Alpala: The discovery and geology of a world-class

porphyry copper-gold deposit in the Cascabel

project of northern Ecuador
Steve Garwin1 2, Benn Whistler1 (presenter), Jason Ward1, Nick Mather1, Bruce Rohrlach3,
Santiago Vaca1, José Silva1, Bayardo Rosero1, Alfredo Cruz1, Carlos Diaz1, Alex Chafla1,
Santiago Mantilla1, Leonardo Aguilar1 and Alvaro Guachamin1
1
SolGold plc, 2Steven L Garwin Pty Ltd and 3Sunstone Metals Ltd

Contact:
SolGold plc
Level 27, 111 Eagle Street, Brisbane, Queensland 4001, AUSTRALIA
Ph: + 61 (0)7 3303 0660

Steve Garwin: Sgar@iinet.net.au

Benn Whistler: BennWhistler@gmail.com Jason
Ward: JWard@solgold.com.au

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Abstract
The Alpala porphyry copper-gold deposit is located in the southern portion of the 50sq km Cascabel project in northern
Ecuador. The project is owned by Exploraciones Novomining S.A. (ENSA), which is a jointly owned com- pany held by
SolGold plc (85%) and Cornerstone Capital Resources (15%). Cascabel is located near the overlap of Eocene and
Miocene Andean porphyry belts that extend from Colombia through Ecuador and Peru, into Chile and Argentina.
Tenement geology consists of Cretaceous sedimentary rocks unconformably overlain by Tertiary volcanic, volcaniclastic
and volcano-sedimentary rocks that have been intruded by Eocene diorite, quartz diorite and tonalite intrusions.
Previous exploration of the project area, extending from 1980 to 2011, focused on the source of gold, copper, lead and zinc
in stream sediments, which led to the location of gold-bearing, polymetallic epithermal quartz veins in streams that flank
the Alpala deposit. SolGold took an interest in the tenement, signed a deal with Cornerstone and assumed management of
the project in April 2012. In May 2012, reconnaissance mapping located an ap- proximately 80m-wide zone of copper-
and gold-bearing, sheeted, porphyry-style quartz veins in Apala Creek.
A grid soil geochemical survey and a helicopter-borne magnetic survey were conducted in late 2012. The spectral analysis
of the grid soil samples led to the identification of zoned clay-mica alteration assemblages over 2.5km by 1km,
approximately centred over the discovery outcrop. The soil results indicated several zones of coincident gold, copper and
molybdenum anomalies. A reduced-to-the-pole magnetic high/low complex was identified to be broadly coincident with a
1.5km by 2.2km molybdenum (greater than 1.4 ppm) soil anomaly that encompasses the Alpala discovery zone. Rock
channel sampling and structural measurements of quartz veins over 430m by 200m at Alpala provided the geological
context for a diamond drilling programme using a man-portable drill rig that commenced in September 2013.
The first four holes of the drill programme confirmed the surface mineralisation to depths of about 200m. However, the
course of the programme was changed by the length and high grades of chalcopyrite-bearing quartz vein stockworks
encountered in Hole 5, which was started less than 18 months after the location of surface mineralisa- tion. This fifth drill-
hole marks the discovery of the high-grade, world-class Alpala porphyry copper-gold deposit, with an overall interval of
1,306m @ 0.62% copper and 0.54 g/t gold, including 552m @ 1.03% copper and 1.05 g/t gold from a 778m down-hole
depth.
The recognition of geochemical zoning has assisted drill targeting within the deposit and tenement-wide explora- tion.
This zoning is characterised by central Cu-Au; proximal Mo; proximal to distal Bi, Se and Te; and distal As, Mn and Zn.
The central portions of the three major porphyry systems discovered to date show high Cu/Zn and Mo/Mn in soil and
rock-chip samples. Within the Alpala deposit, variations of Au/Cu in drill-hole assist in the delineation of different
intrusion stages.
The applications of the Anaconda method to geological mapping and drill core logging have facilitated the identifi- cation
of more than six major intrusion stages and a vein para-genesis that allows for the prediction of copper-gold grades in the
Alpala deposit. The most important indicators of high-grade mineralisation include the presence of the early-stage causal
intrusion(s), elevated porphyry-style vein abundance and an increased ratio of chalcopyrite to pyrite.
As of the 1 September 2017, five man-portable rigs are on the project and 34 drill-holes have been completed for a total
of approximately 44,000m. The size of the Alpala deposit continues to expand with the completion of nearly every drill-
hole. The 0.7% copper equivalent interpolant1 exceeds 1,000m north-west by 400m north-east and 900m in vertical
extent. SolGold plans to release a maiden copper-gold resource in late 2017 or early 2018.
1
The calculation of copper equivalent grades assumes metal prices of US$1,300/oz gold and US$3/lb copper.

