may be scheduled for production early in the mine life.

 

The metallurgy of oxidized ore should also be recharacterized so that this lower quality ore can be to be incorporated into the mine plan.

 

It is recommended that the suggested program be undertaken by a reputable metallurgical consulting firm.

 

Samples for metallurgical test work can be procured from core in storage in Shipasbamba. New core for metallurgical sampling can be obtained by drilling from currently permitted sites from either underground or surface locations as described below if additional samples are needed.

 

 

 

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Since additional drilling has indicated that sulfides constitute a majority of the total resources, a program of metallurgical testing is recommended with the following objectives:

 

 

·

The emphasis of the metallurgical program for the project should be on the recovery of zinc, lead and silver from the sulfide ores.

 

·

A secondary objective would be to refine the recoveries in oxidized ore.

 

·

The composites should be prepared from the core currently in storage based on ore types/feed grade (high, average, and low grade). This would provide immediately available ore for testing. Follow up testing could use new drill core.

 

·

Metallurgical testing should be directed at optimizing process parameters (grind size, flotation time, reagent type, dosage, etc.) for the rougher flotation and regrind and a determination of the number of cleaner stages required to produce marketable-grade concentrates.

 

·

Locked-cycle tests should be performed to determine the recovery and quality of the concentrates.

 

·

Miscellaneous tests should also be undertaken to generate data for prefeasibility and feasibility work. This would include comminution (CWi, Ai, BWi), thickening, filtration and tailing characterization testing.

 

23.1.2 Drilling

 

Additional exploration drilling is currently planned to increase the resource base of the project. Expansion of the resource is likely in several areas. However, drilling is also required to upgrade the category of the resource so that future mine planning and feasibility studies can be completed.

 

23.1.3 Resource Conversion Drilling

 

Recent drilling was very successful in defining new resources within the previously defined footprint of the deposit. Further additions by discovery of new bodies within the existing resource are probable but the primary emphasis of drilling in the core of the deposit should shift to resource conversion core drilling since the ratio of Measured/Indicated to Inferred resource is low. Mine planning suitable for mineral reserves definition should be supported by a higher proportion of measured and indicated mineral resources.

 

Underground drilling is preferable for resource conversion drilling because the surface topography is challenging and expensive for the development of surface drill stations. The relatively short distances between individual ore shoots also argues for underground drilling, the access for which can be readily developed due to the steep terrain. It is also likely that subsurface drilling will identify new zones and expand existing ones that are not feasible to be drilled from the surface sites. 15,000m of underground drilling is planned in the next campaign.

 

Development of underground access will be supported by completion of the new access road.

 

Previously obtained permits provided for new underground development and drilling in both the northern and southern parts of the deposit (Figure 23‑1). However, it is uncertain if the previously permitted underground location in the northern part of the deposit (near zone 1021) is still current. Some additional underground development is currently permitted in the San Jorge workings.

 

 

 

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Resource conversion drilling can also be efficiently completed from surface drill locations in certain locations. An example would be the expansion of drilling of the manto east of San Jorge, an area which is currently permitted.

 

Some additional drifting and infill drilling from underground at San Jorge could expand resources in permitted areas. Locations such as these could also offer opportunities for obtaining metallurgical samples.

 

23.1.4 Resource Expansion Drilling

 

An expansion of the existing surface drilling permit is currently in preparation. Figure 23‑1 shows holes in prospective areas near the known resources to the south and east within the permit boundary (blue area).

 

Preparation of a longer-term permit (5th modification of the EIAsd) is also in progress for drill sites to test several new exploration targets that have been identified on the Minera Bongará Property. Figure 18-1 shows the location of some of these prospects. Ore grade outcropping mineralization is found at the Shillac, Juan, Tesoro and Pizarro. These surface showings, along with those in the expanded drilling area under the existing permit are quite accessible by new road construction compared to targets previously tested in the immediate vicinity of Florida Canyon.

 

 

Figure 23‑1 Future drilling and current and future underground exploration locations

 

 

 

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Figure 23‑2 shows the hypothesized extension in long section of the “Favorable Horizon” of Florida mineralization to the south to be tested with the drill holes in this area. The mineralized outcrops mentioned above are within the Favorable Horizon within the Chambara Formation. 10,000m of resource expansion drilling is proposed for 2021-2022.

 

Drilling of these areas may be delayed until 2022 due to the timing of approvals for the permit modification.

 

 

Figure 23‑2 Northwest-Southeast long section of area shown in Figure 23‑1

 

Table 23‑1 is a projected work program budget.

 

Table 23‑1 Planned work program for 2021-2022

 

Florida Canyon Prefeasibility Technical Work

Task

Description

Quantity

Unit Cost US$

Est. Budget

Metallurgy

 

 

 

 

 

 

Sampling

20

 

$10,000

Test Work

20

 

$250,000

Underground

 

 

 

 

 

 

North Adit Development

1000 m

$2,000

$2,000,000

South Adit Development

250 m

$2,000

$500,000

Drilling

 

 

 

 

 

 

Underground Resource

15,000 m

$250

$3,750,000

Surface Resource

10,000 m

$300

$3,000,000

Support Cost

Camp, Oversight

-

 

$1,500,000

Total

 

 

 

$11,010,000

 

**

Assumes Road Access Complete. (Does not include project fixed costs)

 

 

 

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24 References

 

ALS Minerals (2014a). Global Capability Statement 2014. Accessed 16 May 2014, from

 

http://www.alsglobal.com/Our-Services/Minerals

 

ALS Minerals (2014b). ALS Geochemistry Schedule of Services and Fees 2014 (USD). Accessed

 

20 May, 2014, from http://www.alsglobal.com/en/Our-

 

Services/Minerals/Geochemistry/Service-Schedule.

 

AMEC (2013). Declaracion de Objectivo de Negocio para Proyecto Bongará (Scoping Study for

 

the Bongará Project). 14 January 2013. 28 pages.

 

Cominco (Perú) S.R.L. (2000). Bongará Project, Peru, 2000 Year-End Report, J.L.R. Muñoz and

 

M.A. Tapia. 15 December, 2000. 55 pages.

 

Guilbert, J.M. and Park, C.F., Jr. (1986). The Geology of Ore Deposits. Waveland Press, Inc.,

 

Long Grove, Illinois. 985 pages.

 

M&R (2020). Geologia y Geotecnia Carretera Paclas Cuchulia. Construcción Carretera Paclas

 

Cuchulia.

 

Nexa (2019). Proyecto Florida Canyon Informe de QA\QC 2019. Informe de Aseguramiento y

 

control de calidad QAQC Noviembre 2018 a Diciembre 2019.

 

Nexa (2020). Reporte de Recursos Minerales Proyecto Florida Canyon, Amazonas, Peru. Reporte

 

Inerno. Preparado: Gerencia de Recursos Minerales. Diciembre 11, 2020.

 

SRK Consulting (2014b). NI 43-101 Technical Report Mineral Resources Bongará Zinc Project.

 

Prepared for Solitario Exploration and Royalty Corp. by SRK Consulting (U.S.) Inc.

 

Effective Date June 05, 2014, Report Date, June 16, 2014, 145p.

 

SRK Consulting (2017). NI 43-101 Technical Report Preliminary Economic Assessment Florida

 

Canyon Zinc Project Amazonas Department, Peru. Prepared for Votorantim Metais and

 

Solitario Exploration by SRK Consulting (U.S.) Inc. Effective Date July 13, 2017, Report

 

Date, August 2, 2017.

 

Universidad Nacional De Huancavelica (2018). Escuela de Posgrado Tesis. Geología y

 

Mineralización del Deposito Mississippi Valley Type de Zn-Pb: Proyecto Canon Florida,

 

Norte De Peru. Presentado por : Bach. Isaac Marcelino Robles Vega.

 

 

 

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25 Reliance on Information Provided by Registrant

 

Solitario has provided the internal reports generated by Nexa, the joint venture partner on the Florida Canyon project. This work has been audited by the QP’s and it is judged to meet the requirements for reporting mineral resources with a technical report summary meeting the SK-1300 standard. The Qualified Persons responsible for this TRS has relied on the following information.

