Technical Report on the Lindero Heap Leach Project Salta Province, Argentina

441 Pages·2013·44.53 MB·English

Technical Report on the Lindero Heap Leach Project
Salta Province, Argentina

Prepared for:
GOLDROCK MINES CORPORATION

Prepared by:

Kappes, Cassiday & Associates

7950 Security Circle

Reno, NV 89506-1995

Report Date: 31 May 2013
Effective Date of Resources: 23 January 2013
Technical Report Effective Date: 1 May 2013

Authors:
Richard J. Taylor, P.E.
Thomas L. Dyer, P.E.
David G. Thomas, P.Geo.
Lindero Project – NI 43-101 Technical Report i

TABLE OF CONTENTS

1.0  SUMMARY ......................................................................................................... 1-1 
1.1  Introduction .............................................................................................. 1-1 
1.2  Key Outcomes .......................................................................................... 1-1 
1.3  Property Description and Location .......................................................... 1-1 
1.4  Accessibility, Climate, Local Resources, Infrastructure and
Physiography............................................................................................ 1-3 
1.5  History of Exploration ............................................................................. 1-4 
1.6  Geological Setting and Mineralization .................................................... 1-4 
1.7  Deposit Types .......................................................................................... 1-5 
1.8  Exploration ............................................................................................... 1-5 
1.9  Drilling ..................................................................................................... 1-6 
1.10  Sample Preparation, Analysis, and Security ............................................ 1-7 
1.11  Data Verification ...................................................................................... 1-8 
1.12  Mineral Processing and Metallurgical Testing ........................................ 1-9 
1.13  Mineral Resource Estimates .................................................................. 1-10 
1.14  Mineral Reserve Estimates .................................................................... 1-12 
1.15  Mining Methods ..................................................................................... 1-13 
1.16  Recovery Methods ................................................................................. 1-14 
1.17  Project Infrastructure ............................................................................. 1-16 
1.18  Market Studies and Contracts ................................................................ 1-18 
1.19  Environmental Studies, Permitting and Social or Community Impact .. 1-18 
1.20  Capital and Operating Costs .................................................................. 1-20 
1.21  Economic Analysis ................................................................................ 1-22 
1.22  Adjacent Properties ................................................................................ 1-25 
1.23  Project Implementation .......................................................................... 1-25 
1.24  Interpretation and Conclusions .............................................................. 1-26 
1.25  Recommendations .................................................................................. 1-27 
2.0  INTRODUCTION ............................................................................................... 2-1 
2.1  Qualified Persons ..................................................................................... 2-1 
2.2  Site Visits ................................................................................................. 2-2 
2.3  Effective Dates ......................................................................................... 2-2 
2.4  Previous Technical Reports ..................................................................... 2-3 
3.0  RELIANCE ON OTHER EXPERTS .................................................................. 3-1 
3.1  Environmental .......................................................................................... 3-1 

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Lindero Project – NI 43-101 Technical Report ii

