Ayawilca Zinc Zone

Mineral resources at the Ayawilca Zinc Zone are estimated to contain, as at November 26, 2018 (see Table 3):

• Zinc - 1.8 billion pounds in the Indicated resource category and 5.6 billion pounds in the Inferred category;
• Silver - 5.8 million ounces in the Indicated resource category and 25.2 million ounces in the Inferred category;
• Lead - 42 million pounds in the Indicated resource category and 230 million pounds in the Inferred category;

Mineralization is in the form of primary sulphides. The mineralization remains open to the south and to the west.

Zinc mineralization at Ayawilca occurs as massive sulphide lenses hosted in limestones of the Pucará Group (Triassic-Jurassic age), the same host rock as at the large CRD mines of Cerro de Pasco and Morococha. Pucará Group limestone occurs at depths of between 150 and 450 metres from surface in the resource area at Ayawilca, beneath sandstones and siltstones of the Goyllarisguizga (“Gollyar”) Group (Lower Cretaceous age) between 120 and 200 metres thick. Goyllar sandstones outcrop extensively over the resource area and dip gently to the east. Beneath the Pucará Group limestone lies basement rocks of the Excelsior Group (Paleozoic age), in fault contact with the limestone which also dips gently to the east.

An important north-northwest trending fault structure, the Colquipucro Fault, controls the location of high-grade mineralization adjacent to the fault. At Ayawilca West and South, mineralized lenses are ‘stacked’ to form almost continuously mineralized zones with a vertical thickness of 100 to 150 metres. Zinc mineralization occurs as both iron-rich sphalerite (marmatite) and low iron sphalerite. Silver mineralization is associated with galena and silver sulfosalts. Gangue sulphide minerals include pyrite, pyrrhotite, and arsenopyrite. Alteration minerals include chlorite, magnetite, clays, siderite and other complex carbonates, and quartz.