 

 

·

Markets – information related to market studies/markets for product, market entry strategies, marketing and sales contracts, product valuation, product specifications, refining, and treatment charges, transportation costs, agency relationships and material contracts. This information is used in supporting the resource estimate in Section 11 and in Section 16.

 

·

Legal Matters – information relating to the corporate ownership interest, mineral tenure, surface rights, water rights, royalties, encumbrances, easements, violations and fines, permitting requirements, monitoring requirements. This information is used in Section 3, and supports the mineral resource in Section 11.

 

·

Environmental Matters – information relating to baseline studies, environmental permitting and monitoring, ability to retain current permits, emissions control, closure planning and bonding and regulations pertaining to protected species and habitats. This information is used in Section 17 and supports the mineral resource in Section 11

 

·

Stakeholder Accommodation – information relating to social and stakeholder baseline studies, other organizations, non-governmental organizations, and community relations plans. This information was used to support the mineral resources in Section 11.

 

·

Governmental Factors – information related to government royalty clams supports the mineral resource estimate in Section 11.

 

 

 

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S-K 1300 Technical Report Summary

  

26 Glossary

 

26.1 Mineral Resources

 

The mineral resources and mineral reserves have been classified according to the “CIM Definition Standards for Mineral Resources and Mineral Reserves” (May 10, 2014). Accordingly, the Resources have been classified as Measured, Indicated or Inferred, any Reserves have been classified as Proven, and Probable based on the Measured and Indicated Resources as defined below.

 

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

 

An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

 

An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.

 

A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.

 

26.2 Mineral Reserves

 

Modifying Factors are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.

 

 

 

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A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.

 

The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported.

 

The public disclosure of a Mineral Reserve must be demonstrated by a Pre-Feasibility Study or Feasibility Study.

 

A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve. The Qualified Person(s) may elect, to convert Measured Mineral Resources to Probable Mineral Reserves if the confidence in the Modifying Factors is lower than that applied to a Proven Mineral Reserve.

 

Probable Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a Pre-Feasibility Study.

 

A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors. Application of the Proven Mineral Reserve category implies that the Qualified Person has the highest degree of confidence in the estimate with the consequent expectation in the minds of the readers of the report. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect the potential economic viability of the deposit.

 

Proven Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a Pre-Feasibility Study. Within the CIM Definition standards the term Proved Mineral Reserve is an equivalent term to a Proven Mineral Reserve.

 

 

 

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26.3 Glossary

 

The following general mining terms may be used in this report.

 

Table 26‑1 Glossary

 

Term

Definition

Assay:

The chemical analysis of mineral samples to determine the metal content.

Capital Expenditure:

All other expenditures not classified as operating costs.

Crushing:

Initial process of reducing ore particle size to render it more amenable for further processing.

Cut-off Grade (CoG):

The grade of mineralized rock, which determines whether it is economic to recover its mineral content by further concentration.

Dilution:

Waste, which is unavoidably mined with ore.

Dip:

Angle of inclination of a geological feature/rock from the horizontal.

Fault:

The surface of a fracture along which movement has occurred.

Footwall:

The underlying side of an orebody or stope.

Gangue:

Non-valuable components of the ore.

Grade:

The measure of concentration of gold within mineralized rock.

Hangingwall:

The overlying side of an orebody or slope.

Haulage:

A horizontal underground excavation which is used to transport mined ore.

Igneous:

Primary crystalline rock formed by the solidification of magma.

Level:

Horizontal tunnel the primary purpose is the transportation of personnel and materials.

Lithological:

Geological description pertaining to different rock types.

LoM Plans:

Life-of-Mine plans.

LRP:

Long Range Plan.

Material Properties:

Mine properties.

Milling:

A general term used to describe the process in which the ore is crushed and ground and subjected to physical or chemical treatment to extract the valuable metals to a concentrate or finished product.

Mineral/Mining Lease:

A lease area for which mineral rights are held.

Mining Assets:

The Material Properties and Significant Exploration Properties.

Ongoing Capital:

Capital estimates of a routine nature, which is necessary for sustaining operations.

Ore Reserve:

See Mineral Reserve.

Pillar:

Rock left behind to help support the excavations in an underground mine.

RoM:

Run-of-Mine.

Sedimentary:

Pertaining to rocks formed by the accumulation of sediments, formed by the erosion of other rocks.

Shaft:

An opening cut downwards from the surface for transporting personnel, equipment, supplies, ore and waste.

Sill:

A thin, tabular, horizontal to sub-horizontal body of igneous rock formed by the injection of magma into planar zones of weakness.

Stope:

Underground void created by mining.

Stratigraphy:

The study of stratified rocks in terms of time and space.

Strike:

Direction of line formed by the intersection of strata surfaces with the horizontal plane, always perpendicular to the dip direction.

Sulfide:

A sulfur bearing mineral.

Tailings:

Finely ground waste rock from which valuable minerals or metals have been extracted.

Total Expenditure:

All expenditures including those of an operating and capital nature.

 

 

 

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26.4 Definition of Terms

 

The following abbreviations may be used in this report.

 

Table 26‑2 Abbreviations

 

Abbreviation

Unit or Term

A

ampere

AA

atomic absorption

A/m2

amperes per square meter

Ag

silver

Au

gold

°C

degrees Centigrade

CCD

counter-current decantation

CIL

carbon-in-leach

CoG

cut-off grade

cm

centimeter

cm2

square centimeter

cm3

cubic centimeter

cfm

cubic feet per minute

ConfC

confidence code

CRec

core recovery

CSS

closed-side setting

CTW

Cu

calculated true width

copper

°

degree (degrees)

dia.

EDX

Diameter

energy dispersive x-ray

EIS

Environmental Impact Statement

EMP

Environmental Management Plan

FA

fire assay

ft

foot (feet)

ft2

square foot (feet)

ft3

cubic foot (feet)

g

gram

gal

gallon

g/L

gram per liter

g-mol

gram-mole

gpm

gallons per minute

g/t

grams per tonne

ha

hectares

Hp

HQ

Horsepower

drill core diameter of ~63.5 mm

HTW

horizontal true width

ICP-MS

 inductively coupled plasma mass spectrometry

ID2

inverse-distance squared

ID3

inverse-distance cubed

kA

kiloamperes

kg

kilograms

 

 

 

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Abbreviation

Unit or Term

Km

kilometer

km2

square kilometer

koz

thousand troy ounce

kt

thousand tonnes

kt/d

thousand tonnes per day

kt/y

thousand tonnes per year

kV

kilovolt

kW

kilowatt

kWh

kilowatt-hour

kWh/t

kilowatt-hour per metric tonne

L

liter

L/sec

liters per second

L/sec/m

liters per second per meter

lb

pound

LHD

Long-Haul Dump truck

LOI

Loss On Ignition

LoM

Life-of-Mine

m

meter

m2

square meter

m3

cubic meter

masl

Ma

meters above sea level

millions of years before present

mg/L

MLA

milligrams/liter

mineral liberation analysis

mm

millimeter

mm2

square millimeter

mm3

cubic millimeter

MME

Mine & Mill Engineering

Moz

million troy ounces

Mt

million tonnes

MTW

measured true width

MW

million watts

m.y.

million years

NGO

non-governmental organization

NI 43-101

NQ

opt

Canadian National Instrument 43-101

drill core diameter of ~47.5 mm

troy ounce per ton

OSC

Ontario Securities Commission

oz

troy ounce

%

Pb

PGM

Percent

lead

Pilot Gold Mill

PLC

Programmable Logic Controller

PLS

Pregnant Leach Solution

PMF

probable maximum flood

ppb

parts per billion

ppm

parts per million

QA/QC

Quality Assurance/Quality Control

   

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

Abbreviation

 Unit or Term

RC

rotary circulation drilling

RoM

Run-of-Mine

RQD

Sb

Rock Quality Description

antimony

sec

second

SEM

SG

Scanning Electron Microscope

specific gravity

SPT

standard penetration testing

st

short ton (2,000 pounds)

t

tonne (metric ton) (2,204.6 pounds)

t/h

tonnes per hour

t/d

tonnes per day

t/y

tonnes per year

TSF

tailings storage facility

TSP

total suspended particulates

µm

micron or microns

V

volts

VFD

variable frequency drive

W

Tungsten or watts

XRD

XRF

x-ray diffraction

x-ray fluorescence

Y

Zn

Year

zinc

  

