Report to:

Technical Report and Updated Preliminary

Assessment of the Zafranal Project, Peru

Document No. 1295840200-REP-R0001-04

Report to:

TECHNICAL REPORT AND UPDATED

PRELIMINARY ASSESSMENT OF THE
ZAFRANAL PROJECT, PERU

EFFECTIVE DATE: OCTOBER 4, 2013

Prepared by Marinus Andre De Ruijter, P.Eng.

Gregory Z. Mosher, P.Geo.
Hassan Ghaffari, P.Eng.
Sabry Abdel Hafez, Ph.D., P.Eng.
Anoush Ebrahimi, P.Eng.
Monica Danon-Schaffer, Ph.D., P.Eng.

AS/jc

Suite 800, 555 West Hastings Street, Vancouver, British Columbia V6B 1M1
Phone: 604-408-3788 Fax: 604-408-3722
TABLE OF CONTENTS

1.0 SUMMARY ....................................................................................................... 1-1

1.1 INTRODUCTION ...................................................................................................... 1-1
1.2 PROPERTY DESCRIPTION ........................................................................................ 1-4
1.3 HISTORY ............................................................................................................... 1-4
1.4 GEOLOGICAL SETTING ............................................................................................ 1-4
1.5 MINERAL RESOURCES ............................................................................................ 1-5
1.6 MINERAL PROCESSING AND METALLURGICAL TESTING .............................................. 1-5
1.6.1 MINERAL PROCESSING ........................................................................... 1-5
1.6.2 METALLURGICAL TESTING ....................................................................... 1-6
1.7 MINING ................................................................................................................ 1-6
1.8 PROJECT INFRASTRUCTURE ..................................................................................... 1-7
1.9 ENVIRONMENTAL ................................................................................................... 1-8
1.10 CAPITAL AND OPERATING COSTS ............................................................................. 1-9
1.10.1 CAPITAL COST ESTIMATE......................................................................... 1-9
1.10.2 OPERATING COST ESTIMATE .................................................................... 1-9
1.11 ECONOMIC ANALYSIS ........................................................................................... 1-10
1.11.1 SENSITIVITY ANALYSIS .......................................................................... 1-11
1.12 PROJECT DEVELOPMENT PLAN .............................................................................. 1-13
1.13 OPPORTUNITIES AND RECOMMENDATIONS ............................................................. 1-13
2.0 INTRODUCTION ............................................................................................... 2-1
3.0 RELIANCE ON OTHER EXPERTS ...................................................................... 3-1
4.0 PROPERTY DESCRIPTION AND LOCATION ...................................................... 4-1
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY ............................................................................................... 5-1
6.0 HISTORY .......................................................................................................... 6-1
6.1 ZAFRANAL MAIN ZONE ........................................................................................... 6-1
6.2 VICTORIA ZONE...................................................................................................... 6-2
7.0 GEOLOGICAL SETTING AND MINERALIZATION................................................ 7-1
7.1 REGIONAL GEOLOGY .............................................................................................. 7-1
7.2 PROPERTY GEOLOGY.............................................................................................. 7-2
7.2.1 ZAFRANAL MAIN ZONE ........................................................................... 7-2
7.2.2 VICTORIA ZONE ...................................................................................... 7-4
7.2.3 SICERA NORTE ZONE.............................................................................. 7-4
7.2.4 SICERA SUR ZONE ................................................................................. 7-5
7.3 MINERALIZATION ................................................................................................... 7-6

i 1295840200-REP-R0001-04
 7.3.1 ZAFRANAL MAIN ZONE ........................................................................... 7-7
7.3.2 VICTORIA ZONE ...................................................................................... 7-8
7.3.3 SICERA NORTE ZONE.............................................................................. 7-8
7.3.4 SICERA SUR ZONE ................................................................................. 7-8
8.0 DEPOSIT TYPES ............................................................................................... 8-1
9.0 EXPLORATION .................................................................................................. 9-1
10.0 DRILLING ....................................................................................................... 10-1
10.1 ZAFRANAL MAIN AND VICTORIA ZONES................................................................... 10-1
11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY ..................................... 11-1
11.1 DRILL CORE SAMPLING ........................................................................................ 11-1
11.2 QUALITY ASSURANCE/QUALITY CONTROL PROCEDURES........................................... 11-2
11.3 STANDARDS ........................................................................................................ 11-2
11.4 BLANKS.............................................................................................................. 11-3
11.5 DUPLICATES ........................................................................................................ 11-3
12.0 DATA VERIFICATION ...................................................................................... 12-1
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING.............................. 13-1
13.1 INTRODUCTION .................................................................................................... 13-1
13.2 CHRONOLOGY OF METALLURGICAL TEST WORK ...................................................... 13-1
13.3 MINERALOGY ...................................................................................................... 13-2
13.4 FEED GRADE ....................................................................................................... 13-5
13.5 MINERALIZED MATERIAL CHARACTERISTICS ............................................................ 13-6
13.6 GRINDABILITY...................................................................................................... 13-6
13.6.1 CRUSHER WORK INDEX ........................................................................ 13-7
13.6.2 ABRASION INDEX.................................................................................. 13-8
13.6.3 BOND BALL MILL WORK INDEX ............................................................. 13-9
13.6.4 JK SAG MILL COMMINUTION TEST RESULTS .......................................... 13-9
13.7 FLOTATION TESTS .............................................................................................. 13-10
13.7.1 BULK SULPHIDE FLOTATION ................................................................ 13-11
13.7.2 FLOTATION PROGRAMS ....................................................................... 13-12
13.7.3 FLOTATION TESTING – GRIND SIZE EVALUATION .................................... 13-12
13.7.4 FLOTATION – COLLECTOR REAGENT EVALUATION .................................. 13-13
13.7.5 FLOTATION – PH EVALUATION ............................................................. 13-14
13.7.6 FLOTATION – ROUGHER FLOTATION TIME ............................................. 13-14
13.7.7 FLOTATION – REGRIND ....................................................................... 13-15
13.7.8 FLOTATION – CLEANER PH EVALUATION ............................................... 13-15
13.7.9 FLOTATION – LOCKED CYCLE TESTING ................................................. 13-16
13.7.10 FLOTATION – FINAL CONCENTRATE ELEMENTAL ANALYSIS...................... 13-19
13.7.11 FLOTATION – VARIABILITY TESTS (ROUGHER) ........................................ 13-19
13.8 SETTLING TEST WORK (TAILINGS) ....................................................................... 13-24
13.9 ENVIRONMENTAL TESTING .................................................................................. 13-24
13.10 SOLVENT EXTRACTION AND ELECTROWINNING TEST WORK .................................... 13-24
13.11 CONCLUSIONS ................................................................................................... 13-24

