Ayawilca Zinc-Silver-Tin

Tinka's Ayawilca Zinc-Silver-Tin Project, located in central Peru, is one of the most significant emerging polymetallic deposits in the region. The project comprises a large resource of zinc, silver, tin, and indium, making it a key asset for Tinka Resources in the global mining landscape. The recent NI 43-101 compliant technical report highlights an Indicated Mineral Resource of 28.3 million tonnes grading 5.82% zinc, 16.4 g/t silver, and 91 g/t indium, along with an Inferred Mineral Resource of 31.2 million tonnes grading 4.21% zinc and 14.5 g/t silver. Additionally, Ayawilca hosts a Tin Zone with 1.4 million tonnes in the Indicated category grading 0.72% tin and 12.7 million tonnes in the Inferred category grading 0.76% tin. These robust resource figures, coupled with strong financial metrics outlined in the Preliminary Economic Assessment (PEA), underscore the project's potential to become a major player in the production of zinc, silver, and tin.

Strategically located in a mining-friendly jurisdiction, Ayawilca benefits from excellent infrastructure, including access to roads, power lines, and proximity to a seaport. The project is also bolstered by partnerships with local mining companies like Buenaventura and Nexa Resources, which further enhance its operational potential. The PEA highlights a compelling economic case for the project, with favorable internal rate of return (IRR) and net present value (NPV), making Ayawilca a highly attractive asset in the context of rising global demand for base and precious metals. Tinka Resources is committed to advancing Ayawilca through further exploration and development, positioning it as a key contributor to the global supply of zinc, silver, and tin while adhering to high environmental and social standards.

Location and Infrastructure

Map 1: Location of the Tinka’s projects in central Peru

Tinka holds a total of 77 granted mining concessions in central Peru covering 28,915 hectares (289 km2) held by two 100%-owned subsidiary companies: Tinka Resources S.A.C. holds 59 granted mining concessions covering 16,809 hectares of the Ayawilca zinc-silver-tin project in the Department of Pasco (also includes Colquipucro silver project which is 1.5 km north of the Ayawilca Zinc Zone); the other properties include the Silvia copper silver project which is located adjacent the Ayawilca and Tinka’s Pampahuasi gold project, which are held by Tinka’s other subsidiary, Darwin Peru S.A.C.

The Ayawilca Project is located in the central Andes of Peru, approximately 200 kilometers northeast of Lima and at an elevation of 3,800 to 4,300 meters above sea level. The project is situated in a well-established mining region, benefiting from excellent infrastructure, including a nearby highway, power lines crossing the property, and access to a rail line and seaport. The project's strategic location provides easy access to essential facilities and services, making it a prime site for efficient exploration and potential future development. Additionally, its proximity to other mining operations further enhances its logistical advantages.

Ayawilca lies approximately 300 km by road from the Port of Callao and a zinc refinery. The road leaving the Project is an all-weather gravel road that crosses the high central Andes for about 60 km before joining a bitumen road to the coast and then to the Port of Callao via the Pan-American highway. The Cajamarquilla zinc refinery, owned by Nexa, is a potential source for Ayawilca zinc concentrates, and is situated on the outskirts of Lima with good access from the highway.

Geology & Mineralization

The Ayawilca zinc-silver-tin deposit is a “blind” deposit occurring between 120 m to 450 m from surface. Sulphide mineralization is hosted by the Pucara limestone (Triassic-Jurassic) which is between 150 to 250 m in thickness and does not outcrop in the resource area. Pucara limestone is overlain by Goyllarisguizga (“Goyllar”) sandstones (Cretaceous which outcrops extensively above the resource. The Goyllar Formation is a sandstone-siltstone sequence up to 200 m thick, and forms a ‘cap’ to the mineralization but can also host narrow zinc sulphide veins.

