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
A specific gravity model was interpolated by ID 2 methodology from 18236 sulphide zone and
3131 oxide zone specific gravity values normalized to 1 m down hole composites.
Interpolation procedures were the same as those used for metal grade assignment and the
highest interpolated specific gravity value calculated for each block was selected as the valid
block value.
The Pulacayo deposit has an extensive history of mining activity represented by shafts,
winzes, level development, and stoping. Digital modeling of stopes and underground
development by EPCM Consultants S.R.L (EPCM) for Apogee was upgraded and validated
by TWP by digitally adding historic underground mining and stoping from archived mine
engineering plans. The revised digital model of underground development and stopes shows
good visual correlation with the drill hole database.
Indicated Resources are all interpolated blocks with at least 7 contributing assay composites
with a maximum average distance of 70 m from the block centroid, and having h the nearest
contributing composite at 60 m or less. Inferred Resources are all other interpolated blocks
within the peripheral constraint or blocks that otherwise meet Indicated Resources parameter
but are interpolated through drill hole intersections that lack sampling.
Net Smelter Return (NSR) values for the blocks occurring within the sulphide zone were
determined by means of a net smelter return calculator developed for the deposit by John
Starkey, P. Eng., of Starkey and Associates Inc., Consulting Metallurgical Engineers of
Oakville Ontario. The modeling used a 36 month trailing average silver price of
25.00 USD/oz. The base metal prices used in the modeling were 0.86 USD/lb lead and
1.00 USD/lb zinc. The base metal prices were supplied by Exen Consulting Ltd. of Oakville,
Ontario and are based upon the average long-term analyst lead and zinc price projections
from a number of metal broker and mining investment banking sources. Exen Consulting Ltd.
is a commercial concentrate marketing business providing consulting services to producers,
metal traders and smelters around the world.
Open pit resources to an elevation of 4,159 m ASL (top of crown pillar) were determined
within a Whittle optimized maximum NPV pit shell utilizing 1.80 USD/ton mining cost,
1.60 USD/ton surface haulage cost, 2.50 USD /ton G&A, and 19.0 USD/ton and
9.10 USD/ton respectively for oxide and sulphide processing costs. Pit slopes varied from 42
to 43 degrees. In the pit optimization process, only silver derived NSR values were used in
the oxide zone, while silver, lead and zinc derived NSR values were used in the sulphide
zone. P&E Mining Consultants Inc. of Brampton, Ontario completed the Whittle open pit
optimization program and provided statements of associated oxide and sulphide zone
mineral resources.
Resource block model results were validated through comparison with separate deposit
models based on grade interpolation using Ordinary Kriging (OK) and Nearest Neighbor (NN)
methodologies. Statistical results of the ID 2 interpolation were determined as most
appropriately representing contributing assay populations and associated sectional deposit
interpretations.
TWP Sudamérica S.A. Av. Encalada 1257 Of. 801, Santiago de Surco Lima 33, Perú (51-1) 4377473
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