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

27 Appendix A: Drill Hole Collars

  

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

BGFC-01

824110.3

9353472

2433.11

250.1

BGFC-02

824110.3

9353472

2433.11

189.7

BGFC-03

824109

9353471

2432.93

190.9

BGFC-04

824109

9353471

2432.93

213.1

BGFC-05

824306.8

9353337

2502.27

253.2

BGFC-06

824306.8

9353337

2502.27

220

BGFC-07

824436.6

9352986

2459.128

201.3

BGFC-08

823898.8

9352544

2299.51

207.3

BGFC-09

823959.4

9353301

2588.44

487.45

BGFC-10

823948

9353585

2521.34

457.4

BGFC-11

823947.5

9352916

2413.21

234.8

BGFC-12

824421.1

9353138

2472.183

158.6

BGFC-13

824482.3

9352793

2422.971

146.5

BGFC-14

824130.4

9353679

2461.91

244

BGFC-15

824422.4

9353138

2472.204

194.25

BGFC-16

824130.4

9353679

2461.91

187

BGFC-17

823898.8

9352544

2299.51

296.8

BGFC-18

824438.6

9352988

2458.92

204.2

BGFC-19

823898.8

9352544

2299.51

155.35

BGFC-20

824123.6

9352841

2368.83

147.1

BGFC-20A

824123.6

9352841

2368.83

93.9

BGFC-20B

824123.6

9352841

2368.83

174.3

BGFC-21

824721.4

9352972

2553.36

229.2

BGFC-22

824062.2

9353128

2467.13

237.4

BGFC-23A

823915

9352434

2209.45

343.55

BGFC-24

823931.9

9352647

2272.99

264.3

BGFC-25

823748.1

9352313

2238.38

274.9

BGFC-26

823949.8

9352806

2359.52

205.2

BGFC-27

823762.6

9352099

2114.94

230.8

BGFC-28

823949.8

9352806

2359.52

332.6

BGFC-29

823946.8

9352215

2218.196

368.5

BGFC-30

823705.8

9352452

2311.75

304.9

BGFC-31

823947.5

9352916

2413.21

361.9

BGFC-32

823705.8

9352452

2311.75

349.2

BGFC-33

824475.9

9353346

2401.37

87

BGFC-34

824318.6

9353818

2565.39

259.25

BGFC-35

824473.6

9353347

2401.293

109

BGFC-36

824915.9

9353523

2533.225

228.75

BGFC-37

824516.8

9354141

2639.61

439.2

BGFC-38

823946.8

9352215

2218.196

225.7

  

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

BGFC-39

825178.1

9352219

2509.473

430.05

BGFC-40

825195.8

9352895

2609.16

329.4

BGFC-41

825287

9353844

2724.605

512.4

BGFC-42

827233.4

9352599

2711

316

BGFC-43

824785

9354291

2669.38

277.5

BGFC-44

825368.3

9353415

2733.05

439.2

BGFC-45

824785

9354291

2669.38

610

BGFC-46

826977.9

9352253

2599

488

BGFC-47

824516.8

9354141

2639.61

515.45

BGFC-48

824318.6

9353818

2565.39

326.35

BGFC-49

824709.1

9353805

2775.08

493

BGFC-50

825231

9353822

2713.835

504.75

BGFC-51

823937.5

9352731

2301.5

181.5

BGFC-52

824019.9

9352895

2389.29

233.9

BGFC-53

825228.1

9353822

2713.61

508.35

BGFC-54

824022.6

9352894

2389.16

208.95

BGFC-55

824062.2

9353128

2467.13

325.35

BGFC-56

825107.6

9353598

2608.545

369.05

BGFC-57

824062.4

9353327

2506.33

194.2

BGFC-58

825108.8

9353597

2608.553

335.5

BGFC-59

824145.6

9353374

2419.83

157.6

BGFC-60

825109.6

9353595

2608.607

341.6

BGFC-61

824576.6

9353236

2517.33

197.25

BGFC-62

825109.7

9353595

2608.593

350.75

BGFC-63

824401.4

9353498

2570.93

256.3

BGFC-64

824917

9353523

2533.282

278.25

BGFC-65

824619.7

9353967

2725.87

463.9

BGFC-66

825044.5

9353252

2729.091

375.15

BGFC-67

825521.9

9353021

2752.11

114.9

BGFC-68

825015.5

9352933

2628.01

341.6

BGFC-69

825521.9

9353021

2752.11

537

BGFC-70

824318.6

9354069

2659.23

451.4

BGFC-71

824806.8

9354239

2687.07

493.75

BGFC-72

824947.8

9353161

2738.632

387.3

BGFC-73

826101

9352414

2792

603.9

BGFC-74

825642.5

9352657

2772.61

500.3

BGFC-75

823886.7

9352329

2124.64

106.25

BGFC-76

824427.3

9352180

2366.55

378.2

BGFC-77

824658.1

9353507

2465.706

208.3

   

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

   

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

BGFC-78

824285.5

9351867

2237.222

402.2

BGFC-79

824660.3

9353503

2465.616

150.55

BGFC-80

824318.6

9353818

2565.39

339

VMA1

824547.6

9353444

2429.054

160.15

VMA2

824550.5

9353439

2429.058

141.75

VMA3

824547.9

9353443

2429.057

106.25

VMA4

824549.8

9353446

2429.188

151.25

VMA5

824547.9

9353442

2428.999

137.25

VMA6

824552

9353443

2429.109

131.55

VMC1

824658.5

9353507

2465.66

179.2

VMC2

824658.4

9353503

2465.526

157.35

VMC3

824661.1

9353504

2465.467

154.55

VMC4

824656.7

9353506

2465.658

154.45

VMC5

824662.1

9353506

2465.646

150.1

VMC6

824658

9353503

2465.445

151.9

VMD1

824725.8

9353519

2480.759

87.5

VMD2

824726.7

9353517

2480.606

195.2

VMD3

824729.5

9353513

2480.645

194.1

VMD4

824730.3

9353518

2480.681

30

VMD4A

824730

9353518

2480.751

86.35

VMD5

824730.6

9353516

2480.778

179.2

VMD6

824726

9353516

2480.703

173.4

VMD7

824729.1

9353518

2480.675

101.8

VME1

824914.6

9353527

2533.173

282.35

VME2

824914.9

9353526

2533.104

238.4

VME3

824916.9

9353527

2533.286

272.15

VME4

824918.3

9353525

2533.166

240

VME5

824914.5

9353526

2533.097

255.2

VME6

824915.2

9353523

2533.242

242.1

V08

824620

9353967

2726

476.1

V08A

824620

9353967

2726

32.5

V08B

824620

9353967

2726

322.8

V09

824709

9353805

2775

512.95

V10

824709

9353805

2775

494.7

V10A

824709

9353805

2775

536.4

V13

824581.6

9353835

2688.352

413.3

V15

824582.2

9353834

2688.405

454.5

V18

824367.6

9353929

2588.43

324.4

V19

824367.6

9353929

2588.43

296.55

V20

824367.6

9353929

2588.43

323.3

  

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

    