ii 1295840200-REP-R0001-04
 13.12 RECOMMENDED ADDITIONAL TEST WORK ............................................................ 13-24
14.0 MINERAL RESOURCE ESTIMATES ................................................................. 14-1
14.1 EXPLORATORY DATA ANALYSIS .............................................................................. 14-1
14.1.1 ASSAYS ............................................................................................... 14-1
14.1.2 CAPPING ............................................................................................. 14-2
14.1.3 COMPOSITES ....................................................................................... 14-2
14.2 BULK DENSITY .................................................................................................... 14-2
14.3 GEOLOGICAL INTERPRETATION .............................................................................. 14-3
14.4 SPATIAL ANALYSIS ............................................................................................... 14-6
14.5 RESOURCE BLOCK MODEL ................................................................................... 14-8
14.6 INTERPOLATION PLAN........................................................................................... 14-8
14.7 MINERAL RESOURCE CLASSIFICATION .................................................................... 14-8
14.8 MINERAL RESOURCE TABULATION ......................................................................... 14-9
14.9 BLOCK MODEL VALIDATION .................................................................................. 14-9
14.10 PREVIOUS RESOURCE ESTIMATES ....................................................................... 14-16
15.0 MINERAL RESERVE ESTIMATES .................................................................... 15-1
16.0 MINING METHODS ........................................................................................ 16-1
16.1 INTRODUCTION .................................................................................................... 16-1
16.2 PIT OPTIMIZATION ................................................................................................ 16-2
16.2.1 PIT OPTIMIZATION INPUT PARAMETERS................................................... 16-2
16.2.2 SURFACE TOPOGRAPHY ........................................................................ 16-3
16.2.3 BLOCK MODEL .................................................................................... 16-3
16.2.4 OVERALL PIT SLOPES ........................................................................... 16-4
16.2.5 PIT OPTIMIZATION RESULTS .................................................................. 16-4
16.3 FINAL PIT DESIGN................................................................................................ 16-8
16.3.1 MINE LAYOUT ...................................................................................... 16-8
16.3.2 BENCH HEIGHT AND PIT WALL SLOPES .................................................. 16-8
16.3.3 MINIMUM WORKING AREA .................................................................... 16-8
16.3.4 HAUL ROAD DESIGN............................................................................. 16-8
16.3.5 SUMMARY OF THE ULTIMATE PIT DESIGN ............................................... 16-9
16.4 PRODUCTION SCHEDULE .................................................................................... 16-10
16.4.1 MINING OPERATION AND PRODUCTION SCHEDULE ................................ 16-10
16.4.2 CUT-OFF GRADE AND STOCKPILING ...................................................... 16-13
16.4.3 RESULTS ........................................................................................... 16-14
16.5 MINE EQUIPMENT.............................................................................................. 16-16
16.5.1 MINE EQUIPMENT FLEET .................................................................... 16-16
16.5.2 AVAILABLE HOURS ............................................................................. 16-16
16.5.3 MINING EQUIPMENT ........................................................................... 16-17
16.5.4 MINING LABOUR REQUIREMENTS ........................................................ 16-20
17.0 RECOVERY METHODS ................................................................................... 17-1
17.1 INTRODUCTION .................................................................................................... 17-1
17.2 SUMMARY .......................................................................................................... 17-1
17.3 PLANT DESIGN – CONCENTRATOR ......................................................................... 17-4

