SAN GABRIEL IRON PROJECT

SAN GABRIEL IRON PROJECT

Key metric
Mineralization IOCG rich in Fe Massive magnetite lenses, pods and irregular bodies; magnetite-cemented breccias;
Type (in 3 targets) massive magnetite veins; sheeted veinlet to stockwork systems; disseminated magnetite; others.
Drilling 19757m 76 drillholes (19,757m) in the 3 targets, of which 2191 m DDH & 17566 m RC
IP IP Array: Pole-Dipole d=50m. (Chargeability and Resistivity).
Geophysic Gravimetry 288 reading on 23 lines between 9500 and 16500 long oriented at N45°W.
Magnetometry In some parts Ground Magnetometry
Resources Measured + ➢ Cutoff of 15% Fe: 78,013,125 tons @ 26.4% Fe
(only 1 target) Indicated ➢ Cutoff of 20% Faith: 58,871,718 tons @ 29.2% Fe
Environment & Environmental qualification resolution approved a Mine-Concentrator-Shipment of Iron
Approved
Permits Concentrates operation, daily capacity of 40,000 tpd of iron ore processing.
Mine Open Pit Long 400m, 300 m wide and depth 110 m
The Plant consisted in stages of stocking, crushing, classification and magnetic
Mineral Processing
concentration. Nominal capacity of 2000 tph
Technical Report JORC Code Internal Report, prepared for the current owners. Not published.

Locatión
The San Gabriel Project is located in the Atacama Desert,
approximately 50 km northeast of of Diego de Almagro Town, and
approximately 70 kms northeast of the port town of Chañaral. in
the Atacama Region, Chile, South America. The center of the San
Gabriel property is approximately 389,000E and 7,132,500N
(datum: PSAD 56, Zone 19S). There are exploitation mining
concessions, which cover a total of 1100 hectare. There are several
towns near the Project. Taltal and Diego de Almagro are a cities
close to the mine. Chañaral is a deep sea port less than one and a
half hour's drive to the west of the property. Chañaral has a
population of about 12,500 people, hotel accommodation, food,
fuel and minor services. Copiapó City is about two and a half hours
south of the San Gabriel property, has a population of
approximately 170,000 people, an airport with daily scheduled
flights to Santiago and Antofagasta and companies that offer
abundant services for mining and exploration. Antofagasta is
considered the mining capital of Chile, with 370,000 inhabitants,
and is Chile's main mineral export port, and is located
approximately 3.5 hours north of the project.

Fig. N° 1: San Gabriel Project Location Plan.

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History
Artisanal mining activities commenced in the
project area during the early 19th century.
The major commodities targeted were gold,
copper and iron. As a result, there are a
significant number of workings and little pits
throughout the Project area.

Industrial production of Esperanza Mine and

process plant begins operations in August
2013 at a rate of 1,500 tph, producing high
grade Fe concentrates (greater than 62% TFe)
those that were exported to the Chinese
market. The plant operated until the end of
2014. Product of a sustained decline in the
price of iron, which since August 2014
experienced the mineral in international
markets, the operations were not viable, and
it was decided to stop operations until
today.

Fig. N° 2: Photo Pit Esperanza Mine

Geology
This project is part of the Chilean Iron Belt is a narrow, NS trending belt
stretching for >2,000 km parallel to the Chilean coast, from approximately
25ºS to 31ºS. Between approximately 132–106 Ma, a number of tabular-
shaped mafic to felsic plutonic complexes were emplaced along the
Atacama fault system. Emplacement occurred during both strike-slip
(ductile) and dip-slip (brittle) deformation regimes.

The San Gabriel Project lies within a Mesozoic back-arc volcanic-

sedimentary sequence of rocks at the southern end of the Lower
Cretaceous Cerro del Pingo dioritic-granodioritic Coastal Batholith. The San
Gabriel Project is located 15km to the east of the crustal-scale Atacama
Fault System.

The emplacement of the magnetite mineralization at the San Gabriel Project

appears to be associated with either, or a combination of, metasomatic /
hydrothermal magnetite mineralizing events, or high-level intrusions of
magnetite magmas into Upper Jurassic-Lower Cretaceous volcanics and
volcaniclastic rocks to produce variably metasomatic magnetite bearing
aureoles as roof pendants in the Lower Cretaceous dioritic rocks of the
Coastal Batholith.

Fig. N° 3: San Gabriel Project, Local Geological ap.

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 SAN GABRIEL IRON PROJECT

Fig. 4: Geological map of the Project,

including 3 targets for iron ore. San
Gabriel is the most important target,
never exploited. Esperanza is the
name of the mine where there is a
large open pit (450 m long, 350 wide
and 230 m depth)

The higher-grade magnetite core occurs as a dike-fed lopolith at the San Gabriel Zone, and possibly at the Esperanza Zone. The
resource at the Antonia Zone appears to be associated with a moderately dipping brecciated structural system. Geologic mapping /
drilling is required to establish the nature of the other magnetically anomalous zones that were outlined during the magnetometric
survey. The magnetite occurrences, which typically strike northwesterly, are structurally controlled, and in fact there are occurrences
within the eventual dilatory zones related to a through going fault system which is a splay off of, and to the east of, the main Atacama
Fault System which is located approximately 15 kilometers to the west.