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V21

824367.6

9353929

2588.43

377

V21A

824367.6

9353929

2588.43

341.35

V22

824528.6

9353706

2756.439

460.3

V23

824528.8

9353705

2756.451

491.2

V23A

824527.5

9353706

2756.4

494

V26

824315.8

9353816

2565.28

304

V28

824315.5

9353819

2565.28

298

V32

824321.8

9353594

2684.912

600

V33

824322

9353594

2684.914

380

V34

824321.6

9353591

2684.864

283.9

V35

824321.8

9353590

2684.883

442.95

V35A

824323.7

9353592

2684.864

416

V36

824486.6

9353221

2469.709

320.55

V37

824486.6

9353218

2469.744

191.2

V37A

824484.5

9353220

2469.553

452.1

V38

824597.4

9353048

2462.498

165.05

V39

824597.2

9353044

2462.226

162.55

V39A

824599.4

9353046

2462.498

167.4

V40

824225.5

9353379

2414.51

137.4

V41

824225.5

9353375

2414.444

149

V42

824437.3

9353073

2467.583

200.15

V43

824437

9353070

2467.337

167.7

V_44

824104.1

9352043

2218.567

308.4

V_45

824103.5

9352043

2218.577

293

V_46

824100.2

9352043

2218.641

750.5

V_47

824416.5

9351927

2328.957

430.1

V_48

824414.2

9351926

2328.954

453

V_49

824307.3

9352356

2469.198

339

V_50

824302.8

9352358

2469.207

168.1

V_51

824305.2

9352355

2469.171

377.6

V_52

824635.9

9352115

2405.196

434

V_53

824636.3

9352115

2405.242

583.4

V_54

824629.6

9352476

2580.375

398.6

V_55

824832.2

9352614

2625.939

46.2

V_56

824883.9

9352229

2492.771

497.5

V_57

824105.1

9352165

2269.818

293.6

V_58

824241

9352566

2392.067

257.4

V_59

824102.2

9352045

2218.616

83.45

V_63

824302.7

9352358

2469.212

162.4

V_87

824597

9353047

2462.533

140.5

  

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

      

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_88

824597.9

9353045

2462.335

170

V_89

824597.7

9353048

2462.476

173

V_90

824595.8

9353048

2462.486

199.6

V_91

824595

9353046

2462.464

164.4

V_92

824594.3

9353044

2462.241

210

V_109

824823.1

9352987

2590.437

246.4

V_110

824824.9

9352987

2590.623

248

V_111

824825.7

9352985

2590.529

269.1

V_112

824823

9352986

2590.395

287.3

V_113

824825.1

9352984

2590.399

290.2

V_114

824823.7

9352985

2590.304

269.9

V_115

824832.1

9352616

2625.554

389.3

V_121

824844.4

9353241

2692.052

359.6

V_122

824846.5

9353240

2692.051

398.3

V_123

824844.2

9353242

2691.901

398.3

V_124

824845.4

9353241

2692.042

398.3

V_125

824844.2

9353241

2691.998

356.5

V_126

824846.2

9353240

2692.055

125.4

V_127

824845

9353239

2692.043

349.5

V_128

824843.2

9353240

2691.838

352

V_129

824846.7

9353240

2692.046

365.4

V_130

824850.7

9353102

2633.127

284.5

V_131

824848.6

9353103

2633.139

117.9

V_132

824848.2

9353101

2632.94

305.4

V_133

824849.6

9353102

2632.949

299.5

V_134

824849.1

9353103

2633.239

282.6

V_135

824848.2

9353103

2633.096

303.7

V_136

824851

9353101

2632.906

302.2

V_137

824848.7

9353104

2633.322

299.5

V_138

824850.3

9353104

2633.477

278

V_139

824882.2

9352229

2492.711

437.3

V_145

824950.1

9353159

2738.679

431.5

V_164

824106.2

9352163

2269.462

347.5

V_165

824108.2

9352165

2270.029

284.4

V_166

824241

9352563

2392.013

305.3

V_167

824826.1

9352985

2590.509

152.3

V_168

824241.9

9352563

2392.054

227.2

V_169

824304

9352355

2469.172

455.4

V_170

824243.1

9352564

2392.077

203.6

V_171

824303.9

9352356

2469.138

465

   

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

   

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_172

824241.4

9352566

2392.099

209.6

V_173

824239.4

9352564

2392.004

265.1

V_174

824304

9352357

2469.222

415.2

V_175

824447.1

9352671

2379.978

130.8

V_176

824443.3

9352670

2379.91

122.8

V_177

824446.2

9352670

2379.949

169.1

V_178

824102.5

9352041

2218.596

380.2

V_179

824634.6

9353274

2568.23

271.3

V_180

824634.9

9353277

2568.257

296

V_181

824282.8

9351870

2237.225

425.4

V_182

824634.5

9353276

2568.171

230.6

V_183

824423.4

9352180

2365.946

107.9

V_184

824634.8

9353275

2568.239

260

V_185

824422.3

9352180

2365.977

436

V_186

824284.1

9351870

2237.193

395

V_187

824632.3

9353279

2568.249

291

V_188

824633.3

9353280

2568.269

285

V_189

824422.9

9352182

2365.979

365

V_190

824282.6

9351868

2237.166

561

V_191

824437

9352985

2458.758

205

V_192

824426.4

9352182

2366.05

379

V_193

824436.3

9352986

2458.815

210

V_194

824438.2

9352986

2458.886

190

V_195

824286.5

9351867

2237.1

116

V_196

824422.9

9352181

2365.96

65.5

V_197

824281.8

9351871

2237.341

183

V_198

824723.6

9352973

2553.712

246

V_199

824423

9352182

2365.977

374

V_200

824305.7

9352358

2469.171

340

V_201

824722.6

9352973

2553.68

239.2

V_202

825089.3

9353776

2669.645

445

V_203

824306.1

9352358

2469.169

358.8

V_204

824601.3

9352735

2447.233

156

V_205

824601.6

9352735

2447.221

193

V_206

824304.5

9352358

2469.198

325

V_207

824600.2

9352738

2447.158

185

V_208

824601.1

9352739

2447.196

180

V_209

825088.7

9353779

2669.645

469

V_210

824242.1

9352567

2391.97

219

V_211

824626.7

9352475

2579.774

438

   

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

     

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_212

824444.5

9352668

2380.086

228

V_213

825090.8

9353776

2669.634

428

V_214

824444.1

9352673

2379.901

245

V_215

824626.6

9352477

2579.7

417

V_216

824443.1

9352671

2379.881

197

V_217

824446

9352669

2379.983

179

V_218

825088.6

9353776

2669.607

438

V_219

824599.7

9352739

2447.083

345

V_220

824049.4

9351876

2267.857

482

V_221

824604.1

9352739

2447.221

185

V_222

824599.6

9352737

2447.152

225

V_223

825107.1

9353596

2608.266

310.6

V_224

825106.8

9353596

2608.299

317.6

V_225

825107.6

9353598

2608.499

325

V_226

825107.4

9353598

2608.503

335.5

V_227

825108.9

9353599

2608.316

338.8

V_228

825109.8

9353598

2608.463

341.6

V_229

825108.1

9353595

2608.406

310

V_230

825109.8

9353597

2608.34

41.9

V_231

825110.2

9353597

2608.439

36

V_232

825089.5

9353776

2669.476

421.3

V_233

825088.4

9353776

2669.426

420.4

V_234

825088.7

9353777

2669.408

428.5

V_235

825090.7

9353775

2669.443

419.5

V_236

825091.7

9353777

2669.859

434.5

V_237

825091.1

9353778

2669.457

434.5

V_238

825089.2

9353779

2669.508

425.5

V_239

825088

9353776

2669.47

430

V_240

824207.3

9352165

2113.333

197.6

V_241

824207.4

9352165

2112.941

202.2

V_242

824207.6

9352165

2112.601

148.2

V_243

824207.9

9352166

2112.504

134.1

V_244

824212.4

9352168

2112.328

122.2

V_245

824212.8

9352168

2112.444

109.6

V_246

824213.2

9352168

2112.64

113.4

V_247

825088.4

9353777

2669.444

431

V_248

823844.3

9351986

2106.446

362.5

V_249

823846.9

9351987

2106.527

298

V_250

825106.9

9353597

2608.345

308.6

V_251

824215

9352194

2112.572

205.8

  

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

   