Introduction
The Alpala porphyry copper-gold deposit is a recent discovery in northern Ecuador (Figure 1). The deposit lies within the
Cascabel project which is about 100km north of the capital of Quito and 50km NNW of Ibarra in Im- babura Province.
The project is located about 20km south of the border with Colombia and 75km south-east of the Pacific Ocean port of
San Lorenzo. Cascabel lies about 60km north-east of the Junin (Llurimagua) porphyry copper-molybdenum deposit.
The Cascabel concession consists of a single 50sq km claim, licensed for advanced exploration by the Ecuador
Government. The concession is controlled by Exploraciones Novomining S.A. (ENSA), which is owned by Sol- Gold plc
(85%) and Cornerstone Capital Resources (15%). The current license was granted in March 2011 and is valid for 25 years.

Page 2 NewGenGold 2017 SolGold plc

 Alpala occurs near the overlap of Eocene and Miocene Andean porphyry belts that extend from Colombia through
Ecuador and Peru, and into Chile and Argentina (Figure 1). The deposit formed in the Eocene (~39 Ma; Garwin et al.,
2015), which is similar in age to the giant La Escondida and El Abra deposits in Chile (Cunningham et al., 2008).

Figure 1: Location of the Alpala porphyry copper-gold deposit, Cascabel project in the Eocene porphyry belt of northern Ecuador

Cascabel exploration history

Early exploration (pre-2012)

The earliest documented exploration in the Cascabel project area includes work conducted by the Directorate General of
Geology and Mines (DGGM) in 1980 to 1984 and a cooperative agreement with the Belgium Mission in 1984-1985
(Gilbertson, 2017). This work identified quartz veins, stockworks and disseminated sulphides at Parambas Creek in the
southern part of the current tenement. An agreement between Rio Tinto Zinc (RTZ) and the Ecuadorian Government in
1986 facilitated the ICP analysis of rock samples from outcrops within the area but the focus of this work was west of
Junin, south-west of Cascabel. Lumina Gold Corp, formerly Odin Min- ing and Exploration Ltd, undertook limited
stream sediment sampling in the license area during 1988 to 1991, which generated silver, copper, lead and zinc
anomalies. However, Odin relinquished the Cascabel tenement back to the Ecuadorian Government. The Ecuadorian
Mining Development and Environmental Control Project (1998 to 2000), with the assistance of the British Geological
Survey, completed 1:50,000 geological mapping and stream sediment sampling over much of the Western Cordillera.
This work identified Au-Ag-Cu-Pb-Zn-bearing, epithermal-type quartz veins hosted by propylitic- and clay-silica-altered
volcanic rocks in the vicinity of Cascabel, including outcrops in Parambas Creek.
Santa Barbara Copper & Gold S.A. (SBCG) was granted the current Cascabel license area along with other con- cessions
in 2008. Subsequent prospecting, stream sediment- and rock-sampling generated results anomalous

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CASCAB

in gold, silver, copper, lead and zinc. Cornerstone Capital Resources Inc. purchased the property from SBCG through the
establishment of ENSA in February 2011. Prospecting, reconnaissance mapping and a stream sedi- ment survey in June-
July 2011 delineated copper-gold-molybdenum and lead-zinc-silver rock chip anomalies, as well as copper-molybdenum-
gold stream sediment anomalies. A central 4km by 5km area of interest was identified around porphyry-style outcrops in
Moran Creek (Rohrlach et al., 2015). Gold-anomalous rock samples, containing 0.1 g/t to greater than 1 g/t gold, were
collected in Cachaco Creek and Parambas Creek from outcrops that are located 1-3km from what became the discovery
outcrop in Alpala Creek.

