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YURA GOLD PROJECT

LATTITUDE 16° 21’ S LONGITUDE 71° 48’ W

DEPARTMENT OF AREQUIPA REPUBLIC OF

PERU

For:

Inversiones Mineras Stiles

Urb. Leon XIII G-2 – 2do. Piso - Cayma

Arequipa, Peru

(054) 275110

Prepared by:

Edward E Gates, M.Sc., P.Geo.

6611 W. Bernhill Rd.

Spokane, WA 99208

May 5, 2013

Updated August 6, 2014

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Some have been mapped for several hundred meters along strike. It has a very high correlation with tin. although most a less than one meter. It comprises an 16. and one is exposed on a canyon wall for a vertical distance of 270 meters. transporting and using Project administration in place Camp facilities Road access Turn-key for immediate execution of drilling. Permitting is in hand for drilling and exploration mining on many of the major gold targets.713 rock chip samples have been collected. which has yielded significant gold assays. and several are being grouped together into a proposed underground mining zone. which indicates that the mineralization is part of an intrusion- hosted mesozonal gold system. A large number of targets have been developed at the Yura Gold Project. tellurium. thallium and bismuth. Quartz veins can be up to six meters thick. similar to the Fort Knox Mine in Alaska. Geological mapping has been completed on 4. together with the large breccia zone. An exploitation permit is also in hand for one group of the concessions. Project has industrial license from city of Yura. Savings in time and money.520 hectares of the project and 1. Numerous quartz veins have been mapped and sampled. 62km to the northwest. The veins are also similar to those at the San Juan Chorunga. and is free-milling. The gold occurs both in the veins and in the wallrock. A large breccia body has recently been identified. A permit is in hand for drilling four water wells. This zone will be the focus of a first phase of drilling.794 hectare group of concessions which occupy most of a 9 by 12 kilometers circular feature of intense faulting within quartz diorite and tonalite. Those veins have been mined for 60 years and are at a depth of 1400 meters. Low elevation and close proximity to city Good relations with nearby communities and a strong public relations program. Positive aspects of the project also include: Heavy equipment on site Large capacity explosives magazine constructed.SUMMARY The Yura Gold Project is located approximately 30 kilometers west of Arequipa. in the northern part of the Atacama Desert. many with impressive gold grades. Registered in two new water resource dam projects 2 . permitted and licensed Licenses for explosives purchasing. A good neighbor agreement with local farmers and communities is nearing completion. Peru.

................. 5 HISTORY .................................................................................................................................................................................................................. 8 GEOLOGY ..... TABLE OF CONTENTS SUMMARY............... 8 STRUCTURE.......... 17 TARGETS ....2 TABLE OF CONTENTS.............................................................................................................................................. 6 LAND............ 3 LOCATION... 12 MINERALIZATION.. 18 PROJECT POTENTIAL ............................................................................ CLIMATE AND ACCESS.... 12 MODEL ..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 28 STATEMENT OF QUALIFICATIONS ...................................................................................................................................................................................... 8 LITHOLOGY............................................................................................................................................................ 10 ALTERATION.................................................................................................................................................................... 5 INFRASTRUCTURE ............ 30 3 ............... 26 RECOMMENDATIONS............................ 7 PERMITTING.................................................................................................................................................................................... 27 REFERENCES CITED..............................................................................................................................................................................................................

..... 15 FIGURE 6 HISTOGRAM OF GOLD GRADES ...................................................... 26 FIGURE 17 LARGE-SCALE UNDERGROUND MINING CONCEPT .................................................MAIN VEIN LONGITUDINAL SECTION................... 7 FIGURE 3 GEOLOGIC MAPPING AND SAMPLING........ 20 FIGURE 11 ELIANA TARGET ............................................ 11 FIGURE 5 ROCK GEOCHEMISTRY .................................................................................... 16 FIGURE 7 CORRELLATIONS WITH GOLD....... 22 FIGURE 13 SUZIE TARGET – GEOLOGY .............................................................................................................. 19 FIGURE 10 ELDA TARGET ............................................... 4 .GOLD..................... LIST OF FIGURES FIGURE 1 YURA GOLD PROJECT LOCATION MAP ...................GEOLOGY ...................................... 27 APPENDICIES APPENDIX I YURA PROJECT SAMPLE RECORD (separate spreadsheet).............................. 9 FIGURE 4 VEIN TYPES ......................................................................................................... 23 FIGURE 14 PAMELA – ALMA ....................... 21 FIGURE 12 ELIANA ...CHARLIE TARGET – GEOLOGY............................................................... 17 FIGURE 8 ORE DEPOSIT MODEL ................................................................................................. 25 FIGURE 16 AYLIN TARGET – GEOLOGY..GEOLOGY .............. 18 FIGURE 9 LILA – MARYLIN TARGET........................................ 5 FIGURE 2 MINERAL CONCESSIONS ........... 24 FIGURE 15 CHARLIE – ESPANOLA – SUZIE AREA ....................................GEOLOGY ......................

