Drill Summary

Drilling at El Cobre

The four copper-gold porphyry targets currently known within the El Cobre Project, Villa Rica (Raya Tembrillo), Norte, Encinal, and El Porvenir, are defined by distinct Cu-Au soil anomalies, discrete, positive magnetic features and a large IP chargeability anomaly.

The largest target area is the Villa Rica zone. First pass drilling at the Villa Rica (Raya Tembrillo) target in 2017 (see press releases of November 28 and December 13, 2017) intersected a chalcocite dominant enriched copper zone right from surface as well as hypogene mineralisation at depth. At this time the extent and orientation of both the hypogene and enriched mineralisation are not understood. Further drilling in the area is planned.

Limited past RC and diamond drill testing at the Encinal, El Porvenir, and Norte targets has returned wide intercepts of porphyry copper-gold and narrow zones of intermediate sulphidation epithermal gold-silver vein mineralization, with selected intercepts as follows:

  • El Porvenir Zone: Drilling has demonstrated that the system persists at least to 400 m depth. Significant copper and gold grades were intersected such as 0.16% Cu and 0.39 g/t Au over 290 m in hole DDH04CB1. In addition, hole EC-13-004 intersected 0.23% Cu and 0.36 g/t Au over 106 m, to a depth of 504 m, again indicating potentially significant mineralization at depth. On December 5, 2017, Almadex announced results for holes 040 and 042, the first holes drilled on this target since 2013. Intercepts in hole EC-17-040 included 108.00 meters grading 0.88 g/t Au and 0.29% Cu, and 80.00 meters grading 1.11 g/t Au and 0.36% Cu.
  • Encinal Zone: Drilling in 1998 (Hole CB5) intersected a highly altered breccia pipe containing fragments of stockwork veining and porphyry mineralisation across which 18.28 meters returned 1.42 g/t Au and 0.10% Cu. The breccia pipe occurs in a large alteration zone, IP chargeability high and magnetics low. On June 19, 2017 Almadex announced that a new area of exposed stockwork quartz veining and gold mineralisation had been identified in the Encinal zone. On June 29, 2017 Almadex announced the results of initial drilling on this exposed stockwork (Hole EC-17-025) which returned results including 34.47 meters grading 0.73 g/t Au and 0.20% Cu.
  • Norte Zone: All five holes drilled in the Norte zone prior to 2016 intersected porphyry-style mineralization. Hole 08-CBCN-022, one of the deepest holes drilled at Norte in 2008, returned values of 0.14% Cu with 0.19 g/t Au over 259 m and 08-CBCN-19 intersected 41.15 meters averaging 0.42 g/t gold and 0.27% copper to the end of the hole at 187.45 meters. Drilling at the Norte zone in 2016 and 2017 has resulted in the highest grade intersections to date at the El Cobre project, including 114.60 meters grading 1.33 g/t Au and 0.48% Cu (Hole EC-17-018, see press release of April 5, 2017), 80.50 meters grading 1.34 g/t Au and 0.46% Cu (Hole EC-16-012, see press release of October 24, 2016), 70.45 meters grading 2.32 g/t Au and 0.59% Cu (Hole EC-17-026, see press release of July 25, 2017), and 534.90 meters grading 0.90 g/t Au and 0.30% Cu (Hole EC-17-029, see press release of August 15, 2017). Since the Norte zone discovery, Almadex has 5 been carrying out a systematic drill campaign to define this target. Future Norte drilling will focus on defining the high grade zone now emerging from the Norte drill program.

    In addition to the above, several anomalous areas either remain untested by drilling or have only seen drilling commence very recently, including the Villa Rica Zone, a roughly 2.5 kilometre by 1 kilometre area defined by a strong north-northwest trending magnetic-chargeability high, an associated copper-gold soil geochemical anomaly, and significant outcrop, float, and channel sample assays.

Drill Results - Norte Zone

Drilling at Norte re-commenced in June 2016, and was initially targeted to follow up interesting drill intersections generated by a former joint venture partner in 2008. A brief overview of drilling since then is also provided below along with a comparison to other gold/copper porphyry projects.

Since the Norte Zone discovery in August 2016 Almadex has been carrying out a systematic drill campaign to define this target. This drilling was initially based on step-outs which have yet to define the limits of mineralisation. Current drilling is also focused on defining the high grade zone that is emerging from the drilling results. Continuous mineralization in hole 29 starting close to surface and continuing for over half a kilometer (534.9m of 0.90g/t Au and 0.30% Cu) shows the Norte Zone is developing significant tonnage as well as good grades. (See press release dated August 15, 2017)

The section below shows some results of recent drilling at Norte.

The chart below compares the grade of some of the recent Norte drill intersections with the grades of some operating and development-stage gold-copper porphyry projects.

Finally, the map below labelled “Norte Zone” shows a highly prospective target area based on geophysics and soil geochemistry which is about 1km wide and extends approximately 3km south of the Norte Zone.

Drill Results – Villa Rica Zone, Raya Tembrillo

On March 29, 2017, Azucar announced the discovery of high grade outcrop in an area called Raya Tembrillo, located at the northern portion of the Villa Rica target. By the end of the year (see press releases of November 28 and December 13, 2017), Azucar had announced results of initial drilling into this target, which intersected an enriched copper zone from near surface, and hypogene mineralization at depth.

Further drilling is needed to define the extent and orientation of both the enriched and hypogene mineralization discovered in this area.

Drill Results – El Porvenir

The El Porvenir target, located east of the Villa Rica zone, received 18 drill holes prior to 1998, many of which intersected copper gold mineralization and none of which adequately tested the system to depth. In late 2017 Azucar drilled two holes into this area generating interesting results (see press releases of December 5, 2017 and February 8, 2018).

Drill Results - Encinal Zone

On June 19, 2017 Azucar announced that a new area of exposed stockwork quartz veining and gold mineralisation had been identified in the Encinal Zone. On June 29th, 2017, Azucar announced the results of initial drilling on this exposed stockwork (Hole EC-17-025) which returned results including 34.47 meters grading 0.73 g/t Au and 0.20% Cu. A plan view of this target and cross section of hole EC-17-025 is provided below.

Historic Drilling

Historic drilling at the El Cobre has returned significant copper and gold values. Many of the holes have been shallow and have ended in copper-gold mineralization. Mineralogic and fluid inclusion studies show conclusively that the gold and copper-gold porphyry-style mineralization at El Cobre is not deeply eroded and great potential exists at depth, beyond the previous shallow drilling.

More importantly, these studies indicate that the mineralization is genetically unique like that of some of the Maricunga district gold-copper porphyry systems in Chile including the following deposits:

  • Cerro Casale Gold-Copper Deposit: 21.2 million ounces of gold at a grade of 0.61 grams per tonne (“g/t”) and 5,308 million pounds of copper grading 0.22% (Kinross NI 43-101 Report, December 31st 2008).
  • Refugio Gold Mine: 5.4 million ounces of gold at a grade of 0.76 g/t (Kinross NI 43-101 Report, December 31st 2006).
  • Volcan Deposit: Measured and Indicated resources of 6.6 million ounces gold at a grade of 0.85 g/t and a further 3.3 million ounces of gold at 0.9g/t (Andina 43-101 Report, July 2008).
  • Caspiche Deposit: Inferred resource of 19.6 million ounces at a grade of 0.55 g/t gold and 0.22% copper (Exeter Resources 43-101 Report, September, 2009)

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