iii 1295840200-REP-R0001-04
 17.3.1 MAJOR DESIGN CRITERIA...................................................................... 17-4
17.3.2 OPERATING SCHEDULE AND AVAILABILITY ............................................... 17-5
17.4 PROCESS PLANT DESCRIPTION – CONCENTRATOR .................................................. 17-5
17.4.1 PRIMARY CRUSHING............................................................................. 17-5
17.4.2 COARSE PLANT FEED STOCKPILE AND RECLAIM ...................................... 17-6
17.4.3 GRINDING AND CLASSIFICATION............................................................. 17-6
17.4.4 FLOTATION AND REGRIND CIRCUITS ....................................................... 17-7
17.4.5 CONCENTRATE HANDLING ..................................................................... 17-9
17.4.6 TAILINGS THICKENER ......................................................................... 17-10
17.4.7 REAGENT HANDLING AND STORAGE ..................................................... 17-10
17.4.8 ASSAY AND METALLURGICAL LABORATORY ............................................ 17-12
17.4.9 WATER SUPPLY ................................................................................. 17-13
17.4.10 AIR SUPPLY ....................................................................................... 17-13
17.4.11 ON-LINE SAMPLE ANALYSIS ................................................................ 17-13
17.5 LEACH/SOLVENT EXTRACTION-ELECTROWINNING PROCESSING FACILITY ................. 17-14
17.5.1 INTRODUCTION .................................................................................. 17-14
17.5.2 SUMMARY ......................................................................................... 17-14
17.5.3 PLANT DESIGN – LEACH/SX-EW FACILITY ........................................... 17-15
17.6 PROCESS DESCRIPTION – LEACH/SX-EW............................................................ 17-16
17.6.1 DUMP LEACHING ............................................................................... 17-16
17.6.2 SOLVENT EXTRACTION ........................................................................ 17-16
17.6.3 ELECTROWINNING CIRCUIT .................................................................. 17-18
17.6.4 WATER SUPPLY – REVERSE OSMOSIS PLANT........................................ 17-18
18.0 PROJECT INFRASTRUCTURE ......................................................................... 18-1
18.1 INTRODUCTION .................................................................................................... 18-1
18.2 PROCESS PLANT AND ANCILLARY FACILITIES ........................................................... 18-4
18.2.1 FACILITIES DESCRIPTIONS ..................................................................... 18-5
18.3 WAREHOUSE, MAINTENANCE, AND CONCENTRATE OPERATIONS FACILITIES ............... 18-8
18.3.1 MAINTENANCE SHOP AND WAREHOUSE.................................................. 18-8
18.3.2 CONCENTRATOR OPERATING FACILITY .................................................... 18-8
18.3.3 FUEL STORAGE AND DISTRIBUTION ........................................................ 18-8
18.4 TAILINGS MANAGEMENT FACILITY .......................................................................... 18-8
18.5 LEACH/SX-EW FACILITY ...................................................................................... 18-9
18.6 ROADS ............................................................................................................. 18-10
18.6.1 OVERVIEW ......................................................................................... 18-10
18.6.2 FACILITY PADS ................................................................................... 18-11
18.6.3 ACCESS ROADS ................................................................................. 18-11
18.6.4 MAINTENANCE ROADS ........................................................................ 18-11
18.7 FRESH WATER SUPPLY AND DISTRIBUTION ........................................................... 18-12
18.7.1 POWER SUPPLY AND DISTRIBUTION ..................................................... 18-13
18.8 WATER RESERVOIRS AND DAMS ......................................................................... 18-14
18.9 OTHER INFRASTRUCTURE ................................................................................... 18-14
19.0 MARKET STUDIES AND CONTRACTS............................................................. 19-1
20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY
IMPACT .......................................................................................................... 20-1