Map 2: Regional geology of the Ayawilca and Silvia projects

Zinc Zone mineralization is concentrated in sub-vertical pipes (or chimneys) and flat-dipping sulphide ‘mantos’ within the limestones. All of the zinc mineralization is sulphide (sphalerite) with no oxide or transitional mineralization. At West Ayawilca, two sulphide ‘pipes’ each with diameters of between 100 and 150 m extend throughout the limestone sequence up to 200 m vertically - Geological map in Figure 2; Cross section in Figure 3. At South Ayawilca, the main sulphide pipe consists of high-grade, massive zinc mineralization. At both areas the zinc mineralization is concentrated within the hinge of a north-south trending anticline fold, and at South Ayawilca the entire limestone sequence within the fold hinge is entirely mineralized. Zinc within the pipes is typically highest grade along the base of the limestone in contact with underlying basement rock (phyllite) or near the top of the limestone in contact with sandstone. At West Ayawilca, zinc occurs in the breccia matrix of altered limestone within the pipes. Zinc Zone mineralization also contains minor silver-lead mineralization (as galena and silver sulphide minerals). Zinc mineralization occurs as sphalerite with abundant pyrite, marcasite, Fe-rich carbonate (siderite) and minor magnetite or pyrrhotite.

Map 3: Local geology of the Ayawilca project

The Silver Zone is a subvertical vein structure, trending northeast-southwest, consisting of silver sulphides with minor sphalerite and galena hosted by a carbonate-quartz rich matrix. The Silver Zone truncates the zinc mineralization at South Ayawilca and therefore post-dates the main stage zinc mineralization at Ayawilca. The Silver Zone can be up to 20 m wide, and is considered ‘epithermal’ in origin. The Silver Zone remains open in both directions along strike as well as at depth, so there is high potential for increasing the size of the resource.

Tin Zone mineralization pre-dates the zinc-silver mineralization at Ayawilca, and formed in hotter and deeper parts of the system. Tin mineralization consists predominantly of cassiterite, hosted by flat-dipping pyrrhotite-rich sulphide mantos typically 10-15 m thick. The mantos occur mostly along the basal limestone contact with the underlying phyllite. Minor chalcopyrite occurs also with the cassiterite. At South Ayawilca, a tin-rich pyrrhotite manto with coarse-grained cassiterite lies within the core of an overturned anticline (not accompanied by chalcopyrite) and is surrounded by high-grade zinc mineralization.

Map 4: Ayawilca exploration targets and target zones

The Ayawilca deposit drill database includes 249 drill holes totalling 94,258 m with all holes drilled by Tinka. The drillhole database has been incorporated into a Leapfrog 3D geological model. During the most recent drill program (completed in 2023) Tinka completed 33 diamond drill holes for 11,115 m in both infill and step-out exploration holes focused at West and South Ayawilca. Some of the highlights of the program included the following intercepts:

South Ayawilca:

Hole A22-202: 38.9 m at 20.0% Zn, 0.1% Pb and 31 g/t Ag from 170.5 m.
Hole A22-199: 42.4 m at 9.4% Zn, 0.1% Pb and 19 g/t Ag from 246.5 m.
Hole A22-212: 145.2 m at 10.9% Zn, 0.2% Pb and 31 g/t Ag from 158.2 m.
Hole A22-208: 71.2 m at 8.8% Zn, 0.5% Pb and 33 g/t Ag from 168.8 m.
Hole A22-206: 37.8 m at 10.5% Zn, 0.1% Pb and 17 g/t Ag from 153.6 m.

West Ayawilca:

Hole A22-200: 44.9 m at 12.0% Zn, 0.1% Pb and 16 g/t Ag from 283.6 m.
Hole A22-207: 132.5 m at 6.8% Zn, 0.3% Pb and 21 g/t Ag from 193.9 m.
Hole A22-205: 134.0 m at 4.8% Zn, 0.1% Pb and 10 g/t Ag from 180.0 m.
Hole A22-203: 49.8 m at 8.3% Zn, 0.1% Pb and 16 g/t Ag from 186.88 m.
Hole A23-216: 97.9 m at 8.8% Zn, 0.1% Pb and 16 g/t Ag from 197.9 m.

Resource

The Ayawilca Project Mineral Resource estimate for the Zinc Zone, Silver Zone, and Tin Zone is summarized below as estimated by SLR Consulting (Canada) Ltd (“SLR”). For the purposes of demonstrating ‘Reasonable Prospects for Eventual Economic Extraction’ (“RPEEE”), Mineral Resources are constrained within underground reporting shapes generated in Deswik Stope Optimizer (“DSO”) using a minimum mining width of three metres and an NSR cut-off value of $ 50/t for the Zinc and Silver Zones and $ 60/t for the Tin Zone. Tin Zone, Zinc Zone and Silver Zone resources do not overlap.