There have been at least two pulses of intrusion, or deposition, of magnetite at the San Gabriel Zone and probably at the Esperanza
Zone. The first press may be magmatic, and the second press the result of hydrothermal brecciation and the introduction of
hydrothermal magnetite as breccia fill. The primary (igneous) magnetite is frequently very coarse grained and crystalline. Various
types of magnetite occurrences have been defined including - a massive phase, a vein phase, a stockwork phase, and a disseminated
magnetite phase developed in the metasomatized volcanoclastic country rock.

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GEOLOGIC CROSS SECTION THROUGH SAN GABRIEL SECTION SG-06 GEOLOGIC CROSS SECTION THROUGH ESPERANZA SECTION EZ-2-0
REZA - 026
1100 mN 1100 mN
REZA - 020
REZA - 014
REZA - 007
REZA - 001
REZA - 018

1000 m 1000 m

900 m 900 m

800 m 800 m

700 m 700 m

GEOLOGY LEGEND
400 m

600 m
300 m

500 m

700 m

Qa / Qc HOLES GRADE
600 m 600 m
(FeT (%)
Andesite
GEOLOGY LEGEND 10 - 15
HOLES GRADE (FeT (%) Diorite
Qa / Qc 15 - 20
10 - 15
Dike 20 - 25
Andesite 15 - 20 25 - 30

Diorite 20 - 25
GEOLOGIC CROSS
Breccia Actinolite SECTION THROUGH ANTONIA SECTION ANT-02
(Contact?)
30 - 35
Breccia Magnetite
25 - 30
> 35
Dike Brecciated Massive Magnetite RANTA - 02
30 - 35
Breccia Actinolite 1100 m Fault / Fracture 1100 m
> 35
Breccia Magnetite

Brecciated Massive Magnetite

Fault / Fracture 1500 m 1500 m

1000 m 1000 m

Fig. 5, 6 and 7: Geological Sections of San Gabriel Target 950 m 950 m

and Esperanza Mine. Lithology, structures and iron

grades. San Gabriel and Antonia targets are important
GEOLOGY LEGEND

targets, never exploited. 900 m Qa / Qc 900 m

HOLES GRADE Andesite

(FeT (%)
Diorite
10 - 15
Dike
15 - 20
20 - 25 Breccia Actinolite (Contact?)
850 m 850 m
25 - 30 Breccia Magnetite

30 - 35 Brecciated Massive Magnetite

> 35 Fault / Fracture

500 m

600 m

700 m
550 m

650 m

800 m

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Mineralization
The iron mineralization occurs in a transitional series of six dominant forms (Easdon, 2008).

1) Massive magnetite lenses, pods and irregular bodies;

2) Magnetite-cemented breccias;
3) Massive magnetite veins;
4) Sheeted veinlet to stockwork systems;
5) Disseminated magnetite;
6) Other types of iron mineralization.

Fig. N° 7: Part of DDH RSGA-22. Massive magnetite 66% TFe; 61,5% Fe-Magn.

Mineral Resources
According to the results of the resources estimation of Core Mining Studies 2010, and ratified in December 2017, the mineral
resources only for the San Gabriel target, are those shown in the following table:

SAN GABRIEL AREA - TOTALS RESOURCES

TONNAGE GRADE TABLE
Measured Resources Indicated Resources Measured + Indicated Inferred Resources Total Resources
cutoff Tonnage Fe Tonnage Fe Tonnage Fe Tonnage Fe Tonnage Fe
(t) (%) (t) (%) (t) (%) (t) (%) (t) (%)
0 9,237,523 14.9 228,950,621 12.7 238,188,144 12.8 61,009,455 9.1 299,197,599 12.1
5 8,256,212 16.1 208,846,397 13.5 217,102,609 13.6 54,819,627 9.7 271,922,235 12.9
10 4,138,295 25.5 84,534,283 23.4 88,672,578 23.5 14,463,897 17.7 103,136,475 22.8
15 3,095,247 29.9 66,501,272 26.5 69,596,519 26.7 8,416,606 24.2 78,013,125 26.4
20 2,303,522 34.1 50,732,482 29.2 53,036,004 29.4 5,835,713 27.7 58,871,718 29.2
25 1,720,076 38.1 29,420,073 33.6 31,140,149 33.8 2,817,499 31.3 33,957,648 33.6
30 1,199,721 42.8 17,649,372 37.8 18,849,093 38.1 1,443,970 34.8 20,293,063 37.9

Note: The mineral resources of the Antonia and Esperanza targets are not included.

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Mineral Processing
The studies carried out to date shows that the materials extracted mainly from the sectors of San Gabriel and Esperanza can be
separated magnetically, obtaining products with a high iron content, greater than 62% TFe at standard crushing granulometry, 100%
under 1.5 inches.

With this plant was operated the area of Esperanza Mine to produce high grade Fe concentrates (> 62% TFe). During operation, the
plant produced close to 1,8 Mt Fe concentrates.

Figure.1: Taltal Plant Iron Process Plant Flow Diagram.

Environment and Permits

The original SCMSG project obtained an environmental qualification resolution through an Environmental Impact Statement. In this
resolution, the company approved a Mine-Concentrator-Shipment of Iron Concentrates operation, for a daily capacity of around
40,000 tpd of iron ore processing. However, the closing of operations in 2014, the resolution is still in force, however, it is required to
update the administration and project changes as such and their scope to keep it current.

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