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_252

824215.9

9352195

2111.973

133.4

V_253

824215.1

9352194

2112.235

200.5

V_254

824215.5

9352194

2111.975

167.5

V_255

824219.9

9352197

2111.892

81.6

V_256

824220.4

9352197

2112.229

95.45

V_257

824220.4

9352198

2112.773

105

V_258

824220.4

9352197

2113.324

157.8

V_259

823857.9

9352139

2117.582

227.3

V_260

823857.1

9352139

2117.765

212.5

V_261

824205.6

9352127

2113.235

195.3

V_262

824205.6

9352127

2113.055

218.2

V_263

824205.9

9352127

2112.89

190.4

V_264

824206.3

9352128

2112.907

169.3

V_268

824915.3

9353526

2533.106

242.5

V_269

825107.1

9353597

2608.343

315

V_265

824210

9352129

2112.889

140

V_266

824210.4

9352129

2112.892

134.8

V_267

824210.9

9352129

2113.1

145.1

V_270

824168.7

9352197

2111.506

163.1

V_271

824168.7

9352197

2111.865

104.8

V_272

824168.7

9352197

2111.13

187

V_273

824168.9

9352197

2110.835

176

V_274

824169.3

9352197

2110.853

105.95

V_275

824173.3

9352201

2110.823

95

V_276

824173.5

9352201

2111.059

93.75

V_277

824173.5

9352201

2111.74

118.7

V_278

824173.5

9352201

2112.236

186.4

V_279

825106.8

9353598

2608.335

334

V_280

824915.9

9353526

2533.13

239.5

V_281

825107.2

9353597

2608.369

323

V_282

824206.4

9352086

2113.093

207.2

V_283

824206.7

9352086

2113.109

200.8

V_284

824210.5

9352089

2112.958

166.4

V_285

824211.1

9352089

2113.3

196

V_286

825109.7

9353597

2608.516

45.8

V_287

825109.5

9353598

2608.454

313

V_288

825109.7

9353599

2608.439

320.6

V_289

824915.6

9353526

2533.12

226.6

V_290

824911.7

9353525

2533.11

223

V_291

825107.1

9353596

2608.38

314.5

  

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

  

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_292

824208.2

9352050

2113.784

247.35

V_293

824208.5

9352050

2113.672

273.6

V_294

824209

9352050

2113.606

227.15

V_295

824208.9

9352049

2113.509

230

V_296

824209.1

9352049

2113.467

394

V_297

824209.9

9352049

2113.472

279.2

V_298

824212

9352051

2113.604

242.4

V_299

824212.4

9352051

2113.577

240

V_300

824213

9352053

2113.795

265.9

V_301

824212.4

9352052

2113.488

205.3

V_302

824212.6

9352052

2113.508

209.5

V_303

824213

9352053

2113.739

234.3

V_304

824911.4

9353525

2533.125

230.2

V_305

824087.3

9352187

2110.091

135

V_306

824087.2

9352187

2109.619

174.3

V_307

824087.5

9352187

2109.154

191.8

V_308

824087.8

9352187

2109.064

116.8

V_309

824087.7

9352189

2109.837

115.4

V_310

824091.4

9352190

2109.156

107

V_311

824091.9

9352191

2109.411

111.7

V_312

824091.9

9352191

2110.274

161

V_313

824091.7

9352190

2110.64

225.1

V_314

824087.3

9352187

2109.243

257

V_315

824091.5

9352190

2111.576

146.6

V_316

824091.9

9352190

2111.131

100.3

V_317

824913.5

9353524

2533.132

221.5

V_318

825108.2

9353596

2608.328

290.5

V_319

824914.7

9353527

2533.131

239.6

V_320

824914.8

9353527

2533.139

257.5

V_321

825108.4

9353599

2608.424

317.5

V_322

824911.7

9353526

2533.143

217

V_323

825108.3

9353599

2608.446

320.5

V_324

824911.8

9353525

2533.133

217

V_325

824913.8

9353524

2533.142

230.6

V_326

824728.6

9353518

2480.53

146

V_327

824913.7

9353524

2533.125

220

V_328

824728.9

9353518

2480.523

117.7

V_329

824913.7

9353524

2533.142

226.1

V_330

824728

9353518

2480.597

128.5

V_331

824727.4

9353517

2480.54

122.6

  

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

   

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_332

824913.8

9353527

2533.184

221.5

V_333

824728

9353517

2480.595

146.1

V_334

824728.2

9353517

2480.598

158

V_335

824913.8

9353528

2533.189

223.3

V_336

824727.5

9353516

2480.573

125.5

V_337

824913.8

9353527

2533.188

239.5

V_338

824727.6

9353516

2480.565

131.5

V_339

824915.3

9353524

2533.155

211.5

V_340

824915.5

9353524

2533.15

212.5

V_341

824021

9352176

2108.104

128.1

V_342

824021.8

9352176

2107.852

123.3

V_343

824022.1

9352176

2108.059

130

V_344

824022.2

9352176

2108.6

152

V_345

824022.2

9352176

2108.988

49.8

V_346

824022.2

9352176

2109.231

215.5

V_347

824018.1

9352174

2108.134

271.05

V_348

824915.7

9353524

2533.157

97.3

V_349

824912.7

9353527

2533.218

215.5

V_350

824912.4

9353528

2533.229

227.5

V_351

824912.6

9353527

2533.22

248.1

V_352

824911.8

9353526

2533.126

209.5

V_353

824020.8

9352175

2108.07

148

V_354

824209.9

9352049

2113.49

314.3

V_355

824211.1

9352049

2113.584

289

V_356

824209.4

9352049

2113.458

262.8

V_357

824912

9353526

2533.129

153.2

V_358

824911.5

9353526

2533.144

171

V_359

824916

9353525

2533.17

218.5

V_360

824915.5

9353525

2533.142

230.5

V_361

824915.4

9353527

2533.123

230

V_362

824050.8

9351878

2267.92

508.1

V_363

824915.6

9353527

2533.144

242.5

V_364

824915.8

9353527

2533.165

268

V_365

824050.6

9351879

2268.429

576.4

V_366

824902.8

9353388

2652.128

368.5

V_367

824899.8

9353389

2652.076

367.5

V_368

825112.7

9353484

2680.215

367.9

V_369

824048

9351878

2267

569.5

V_370

825110.5

9353483

2680.188

421.2

V_371

824284.8

9351868

2237.013

110

   

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_372

824284.8

9351868

2237.013

115

V_373

824714.3

9353419

2568.488

245

V_374

824284.8

9351868

2237.013

110.1

V_375

824417

9351927

2329

190

V_376

824417

9351927

2329

190

V_377

824726

9353520

2480.745

116

V_378

824726

9353520

2480.776

146.5

V_379

824726.5

9353520

2480.739

194

V_380

824726.5

9353520

2481.061

152

V_381

824726.9

9353519

2480.721

131.2

V_382

824727.4

9353519

2480.636

150

V_383

824726.5

9353519

2480.685

141.7

V_384

824726.8

9353519

2480.788

118.1

V_385

824727.4

9353519

2480.599

127.8

V_386

824727.1

9353518

2480.627

116

V_387

824728.1

9353517

2480.583

166.7

V_388

824727.5

9353517

2480.608

143.1

V_389

824727.3

9353516

2480.628

136.9

V_390

824726.1

9353515

2480.612

106.8

V_391

824726

9353515

2480.62

112.4

V_392

824725.6

9353515

2480.612

132

V_393

824725.4

9353514

2480.586

148

V_394

824725

9353516

2480.637

145

V_395

824724.8

9353515

2480.863

136

V_396

824723.6

9353517

2480.625

119

V_397

824723.9

9353517

2480.621

116

V_398

824724.2

9353519

2480.556

134.6

V_399

824724.5

9353519

2480.603

122.5

V_400

824725.3

9353519

2480.625

135

V_401

824725.3

9353520

2480.763

188.2

V_402

824725.4

9353520

2480.732

152.2

V_403

824128.5

9352195

2110.66

100.6

V_404

824128.5

9352195

2110.417

77.5

V_405

824129.2

9352195

2110.073

62.7

V_406

824134.3

9352198

2110.091

70.1

V_407

824134.6

9352198

2110.634

111.65

V_408

824134.7

9352198

2111.239

120.5

V_409

824134.7

9352198

2111.542

7.7

V_410

824134.6

9352198

2111.936

167.35

V_411

824134.2

9352198

2110.02

72

  

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

    

