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  • Ground floor opportunity in a brand new Lundin exploration vehicle
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  • Los Helados - Exposure to rising copper and gold prices through ownership of a strategic resource in an operating mining district

Q2 2022 OPERATING HIGHLIGHTS AND OUTLOOK

2022 Drill Program Successfully Completed at Los Helados, Confirming Multiple High-grade Centres

The Company’s 2022 drill program at Los Helados concluded in June 2022, coinciding with the onset of winter weather in South America. The campaign completed 10,312 metres in 10 holes, three of which will be deepened when the Company restarts drilling, currently planned for October 2022.

The drill campaign undertaken at Los Helados has successfully:

  • Expanded, and demonstrated continuity of, mineralization associated with the high-grade breccia phase at the core of the current Mineral Resource at Los Helados, now called the Condor Zone. The Condor Zone was the main target of the Company’s 2022 program, and drilling sought to confirm continuity of the high-grade mineralization through infill drilling, and test the potential for extension as guided by a recent reinterpretation of the Los Helados geological model;
  • Confirmed the existence of a second high-grade centre to the Los Helados deposit, the Fenix Zone, located at the western edge of the current Mineral Resource. The Fenix Zone remains open at depth, towards the surface, and laterally. Most importantly, the identification and confirmation of the Fenix Zone as a separate and distinct mineralized feature from the Condor Zone validates the Company’s recently revised geological interpretation, which hypothesizes that the Los Helados deposit contains multiple centres of high-grade mineralization and that elevated grades may not necessarily dissipate towards the edges of the deposit;
  • Discovered a third distinct, high-grade centre to the Los Helados deposit, the Alicanto Zone, located 550m north of the Condor Zone, which further affirms the Company’s reinterpretation of the geological model. The Alicanto Zone was discovered by drillhole LHDH078, which returned 474.8m at 0.61% copper equivalent (“CuEq”), including 100.0m at 1.20% CuEq. This newly discovered zone of high-grade mineralization remains open in all directions, and will be a high priority drill target for the Company’s upcoming drill campaign.

The results from the Company’s 2022 drill campaign at Los Helados have demonstrated the potential to add significantly more high-grade material at Los Helados, through continued expansion of the known zones and the discovery of new high-grade satellite structures, like the Fenix and Alicanto Zones. In addition, the results from this program have provided validation of the Company’s current geological interpretation of the Los Helados deposit, which will form the basis for ongoing exploration.

Assay results received, analyzed and released by the Company during and subsequent to the second quarter of 2022 are summarized as follows:

Hole-ID From
(m)
To
 (m)
Length
(m)
Cu
(%)
Au
(g/t)
Ag
(g/t)
CuEq1
(%)
Zones
Intersected
LHDH073 124.0 1,000.0 876.0 0.56 0.28 2.1 0.74 Condor Zone
incl. 216.0 912.0 696.0 0.60 0.31 2.2 0.80
incl. 314.0 524.0 210.0 0.76 0.45 2.8 1.06
LHDH074 42.0 1,058.3 1,016.3 0.45 0.31 1.9 0.65 Condor Zone
incl. 136.0 890.0 754.0 0.52 0.30 2.0 0.71
and incl. 210.0 504.0 294.0 0.60 0.41 2.1 0.87
and incl. 606.0 746.0 140.0 0.64 0.29 2.5 0.83
and incl. 816.0 890.0 74.0 0.58 0.25 2.5 0.74
LHDH075 14.0 922.0 908.0 0.39 0.24 1.3 0.55 Condor Zone
incl. 88.0 652.0 564.0 0.47 0.29 1.4 0.65
incl. 222.0 602.0 380.0 0.51 0.31 1.6 0.70
incl. 222.0 378.0 156.0 0.59 0.42 1.7 0.86
LHDH076 110.0 1,400.0 1290.0 0.60 0.21 2.3 0.74 Condor Zone
incl. 138.0 922.0 784.0 0.63 0.25 1.9 0.80
incl. 138.0 542.0 404.0 0.77 0.35 2.2 1.00
and incl. 1,166.0 1,400.0 234.0 0.80 0.24 4.5 0.97 Fenix Zone
incl. 1,166.0 1,308.0 142.0 1.14 0.35 3.8 1.38
incl. 1,384.0 1,400.0 16.0 0.86 0.19 23.4 1.11
LHDH077 0.0 989.0 989.0 0.51 0.27 1.7 0.69 Condor Zone
incl. 42.0 778.0 736.0 0.58 0.32 1.9 0.79
incl. 328.0 548.0 220.0 0.69 0.41 2.4 0.95
incl. 328.0 452.0 124.0 0.71 0.47 2.6 1.02
Upper ext. 42.0 150.0 108.0 0.53 0.38 1.6 0.77
Lower ext. 526.0 778.0 252.0 0.57 0.20 2.0 0.71
LHDH078 566.0 1,040.8 474.8 0.55 0.08 1.7 0.61 Alicanto Zone
incl. 700.0 1,040.8 340.8 0.67 0.09 2.0 0.73
incl. 844.0 944.0 100.0 1.10 0.14 2.1 1.20