3.2  Tenure ...................................................................................................... 3-2 
3.3  Permitting ................................................................................................. 3-2 
3.4  Hydrology and Hydrogeology ................................................................. 3-3 
3.5  Taxes ........................................................................................................ 3-3 
4.0  PROJECT DESCRIPTION .................................................................................. 4-1 
4.1  Location ................................................................................................... 4-1 
4.2  Property and Title in Argentina ............................................................... 4-2 
4.3  Tenure History ......................................................................................... 4-6 
4.4  Surface Rights .......................................................................................... 4-9 
4.5  Royalties ................................................................................................ 4-10 
4.6  Permits ................................................................................................... 4-10 
4.7  Environmental ........................................................................................ 4-14 
4.8  Comments on Section 4 ......................................................................... 4-15 
5.0  ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE
AND PHYSIOGRAPHY ..................................................................................... 5-1 
5.1  Accessibility & Infrastructure .................................................................. 5-1 
5.2  Climate ..................................................................................................... 5-1 
5.3  Infrastructure ............................................................................................ 5-2 
5.4  Physiography............................................................................................ 5-4 
5.5  Comments on Section 5 ........................................................................... 5-5 
6.0  HISTORY ............................................................................................................ 6-1 
7.0  GEOLOGICAL SETTING AND MINERALIZATION ..................................... 7-1 
7.1  Regional Geology .................................................................................... 7-1 
7.2  District Geology ....................................................................................... 7-3 
7.3  Lindero Deposit Geology ......................................................................... 7-5 
7.4  Arizaro Prospect Geology ...................................................................... 7-14 
7.5  Mineralization ........................................................................................ 7-22 
7.6  Comments on Section 7 ......................................................................... 7-27 
8.0  DEPOSIT TYPES ................................................................................................ 8-1 
8.1  Geological Model and Concepts .............................................................. 8-1 
8.2  Exploration Concepts ............................................................................... 8-2 
8.3  Comments on Section 8 ........................................................................... 8-3 
9.0  EXPLORATION.................................................................................................. 9-1 
9.1  Lindero Deposit ....................................................................................... 9-1 
9.2  Arizaro Prospect ..................................................................................... 9-11 
9.3  Comments on Section 9 ......................................................................... 9-18 
10.0  DRILLING ......................................................................................................... 10-1 
10.1  Introduction ............................................................................................ 10-1 

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10.2  Lindero Deposit ..................................................................................... 10-1 
10.3  Arizaro Project ....................................................................................... 10-9 
10.4  Drill Program Conclusions and Recommendations ............................. 10-15 
10.5  Comments on Section 10 ..................................................................... 10-15 
11.0  SAMPLE PREPARATION, ANALYSIS AND SECURITY ........................... 11-1 
11.1  Introduction ............................................................................................ 11-1 
11.2  Drill Hole Sampling Method ................................................................. 11-1 
11.3  Trench Sampling Method Lindero ......................................................... 11-2 
11.4  Trench and Road-cut Sampling Method Arizaro ................................... 11-3 
11.5  Sample Preparation and Assaying ......................................................... 11-4 
11.6  Bulk Density/Specific Gravity ............................................................... 11-7 
11.7  Comments on Section 11 ....................................................................... 11-8 
12.0  DATA VERIFICATION ................................................................................... 12-1 
12.1  Database Audit ....................................................................................... 12-1 
12.2  Collar and Down-hole Surveys .............................................................. 12-1 
12.3  Drill Logs ............................................................................................... 12-3 
12.4  Assays .................................................................................................... 12-3 
12.5  Bulk Density/Specific Gravity ............................................................... 12-5 
12.6  Core Recovery ....................................................................................... 12-5 
12.7  Assay QA/QC ........................................................................................ 12-6 
12.8  Recommendations Arising from 2009 AMEC Data Verification........ 12-19 
12.9  Comments on Section 12 ..................................................................... 12-20 
13.0  MINERAL PROCESSING AND METALLURGICAL TESTING ................. 13-1 
13.1  Introduction ............................................................................................ 13-1 
13.2  Summary Recoveries and Leaching Parameters .................................... 13-1 
13.3  Testwork Programs ................................................................................ 13-2 
13.4  Sampling ................................................................................................ 13-5 
13.5  Mineralogy and Petrography .................................................................. 13-1 
13.6  Crushing Work Index and Abrasiveness ................................................ 13-4 
13.7  Paste pH, Eh and Dissolved Oxygen ..................................................... 13-5 
13.8  Head Analyses ....................................................................................... 13-6 
13.9  Particle size distribution ......................................................................... 13-8 
13.10  Rock Density Test Work ........................................................................ 13-9 
13.11  Bottle Rolls .......................................................................................... 13-10 
13.12  Drain down tests, Slump data and Permeability .................................. 13-11 
13.13  AllOX Puncture Test ............................................................................ 13-13 
13.14  Blast Testing ........................................................................................ 13-14 
13.15  Cyanide Column Tests ......................................................................... 13-16 