iv 1295840200-REP-R0001-04
 20.1 ENVIRONMENTAL STUDIES .................................................................................... 20-1
20.2 ENVIRONMENTAL PERMITTING .............................................................................. 20-1
20.2.1 ENVIRONMENTAL IMPACT ASSESSMENTS................................................ 20-2
20.2.2 OTHER PERMITS .................................................................................. 20-2
20.2.3 MINE CLOSURE PLAN ........................................................................... 20-3
20.2.4 ENVIRONMENTAL LEGISLATION .............................................................. 20-3
20.2.5 PERUVIAN ENVIRONMENTAL GUIDELINES................................................ 20-5
20.2.6 APPLICABLE INTERNATIONAL STANDARDS ............................................... 20-5
20.3 ENVIRONMENTAL MANAGEMENT PLAN................................................................... 20-6
20.3.1 POTENTIAL ENVIRONMENTAL IMPACTS.................................................... 20-6
20.4 TAILINGS MANAGEMENT ....................................................................................... 20-7
20.4.1 TAILINGS DRAINAGE ............................................................................. 20-7
20.4.2 TAILINGS MONITORING ......................................................................... 20-8
20.4.3 TAILINGS FACILITY CLOSURE ................................................................. 20-9
20.5 SULPHIDE TAILINGS MANAGEMENT ....................................................................... 20-9
20.6 MINE CLOSURE AND RECLAMATION ..................................................................... 20-10
20.6.1 PROGRESSIVE RECLAMATION .............................................................. 20-10
20.6.2 FINAL CLOSURE ................................................................................. 20-10
20.7 SOCIAL AND COMMUNITY CONSIDERATIONS ......................................................... 20-13
20.7.1 PROJECT LOCATION AND AREA OF DIRECT INFLUENCE ............................ 20-13
20.7.2 ENGAGEMENT WITH COMMUNITIES ...................................................... 20-14
20.7.3 COMMUNITY RELATIONS PLAN............................................................. 20-14
21.0 CAPITAL AND OPERATING COSTS ................................................................. 21-1
21.1 CAPITAL COST ESTIMATE ...................................................................................... 21-1
21.1.1 INTRODUCTION .................................................................................... 21-1
21.1.2 ESTIMATE BASE DATE AND VALIDITY PERIOD EXCHANGE RATE .................. 21-2
21.1.3 ESTIMATE APPROACH ........................................................................... 21-2
21.1.4 COST BASIS BY PROJECT AREA .............................................................. 21-3
21.1.5 OWNER’S COSTS ................................................................................. 21-7
21.1.6 SUSTAINING CAPITAL ............................................................................ 21-9
21.1.7 ELEMENTS OF COSTS ........................................................................... 21-9
21.1.8 MINING CAPITAL COST ESTIMATE .......................................................... 21-9
21.1.9 PROCESS PLANT CAPITAL COST ESTIMATE ............................................ 21-13
21.1.10 TAILINGS MANAGEMENT FACILITY CAPITAL COST ESTIMATE .................... 21-13
21.1.11 LEACH/SX-EW FACILITY ..................................................................... 21-14
21.1.12 POWER SUPPLY ................................................................................. 21-16
21.1.13 WATER SUPPLY ................................................................................. 21-16
21.1.14 INFRASTRUCTURE ............................................................................... 21-17
21.2 OPERATING COST ESTIMATES ............................................................................. 21-17
21.2.1 SUMMARY ......................................................................................... 21-17
21.2.2 MINING OPERATING COST ESTIMATE.................................................... 21-18
21.2.3 PROCESS PLANT OPERATING COST ESTIMATE ....................................... 21-19
21.2.4 LEACH/SX-EW OPERATING COST ESTIMATE ......................................... 21-23
21.2.5 WATER SUPPLY OPERATING COST ESTIMATE ........................................ 21-25
22.0 ECONOMIC ANALYSIS.................................................................................... 22-1
22.1 INTRODUCTION .................................................................................................... 22-1

v 1295840200-REP-R0001-04
 22.2 PRE-TAX MODEL .................................................................................................. 22-2
22.2.1 MINE/METAL PRODUCTION IN FINANCIAL MODEL ................................... 22-2
22.2.2 BASIS OF FINANCIAL EVALUATIONS......................................................... 22-4
22.3 SUMMARY OF FINANCIAL RESULTS ........................................................................ 22-5
22.4 SENSITIVITY ANALYSIS .......................................................................................... 22-6
22.5 POST-TAX FINANCIAL ANALYSIS ............................................................................. 22-8
22.5.1 PERUVIAN TAX REGIME ......................................................................... 22-8
22.5.2 ESTIMATED TAXES AND ROYALTIES PAYABLE ........................................... 22-9
22.6 ROYALTIES ........................................................................................................ 22-10
22.7 SMELTER TERMS ............................................................................................... 22-10
22.8 TRANSPORTATION COSTS ................................................................................... 22-10
22.8.1 INSURANCE ....................................................................................... 22-10
23.0 ADJACENT PROPERTIES ................................................................................ 23-1
24.0 OTHER RELEVANT DATA AND INFORMATION................................................ 24-1
24.1 PROJECT EXECUTION PLAN ................................................................................... 24-1
24.1.1 INTRODUCTION .................................................................................... 24-1
24.1.2 PROJECT APPROACH ............................................................................. 24-1
24.1.3 PROJECT EXECUTION SUMMARY ............................................................ 24-3
24.1.4 ENGINEERING ...................................................................................... 24-5
24.1.5 PROCUREMENT .................................................................................... 24-5
24.1.6 CONSTRUCTION MANAGEMENT .............................................................. 24-6
24.1.7 CONSTRUCTION SCHEDULE ................................................................... 24-8
24.1.8 PRE-OPERATIONAL TESTING AND START-UP ........................................... 24-11
25.0 INTERPRETATION AND CONCLUSIONS ......................................................... 25-1
25.1 RISK ANALYSIS.................................................................................................... 25-1
25.2 GEOLOGY............................................................................................................ 25-3
25.3 MINING .............................................................................................................. 25-3
25.4 CONCENTRATOR .................................................................................................. 25-4
25.5 LEACH FACILITY ................................................................................................... 25-4
25.6 TAILINGS AND WATER MANAGEMENT ..................................................................... 25-4
25.7 OWNER’S COSTS ................................................................................................. 25-4
25.8 ENVIRONMENTAL ................................................................................................. 25-5
26.0 RECOMMENDATIONS .................................................................................... 26-1
26.1 SUMMARY .......................................................................................................... 26-1
26.2 RISK ANALYSIS.................................................................................................... 26-2
26.2.1 SOCIAL/POLITICAL ............................................................................... 26-2
26.2.2 ENVIRONMENTAL ................................................................................. 26-2
26.3 MINING .............................................................................................................. 26-3
26.4 DRILLING ............................................................................................................ 26-4
26.5 CONCENTRATOR .................................................................................................. 26-4
26.5.1 WATER MANAGEMENT .......................................................................... 26-4
26.5.2 CLEANER FLOTATION CIRCUIT CONFIGURATION ........................................ 26-4
26.5.3 CYCLONE OVERFLOW/ROUGHER FLOTATION FEED .................................. 26-5

