Filo Mining Corp. | Reserve and Resource Statement

Reserve and Resource Statement

Filo del Sol Mineral Reserve Statement (@ 0.01 $/t NVPT cut-off)

 

Tonnage

Grade

Contained Metal

Category
(all domains)

(Mt)

Cu (%) 

Au
(g/t) 

Ag
(g/t) 

NVPT
 ($/t)

Cu
(M lbs)

Au
(K oz)

Ag
(K oz)

Proven

-

-

-

-

-

-

-

-

Probable

259.1

0.39

0.33

15.1

25.30

2,226

2,764

126,028

Total Proven and Probable

259.1

0.39

0.33

15.1

25.30

2,226

2,764

126,028

Notes to accompany Filo del Sol Mineral Reserves table:

  1. Mineral Reserves have an effective date of 13 January 2019. The Qualified Person for the estimate is Mr. Jay Melnyk, P.Eng. of AGP Mining Consultants, Inc.
  2. The Mineral Reserves were estimated in accordance with the CIM Definition Standards for Mineral Resources and Reserves;
  3. The Mineral Reserves are supported by a mine plan, based on a pit design, guided by a Lerchs Grossmann (LG) pit shell. Inputs to that process are:
    • Metal prices of Cu $3.00/lb, Ag $20/oz, Au $1300/oz;
    • Mining cost of $2.00/t;
    • An average processing cost of $9.73/t;
    • General and administration cost of $2.02/t processed;
    • Pit slope angles varying from 29 to 45 degrees, inclusive of geotechnical berms and ramp allowances;
    • Process recoveries were based on rocktype. The average recoveries applied were 83% for Cu, 73% for Au and 80% for Ag, which exclude the adjustments for operational efficiency and copper recovered as precipitate which were included in the financial evaluation;
  4. Dilution and Mining Loss adjustments were applied at ore/waste contacts using a mixing zone approach. The volumes of dilution gain and ore loss were equal, resulting reductions in grades of 1.0%, 1.3% and 1.0% for Cu, Au and Ag respectively;
  5. Ore/Waste delineation was based on a Net Value Per Tonne (NVPT) breakeven cut-off considering metal prices, recoveries, royalties, process and G&A costs as per LG shell parameters stated above;
  6. The life-of-mine (LOM) stripping ratio in tonnes is 1.52:1;
  7. All figures are rounded to reflect the relative accuracy of the estimate. Totals may not sum due to rounding as required by reporting guidelines.

The Mineral Resource estimate as of the effective date of June 11, 2018


Table 1: Total Resource

Zone Cutoff Category Tonnes Cu Au Ag lbs Cu Ounces Au Ounces Ag
(millions) (%) (g/t) (g/t) (millions) (thousands) (thousands)
AuOx 0.20 g/t Au Indicated 49.9 0.04 0.42 3.0 45 679 4,810
Inferred 20.8 0.08 0.34 2.4 35 226 1,580
CuAuOx 0.15 % CuEq Indicated 259.2 0.38 0.29 2.7 2,166 2,385 22,500
Inferred 74.3 0.29 0.31 2.1 481 735 5,040
Ag 20 g/t Ag Indicated 40.5 0.50 0.43 87.6 446 562 114,180
Inferred 8.8 0.36 0.43 79.3 70 121 22,400
Sulphide 0.30 % CuEq Indicated 75.5 0.27 0.34 2.2 451 813 5,370
Inferred 71.2 0.30 0.33 2.5 470 750 5,740
Total Indicated 425.1 0.33 0.32 10.7 3,108 4,439 146,860
Inferred 175.1 0.27 0.33 6.2 1,056 1,832 34,760
  1. 1 – CuAuOx copper equivalent (CuEq) assumes metallurgical recoveries of 82% for copper, 55% for gold and 71% for silver based on preliminary metallurgical testwork, and metal prices of US$3/lb copper, US$1300/oz gold, US$20/oz silver. The CuEq formula is: CuEq=Cu+Ag*0.0084+Au*0.4239;
  2. 2 – Sulphide copper equivalent (CuEq) assumes metallurgical recoveries of 84% for copper, 70% for gold and 77% for silver based on similar deposits, as no metallurgical testwork has been done the Sulphide mineralization, and metal prices of US$3/lb copper, US$1300/oz gold, US$20/oz silver. The CuEq formula is: CuEq=Cu+Ag*0.0089+Au*0.5266;
  3. 3 – The Qualified Person for the resource estimate is James N. Gray, P.Geo. of Advantage Geoservices Ltd.;
  4. 4 – All figures are rounded to reflect the relative accuracy of the estimate;
  5. 5 – Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability;
  6. 6 – The resource was constrained by a Whittle® pit shell using the following parameters: Cu $3/lb, Ag $20/oz, Au $1300/oz, slope of 45°, a mining cost of $2.50/t and an average process cost of $13.26/t.