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13.16  Leaching Parameters ............................................................................ 13-18 
13.17  Gold Recoveries ................................................................................... 13-25 
13.18  Production Model and Curves ............................................................. 13-27 
13.19  Copper Behavior and SART ................................................................ 13-29 
13.20  Water Quality ....................................................................................... 13-34 
13.21  Detoxification Testwork ...................................................................... 13-35 
13.22  Arizaro Bottle Rolls ............................................................................. 13-37 
14.0  MINERAL RESOURCE ESTIMATES .......................................................... 14-38 
14.1  Database ............................................................................................... 14-38 
14.2  Geological Models ............................................................................... 14-39 
14.3  Mineral Resource Classification .......................................................... 14-58 
14.4  Assessment of Reasonable Prospects for Economic Extraction .......... 14-59 
14.5  Mineral Resource Statement ................................................................ 14-62 
14.6  Comments on Section 14 ..................................................................... 14-64 
15.0  MINERAL RESERVE ESTIMATES................................................................ 15-1 
15.1  Pit Optimization ..................................................................................... 15-1 
15.2  Pit Designs ............................................................................................. 15-6 
15.3  Dilution ................................................................................................ 15-14 
15.4  Reserves and Resources ....................................................................... 15-14 
16.0  MINING METHODS ........................................................................................ 16-1 
16.1  Material Types ....................................................................................... 16-1 
16.2  Waste Material Definition...................................................................... 16-1 
16.3  Ore Definition ........................................................................................ 16-1 
16.4  Mining Method ...................................................................................... 16-2 
16.5  Mine-Waste Facilities ............................................................................ 16-2 
16.6  Mine-Production Schedule..................................................................... 16-2 
16.7  Equipment Selection and Productivities ................................................ 16-7 
16.8  Mine Personnel ...................................................................................... 16-8 
17.0  RECOVERY METHODS .................................................................................. 17-1 
17.1  Process Design Basis ............................................................................. 17-1 
17.2  Processing Rate ...................................................................................... 17-2 
17.3  Crushing Area ........................................................................................ 17-2 
17.4  Leach Pad and Leach System ................................................................ 17-4 
17.5  Solution Management ............................................................................ 17-8 
17.6  ADR Plant ............................................................................................ 17-10 
17.7  Process Solution & Makeup Water ...................................................... 17-12 
17.8  Process Water Balance ......................................................................... 17-12 
17.9  Process Reagents & Consumables ....................................................... 17-18 

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17.10  Additional Plant Design Considerations .............................................. 17-18 
17.11  SART ................................................................................................... 17-19 
18.0  PROJECT INFRASTRUCTURE ...................................................................... 18-1 
18.1  Access Roads & Site Access.................................................................. 18-2 
18.2  Power Supply ......................................................................................... 18-3 
18.3  Water Supply ......................................................................................... 18-5 
18.4  Process Area Buildings .......................................................................... 18-9 
18.5  Mine Area Buildings ............................................................................ 18-11 
18.6  Camp .................................................................................................... 18-13 
18.7  Diesel Fuel Delivery and Storage Systems .......................................... 18-15 
18.8  Site Services ......................................................................................... 18-15 
18.9  Site Fencing ......................................................................................... 18-16 
19.0  MARKET STUDIES AND CONTRACTS ....................................................... 19-1 
19.1  Gold Pricing ........................................................................................... 19-1 
19.2  Gold Industry Trends ............................................................................. 19-1 
19.3  Doré Production Rate ............................................................................. 19-2 
19.4  Refinery Selection .................................................................................. 19-3 
19.5  Refining Terms ...................................................................................... 19-3 
19.6  Gold Production Schedule ..................................................................... 19-3 
19.7  Refining and Transportation Costs ........................................................ 19-5 
20.0  ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR
COMMUNITY IMPACT .................................................................................. 20-1 
20.1  Environment ........................................................................................... 20-1 
20.2  Socio-Economic and Cultural Aspects ................................................ 20-33 
20.3  Permitting ............................................................................................. 20-37 
20.4  Closure ................................................................................................. 20-41 
20.5  Closure Cost Basis ............................................................................... 20-49 
20.6  Recommendations ................................................................................ 20-51 
21.0  CAPITAL AND OPERATING COSTS ............................................................ 21-1 
21.1  Capital Costs .......................................................................................... 21-2 
21.2  Mining Capital Costs ............................................................................. 21-5 
21.3  Processing Capital Costs ........................................................................ 21-7 
21.4  Operating Costs .................................................................................... 21-17 
21.5  Basis of Operating Cost Estimate ........................................................ 21-19 
21.6  Mining Operating Costs ....................................................................... 21-22 
21.7  Process Operating Cost ........................................................................ 21-28 
21.8  General and Administrative ................................................................. 21-36 
22.0  ECONOMIC ANALYSIS ................................................................................. 22-1 