SolGold interest in Cascabel (early-2012)

In early 2012, after many years of exploration for porphyry copper deposits in the Solomon Islands, SolGold de- cided to
focus on a global search to find a new theatre for exploration. This work was led by then CEO, Malcom Norris, and
general manager of exploration, Dr Bruce Rohrlach, who focused on the Andes and particularly Ecua- dor, due to its
underexplored status. Northern Ecuador was considered to be attractive and possess the preferred tectonic setting and
accretionary terrane model for porphyry copper-gold fertility. The location of the subducted portion of the Carnegie
Ridge beneath the region and the proximity of the large Junin copper-molybdenum por- phyry system to Cascabel,
contributed to the prospectivity of the Cornerstone-held concession.
When SolGold looked at the data available from prior work at Cascabel, the team was impressed by the wide- spread
copper-gold-molybdenum anomalies in rock chip samples (3km by 3km) and stream sediment samples (5km by 5km).
Copper was consistently anomalous and there were a significant number of rock chips which re- turned assays greater
than 1 g/t gold.
In July 2012, SolGold signed a definitive JV agreement with Cornerstone, further to the legally-binding letter of intent
announced on 10 April 2012. SolGold assumed technical management of the Cascabel license area.

Exploration by SolGold/ENSA (May 2012 to present)

The discovery outcrop was found in Alpala Creek in May 2012, during reconnaissance mapping by SolGold/ENSA
geologists (Rohrlach et al., 2015). The outcrop consists of chalcopyrite- and pyrite-bearing, sheeted, porphyry- style B-
type quartz veins, using the nomenclature of Gustafson and Hunt (1975), in quartz-sericite-pyrite (phyllic) altered
volcanic rocks (Figure 2). Quartz vein abundance ranges from 2.0 volume-percent over 80m to greater than 20 volume-
percent over 10m, measured across the north-westerly strike direction of the steeply northeast- dipping veins. Subsequent
channel sample results of the vein zone returned 4m @ 0.99% copper and 3.30 g/t gold; 33.3m @ 0.65% copper and 1.02
g/t gold; and 56.9m @ 0.34% copper and 1.16 g/t gold. Exploration has shown that this small stream outcrop forms the
upper portion of a cluster of porphyry targets that extends over 2km north-west by 1.1km north-east, termed the greater
Alpala porphyry cluster.

Figure 2: Alpala Creek discovery outcrop of porphyry-style quartz veins showing copper-gold rock-channel sample results (2013)