Map 5: Cross section of the Ayawilca project with 2024 PEA Zinc Zone stopes

To satisfy RPEEE for an underground mining scenario, Tinka is reporting Mineral Resources within potentially mineable shapes (i.e., stopes) thereby demonstrating the spatial continuity of the mineralization. Where the potentially mineable volumes contain smaller zones of mineralization with values below the stated cut-off, this lower grade material is included in the Mineral Resource estimate.

Map 7: Longitudinal view along 060 Fault section

The Mineral Resources estimate as at January 1, 2024, contains the following:

Indicated Zinc Zone Mineral Resource of 28.3 Mt grading 5.82% zinc, 16.4 g/t silver, 0.2% lead & 91 g/t indium containing:

3.64 billion pounds of zinc;
14.9 million ounces of silver;
108 million pounds of lead; and
2,582 tonnes of indium.

Inferred Zinc Zone Mineral Resource of 31.2 Mt grading 4.21% zinc, 14.5 g/t silver, 0.2% lead & 45 g/t indium containing:

2.90 billion pounds of zinc;
14.6 million ounces of silver;
133 million pounds of lead; and
1,414 tonnes of indium.

Indicated Tin Zone Mineral Resource of 1.4 million tonnes grading 0.72% tin, containing:

22 million pounds of tin.

Inferred Tin Mineral Resource of 12.7 million toones grading 0.76% tin, containing:

213 million pounds of tin.

Inferred Silver Zone Mineral Resource of 1.0 Mt grading 111.4 g/t silver, 1.54% zinc, & 0.5% lead containing:

3.7 million ounces of silver;
35 million pounds of zinc; and
12 million pounds of lead.

No Mineral Reserves have been estimated at the Project.

PEA - Ayawilca Preliminary Economic Assessment

On February 28, 2024, Tinka Resources announced the results from an updated Preliminary Economic Assessment (“PEA”) on the Company’s 100%-owned polymetallic Ayawilca project (“Ayawilca” or the “Project”) in central Peru. The updated PEA shows Ayawilca to be an excellent base metals project with significant enhancements from the previous PEA study. The Project now features a smaller, more efficient zinc-silver-lead plant, introduces a separate tin plant for additional revenue and commodity diversification and highlights the development path forward for Ayawilca to become a producing mine. PEA Highlights:

Robust economics: After-tax Net Present Value (“NPV”) at 8% discount of US$434 million (pre-tax NPV8% of US$732 million) and after-tax Internal Rate of Return (“IRR”) of 25.9% (pre-tax IRR of 34.8%).
Payback period after-tax of 2.9 years (pre-tax of 2.4 years).
Initial Capital Expenditure (“Capex”) of US$382 million.
Long 21-year life of mine (“LOM”) for a 2.0 million tonnes per annum (Mtpa) zinc-silver-lead operation with 15-years of tin production at 0.3 Mtpa.
Average C1 cash cost of US$0.55/pound zinc and all in sustaining cost (“AISC”) of US$0.68/ pound zinc.
Average annual metal production (in concentrate) of 200 million pounds of zinc (90,000 tonnes Zn), 3.26 million pounds of tin (1,500 tonnes Sn), 560,000 ounces of silver and 5.7 million pounds of lead (2,590 tonnes Pb).
Zinc Zone Indicated Mineral Resource tonnage increased 49% from the previous Mineral Resource estimate.
Tin Zone Indicated Mineral Resource declared for the first time.
Excellent location in a world-class mining jurisdiction, close to a zinc smelter and port.
Compact mine footprint and planned use of filtered tailings technology provides the lowest risk and most water-efficient solution for tailings storage while 40% of tailings to be stored underground as backfill.

Technical Report

The NI 43-101 Technical Report for Tinka Resources' Ayawilca Zinc-Silver-Tin Project in central Peru provides a comprehensive assessment of the project's mineral resources and economic potential. The report highlights a significant Indicated Mineral Resource of 28.3 million tonnes grading 5.82% zinc, along with substantial silver and indium credits, and an Inferred Mineral Resource of 31.2 million tonnes grading 4.21% zinc. Additionally, the report details a newly defined Tin Zone, which includes an Indicated Resource of 1.4 million tonnes grading 0.72% tin and an Inferred Resource of 12.7 million tonnes grading 0.76% tin. The study also outlines a robust Preliminary Economic Assessment (PEA) showcasing strong financial metrics, including a favorable internal rate of return (IRR) and net present value (NPV), underscoring Ayawilca's potential to become a significant producer of zinc, silver, and tin in a world-class mining jurisdiction.