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22.1  Summary ................................................................................................ 22-1 
22.2  Methodology .......................................................................................... 22-3 
22.3  General Assumptions ............................................................................. 22-4 
22.4  Financial Model and Results .................................................................. 22-6 
22.5  Sensitivity Analysis ............................................................................. 22-11 
23.0  ADJACENT PROPERTIES .............................................................................. 23-1 
24.0  OTHER RELEVANT DATA AND INFORMATION ..................................... 24-1 
24.1  Hydrology .............................................................................................. 24-1 
24.2  Operations Strategy ................................................................................ 24-7 
24.3  Project Security ...................................................................................... 24-8 
24.4  Health and Safety ................................................................................. 24-10 
24.5  Risks and Opportunities ....................................................................... 24-11 
24.6  Project Implementation ........................................................................ 24-14 
25.0  INTERPRETATION AND CONCLUSIONS ................................................... 25-1 
26.0  RECOMMENDATIONS ................................................................................... 26-1 
26.1  Deposit Expansion and Exploration Activities ...................................... 26-1 
26.2  Basic Engineering & Procurement Activities ........................................ 26-1 
26.3  Detailed Engineering ............................................................................. 26-2 
26.4  Test Work............................................................................................... 26-2 
27.0  REFERENCES .................................................................................................. 27-1 
28.0  AUTHORS’ CERTIFICATES........................................................................... 28-1 

TABLE OF FIGURES

Figure 4-1 Location Map ........................................................................................... 4-1 
Figure 4-2 Corporate Holding Structure .................................................................... 4-7 
Figure 4-3 Pertenacia Layout Map ............................................................................ 4-8 
Figure 4-4 Water, Camp and Surface Rights Map .................................................. 4-10 
Figure 7-1 Regional Geology .................................................................................... 7-2 
Figure 7-2 District Geology ....................................................................................... 7-4 
Figure 7-3 Plan of Lindero Deposit ........................................................................... 7-6 
Figure 7-4 Cross-section through Lindero Deposit ................................................... 7-7 
Figure 7-5 Plan View of Alteration Zones at the Lindero Deposit .......................... 7-11 
Figure 7-6 Arizaro Porphyry Units .......................................................................... 7-15 
Figure 7-7 Alteration Map of the Arizaro Prospect ................................................. 7-19 