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Geochemical soil surveys, spectral analyses and helicopter-borne magnetic survey (2012)
Rohrlach et al. (2015) cite three tenement-scale databases, collected during the second half of 2012, as being sig- nificant
to the preliminary delineation of the Alpala deposit. A grid soil survey was completed over about 20sq km and typically
sampled the C-horizon from depths of 1-2m using a hand-auger. Initial sample spacing was 200m by 100m, some of which
was later infilled to 100m by 100m. The soils were sieved to -80 mesh and analysed for gold by fire-assay and multi-
elements by ICP. The survey identified widespread geochemical anomalies, including at least four major porphyry
centres characterised by coincident gold, copper and molybdenum which consist of the Alpala cluster, Moran, Aguinaga
and Tandayama-America (Figure 3). The discovery outcrop lies in the approxi- mate centre of a 1.5km by 2.2km
molybdenum (>1.4 ppm) anomaly. Alpala, Aguinaga and Tandayama-America are characterised by low zinc and
manganese, which when imaged as ratios with copper and molybdenum pro- duce robust anomalies (e.g., bullseyes for
high Cu/Zn and Mo/Mn). The Alpala porphyry cluster is characterised by elevated As, Bi, Se and Te in soil, whereas,
Aguinaga and Tandayama-America are low in these elements. This may indicate a higher level of exposure and less erosion
for the Alpala cluster than for Aguinaga and Tandayama- America. This interpretation is supported by the occurrence of
high-temperature biotite (potassic) alteration in the outcrops at Aguinaga and Tandayama-America and lower-
temperature clay-mica (phyllic, intermediate and advanced argillic) alteration at surface in the Alpala cluster.
TerraSpecTM analyses of the coarse residues from the soil samples, sieved to greater than 1mm, were under- taken to
assist in the mapping of hydrothermal alteration minerals in zones of variable clay-mica alteration, termed ‘argillic’ when
mapped in 2011-2012 (Figure 4a). This approach worked well in the Alpala porphyry cluster, where it identified zoned
neutral- to acid-alteration assemblages over an area of 2.5km north-west by 1km north-east (Rohrlach et al., 2015). This
zoning with respect to the discovery outcrop was interpreted to indicate proximal illite (phengite), passing upwards and
outwards through kaolinite into dickite and pyrophyllite (Figure 4b). This distribu- tion of hydrothermal alteration deduced
from the soils was inferred to represent the structurally controlled roots of a lithocap above the Alpala porphyry
system(s), as described by Rohrlach et al. (2015).
A helicopter-borne magnetics and radiometric survey was flown over the entire Cascabel tenement in November 2012,
using a line spacing of 100m. The flight lines were oriented north-south. The reduced-to-the-pole images from this data
identified a magnetic high/low complex which is broadly coincident with the greater than 1.4 ppm molybdenum soil
anomaly centred on the Alpala cluster (Rohrlach et al., 2015).

Figure 3: Summary of soil geochemical results for the Cascabel tenement, showing molybdenum, manganese and Cu/Zn

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Figure 4: Cascabel tenement maps for 2012 to 2014. a) Lithology and alteration of the Cascabel concession. b) Alteration zonation within
the Alpala lithocap defined by TerraSpecTM mapping (figure from Rohlach et al., 2015). The location of the discovery outcrop is indicated by
the black circle in the central portion of the lithocap

Outcrop channel sampling, trenching and initial diamond drilling (2013 to 2014)
In the first half of 2013, SolGold/ENSA completed channel sampling using a petrol-driven rock saw and hand- trenching
over an area of about 430m (north-south) by 200m (east-west) around the Alpala discovery outcrop to delineate the
extent of the B-type porphyry-style veins (Rohrlach et al., 2015). Similar sampling was completed at Tandayama-
America and Moran during this time. About 400 structural measurements were collected from the B-type quartz veins at
Alpala, which assisted in the targeting of drill-holes in the subsequent drill programme.
Diamond drilling started on 1 September 2013. Drilling was accomplished by man-portable, Hydro Core rigs, modified
by the drill contractor, HP Drilling, to penetrate to great depth. Through a series of rig modifications dur- ing the course
of the 2013-2017 drill programme, this type of rig has reached maximum depths of 355.7m PQ, 1,005.3m HQ, 1,614.1m
NQ and 2,216.8m BQ. From the start of the drill programme through early 2016, access to the drill sites was by walking
track less than 1.5m wide from the nearest village, Santa Cecilia, which lies about 2.5km north of the Alpala discovery
outcrop. All drill-related equipment was transported by pack-burros, local labourers and iron horses, which are petrol-
powered, track-driven machines that can carry up to a tonne. Suffice to say, without man- and donkey-portable drill rigs,
capable of routinely achieving depths in excess of 1,600m, the discovery and growth of the Alpala deposit would have
been more difficult and costly.
The first hole (CSD-13-001) drilled south-west at an inclination of about 61° beneath one of the best surface re- sults of
NW-striking, steeply NE-dipping B-type quartz veins in the Alpala stream (Channel 46). This hole returned 302m @
0.39% copper and 0.48 g/t gold from 16m depth (Table 1). Hole 2 drilled about 63° towards the east to provide a scissor
hole, which yielded 292m @ 0.37% copper and 0.30 g/t gold from 126m depth. Hole 3 was drilled 60° to the south-east
towards a preliminary ‘magnetic high’ that shifted when remodelled using the MVI algorithm. This hole drilled through
the upper halo of the porphyry system, returning 747.3m @ 0.11% copper and
0.05 g/t gold from 4m. Hole 4 was lost in a clay gouge-rich fault zone and did not reach the target.
In November 2013, CSD-13-005 was commenced from the same pad as Hole 1, oriented 85° towards the south- west to
test for the down-dip extension of the near-surface copper-gold mineralisation intersected in CSD-13-001. The length and
high-grades encountered in Hole 5 changed the course of the drill programme and indicated the presence of intense
copper-gold mineralisation at depths of about 750m beneath surface. This fifth hole marks the discovery of the high-grade
world-class Alpala porphyry copper-gold deposit, with intervals of 1,306m @ 0.62% copper and 0.54 g/t gold, including
552m @ 1.03% copper and 1.05 g/t gold from 778m depth. This mineralisa- tion is typically related to chalcopyrite in
quartz+magnetite (B-type) veins and chalcopyrite-rich (C-type) sulphide