Estimation Methods

The resource estimate was completed by James N. Gray, P.Geo. of Advantage Geoservices Ltd., an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves, adopted by CIM Council, as amended. Estimation methods are summarized below. Further details of the estimation methods and procedures will be available in a NI 43-101 Technical Report which will be filed on SEDAR (www.sedar.com) within 45 days of completion of the PFS, expected to be early in 2019.

The resource estimate is controlled by a geologic model based on three-dimensional interpretation of drill results and surface geological mapping. An additional 45 holes have been included in this resource update compared to the 2017 Mineral Resource estimate. In total, 188 holes (30 core and 158 RC) have been utilized in the resource estimation. Copper, silver, and gold assays were composited to a constant length of two metres. Outliers to the composite distributions were controlled by high-grade capping. Grades for the three elements were estimated by ordinary kriging using Gemcom® software, into 15 x 15 x 12m blocks. Average rock densities were applied based on the geologic model. A total of 1,369 density measurements have been made on core samples. Bulk density for the deposit averages 2.31 tonnes/m3.

Contiguous blocks were assigned as Inferred Mineral Resource where they are nominally: within 50m of a drillhole and/or have sample data in at least three octants of a 150m spherical search. Indicated blocks are greater than 25m inside the classified volume and estimated by at least three holes, and within 65m of the closest hole or have samples in at least five octants of a 150m spherical search.

Reasonable prospects of eventual economic extraction were established by the optimization of a Whittle® pit shell using the following parameters: Cu $3/lb, Ag $20/oz, Au $1300/oz, average recoveries of: 75% Cu, 68% Au and 82% Ag, slope of 45°, mining cost of $2.50/t and an average process cost (including G&A) of $13.26/t. These parameters are the same as those used for the 2017 Resource in order to allow for a direct comparison of the changes. All material included in the Mineral Resource Estimate is within the optimized pit shell.

There are no known legal, political, environmental or other risks that could materially affect the potential development of the mineral resource.

QUALIFIED PERSONS 

Mr. James N. Gray, P.Geo. of Advantage Geoservices Ltd., is an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and is an independent consultant to the Company. Mr. Gray prepared the Mineral Resource Estimate contained herein and has reviewed and approved the technical information pertaining to it contained in this news release.

Mr. Bob Carmichael, B.A.Sc, P.Eng., is the Qualified Person as defined by National Instrument 43-101. Mr. Carmichael is Vice President, Exploration for the Company and has reviewed and verified that the technical disclosure contained in this news release is accurate.

QUALITY ASSURANCE/QUALITY CONTROL

Samples were collected at the drill site by Company personnel with initial splitting carried out at a facility near the drill sites and final splitting completed at the Company’s core processing facilities located in San Juan, Argentina or Copiapo, Chile. Individual samples represent final splits from 2 metre intervals down the hole. Samples were analysed the ALS laboratory in Mendoza, Argentina or Lima, Peru (2017/2018) or ACME Labs in Santiago, Chile. Samples were crushed, split and 500g was pulverized to 85% passing 200 mesh. Gold analyses were by fire assay fusion with AAS finish on a 30g sample. Copper and silver were analysed by atomic absorption following a 4 acid digestion. Samples were also analyzed for a suite of 36 elements with ICP-ES. Copper and gold standards as well as blanks and duplicates (field, preparation and analysis) were randomly inserted into the sampling sequence for Quality Control. On average, 9% of the submitted samples correspond to Quality Control samples.

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