5C at night in July to 22. There are numerous hand-dug adits. The total distance is approximately 44 kilometers and takes between 1. then following Cemento Yura’s ore haulage road west and then to the south on the property access road.6C in the daytime in October. CLIMATE AND ACCESS The Yura Gold Project is located approximately 30 kilometers west of the city of Arequipa. (Figure 1) HISTORY The project area has been the focus of a long history of informal mining.5 and 2 hours to drive. in southern Peru. sunny and dry. Elevations range from 1380 meters in the Yura River canyon to 2570 meters at the northern end of the claim block. A rainy season generally starts in late December and usually ends by mid-March. The mineralization was either hauled from the site in sacks or leached with cyanide on-site.LOCATION. The property is reached by taking highway 34A northwest from Arequipa to the town of Yura. It lies at the foot of the Cordillera Occidental Mountains. and adjacent to the coastal plain. with most of the year being warm. The climate is sub-tropical desert. 5 . shafts and stopes. Annual precipitation at Arequipa averages 95 millimeters. Temperatures range from 5.

which includes 8 housing cabins. A camp exists at the project. The current exploration work began in June of 2011. At the Mercedes target. IP-resistivity surveys and aerial photography. located on Shiprock Peru ground. Inmobiliaria would immediately transfer their Yebacha claims to Donald Stiles. limited road cut mapping. located on Shiprock Peru ground. Another provision of the JV agreement was that Zoro would provide funding for the permitting. Donald Stiles has been personally covering most of the project costs. In September of 2011. approximately 31 kilometers of roads have been constructed within the project area to provide access to mineralized zones. trenching. 2014 that the joint venture was terminated. underground mine workings were converted into an explosives magazine with a licensed capacity of 60 tons. In 2010. exploration and administration activities of the JV.Donald Stiles began acquiring mining claims in the project area in 2004. In return. they would be provided with stock in Formacion Yura Exploracion. consisting of detailed geologic mapping and geochemical rock sampling. Donald Stiles entered into a joint venture agreement with Zoro.A. an office. 6 . INFRASTRUCTURE In addition to the upgrade and maintenance of the 10 kilometer access road from the north. The transfer took place in March of 2013. and continued until April of 2012. One of the provisions of the JV agreement was that S. In 2011 work commenced on three exploration shafts on the most prospective veins. Zoro fell far behind in providing funding. Mining was suspended due to the expiration of the permit and lack of funding. In 2011 a 288 square meter core shed was constructed at the camp. This work included rock geochemical sampling. Minex and South American Inmobiliaria. where they could be added to the JV exploration permitting and drilling program. Zoro was notified on April 22. and for the past two years. Zoro Mining Corporation began working on the Yura Gold Project in 2005. A number of other cabins are found at various locations on the property. Zoro walked away from the project during the economic downturn of 2008. a Donald Stiles company which owns other Yebacha claims in the JV area. a kitchen-dining hall and bathroom. Minex reached an agreement with Donald Stiles and South American Inmobiliaria (SAI) to conduct exploration mining.

26. 5. 5. 23. Yebacha 2A. 6.C. Some claims overlap and this area is not counted twice. 12. 9 1. 4. 17.794 Land to the north of the joint venture area is controlled by a variety of owners. 13.410 Total 16. which is very active in mining their concessions. 7 . 8. 16. LAND The following table and Figure 2 show the ownership of the mineral concessions that are part of the Yura Gold Project. 27. 11. 7. especially Minera Laytaruma. 21. 6. It should be noted that the area listed for the concessions is the effective area. 14.A.889 Tonalia. which total 16.794 hectares. 4. 2. 24 13. Tonalia 1.495 Yebacha 3. AREA OWNER CONCESSIONS (HA) Formacion Yura Exploracion S. 19. 7 Shiprock Peru Yebacha 1. 3.Exploration shafts and head frames have been developed on three of the veins. Donald Le Roy Stiles 18. The shafts have each reached a depth of about 30 meters. 28 1.