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Figure 7-8 Plan of Mineralized Bodies .................................................................... 7-23 
Figure 8-1 Copper-Gold Porphyry Model ................................................................. 8-1 
Figure 9-1 Trench Locations and Soil Grid Layout for the Lindero Project ............. 9-8 
Figure 9-2 Stereographic Projection (to Upper Hemisphere) of Structures and
Veinlets .................................................................................................. 9-15 
Figure 9-3 Arizaro Section 3950 ............................................................................. 9-17 
Figure 10-1 Drill Hole Locations and Orientations ................................................... 10-8 
Figure 10-2 Drill Location Map .............................................................................. 10-14 
Figure 11-1 Photo of Drill Core before Sampling ..................................................... 11-2 
Figure 11-2 Photo of Channel Sample....................................................................... 11-3 
Figure 13-1 Metallurgical Testwork Sampling Locations ......................................... 13-8 
Figure 13-2 Hammer Mill Particle Size Distribution of Phase III Material .............. 13-8 
Figure 13-3 HPGR Particle Size Distribution of Phase V Material .......................... 13-9 
Figure 13-4 Photographs of Blast Testwork ............................................................ 13-15 
Figure 13-5 Crush size versus Recoveries for Phases II, III, IV ............................. 13-18 
Figure 13-6 Polysius Abrasion Comparisons .......................................................... 13-19 
Figure 13-7 Recovery Curves for Various Crusher Types ...................................... 13-20 
Figure 13-8 Cyanide Consumptions (Laboratory) as a Function of Solution to Ore
Ratio for All Lithologies, Phases II, III, IV ......................................... 13-21 
Figure 13-9 Recoveries as a function of leaching time for a 10m lift ..................... 13-24 
Figure 13-10 Head grades versus Recoveries for 6.3mm and 9mm Material ........... 13-26 
Figure 13-11 Field Recovery Curves for All Met Types ........................................... 13-29 
Figure 14-1 Lindero Lithological Domains ............................................................. 14-42 
Figure 14-2 Plan 3760–Model Gold Grade Blocks, Composites and Search Ellipses
.............................................................................................................. 14-43 
Figure 14-3 North–South Section Showing Gold Grades of Blocks and Composites
.............................................................................................................. 14-44 
Figure 14-4 East–West Section Showing Gold Grades of Blocks and Composites
.............................................................................................................. 14-45 
Figure 14-5 Section 2623155 E, Showing Composites and OK Model Gold Grades
.............................................................................................................. 14-55 
Figure 14-6 Geotechnical Pit Slope Parameters ...................................................... 14-61 
Figure 14-7 Comparison of Reported Mineral Resource within Optimised Pit Shells
.............................................................................................................. 14-65 
Figure 15-1 Graph of Whittle Results ....................................................................... 15-5 
Figure 15-2 Lindero Ultimate Pit Design .................................................................. 15-9 
Figure 15-3 Phase 1 Pit Design ............................................................................... 15-11 
Figure 15-4 Phase 2 Pit Design ............................................................................... 15-12 

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Figure 15-5 Phase 3 Pit Design ............................................................................... 15-13 
Figure 16-1 Owner Mining Mine Organizational Chart ............................................ 16-9 
Figure 17-1 Lindero Projected Field Heap Recovery Curves by Met Type .............. 17-7 
Figure 17-2 Process Water Balance Diagram, Average Precipitation Year ............ 17-17 
Figure 18-1 Project Location Map ............................................................................. 18-2 
Figure 18-2 Well Test Locations ............................................................................... 18-7 
Figure 20-1 Example of Air Quality Sampling Equipment ..................................... 20-11 
Figure 20-2 Ecological Units ................................................................................... 20-18 
Figure 20-3 Project Location in Relation to National Parks .................................... 20-19 
Figure 20-4 Location of Archaeological Sites ......................................................... 20-20 
Figure 20-5 Training is an Important Part of the Company’s Culture .................... 20-34 
Figure 22-1 After-Tax IRR vs. Gold Price, Capital Cost, and Operating Cash Cost
.............................................................................................................. 22-12 
Figure 22-2 NPV @ 0% vs. Gold Price, Capital Cost, and Operating Cash Cost ... 22-13 
Figure 22-3 NPV @ 5% vs. Gold Price, Capital Cost, and Operating Cash Cost ... 22-14 
Figure 22-4 NPV @ 8% vs. Gold Price, Capital Cost, and Operating Cash Cost ... 22-15 
Figure 24-1. Water Sources Near Project Area .......................................................... 24-2 
Figure 24-2 Arita, Chachas, Lindero and Emboscadero Sub-Basins ........................ 24-3 
Figure 24-3 Geoelectric Profile of Chachas Sub-Basin ............................................. 24-6 