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_412

824659.1

9353507

2465.702

157

V_413

824660.4

9353507

2465.633

151

V_414

824660

9353506

2465.648

101.3

V_415

824661

9353505

2465.441

107.3

V_416

824662.2

9353504

2465.561

116

V_417

824661.1

9353503

2465.502

116

V_418

824659.5

9353502

2465.472

135

V_419

824658.4

9353502

2465.483

136.5

V_420

824659

9353504

2465.58

119.5

V_421

824657.3

9353503

2465.538

150.6

V_422

824658.1

9353504

2465.59

116.4

V_423

824657.4

9353504

2465.619

125.1

V_424

824656.9

9353504

2465.549

156.3

V_425

824657.5

9353505

2465.575

108.9

V_426

824657.4

9353505

2465.612

140.2

V_427

824656.7

9353505

2465.672

163.8

V_428

824657.8

9353507

2465.694

116.4

V_429

824657.5

9353507

2465.693

98.4

V_430

824658.5

9353507

2465.748

110.3

V_431

824219.8

9352197

2111.621

93

V_432

824220.4

9352197

2113.788

109.1

V_433

824210.6

9352089

2112.95

168

V_434

824211.4

9352089

2114.204

145.5

V_435

824213.4

9352169

2113.393

107.1

V_436

824211

9352130

2113.873

136.5

V_437

824210.5

9352130

2112.817

132.7

V_438

824210

9352128

2112.822

151.3

V_439

824208.6

9352166

2112.332

120.1

V_440

824548.9

9353446

2429.17

83.4

V_441

824549.7

9353445

2429.127

95.4

V_442

824550

9353446

2429.162

86.1

V_443

824551.1

9353445

2429.107

88.7

V_444

824550.8

9353442

2429.106

101

V_445

824550.3

9353443

2429.13

95.2

V_446

824549.5

9353440

2428.945

106.5

V_447

824548.8

9353441

2429.029

92.3

V_448

824548.3

9353442

2429.042

86.3

V_449

824546.4

9353442

2428.982

101

V_450

824546

9353441

2429.026

115.5

V_451

824545.6

9353443

2429.073

124.5

  

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

V_452

824546.8

9353444

2429.064

86.3

V_453

824546.4

9353444

2429.072

107

V_454

824545.9

9353444

2429.094

118.5

V_455

824547.6

9353445

2429.157

101.5

V_456

824213.4

9352169

2113.862

94.2

V_457

824211

9352129

2114.622

159.5

V_458

824173.5

9352201

2112.541

180.2

V_459

824210.5

9352071

2113.267

177

V_460

824547.6

9353444

2429.127

101.6

V_461

824725.4

9353519

2481.258

149.1

V_462

824658.5

9353506

2465.71

135

V_463

824913.8

9353525

2533.102

158.5

V_464

824546.6

9353148

2499.087

161.6

V_465

824210.8

9352071

2113.224

168.1

V_466

824211.1

9352071

2113.483

133

V_467

824597.5

9353044

2463.286

150

V_468

825317

9352640

2766.444

40

V_469

825009

9352684

2661

40

V_470

825269

9352108

2564

42.1

V_471

824963

9352030

2480.821

122.6

V_472

824649

9351768

2390

160

V_473

824885

9352230

2493

110.5

V_474

824209.8

9352071

2113.362

100.3

V_475

824218.1

9352195

2111.99

100.05

V_476

824130.5

9352197

2110.121

100.2

V_477

823852.1

9352019

2106.604

146.8

V_478

824211.4

9352071

2113.886

102.4

PEBGD000002

824617.4

9353969

2725.68

471.4

PEBGD000003

824523.6

9353708

2756.337

475.4

PEBGD000004

825307.7

9353737

2736.647

560

PEBGD000005

824621

9353967

2725.732

178.8

PEBGD000006

824524.5

9353709

2756.444

475.4

PEBGD000008

824337.6

9353635

2685.748

570.2

PEBGD000012

823896.6

9352542

2299.677

384.3

PEBGD000015

823922.3

9351648

2175.996

493.2

PEBGD000018

823898.8

9352544

2299.763

204.2

PEBGD000019

824337.5

9353638

2685.795

454.3

PEBGD000021

824617.5

9353967

2725.668

506

PEBGD000023

823922.8

9351648

2176.027

580.4

PEBGD000027

824423.1

9352181

2366.159

341.4

    

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

     

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

BHID

XCOLLAR

YCOLLAR

ZCOLLAR

DEPTH

PEBGD000031

824580.1

9353841

2688.52

420

PEBGD000032

824423.9

9352180

2366.17

377.7

PEBGD000035

824427.5

9352182

2366.298

339

PEBGD000036

824580.8

9353843

2688.627

440.9

PEBGD000038

823921.5

9351649

2176.029

471.2

PEBGD000039

824425

9352180

2366.17

488.5

PEBGD000001

825307

9353734

2736.695

517.3

PEBGD000007

824581.7

9353840

2688.603

402.1

PEBGD000009

824582.6

9353842

2688.575

393.7

PEBGD000010

824523.2

9353710

2756.439

497.5

PEBGD000011

824337.4

9353637

2685.757

461.4

PEBGD000013

824523.4

9353711

2756.456

470.2

PEBGD000014

824339.1

9353635

2685.738

423

PEBGD000016

824524.4

9353707

2756.42

464.4

PEBGD000017

823898.8

9352542

2299.698

230

PEBGD000020

823922.3

9351648

2175.992

555.2

PEBGD000022

824423.2

9352180

2366.143

463.8

PEBGD000024

824339.8

9353636

2685.775

383

PEBGD000025

824340.1

9353636

2685.8

383.9

PEBGD000026

823921.2

9351649

2176.002

465.4

PEBGD000028

824580.2

9353841

2688.529

426.3

PEBGD000029

824423.5

9352181

2366.206

316.5

PEBGD000030

823921.3

9351649

2176.099

488.2

PEBGD000033

824580.4

9353842

2688.618

440.7

PEBGD000034

823920.9

9351649

2176

550.3

PEBGD000037

824581.2

9353843

2688.586

470.9

 

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

28 Appendix B: QA/QC 2019 Laboratory Results

 

28.1 Coarse Blank Results – ALS Laboratory

 

 

Summary

 

Standard Code

C-17282-GT

Element

Ag

Unit of Measure

ppm

Analytical Technique

ICPAAS

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

12/11/2019

Count of Samples

23

Number Of Failures

0

Failure %

0.00%

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

C-17282-GT

Element

Cu

Unit of Measure

per

Analytical Technique

ICPAAS

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

12/11/2019

Count of Samples

23

Number Of Failures

0

Failure %

0.00%

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

  

Summary

 

Standard Code

C-17282-GT

Element

Pb

Unit of Measure

per

Analytical Technique

ICPAAS

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

12/11/2019

Count of Samples

23

Number Of Failures

0

Failure %

0.00%

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

   

Summary

 

Standard Code

C-17282-GT

Element

Zn

Unit of Measure

per

Analytical Technique

ICPAAS

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

12/11/2019

Count of Samples

23

Number Of Failures

0

Failure %

0.00%

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

28.2 Duplicate Results – ALS Laboratory

 

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

RG

Element

Ag

Unit of Measure

ppm

Analytical Technique

Lab

Original Mean Value

3.18

Duplicate Mean Value

3.16

Count of Samples

11

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

RG

Element

Cu

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

0.0009

Duplicate Mean Value

0.0009

Count of Samples

11

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

RG

Element

Pb

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

0.21

Duplicate Mean Value

0.20

Count of Samples

11

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

RG

Element

Zn

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

2.22

Duplicate Mean Value

2.38

Count of Samples

11

Number Of Failures

2

Failure %

18.18

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

  

Summary

 