vi 1295840200-REP-R0001-04
 26.5.4 PRIMARY GRINDING CIRCUIT ................................................................. 26-5
26.6 FUTURE METALLURGICAL TEST WORK ................................................................... 26-5
26.7 CONCENTRATE HANDLING TRADE-OFF.................................................................... 26-6
26.8 PRODUCT TRANSPORTATION ................................................................................. 26-6
26.9 LEACH FACILITY ................................................................................................... 26-6
26.10 SITE LAYOUT ....................................................................................................... 26-6
26.11 TAILINGS MANAGEMENT FACILITY .......................................................................... 26-6
26.12 WATER SUPPLY ................................................................................................... 26-7
26.13 POWER SUPPLY AND DISTRIBUTION ....................................................................... 26-8
26.14 ENVIRONMENTAL ................................................................................................. 26-8
27.0 REFERENCES ................................................................................................ 27-1
28.0 CERTIFICATES OF QUALIFIED PERSON ......................................................... 28-1
28.1 MARINUS ANDRE DE RUIJTER, P.ENG. .................................................................. 28-1
28.2 GREGORY Z. MOSHER, P.GEO. ............................................................................. 28-2
28.3 HASSAN GHAFFARI, P.ENG. .................................................................................. 28-3
28.4 SABRY ABDEL HAFEZ, PH.D., P.ENG. .................................................................... 28-4
28.5 ANOUSH EBRAHIMI, P.ENG................................................................................... 28-5
28.6 MONICA DANON-SCHAFFER, PH.D., P.ENG. ........................................................... 28-6

LIST OF TABLES

Table 1.1 General Project Information......................................................................................... 1-3

Table 1.2 Zafranal Property Resource Estimate Synopsis at 0.2% Copper Cut-off................... 1-5
Table 1.3 Summary of Mining Details .......................................................................................... 1-7
Table 1.4 Capital Cost Summary .................................................................................................. 1-9
Table 1.5 Operating Cost Summary ........................................................................................... 1-10
Table 1.6 Metal Production from the Project ............................................................................ 1-11
Table 2.1 Summary of QPs ........................................................................................................... 2-1
Table 4.1 Zafranal Property Mineral Concessions ...................................................................... 4-4
Table 10.1 Zafranal Main and Victoria Zone Assay Descriptive Statistics................................. 10-2
Table 11.1 Zafranal Property Control Samples ........................................................................... 11-2
Table 11.2 Zafranal Property Standards ...................................................................................... 11-2
Table 13.1 Test Work Programs and Reports .............................................................................. 13-2
Table 13.2 Mineral Composition of Phase III Composite Samples ............................................ 13-3
Table 13.3 Mineral Liberation of Phase III Composite Samples ................................................ 13-4
Table 13.4 Head Values – Composite Samples .......................................................................... 13-5
Table 13.5 Head Values – Variability Samples............................................................................ 13-5
Table 13.6 Specific Gravity Results by Rock Type Classification ............................................... 13-6
Table 13.7 Crusher Bond Work Index Results – Phase I ............................................................ 13-7
Table 13.8 Crusher Bond Work Index Results by Rock Type Classification............................... 13-8
Table 13.9 Abrasion Index Results by Rock Type Classification ................................................ 13-8