The permit is in-hand and has been initiated. rivers. road construction trenching and limited exploration mining. trenching and limited exploration mining. Charlie. LITHOLOGY Quartz Diorite is the most widespread and presumably oldest rock in the project area. One important aspect of the agreement is the establishment of a restricted zone that covers the farms.713 samples have been collected. Mapping is conducted on a Quickbird satellite image and then entered into ArcGIS (Figure 3). informal miner prospect dumps and float. 8 . canal and the steep slopes above the canal. This permit is in hand and has been initiated. underground mapping has been conducted at the Aylin. and is for 19 drilling platforms. Rock geochemical samples are collected from outcrops. an ulimited amount of drilling could also be done. along with several of the informal mine workings. Water – Shiprock has a permit in hand to explore and develop underground water from four wells. June and Mercedes Mines. 2011. It is characterized by having abundant felsic dikes and commonly weathers to leave patches of outcrop on the tops of hills and large parts of the slopes covered with boulders and sub-crop of mineral grains with abundant muscovite. and is for 60 drilling platforms. Shiprock Peru – This permit is under small mining. and is for exploitation of 90 tons per day. The permit is in-hand and has been initiated. a total of 4.PERMITTING Formacion Yura Exploracion – This permit is under small mining. Since June. In this zone. Usarios – An agreement was reached with the water canal Usarios in order to get them to support the project. GEOLOGY Approximately one quarter of the project area has been mapped and rock-chip sampled.520 hectares have been mapped in detail and 1. Donald Le Roy Stiles – This exploration permit is under large mining. In addition to the surface mapping. special permission would need to be granted by the usarios prior to any road construction or surface mining. Under this permit.

It has been seen intruding the quartz diorite. but are concentrated more in the southern part of the project area. with some being strongly chlorite altered. but has about the same quantity of felsic dikes. While they are dark and appear to be mafic. There are multiple phases of these dikes. but have no thickness as hornblende would. They commonly have trends of northwest. They look like hornblende megacrysts. It contains approximately 30-50% feldspar crystals and has a somewhat smaller average grain size than the quartz diorite. Felsic Dikes are very common in the project area. north. they were determined to be dacite through petrography. The dikes range from a few centimeters thick to several meters. Petrographic analysis was done on one sample. There are multiple 9 .The quartz diorite can also have abundant rectangular patches composed of chlorite. which was determined to be quartz monzonite porphyry. Feldspar Porphyry has been mapped in the eastern part of the project area. suggesting an age not much younger than the quartz diorite. Mafic Dikes are common. northeast or east-west.

STRUCTURE The region of the project is dominated by a large circular feature. The tonalite has been cut by very few felsic and mafic dikes. which undoubtedly represent fault zones. in the eastern and western parts. Some fault zones are characterized by extensive development of caliche. as dikes or larger masses.5 kilometers. It appears to intrude the tonalite-quartz diorite contact.3 kilometers. It is not cut by any dikes. and form the plateau east of the project camp. with dimensions of approximately 2. They have been observed cutting the mafic dikes and being cut by the mafic dikes. measuring approximately 9 kilometers north-south by 12 kilometers east-west. 10 . Its dimensions are approximately 0.8 by 1. Wind-blown deposits of this ash are also common. Its weathering appearance is usually quite “fresh” looking compared to the quartz diorite. They have a fine to medium-grained texture and appear to be of intermediate composition.phases of these dikes. Recent air fall ash deposits are common on the hillsides and form considerable thicknesses in canyon bottoms. Along the eastern contact. At the southern contact. Gabbro Diorite forms an elliptical body in the southwestern part of the mapped area. Diorite is tentative name given to several bodies that intrude the quartz diorite and tonalite. Within this feature there is an intense pattern of northeast and northwest lineaments. as seen on aerial photography (Figure 3). Tertiary Sencca pyroclastic volcanic rocks occupy canyon bottoms and low lands on the eastern part of the project area. dipping away from the tonalite. Tonalite intrudes the quartz diorite in the southern part of the project area. In both areas. Hill slopes are generally covered with boulders. Several andesite(?) dikes have been mapped in the project area. They generally strike northwest and have steep dips. and the only alteration seen was a very small amount of chalcedonic quartz. they cut the quartz diorite.5 by 3. tonalite dikes are observed intruding the quartz diorite. a large amount of shearing is observed in the quartz diorite. They look similar to the tonalite. but no petrographic work has been done on them. but this relationship is uncertain. Others have chlorite or epidote along them.