Original Sample Type

OR

Duplicate Sample Type

DP

Element

Ag

Unit of Measure

ppm

Analytical Technique

Lab

Original Mean Value

5.04

Duplicate Mean Value

4.99

Count of Samples

58

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

DP

Element

Cu

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

0.002

Duplicate Mean Value

0.002

Count of Samples

58

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

DP

Element

Pb

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

0.65

Duplicate Mean Value

0.63

Count of Samples

58

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

DP

Element

Zn

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

2.90

Duplicate Mean Value

2.89

Count of Samples

58

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

RP

Element

Ag

Unit of Measure

ppm

Analytical Technique

Lab

Original Mean Value

0.71

Duplicate Mean Value

0.72

Count of Samples

10

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

RP

Element

Cu

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

0.0003

Duplicate Mean Value

0.0003

Count of Samples

10

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

RP

Element

Pb

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

0.05

Duplicate Mean Value

0.05

Count of Samples

10

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

RP

Element

Zn

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

0.19

Duplicate Mean Value

0.23

Count of Samples

10

Number Of Failures

0

Failure %

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

28.3 Standards Results – ALS Laboratory

 

 

Summary

 

Standard Code

SPY-01

Element

Ag

Unit of Measure

ppm

Analytical Technique

ICPAAS

Expected (Actual value)

7.20

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

13/11/2019

Standard Deviation

0.55

Count of Samples

19

Mean

7.08

Bias %

-1.69

Standard Deviation Chart

0.26

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-01

Element

Cu

Unit of Measure

per

Analytical Technique

ICPAAS

Expected (Actual value)

0.0010

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

13/11/2019

Standard Deviation

0.00005

Count of Samples

19

Mean

0.0009

Bias %

-9.50

Standard Deviation Chart

0.00009

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-01

Element

Pb

Unit of Measure

per

Analytical Technique

ICPAAS

Expected (Actual value)

0.08

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

13/11/2019

Standard Deviation

0.00

Count of Samples

19

Mean

0.08

Bias %

2.20

Standard Deviation Chart

0.00

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

 

Summary

 

Standard Code

SPY-01

Element

Zn

Unit of Measure

per

Analytical Technique

ICPAAS

Expected (Actual value)

0.97

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

13/11/2019

Standard Deviation

0.01

Count of Samples

17

Mean

0.95

Bias %

-1.41

Standard Deviation Chart

0.03

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-02

Element

Ag

Unit of Measure

ppm

Analytical Technique

ICPAAS

Expected (Actual value)

18.50

Project

BG

Lab

ALS

Analysis Date From

24/06/2019

Analysis Date To

12/11/2019

Standard Deviation

0.30

Count of Samples

19

Mean

18.97

Bias %

2.53

Standard Deviation Chart

0.71

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-02

Element

Cu

Unit of Measure

per

Analytical Technique

ICPAAS

Expected (Actual value)

0.0019

Project

BG

Lab

ALS

Analysis Date From

24/06/2019

Analysis Date To

12/11/2019

Standard Deviation

0.0002

Count of Samples

19

Mean

0.0018

Bias %

-3.60

Standard Deviation Chart

0.0001

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-02

Element

Pb

Unit of Measure

per

Analytical Technique

ICPAAS

Expected (Actual value)

0.66

Project

BG

Lab

ALS

Analysis Date From

24/06/2019

Analysis Date To

12/11/2019

Standard Deviation

0.02

Count of Samples

19

Average Actual

0.65

Bias %

-0.96

Standard Deviation Chart

0.02

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

 

 

Summary

 

Standard Code

SPY-02

Element

Zn

Unit of Measure

per

Analytical Technique

ICPOVL

Expected (Actual value)

2.79

Project

BG

Lab

ALS

Analysis Date From

24/06/2019

Analysis Date To

12/11/2019

Standard Deviation

0.05

Count of Samples

19

Mean

2.81

Bias %

0.83

Standard Deviation Chart

0.05

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-03

Element

Ag

Unit of Measure

ppm

Analytical Technique

ICPAAS

Expected (Actual value)

25.50

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

12/11/2019

Standard Deviation

0.45

Count of Samples

20

Mean

27.10

Bias %

6.25

Standard Deviation Chart

0.86

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-03

Element

Cu

Unit of Measure

per

Analytical Technique

ICPAAS

Expected (Actual value)

0.0032

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

12/11/2019

Standard Deviation

0.0002

Count of Samples

20

Mean

0.0031

Bias %

-2.19

Standard Deviation Chart

0.0002

 

 

 

Gustavson Associates, LLC

15 March 2022

 

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-03

Element

Pb

Unit of Measure

per

Analytical Technique

ICPAAS

Expected (Actual value)

0.86

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

12/11/2019

Standard Deviation

0.03

Count of Samples

20

Mean

0.86

Bias %

0.36

Standard Deviation Chart

0.03

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Standard Code

SPY-03

Element

Zn

Unit of Measure

per

Analytical Technique

ICPOVL

Expected (Actual value)

5.17

Project

BG

Lab

ALS

Analysis Date From

25/06/2019

Analysis Date To

12/11/2019

Standard Deviation

0.08

Count of Samples

20

Mean

5.13

Bias %

-0.82

Standard Deviation Chart

0.15

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

28.4 External Check Results – Cert vs ALS Laboratory

 

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

DC

Element

Ag

Unit of Measure

ppm

Analytical Technique

Lab

Original Mean Value

6.41

Duplicate Mean Value

5.98

Count of Samples

24

Bias %

-0.63

 

 

 

Gustavson Associates, LLC

15 March 2022

 

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

DC

Element

Pb

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

0.31

Duplicate Mean Value

0.31

Count of Samples

24

Bias %

-0.74

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

Summary

 

Original Sample Type

OR

Duplicate Sample Type

DC

Element

Zn

Unit of Measure

per

Analytical Technique

Lab

Original Mean Value

3.70

Duplicate Mean Value

3.73

Count of Samples

24

Bias %

-0.12

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

29 Appexdix C: Sample Cumulative Frequency Plots

 

 

  

 

 

Gustavson Associates, LLC

15 March 2022

      

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

  

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

30 Appendix D: Cap-Composite Cum. Frequency Plots

 

 

   

 

 

Gustavson Associates, LLC

15 March 2022

 

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

 

  

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

 

  

 

 

Gustavson Associates, LLC

15 March 2022

   

  

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

  

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

31 Appendix E: Mineral Resource

 

Zone

Classification

Tonnes

Zn (%)

Ag (g/t)

Pb (%)

Fe (%)

 1021_m1

Inferred

96,236

3.07

10.45

0.15

0.44

 1021_m2

Inferred

344,927

5.99

9.31

1.21

1.18

 1021_m3

Inferred

33,616

2.7

7.65

0.99

0.75

 1021_m4

Inferred

857

0.3

2.54

0.14

0.51

 1021_m7

Inferred

332,228

7.06

17.56

0.94

2.06

 m_m3_10

Measured

17,325

6.17

9.39

1.46

1.41

Indicated

14,821

4.88

6.84

0.99

1.04

Inferred

241

6.19

15.29

2.63

2.27

 Km_m1

Indicated

48,683

5.78

10.7

1.68

1.19

Inferred

212,585

6.23

16.13

2.45

1.36

 Km_m2_1

Measured

8,920

3.79

4.58

0.67

1.13

Indicated

48,066

5.82

8.32

1.14

1.1

Inferred

487,535

7.01

9.42

1.4

1.48

 Km_m2_3

Inferred

259,685

6.81

3.93

0.29

0.57

 Km_m3_1

Inferred

128,365

11.41

11.92

0.74

3.29

 Km_m3_4

Indicated

8,323

8.43

13.4

1.92

1.76

Inferred

136,337

8.16

4.45

0.53

1.38

 Km_m3_5

Indicated

30,480

7.72

2.35

0.16

1.1

Inferred

567,175

8.43

5.77

0.38

1.29

 Km_m3_7

Measured

11,396

6.89

16.41

2.6

1.62

Indicated

2,380

3.65

6.38

0.94

1.31

 Km_m3_8

Measured

4,068

5.92

4.81

0.67

0.72

Indicated

13,566

8.49

12.42

1.72

0.92

Inferred

39,879

9.63

15.19

2.01

0.95

 Km_m3_9

Indicated

3,069

11.61

29.1

3.27

0.94

Inferred

14,125

5.59

8.73

0.93

0.74

 Km_m3_2

Indicated

75,331

5.78

5.56

0.84

1.09

Inferred

607,754

8.07

9.01

1.16

1.7

 Km_m4_1

Indicated

5,349

2.5

3.76

0.53

0.65

Inferred

74,770

3.97

1.26

0.13

0.77

 Km_m4_2

Measured

3,097

10.15

10.56

1.06

1.27

Inferred

21,733

4.64

2.22

0.3

0.74

 Km_m4_3

Measured

9,710

3.59

9.97

1.36

1.03

Indicated

66,245

8.48

6.64

0.92

1.29

Inferred

293,743

9.27

15.63

1.55

1.56

 Km_m4_5

Inferred

1,790

1.72

3.69

0.46

0.57

 Km_m4_7

Indicated

41,454

4.82

4.47

0.43

1.01

Inferred

251,894

8.66

12.02

1.83

1.37

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

Zone

Classification

Tonnes

Zn (%)