vii 1295840200-REP-R0001-04
Table 13.10 Bond Ball Mill Index Results by Rock Type Classification ........................................ 13-9
Table 13.11 Drop Weight Index Results by Rock Type Classification........................................ 13-10
Table 13.12 Locked Cycle Concentrate Summary...................................................................... 13-19
Table 13.13 Variability Tests – Comparison of Results ............................................................. 13-22
Table 14.1 Zafranal Mineral Zone Bulk Density Measurements ................................................ 14-3
Table 14.2 Zafranal Main and Victoria Zone Variograms and Search Ellipse Parameters ....... 14-7
Table 14.3 Zafranal Main and Victoria Zone Block Model Parameters ..................................... 14-8
Table 14.4 Zafranal Main and Victoria Zones Kriged Resource at 0.2% Copper Cut-off ....... 14-10
Table 14.5 Zafranal Main Zone Kriged Resource Estimate at 0.15% Copper Cut-off ........... 14-12
Table 14.6 Victoria Zone Kriged Resource Estimate at 0.3% Copper Cut-off......................... 14-14
Table 14.7 Tetra Tech 2012 Zafranal Resource Estimate at 0.2% Copper Cut-off ............... 14-16
Table 16.1 Pit Optimization Parameters ...................................................................................... 16-2
Table 16.2 Block Model Parameters ............................................................................................ 16-4
Table 16.3 Pit Optimization Results ............................................................................................. 16-6
Table 16.4 Haul Road Design Parameters .................................................................................. 16-9
Table 16.5 Final Pit Mineable Tonnages................................................................................... 16-10
Table 16.6 Minable Mineral Resources For Processing .......................................................... 16-10
Table 16.7 Milling Cut-off Grade................................................................................................ 16-13
Table 16.8 Direct Feed Cut-off Grades ..................................................................................... 16-14
Table 16.9 Mine Production Schedule Summary ..................................................................... 16-15
Table 16.10 Operational Delays per Shift ................................................................................... 16-16
Table 16.11 LOM Mining Equipment Requirements .................................................................. 16-18
Table 16.12 Maximum Operational Management Complement ............................................... 16-20
Table 16.13 Operator and Maintenance Staff on Payroll .......................................................... 16-21
Table 17.1 Major Design Criteria-Concentrator ........................................................................... 17-4
Table 17.2 Major Design Criteria for the Leach SX-EW Plant .................................................. 17-15
Table 19.1 Commercial Terms for Sale of Products ................................................................... 19-1
Table 21.1 Capital Cost Summary ................................................................................................ 21-2
Table 21.2 Details of Owner’s Costs ............................................................................................ 21-8
Table 21.3 Summary of Mining Costs ....................................................................................... 21-10
Table 21.4 Mining Pre-production Unit Costs ........................................................................... 21-10
Table 21.5 Initial Mining Equipment Fleet ................................................................................ 21-11
Table 21.6 Sustaining Capital Mining Equipment Fleet ........................................................... 21-12
Table 21.7 Process Plant Capital Cost ...................................................................................... 21-13
Table 21.8 Tailings Management Facility Capital Costs .......................................................... 21-14
Table 21.9 Leach/SX-EW Facility Capital Cost ......................................................................... 21-14
Table 21.10 Power Supply and Distribution Capital Cost .......................................................... 21-16
Table 21.11 Water Supply and Distribution Capital Costs ......................................................... 21-17
Table 21.12 Infrastructure Capital Cost ...................................................................................... 21-17
Table 21.13 Operating Cost Summary ........................................................................................ 21-18
Table 21.14 Relevant Consumables Prices ................................................................................ 21-18
Table 21.15 Mining LOM and Unit Operating Cost Summary .................................................... 21-19
Table 21.16 Concentrator Annual Operating Cost Summary ..................................................... 21-20
Table 21.17 G&A Cost Estimate .................................................................................................. 21-21
Table 21.18 Assay Laboratory Costs ........................................................................................... 21-22
Table 21.19 TMF Operating Costs ............................................................................................... 21-23
Table 21.20 First Fills – Capital Cost........................................................................................... 21-23
Table 21.21 Leach/SX-EW Facility Supply Costs ........................................................................ 21-24
Table 21.22 Leach/SX-EW Facility Operating Cost ..................................................................... 21-25
Table 21.23 Water Supply Operating Cost Estimate .................................................................. 21-25
Table 22.1 Metal Production from the Zafranal Project ............................................................. 22-2
Table 22.2 Summary of Pre-tax Financial Results ...................................................................... 22-5

viii 1295840200-REP-R0001-04
Table 22.3 Components of the Various Taxes ............................................................................. 22-9
Table 22.4 Summary of Post-tax Financial Results ..................................................................... 22-9
Table 26.1 Recommended Future Work ...................................................................................... 26-1

LIST OF FIGURES

Figure 1.1 Property Location Map ................................................................................................. 1-2

Figure 1.2 Pre-tax NPV Sensitivity Analysis ................................................................................. 1-12
Figure 1.3 Pre-tax IRR Sensitivity Analysis .................................................................................. 1-12
Figure 1.4 Pre-tax Payback Sensitivity Analysis .......................................................................... 1-13
Figure 4.1 Property Location.......................................................................................................... 4-3
Figure 4.2 Zafranal Property Mineral Concessions and Mineral Zone Locations....................... 4-6
Figure 7.1 Tectonic Belts of Southeastern Peru ........................................................................... 7-1
Figure 7.2 Zafranal and Victoria Geology ...................................................................................... 7-3
Figure 7.3 Sicera Norte Zone Geology .......................................................................................... 7-5
Figure 7.4 Sicera Sur Zone Geology .............................................................................................. 7-6
Figure 13.1 Copper Head Grade versus Recovery for Rock Type ............................................. 13-11
Figure 13.2 LCT Procedure – Plenge .......................................................................................... 13-17
Figure 13.3 LCT Procedure – G&T .............................................................................................. 13-18
Figure 13.4 Rougher Recovery versus Copper Feed Grade – G&T Variability Tests ............... 13-20
Figure 13.5 Rougher Recovery versus Copper Feed Grade – Plenge Variability Tests ........... 13-21
Figure 13.6 Assay Comparison, Copper Head Grade ................................................................ 13-23
Figure 14.1 Plan View Zafranal Oxide Zone 0.1% and 0.2% Grade Shells ................................. 14-4
Figure 14.2 Plan View Zafranal Mixed Zone 0.1% and 0.2% Grade Shells................................. 14-4
Figure 14.3 Plan View Zafranal Supergene Zone 0.1% and 0.2% Grade Shells ........................ 14-5
Figure 14.4 Plan View Zafranal Transition Zone 0.1% and 0.2% Grade Shells .......................... 14-5
Figure 14.5 Plan View Zafranal Hypogene Zone 0.1% and 0.2% Grade Shells .......................... 14-6
Figure 16.1 Zafranal Main Deposit, View from West Looking Towards East .............................. 16-1
Figure 16.2 Overall Pit Slope Angles (Overall/Inter-ramp Angles) ............................................... 16-4
Figure 16.3 Mine Layout ................................................................................................................ 16-8
Figure 16.4 Final Pit Design ........................................................................................................... 16-9
Figure 16.5 Production Schedule by Material Type ................................................................... 16-12
Figure 16.6 First Phase of Mining Activity (End of Year 1) ........................................................ 16-13
Figure 17.1 Simplified Process Flowsheet .................................................................................... 17-3
Figure 18.1 Overall Site Layout...................................................................................................... 18-2
Figure 18.2 Zafranal Main Deposit, View from West Looking Toward East ................................ 18-3
Figure 18.3 Plant Site Layout......................................................................................................... 18-4
Figure 18.4 Tunnel Cross-section with Dimensions ..................................................................... 18-6
Figure 22.1 Total Metal Production Payable ................................................................................. 22-3
Figure 22.2 Pre-tax Undiscounted Annual and Cumulative Net Cash Flows............................... 22-5
Figure 22.3 Pre-tax NPV Sensitivity Analysis ................................................................................. 22-6
Figure 22.4 Pre-tax IRR Sensitivity Analysis .................................................................................. 22-7
Figure 22.5 Pre-tax Payback Sensitivity Analysis .......................................................................... 22-7
Figure 24.1 Project Management Organization Chart .................................................................. 24-2
Figure 24.2 CM Organization Chart ............................................................................................... 24-7
Figure 24.3 Preliminary Project Development Schedule Summary............................................. 24-9