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veins that transect variably chlorite-sericite-clay altered diorite and quartz diorite intrusions. The intrusive rocks,
mineralisation styles and hydrothermal alteration at Apala are further described in the subsequent sections of this paper.
Drill-hole 6 drilled more marginal mineralisation above the deposit, chasing a magnetic high. This hole returned results
of 821.5m @ 0.14% copper and 0.17 g/t gold from 580m, with similar copper-gold grades to Hole 3. Drill- hole 7 was
commenced in May 2014 as a 200m step-out to the north-west from the pad for Hole 5 and drilled in a similar orientation,
85° towards the south-west. This hole, CSD-14-007, intersected 958m @ 0.40% copper and
0.17 g/t gold from 654m, including 235m @ 0.65% copper and 0.35 g/t Au.
In July 2014, around the completion of Hole 7, a review of the drill core, geology logs and assay results to date led to a
better understanding of the zoning in vein styles, hydrothermal alteration and copper-gold-molybdenum-zinc
concentrations. A series of hand-drawn cross-sections and preliminary 3D models constructed in Surpac con- firmed the
following geometric relationships (based on Garwin, 2014):
• Porphyry-style B-veins >0.5% mark the outer margins of low-grade copper-gold (~0.2% copper and 0.2 g/t
gold), with increasing abundances of 2.0, 5.0 and >10% veins corresponding to increasing copper-- gold
grades; high-grade copper-gold coincides with >10% B-veins
• The ratio of chalcopyrite-to-pyrite (cp/py) increases with increasing abundances of veins (2.0, 5.0 and
>10%) corresponding to proximity to the copper-gold core; cp/py >0.5 indicates proximity to higher grade
copper-gold; cp/py >1.0 is common in high-grade zones
• The average of all drill intercepts indicates Au/Cu of ~1; very high-grade zones (+1.5% Cu and +2.0 g/t Au),
characterised by chalcopyrite-rich C-veins that cross-cut early magnetite-bearing, B-type quartz veins, show
Au/Cu > 1.5 (Note: this understanding came later, in mid-2015)
• A molybdenum halo of >10 ppm in drill-core occurs immediately outside of a high-grade copper-gold core
(+0.7% copper and +0.7 g/t Au); visible molybdenite in veins and along fractures is indicative of proximity to
high copper-gold grades
• Increasing Cu/Zn in drill-core, rock chip and soil acts as a proxy for chalcopyrite/sphalerite and indicates
increasing temperatures of mineralisation; higher Cu/Zn provides a vector towards the porphyry centre
• Late-stage anhydrite veins form a halo that is similar to Mo >10 ppm and indicates proximity to higher grades
• Late-stage feldspar-destructive (quartz-sericite-pyrite; phyllic) alteration has overprinted the upper portions of
the system; higher grade zones are related to intrusions that show variable sericite- chlorite+clay-magnetite-
pyrite (intermediate argillic) overprinting of biotite-chlorite-actinolite (transitional potassic) and chlorite-epidote
(propylitic) alteration mineral assemblages
• Minor bornite is late-stage and in equilibrium with pyrite associated with phyllic alteration; bornite is more
common in the upper portions of the system and associated with Au/Cu <0.5
The lack of significant very early, A-type quartz veins (Gustafson and Hunt, 1975), the absence of early-stage bornite in
equilibrium with magnetite and the lack of a central biotite (potassic) alteration zone that is not exten- sively overprinted
by mica-rich alteration led the team to believe that the core of the porphyry system had yet to be tested and that deeper
drilling would be required. The targeting of deeper drill-holes and step-out holes was assisted through the creation of a
series of cross-sections and level-plans that enabled the construction of early 3D models in Surpac and later 3D models
using LeapFrog software.
By August 2014, it was apparent that porphyry-style copper-gold mineralisation occurred along the south-western margin
of an 1,100m by 500m magnetic complex, which extended from an apex at about 750m beneath surface to more than
1,800m depth (Rohrlach et al., 2015). Magnetic susceptibility readings of drill-core suggest that the airborne magnetic
signature is related to primary (magmatic) magnetite in the intrusions and to hydrothermal magnetite in veins,
disseminations and replacements of magmatic hornblende. Figure 5 shows the relationship of the first seven drill-holes to
the 3D model, created by magnetic vector inversion (MVI) Geosoft algorithms of the helicopter-borne magnetic data, and
the molybdenum halo (>10 ppm Mo). This model influenced the drilling programme through Hole 8, which was started
in August 2014. This hole was drilled 85° towards the north from the same pad as Holes 1 and 5 to pierce the apex of the
MVI model (Figure 5). CSD-014-008 returned 914.5m @ 0.41% copper and 0.44 g/t gold, from 396m and is open at
depth. The decision to terminate the hole was made in response to drilling difficulties and the challenges of the site
geologists to visually recognise very fine-grained chalcopyrite in drill core.

