Pulacayo Project Feasibility Study - Apogee Silver

Pulacayo 1 000 t/d Phase I Feasibility Study - NI 43-101 Technical Report
090644-3-0000-20-IFI-100
14.3 Methodology of Resource Estimation
14.3.1 Overview of Estimation Procedure
This updated Pulacayo deposit mineral resource estimate is based on a three dimensional
block model developed using GemcomSurpac ® Version 6.3.1 modeling software. The
estimate is based on validated results of 69,739 m of diamond drilling from 226 surface drill
holes and 42 underground drill holes completed by Apogee and ASC through various drill
programs between 2002 and the end of 2011. The final drill hole completed and included in
the resource is 11PUD266. A total of 28,807 drill core samples have been assayed from
these programs with 24367 samples occurring within the limits of the current resource model.
In addition, 627 trench samples completed in 2011 were included in the resource estimate.
Prior to deposit modeling, a complete set of vertical cross sections through the deposit were
produced from the project database and used to develop north-south geological section
interpretations at a nominal section spacing of 50 m. Raw analytical results were represented
on the interpreted sections to understand TVS geometry and grade distribution trends, along
with corresponding calculated Net Smelter Return (NSR) values determined using a
calculator developed for Apogee by Starkey and Associates Inc., Consulting Metallurgical
Engineers. The NSR calculator is discussed in more detail in report section 14.3.3 below.
To better represent the individual grade trends and distribution of silver, lead and zinc, each
metal was modeled independently for the current resource estimate. On this basis, nine
domain solid models defining zones of veining and higher grade mineralization were created
for silver, lead and zinc from the sectional interpretation of drill core assays and geological
data. The resulting 27 metal domain solid models range from a few meters to tens of meters
in thickness and have varying continuity over a 1,500 m strike length oriented at Az. 280°,
and a 600 m sub-vertical total dip extent. This reflects the orientation and geometry of the
principal mineralized TVS structure and associated secondary structures. A peripheral
constraining wireframe was developed to include all the metal domains and digital terrain
models were created for both the oxide-sulphide zone boundary and the topographic surface.
Inverse distance squared (ID 2 ) grade interpolation was first constrained within the interpreted
metal domain wireframes for silver, lead and zinc using multiple independent search ellipsoid
passes and independent 1 m down hole assay composites. Search ellipsoid orientations for
the interpolation passes conformed to the general trend of Az. 280° with a 30° major axis
plunge and sub-vertical dip, but were modified to accommodate local variations in the
distribution of mineralization. Contributing 1 m assay composites were capped at 1,500 g/t
silver, 15% lead, and 15% zinc. ID 2 grade interpolations for each metal were subsequently
carried out and constrained within the peripheral wireframe envelope, outside the interpreted
metal domain wireframes. A 150 m ellipsoid major axis, 75 m ellipsoid semi-major axis and
25 m ellipsoid minor axis were applied for all interpolation passes with the exception of a
restricted range pass using 30 m major and semi-major axes and a 5 m minor axis for all
values greater than 50 g/t silver, 5% lead, or 5% zinc within the peripheral domain and
external to the main metal wireframes. Contributing 1 m down hole composites were
constrained to a minimum of two and a maximum of nine with no more than three from a
single drill hole. The oxide-sulphide zone digital terrain model functioned as a hard boundary
in all interpolation passes.
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