TABLE OF TABLES

Table 1-1 Lindero Mineral Resource Statement .................................................... 1-12 
Table 1-2 Proven and Probable Reserves and Associated Waste by Phase ........... 1-13 
Table 1-3 Summary of Pre-Production Capital Costs ............................................ 1-21 
Table 1-4 Lindero Project Average Operating Cost ............................................... 1-22 
Table 1-5 Life of Mine Economic Summary ......................................................... 1-24 
Table 1-6 Sensitivity Analysis (After Tax) ............................................................ 1-25 
Table 2-1 QPs, Areas of Report Responsibility, and Site Visits .............................. 2-2 
Table 4-1 Tenure Boundary Co-ordinates ................................................................ 4-7 
Table 4-2 Required Key Permits and Authorizations, including Agencies ........... 4-12 
Table 9-1 Summary of Exploration Programs Carried Out on the Lindero Deposit
.................................................................................................................. 9-1 

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Table 9-2 Trench and Road Cut Samples ................................................................. 9-3 
Table 9-3 Location of 2010 drill holes ................................................................... 9-10 
Table 9-4 Summary of Exploration Programs Carried Out on the Arizaro Prospect
................................................................................................................ 9-11 
Table 10-1 Summary of drilling campaigns at the Lindero Deposit ........................ 10-3 
Table 10-2 Summary of drilling campaigns at the Arizaro Project ....................... 10-10 
Table 12-1 Summary of Collar and Down-hole Surveys ......................................... 12-2 
Table 12-2 AMEC Independent Sampling Results .................................................. 12-4 
Table 12-3 Summary of QA/QC Samples, Rio Tinto Campaign ............................. 12-7 
Table 12-4 Summary of QA/QC Samples 2005–2006 Campaign ......................... 12-10 
Table 12-5 2005–2006 ACME SRM Sample Analyses ......................................... 12-10 
Table 12-6 Summary of QA/QC Samples 2006 Campaign ................................... 12-12 
Table 12-7 2006 ACME SRM Sample Analyses ................................................... 12-12 
Table 12-8 Summary of QA/QC Sample 2006 – 2007 Campaign ......................... 12-14 
Table 12-9 2006-2007 Alex Stewart SRM Analyses ............................................. 12-15 
Table 12-10 Summary of QA/QC Sample Analyses 2007–2008 Campaign ........... 12-16 
Table 12-11 2007–2008 Alex Stewart SRM Analyses ............................................ 12-17 
Table 12-12 Summary Statistics, Comparison of Trenches with Drill Holes .......... 12-19 
Table 13-1 Project Heap Leach Recoveries ............................................................. 13-1 
Table 13-2 Heap Leaching Parameter design criteria .............................................. 13-2 
Table 13-3 Key for Lithology Codes and Groupings ............................................... 13-6 
Table 13-4 Samples Used in Metallurgical Testwork Programs .............................. 13-7 
Table 13-5 Multi-Element Analysis for Phase III material ...................................... 13-3 
Table 13-6 Phase III Whole Rock Analysis ............................................................. 13-4 
Table 13-7 Summary Results Hazen Comminution Tests ....................................... 13-5 
Table 13-8 Summary Results. METSO Comminution Tests ................................... 13-5 
Table 13-9 Results from paste pH, Eh and Dissolved oxygen testwork .................. 13-5 
Table 13-10 Total Carbon, Sulphur, Mercury & Soluble Copper Analyses .............. 13-6 
Table 13-11 Head analyses for the Lindero Testwork ............................................... 13-7 
Table 13-12 Rock Density Results ........................................................................... 13-10 
Table 13-13 Phase II and AllOX Bottle Roll Test Summaries ................................ 13-11 
Table 13-14 Summary of Compacted Permeability Tests ........................................ 13-13 
Table 13-15 Puncture test results ............................................................................. 13-14 
Table 13-16 Column Test Work Parameters for all Phases ..................................... 13-17 
Table 13-17 Cyanide consumption as a function of Lithology ................................ 13-22 
Table 13-18 Column Test Hydrated Lime Consumption as a Function of Lithology
.............................................................................................................. 13-23 
Table 13-19 Recoveries as a Function of Lithology and Testwork Phase ............... 13-25 

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