providing a conduit for mineralizing fluids. an open space developed at the flexure. They fit nicely into the transpressional model for stress in brittle rocks. Ore shoots formed along the fault structures in response to a variety of factors..Over three thousand quartz veins have been mapped so far. 2004) shows a figure adapted from geologic literature on which the various vein trends from the Yura Gold Project have been highlighted. G. The most common control for ore shoots is flexures in the strike and/or dip of the vein. When the movement occurred along the fault. Most of the veins that form our inventory of exploration targets fall within the Main Shear Trend and R-type Vein categories. Ore shoots have also been identified resulting from the intersection of cross faults or fractures with the vein trend. with some important examples in the Extension Vein type and the P-type structures. et al. 11 . Figure 4 (modified after Tourigny. The main shear trend is parallel to the Peruvian coast and the edge of the South American tectonic plate.

Most of the exposures of mineralization have resulted from vein exploration and exploitation by the informal miners. Caliche Deposits of white calcium carbonate (caliche) are found at the surface. chlorite and albite. and has a distinct pistachio green color. which sometimes is stained by iron oxide to shades of yellow to light brown. The informal miners panned gold at the sites. along veins & possibly larger areas of fracture-controlled mineralization. Clay It is common to have a few centimeters clay developed along the mineralized quartz veins. shafts and stopes scattered across the project area. and for several meters depth.ALTERATION Propylitic The most common alteration present in the project area is propylitic. fine-grained mica. The gold is free-milling and has been exploited by informal miners for many years. and reaches an intense level along the access road near the access control gate. wall rock and in breccia. The resulting rock contains epidote. These caliche zones may prove to be important guides to mineralization. they set up vat-type cyanide leach 12 . It is a white to very light green. which have left hundreds of prospect pits. This alteration is most common in the eastern part of the project area. Sericite This alteration is directly associated with mineralization and is an important indicator of strong gold grades in the quartz veins. It forms as selvages along the veins and can occur on fractures within the veins. where iron and magnesium bearing hydrothermal fluids have attacked biotite and hornblende. In some places. where carbonate is abundant. It is also common along fault zones and some quartz veins. These deposits typically occur in limestone terrains. MINERALIZATION Gold Gold has been found in both quartz veins. The source of the carbonate at the Yura Gold Project is from the destruction of feldspar in the host rocks by hydrothermal fluids. adits.

The clasts of the breccia are intensely altered to sericite and clay(?). processing several hundred tons. Aylin. and has been the subject of considerable informal mining activity. The color varies from white to shades of red and brown. Quartz Veins At least 3. however. The matrix of the breccia consists of euhedral crystals of quartz and limonite after pyrite. The veins are commonly shattered. There is much cover in the area. and in places have developed into vein breccias. Three higher grade zones within the breccia have been observed. Lengths range up to hundreds of meters and thicknesses range up to 12 meters. Eliana and Suzie. Because of the large amount of relief along the Yura River canyon. there are notable exceptions at Aurora. the Charlie vein system can be traced over a vertical distance of 300 meters. The veins which carry gold commonly have limonite pods. or whether there are additional higher grade zones. with iron oxide coating the fracture surfaces. A later phase of gold mineralization has deposited gold on fracture surfaces with limonite. up to roughly 0. Textures of the quartz vary considerably. and it is believed that these limonites are after bornite and sometimes pyrite.000 quartz veins have been mapped so far. Most mineralized veins are less than a meter thick. depending on the amount of iron oxide. that are distributed for about a centimeter around limonite pods. They have also packed out large amounts of material for processing elsewhere. and also as crystals perched on druzy quartz in vugs. while glassy quartz usually has little. An early phase consists of small gold flakes. Ore shoots are commonly developed where there are bends in the veins or intersections with other structures. Sucrossic texture is common in quartz with substantial gold.5 millimeter. indicating large depth extent. Breccia A body of breccia has been identified in the western part of the circular feature. as would be expected in a mesothermal gold system. Limonite pods have also been seen that have gold flakes within them. They seem to be fairly evenly spread throughout the project area.operations. and have been exploited by the informal miners. There appear to be at least two phases of gold deposition. 13 . and it is not known what the full dimensions of the breccia bodies are.

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