Ag (g/t)

Pb (%)

Fe (%)

 Km_m6_2

Inferred

289,291

10.25

7.05

0.79

1.18

 Km_m6_3

Inferred

38,627

4.97

5.08

0.94

1.04

 Km_m6_5

Inferred

294,551

14.03

9.17

1.43

1.96

 Km_m6_6

Indicated

319

8.93

21.41

1.69

1.13

Inferred

50,975

15.18

33.56

2.61

1.62

 Km_m6_9

Indicated

31,453

9.74

9.8

0.81

1.3

Inferred

770,446

11.93

6.02

0.4

1.38

 Km_m7_1

Measured

44,785

10.28

7.21

1.2

1.17

Indicated

39,383

8.74

5.98

1.2

1.06

Inferred

5,910

5.66

3.22

0.49

0.78

 Km_m7_2

Indicated

311

2.25

14.72

1.02

0.21

Inferred

56,648

3.09

16.77

1.83

0.34

 Km_m10

Inferred

755,292

7.42

11.82

0.27

1

 Km_m13

Inferred

72,413

6.41

5.4

1.02

0.51

 Km_m6_4

Measured

28,288

14.01

7.07

0.84

1.23

Indicated

10,570

14.6

4.88

0.44

1.06

Inferred

1,054

12.56

4.79

0.53

1.2

 sj_m1

Measured

373

11.06

9.12

0.21

1.39

Indicated

17,477

8.63

6.35

0.11

1.06

Inferred

24,631

8.67

5.02

0.03

1.12

 sj_m2

Measured

37

1.38

15.06

0.1

1.53

Indicated

5,830

6.75

11.23

0.02

1.82

Inferred

32,176

5.46

4.54

0.3

0.66

 sj_m3

Measured

60

6.75

7.74

0.31

2.59

Indicated

8,524

9.4

9.45

0.5

2.98

Inferred

17,632

5.81

7.95

0.14

2.25

 sj_m4

Measured

20

4.69

4.8

0.15

0.56

Indicated

26

7.43

5.19

0.62

0.69

Inferred

5,633

8.47

3.95

0.69

0.66

 sj_m5

Measured

3,696

6.07

25.03

0.55

1.11

Indicated

7,546

5.04

28.1

0.63

1

Inferred

1,140

4.15

21.34

0.47

0.78

 sj_m6

Measured

31,784

7.13

6.59

0.23

1.77

Indicated

21,048

13.11

16.57

0.69

1.57

Inferred

3,836

14.27

20.97

0.97

1.65

 sj_m7

Measured

18,612

9.99

16.06

1.34

6.52

Indicated

72,773

6.54

10.18

0.76

8.61

Inferred

8,692

7.07

5.84

0.23

2.2

 

 

 

Gustavson Associates, LLC

15 March 2022

  

 

 

 

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

   

Zone

Classification

Tonnes

Zn (%)

Ag (g/t)

Pb (%)

Fe (%)

 sj_m8

Measured

740

14.26

20.13

2.56

4.66

Indicated

45,469

10.19

16.89

2.25

4.78

Inferred

223,046

14.94

18.45

3.31

5.99

 sj_m9

Indicated

41,624

6.29

7.74

0.63

1.72

Inferred

65,342

8.78

9.14

0.99

1.96

 sj_m10

Measured

4,112

10.52

29.18

0.42

2.08

Indicated

16,031

5.92

16.79

0.27

1.3

Inferred

3,211

3.45

8.25

0.1

0.9

 sj_m11

Inferred

424,532

10.42

5.24

0.7

0.95

 sj_m12

Inferred

270,429

8.78

6.58

0.54

4.17

 sj_m13

Inferred

114,568

5.59

2.13

0

1.18

 sj_m14

Inferred

71,914

11.98

13.48

0.68

1.52

 sj_m15

Inferred

77,012

8.87

2.72

0.07

2.61

 sj_m16

Inferred

29,828

4.54

1.95

0.01

1.42

 sj_m17

Inferred

10,371

4.19

5.07

1.09

1.04

 sj_m18

Measured

44

7.04

2.38

0.02

1.38

Indicated

6,442

4.7

1.75

0.02

1.27

 sj_m19

Indicated

3

3.32

6.31

0.32

4

 sj_m20

Indicated

3,253

8.3

0.5

0.02

1.37

 sj_m21

Measured

9,894

9.76

8.38

0.26

1.05

Indicated

2,079

4.76

3.66

0.09

1.06

 sj_m22

Inferred

21,803

11.3

0.92

0

1.45

 sj_m23

Measured

34

0.85

1.83

0.01

0.66

Indicated

1,593

6.35

10.35

0.04

0.85

 sj_m24

Measured

452

12.54

13.51

0.43

1.74

Indicated

264

8.35

6.98

0.27

1.43

 1021_f1

Inferred

316,616

6.91

15.21

1.03

1.59

Zone

Classification

Tonnes

Zn (%)

Ag (g/t)

Pb (%)

Fe (%)

 1021_f2

Inferred

1,002,131

7.95

13.44

1.41

3.35

 1021_f3

Inferred

4,618

3.47

8.26

0.4

0.84

 1021_f4

Inferred

22,371

2.49

4.51

0.5

1.1

 1021_f5

Inferred

103,936

3.22

4.84

0.12

2.57

 1021_f6

Inferred

1,034,401

6.52

14.96

3.19

3.28

 km_f1

Inferred

519,921

4.11

13.64

1.98

0.92

 km_f2

Inferred

288,920

8.36

18.49

2.56

6.42

 km_f3

Inferred

437,530

14.38

12.86

1.36

2.18

 Sam_f1

Inferred

599,392

12.78

6.99

2.96

0.93

 sj_f1

Measured

21,430

8.66

14.8

0.58

1.39

Indicated

19,797

9.5

14.48

0.33

1.65

Inferred

148,436

5.6

7.56

0.28

1.2

 sj_f2

Measured

15,720

7.5

14.44

0.09

1.5

Indicated

20,833

7.16

9.79

0.14

1.34

Inferred

9,852

3.48

10.33

0.25

1.21

  

 

 

Gustavson Associates, LLC

15 March 2022

   

 

 

   

Solitaro Zinc

 

Florida Canyon

S-K 1300 Technical Report Summary

  

Zone

Classification

Tonnes

Zn (%)

Ag (g/t)

Pb (%)

Fe (%)

 sj_f4

Measured

13,427

8.39

2.99

0.19

1.21

Indicated

9,443

6.72

2.29

0.06

0.99

 Km_m3_3

Measured

60,395

7.64

12.36

1.44

2.23

Indicated

252,459

8.62

16.14

1.95

1.98

Inferred

127,411

6.99

9.99

1.34

1.78

 Km_m6_1

Measured

140,270

9.63

9.97

1.4

1.5

Indicated

221,011

7.67

10.34

1.43

1.04

Inferred

265,715

9.53

19.84

4.01

0.81

 sj_f3

Measured

358,256

14.35

21.83

1.74

3.33

Indicated

421,374

17.7

26.9

1.6

3.09

Inferred

2,331,005

15.51

13.75

0.54

2.38

Total

 

17,300,383

9.77

11.82

1.27

2.05

    

*Note: m = mantos, f = feeder

     

 

 

Gustavson Associates, LLC

15 March 2022