1 CuEq for drill intersections is calculated based on US$ 3.50/lb Cu, US$ 1,700/oz Au and US$ 20/oz Ag, with metallurgical recoveries of 88% for copper, 76% for gold and 60% for silver based on a comprehensive program of metallurgical testwork. The formula is: CuEq % = Cu % + (0.6117 * Au g/t) + (0.0057 * Ag g/t).
2 Los Helados hosts large-scale porphyry and associated breccia mineralization and drilled lengths are interpreted to be approximate true widths.  Drill hole LHDH078 is the only hole into the Alicanto Zone and additional drilling is required to define the geometry of this zone and understand the true width of this intersection. 

One additional hole has been completed to date, with assays pending, and three holes are currently suspended and planned to be resumed during the Company’s next drill campaign commencing in or around September 2022. The objective of these additional holes are as follows:

Hole Status Objectives
LHDH079 Completed;
Assays pending
To test for potential extension of the Condor Zone at depth.
LHDH080 Suspended To test a northwest resistivity anomaly.
LHDH081 Suspended To test continuity and potential extension of the Fenix Zone.
LHDH082 Suspended To test for potential extension of the Condor Zone at depth.

Assay results for these holes will be released as they are received, analyzed and confirmed by the Company.

The data generated from the current drill program at Los Helados will form the basis for a revised geological model and will enable evaluation of alternate development scenarios for Los Helados, exploring optionality in scale of operations and mine plan strategies. In addition, the drill program will provide samples for additional detailed metallurgical testwork, which will allow for optimization of process flowsheets and a better understanding of variability within the orebody.

New Copper-Gold Porphyry System Discovered at Valle Ancho

In May 2022, the Company confirmed its discovery of a new copper-gold porphyry system at the La Quebrada target with an intersection of 596.5m of 0.50% CuEq.

The 2021/2022 drill campaign at Valle Ancho consisted of 3,060 metres of diamond drilling in eight holes at three high priority targets. At La Quebrada, five wide-spaced reconnaissance holes were completed, three of which intersected significant intervals of copper-gold mineralization consistent with a large porphyry system. The three discovery holes were drilled to respective depths of 601m, 271m and 431m, with each ending in mineralization. These are the first holes ever drilled by the Company at La Quebrada and the discovery will be an exciting target of future drill campaigns at Valle Ancho, as the Company looks to better understand extent, geometry and controls of this mineralization.

All assay results from the five holes completed at La Quebrada are summarized as follows:

La Quebrada  – Copper-gold Porphyry Discovery

Hole-ID From
(m)
To
 (m)
Length (m) Cu
(%)
Au
(g/t)
Ag
(g/t)
CuEq1
(%)
VADH003 4.0 600.5 596.5 0.23 0.37 1.4 0.50
incl. 4.0 108.0 104.0 0.25 0.50 1.5 0.62
incl. 350.0 600.5 250.5 0.23 0.40 1.6 0.53
VADH004 No significant values
VADH005 0.0 271.0 271.0 0.12 0.26 1.1 0.32
incl. 76.0 271.0 195.0 0.14 0.29 1.2 0.36
incl. 138.0 224.0 86.0 0.15 0.33 1.5 0.40
VADH006 8.0 431.0 423.0 0.19 0.27 2.2 0.40
incl. 162.0 270.0 108.0 0.22 0.38 1.9 0.50
incl. 292.0 428.0 136.0 0.25 0.32 4.2 0.50  
VADH007 No significant values

1 CuEq for drill intersections is calculated based on US$ 3.50/lb Cu, US$ 1,700/oz Au and US$ 20/oz Ag, with metallurgical recoveries of 80% assumed for all metals. The formula is: CuEq % = Cu % + (0.7083 * Au g/t) + (0.0083 * Ag g/t).

The Company’s interest in the Valle Ancho project, comprised of the Valle Ancho and Interceptor properties, is held through an option agreement with the Province of Catamarca, whereby it may earn a 100% interest in Valle Ancho, by making US$8.0 million in total project expenditures by the end of 2022. As of the date of this MD&A, the Company anticipates making the remaining earn-in expenditures prior to the required deadline with additional expenses related to ongoing technical analysis of the results of the Company’s first drill campaign at Valle Ancho.

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