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Table 1: Cascabel Project - Selected Drill-hole Intersections

Cu Au
Hole ID From (m) To (m) Interval (m) % g/t Cu.Eq % Cut Completed
CSD-13-001 16 318 302 0.39 0.48 0.82 na 8-Sep-13
CSD-13-005 24 1330 1306 0.62 0.54 1.10 na 20-Feb-14
incl. 778 1310 532 1.05 1.08 2.01 na
incl. 1096 1146 50 1.80 2.26 3.81 na
CSD-14-007 654 1612 958 0.40 0.17 0.55 na 25-Jul-14
incl. 1056 1294 238 0.65 0.35 0.96 na
CSD-14-008* 396 1310.45 914.45 0.41 0.44 0.80 na 12-Oct-14
(open) incl. 862 1310.45 448.45 0.56 0.64 1.13 na
CSD-14-009 430 1757.35 1327.35 0.57 0.74 1.23 na 11-Jan-15
incl. 650 1738 1088 0.66 0.89 1.45 na
incl. 710 820 110 1.13 2.32 3.19 na
CSD-15-012 128 1440 1312 0.67 0.63 1.23 na 3-Oct-15
incl. 128 366 238 0.47 0.15 0.60 na
incl. 438 1440 1002 0.76 0.77 1.45 na
CSD-16-015R2 394 1732 1338 0.49 0.36 0.81 na 22-May-16
incl. 890 1640 750 0.67 0.50 1.12 na
CSD-16-016 516 1661.6 1145.6 0.63 0.78 1.32 na 21-Mar-16
incl. 548 1404 856 0.80 1.04 1.73 na
incl. 934 1301.6 367.6 1.01 1.35 2.21 1.00
CSD-16-017 330 1278 948 0.60 0.53 1.07 0.20 4-Jun-16
incl. 702 1264 562 0.79 0.75 1.46 0.50
CSD-16-018 466 1670 1204 0.46 0.47 0.88 na 6-Jan-17
incl. 904 1568 664 0.70 0.77 1.39 0.30
incl. 1174 1318 144 1.13 1.67 2.63 1.50
CSD-16-019 268 1612 1344 0.44 0.28 0.62 0.10 20-Jan-17
incl. 514 1494 980 0.55 0.36 0.78 0.30
incl. 822 1374 552 0.68 0.45 0.97 0.50
CSD-17-021 668 1614 946 0.67 0.39 0.92 0.10 17-Mar-17
incl. 962 1266 304 0.99 0.63 1.39 0.70
CSD-17-022 192 1254 1062 0.40 0.18 0.52 0.30 5-Mar-17
incl. 668 1174 506 0.58 0.30 0.77 0.40
incl. 896 996 100 1.10 0.57 1.46 0.70
CSD-17-023R 490 1520 1030 0.59 0.90 1.16 0.10 23-May-17
incl. 830 1304 474 0.89 1.57 1.88 0.50
incl. 970 1186 216 1.29 2.84 3.08 1.50
CSD-17-024 636 1222 586 0.27 0.25 0.43 0.10 12-May-17
incl. 738 898 160 0.63 0.65 1.04 0.30
CSD-17-025 754 1530 776 0.58 0.30 0.77 0.30 12-May-17
incl. 772 1010 238 1.31 0.70 1.76 0.50
incl. 772 872 100 2.64 1.51 3.59 0.70
CSD-17-026* 956 1876 920 0.48 0.31 0.68 0.30 30-July-17