ix 1295840200-REP-R0001-04
GLOSSARY

UNITS OF MEASURE
above mean sea level ............................................................................................................. amsl
acre .......................................................................................................................................... ac
ampere .................................................................................................................................... A
annum (year) ........................................................................................................................... a
billion ....................................................................................................................................... B
billion tonnes ........................................................................................................................... Bt
billion years ago ...................................................................................................................... Ga
British Thermal Unit ................................................................................................................ BTU
centimetre ............................................................................................................................... cm
cubic centimetre ..................................................................................................................... cm3
cubic feet per minute.............................................................................................................. cfm
cubic feet per second ............................................................................................................. ft3/s
cubic foot ................................................................................................................................. ft3
cubic hectometre .................................................................................................................... hm3
cubic inch ................................................................................................................................ in3
cubic metre ............................................................................................................................. m3
cubic yard ................................................................................................................................ yd3
Coefficients of Variation ......................................................................................................... CVs
day ........................................................................................................................................... d
days per week ......................................................................................................................... d/wk
days per year (annum) ............................................................................................................ d/a
dead weight tonnes ................................................................................................................ DWT
decibel adjusted...................................................................................................................... dBa
decibel ..................................................................................................................................... dB
degree...................................................................................................................................... °
degrees Celsius ....................................................................................................................... °C
diameter .................................................................................................................................. ø
dollar (American) ..................................................................................................................... US$
dollar (Canadian)..................................................................................................................... Cdn$
dry metric ton .......................................................................................................................... dmt
foot ........................................................................................................................................... ft
gallon ....................................................................................................................................... gal
gallons per minute (US) .......................................................................................................... gpm
gigajoule .................................................................................................................................. GJ
gigapascal ............................................................................................................................... GPa
gigawatt ................................................................................................................................... GW

x 1295840200-REP-R0001-04
gram ......................................................................................................................................... g
grams per litre ......................................................................................................................... g/L
grams per tonne...................................................................................................................... g/t
greater than............................................................................................................................. >
hectare (10,000 m2) ............................................................................................................... ha
hertz ......................................................................................................................................... Hz
horsepower.............................................................................................................................. hp
hour.......................................................................................................................................... h
hours per day .......................................................................................................................... h/d
hours per week........................................................................................................................ h/wk
hours per year ......................................................................................................................... h/a
inch .......................................................................................................................................... "
kilo (thousand) ........................................................................................................................ k
kilogram ................................................................................................................................... kg
kilograms per cubic metre...................................................................................................... kg/m3
kilograms per hour .................................................................................................................. kg/h
kilograms per square metre ................................................................................................... kg/m2
kilometre ................................................................................................................................. km
kilometres per hour ................................................................................................................ km/h
kilopascal ................................................................................................................................ kPa
kilotonne .................................................................................................................................. kt
kilovolt ..................................................................................................................................... kV
kilovolt-ampere........................................................................................................................ kVA
kilovolts.................................................................................................................................... kV
kilowatt .................................................................................................................................... kW
kilowatt hour............................................................................................................................ kWh
kilowatt hours per tonne (metric ton) .................................................................................... kWh/t
kilowatt hours per year ........................................................................................................... kWh/a
less than .................................................................................................................................. <
litre ........................................................................................................................................... L
litres per minute ...................................................................................................................... L/m
megabytes per second ........................................................................................................... Mb/s
megapascal ............................................................................................................................. MPa
megavolt-ampere .................................................................................................................... MVA
megawatt ................................................................................................................................. MW
metre ....................................................................................................................................... m
metres above sea level .......................................................................................................... masl
metres Baltic sea level ........................................................................................................... mbsl
metres per minute .................................................................................................................. m/min
metres per second .................................................................................................................. m/s
metric ton (tonne) ................................................................................................................... t

