LOS CANELOS AURIFEROUS PROJECT

LOS CANELOS AURIFEROUS PROJECT (Executive Summary)

Key Metrics

Locatión
The Los Canelos Auriferous Project is located in the IV Region of Coquimbo, Chile, in a straight line 230 km north of
Santiago city, and 150 km southeast of La Serena city and Puerto de Coquimbo. Closer is Combarbalá, a small distant
town in a straight line 20 km north-east of the project, and also the city of Illapel, located 30 km southwest of the project,
at an average altitude of 1,500 m. s.n.m. The mining property consists of 2 measurements (140 Hc).

History and Distrital Geology

The project is located in the old El Espino Mining District, which has been historically exploited intensely for its gold
mineralization, both in vetiform deposits, mantles, and in pleasures. The first works go back to pre-Hispanic times, when
areas of high grade of amalgamable gold were benefited. The exploitation has continued, since then, intermittently until
today, with the development of innumerable artisan scale mining works, which are still concentrated in the oxidized zone,
of enrichment and bonanza of the mineralized structures. The hypogenic or primary zone has practically not been
exploited, due to the lower grade, and difficulty of working below the water table. The construction of the 800-m long
Ravanales mining tunnel, carried out in the mid-'30s, by the miner Pedro García Rojo, marked a milestone and a
resurgence of mining in the District, allowing access and extraction of numerous zones of bonanzas and enjoyments that
had been in old and abandoned work, from the time of the arrival of the Spaniards.

The mineralization of Au is found in vetiform bodies of variable widths between 0.3 and 3m, with vein lengths that can
reach several hundred meters. The gangue is calcite, quartz, iron oxides (hematite and / or specularite) and sericite.
There is also mineralization of chalcopyrite and pyrite associated with veins, but it has been scarcely exploited. The
grades of Au are variable, fluctuating between 1 and 30 g/t, although sometimes they exceeded 1000 g/t.

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Geology
The mineralization of the project is hosted in the
contact between the Quebrada Marquesa
Formation, and an intrusive stock of the San
Lorenzo Intrusive Unit (monzodiorite -
granodiorite). The Quebrada Marquesa Formation
is represented by the Member El Espino, of Lower
Cretaceous age, composed of a sequence of very
well stratified marine sedimentary rocks
(limestones and gray shales), affected by strong
metasomatism of silica, albite, actinolite and pyrit,
in part strong magnetite.

At least four different types of gold mineralization

are observed. The most distinctive and high grade
gold is that found in drilling SDEL-01, SDEC-01
and SDEC-02, which intercept marine sedimentary
rocks, with strong phyllic alteration (sericite), and
partly argillic, with Au grades that in some cases
exceed 58 g/t Au.

Another mineralizing system in the area, and

perhaps the most important for its volume, is the
NE belt with stockwork (quartz-pyrite-Au veinlets)
in intrusive, with strong phyllic alteration (sericite-
illite).

MINING PROPERTY, LOS CANELOS PROJECT

Stratification of sedimentary rocks, cut by fault and veins. In

the lower part, a mantle appears with a high content of relict
magnetite, a large part oxidized to limonite and hematite.

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In conclusion, it can be pointed out that the auriferous economic mineralization is housed in 2 different types of rocks:

1.- Mineralization in sedimentary rocks (corneous rocks, protolito calcareous sedimentary rocks of the Quebrada
Marquesa Formation, El Espino Member): with three types of mineralization

a) Mineralization in hydrothermal vents, with grades up to 17 g/t Au with high content of sericite, hematite and Py;

b) Vein structures (feeders), of NE and NS spatial attitude, with grades up to 54 g/t Au;

c) Mantles of Au, Fe, + Ag, + Cu.

2.- Mineralization in granodioritic stock, with stockwork belt with Qz-Py-Au veinlets, and strong sericitic alteration, with
an average width of 100 m and a length greater than 1,000m.

The area of this project is located 2.5 km east of the El Espino Project (IOCG), of Pucobre, which have mineral resources
of (Measured + indicated) of 145Mt @ 0.55% Cu, 0.22 g/t Au (0,7% EqCu).

According to what has been analyzed in this study, a hypothetical potential higher than 1.5 million ounces of gold can be
estimated for the Los Canelos Gold Project. Where there would be in belt of intrusive granodioritic approx. > 40,000,000
ton @ 1 - 2 g/t Au. And in the area of hydrothermal breccias in sedimentary rocks there would be a minimum> 1,500,000
ton @ 4 - 6 g/t Au. The resources in veins or mantles are not considered in this basic and hypothetical estimation, which
can generate in depth good possibilities of finding greater presence of copper.

Drillhole SDEL-01 (41.65m). Hydrothermal

Breccia, clasts corneous sedimentary rock.

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Las Coloradas Sector, Porphyry with diss. Gold

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