Data aggregation method: Intercepts reported using copper equivalent cut-off grades with up to 10m internal dilution, excluding bridging
to a single sample. Minimum intersection length 50m. Gold Conversion Factor of 0.89 calculated from a copper price of US$2.20/lb and
a gold price US$1,350/oz for CSD-1 to 18. Gold conversion factor of 0.63 calculated from a copper price of US$3.00/lb and a gold price
US$1,300/oz for CSD-19 to 26. True widths of downhole interval lengths are estimated to be approximately 25% to 50%. * Drill
intercepts for CSD-14-008 and CSD-17-026 are open at depth

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Figure 5: Magnetic (MVI) model for the Alpala porphyry system in mid-2014, showing copper and gold results for drill-holes CSD-1 to 7
and the molybdenum halo or shell (>10 ppm Mo). This figure is from Rohrlach et al. (2015)

Orion – IP/3DMT survey (2014)

A deep penetration Orion – IP/3DMT survey was completed over about 15sq km in the tenement area during August
2014. The 2D and 3D modelling of this electrical data show large volumes of high chargeability (>60 mil- liseconds),
inferred to be related to pyrite, to lie above and adjacent to the Alpala drill area and to the southeast, beneath the neutral-
to acid-alteration lithocap inferred from the TerraSpecTM soil analyses (Figure 4B). A deep magneto-telluric (MT)
conductor (<120 ohm-meters to depths >2,000m), ~750m in diameter, is centred west of the Alpala drill area and
encompasses the majority of the drill holes completed as of the writing of this paper.

Anaconda-style mapping (September 2014 to present)

The emphasis of exploration and drill targeting shifted in late 2014, with the introduction of the Anaconda mapping
method. This method of geological mapping and drill-core logging was developed by Anaconda geologists at El
Salvador, Chile and Yerington, Nevada during the 1960s (Einaudi, 1996; Brimhall et al., 2006). It involves colour- coded
mapping of key features of alteration and mineralisation, supplemented by visual estimates of vein- and mineral-
abundance, structural measurements and relative timing relationships between different vein types and intrusive contacts.
The important aspects of this mapping style include the documentation of the extent and type of hydrothermal mineral
replacement of mafic magmatic mineral (usually hornblende) and plagioclase sites. In describing outcrop and drill core,
the estimate of sulphide mineral ratios, such as bornite/chalcopyrite and chalco- pyrite/pyrite, are critical and provides
vectors toward the centre of the porphyry system.
Figure 6 shows the results of the application of the Anaconda mapping method at 1:500-scale in the Alpala Creek area,
which was initiated during the completion of CSD-14-009. Surface mapping and core-logging in this hole and re-logging
of previous drill holes indicated a series of intrusion stages and vein paragenesis, as is common in porphyry systems
elsewhere. The early intrusions are much higher grade than the later intrusions, because the younger intrusions post-date
the majority of the copper-gold-bearing vein stages. CSD-14-009 returned two high- grade intervals, an upper zone of
110m @ 1.13% copper and 2.32 g/t gold and a lower zone of 298m @ 1.24% copper and 1.72 g/t gold, which are
separated by a late-stage dike. The overall interval for the hole is 1327.4m @ 0.57% copper and 0.74 g/t gold from 430m.
The mapping of intrusion stages and faults (Figure 6a), sulphide mineral abundance (6b), chalcopyrite/pyrite (6c) and B-
type quartz vein abundance (6d) in Alpala Creek allowed SolGold/ENSA geologists to successfully target Hole 12 in
mid-2015. This hole was designed to test the south-easterly strike-extent of a structurally controlled zone of intrusive
dikes, increased B-type quartz vein abundance, elevated chalcopyrite/pyrite and low pyrite abun- dance (Figure 6). CSD-
15-012 returned the best intercept in the deposit to date, characterised by 1,312m @ 0.67% copper and 0.63 g/t gold from
128m depth. The positive results of this hole validated the application of the mapping method at Alpala and encouraged
the geologists to map the Alpala porphyry cluster and adjacent areas at the scales of 1:500 and 1:1000.

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Figure 6: Results of Anaconda style mapping in Alpala Creek at 1:500-scale (2015), showing drill-hole traces. a) lithology and structure, b)
sulphide - oxide mineral distribution, c) chalcopyrite / pyrite and d) porphyry-style, B-type quartz vein abundance

Ground magnetics survey and Spartan – IP/3DMT survey (2017)

A ground magnetic survey was completed over about 30sq km of the Cascabel tenement in April 2017. In total, 650km of
total-field magnetic data were acquired from east-west oriented lines spaced every 50m. This survey produced an
exceptionally high-quality product. The reduced-to-the-pole image for the ground magnetics data shows a major zone of
magnetite-destruction to occur over much of the Alpala porphyry cluster (Figure 7). This zone of magnetite-destruction is
related to intense hydrothermal (phyllic and advanced argillic) alteration that has converted magnetite to pyrite
(+hematite) and chalcopyrite from surface to depths of more than 750m, as determined from drilling. Below this depth,
high-grade copper and gold mineralisation occurs with magnetite-rich, hydrothermally altered intrusions. The surface
projection of the copper equivalent models for 0.7% and 1.0% coincide with the zone of magnetite-destruction, which
suggests that similar high-grade mineralisation may exist along strike in areas where magnetite-destructive alteration
occurs. The significant amounts of copper and gold in Hole 24 at Alpala Southeast indicate that copper mineralisation is
related to the eastern margin of the zone of magnetite-destruction.
The 3D magnetic inversion (MVI) models based on the ground magnetic data in the Alpala region mostly coincide with
subsurface mineralised envelopes and reveal a north-northwest trending line of significant magnetic bodies at Moran,
Trivinio, Alpala Northwest, and Alpala Central (Figure 7). The central body defined by the 3D MVI mod- els coincides
with the 1% copper equivalent model at Alpala Central and defines the current growing exploration target confirmed by
drilling (Figure 7).
A Spartan–Orion hybrid, distributed IP/3DMT survey commenced in August with the aim of covering a similar area as the
ground magnetic survey. This survey will cover a larger area than the 2014 Orion IP/3DMT survey and pro- vide greater
resolution and depth of penetration. The data from both surveys will be merged, where appropriate. The combined
electrical survey results will enable detection and modelling of sulphides in 3D. Hydrothermal alter- ation will also be
detected and modelled in 3D by Spartan EM to depths in excess of 3 km. In combination with the ground magnetic data,
this electrical survey will allow the delineation and modelling of secondary (hydrothermal) magnetite associated with
altered intrusions in the porphyry systems and assist exploration in the tenement area.

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