xi 1295840200-REP-R0001-04
microns .................................................................................................................................... µm
milligram .................................................................................................................................. mg
milligrams per litre .................................................................................................................. mg/L
millilitre .................................................................................................................................... mL
millimetre ................................................................................................................................ mm
million ...................................................................................................................................... M
million bank cubic metres ...................................................................................................... Mbm3
million bank cubic metres per annum ................................................................................... Mbm3/a
million tonnes.......................................................................................................................... Mt
million years ago ..................................................................................................................... Ma
minute (plane angle)............................................................................................................... '
minute (time) ........................................................................................................................... min
month ...................................................................................................................................... mo
Nuevo sol (Peruvian currency) ............................................................................................... S/.
ounce ....................................................................................................................................... oz
pascal ...................................................................................................................................... Pa
centipoise ................................................................................................................................ mPa∙s
parts per million ...................................................................................................................... ppm
parts per billion ....................................................................................................................... ppb
percent .................................................................................................................................... %
pound(s) .................................................................................................................................. lb
pounds per square inch.......................................................................................................... psi
revolutions per minute............................................................................................................ rpm
second (plane angle) .............................................................................................................. "
second (time) .......................................................................................................................... s
specific gravity......................................................................................................................... SG
square centimetre................................................................................................................... cm2
square foot .............................................................................................................................. ft2
square inch.............................................................................................................................. in2
square kilometre ..................................................................................................................... km2
square metre ........................................................................................................................... m2
thousand tonnes ..................................................................................................................... kt
three dimensional ................................................................................................................... 3D
Three Dimensional Model ...................................................................................................... 3DM
tonne (1,000 kg) ..................................................................................................................... t
tonnes per day ........................................................................................................................ t/d
tonnes per hour....................................................................................................................... t/h
tonnes per year ....................................................................................................................... t/a
two dimension ......................................................................................................................... 2D
volt ........................................................................................................................................... V
week......................................................................................................................................... wk

xii 1295840200-REP-R0001-04
weight/weight.......................................................................................................................... w/w
wet metric ton ......................................................................................................................... wmt
year (annum) ........................................................................................................................... a

ABBREVIATIONS AND ACRONYMS

Abeinsa Infrastructuras Medio Ambiente S.A. ....................................................................... ABEIMA
abrasion index.......................................................................................................................... Ai
acid rock drainage ................................................................................................................... ARD
acid-base accounting............................................................................................................... ABA
Amdel Mineral Laboratories .................................................................................................... Amdel
ammonium nitrate/fuel oil ...................................................................................................... ANFO
AQM Copper Inc. ...................................................................................................................... AQM
areas of direct influence ......................................................................................................... ADI
artisanal and small-scale miners ............................................................................................ ASM
Asociación Nacional del Agua ................................................................................................. ANA
atomic absorption spectrophotometer ................................................................................... AAS
atomic absorption .................................................................................................................... AA
audio-frequency magneto-telluric ........................................................................................... ATM
Autoridad Autónoma de Majes ............................................................................................... Autodema
BHBP Minerals ......................................................................................................................... BHBP
bill of materials ........................................................................................................................ BOMs
Bond ball mill work index ........................................................................................................ BWi
Bond rod mill work Index ......................................................................................................... RWi
Certificate of Non Existence of Archaeological Remains ...................................................... CIRA
CESEL Ingenieros ..................................................................................................................... CESEL
chalcocite ................................................................................................................................. Ch
chalocopyrite ............................................................................................................................ Cp
community relations program ................................................................................................. CRP
Compañia Minera Zafranal ..................................................................................................... CMZ
construction management ...................................................................................................... CM
copper....................................................................................................................................... Cu
crusher work index .................................................................................................................. CWi
cut-off grade ............................................................................................................................. COG
diamond drillhole ..................................................................................................................... DDH
Dirección General de Asuntos Ambientales Mineros ............................................................ DGAAM
Dirección General de Capitanias y Guardacostas del Perú .................................................. DICAPI
Directorate the Dirección General de Asuntos Ambientales Energéticos ............................ DGAAE
distributed control system....................................................................................................... DCS
drilling and blasting ................................................................................................................. D&B
drop weight index..................................................................................................................... DWi

xiii 1295840200-REP-R0001-04
Engineering, Procurement and Construction Management .................................................. EPCM
environmental impact assessment ........................................................................................ EIA
Environmental Management Plan .......................................................................................... EMP
Free Carrier .............................................................................................................................. FCA
front end loader ....................................................................................................................... FEL
G&T Metallurgical Services Ltd. .............................................................................................. G&T
general and administrative ..................................................................................................... G&A
glass reinforced plastic ........................................................................................................... GRP
gold ........................................................................................................................................... Au
health and safety management plan ..................................................................................... HSMP
Health, Safety, and Environmental ......................................................................................... HSE
heating, ventilation, and air-conditioning ............................................................................... HVAC
high-density polyethylene ........................................................................................................ HDPE
induced polarization ................................................................................................................ IP
inductively coupled plasma ..................................................................................................... ICP
inductively coupled plasma-spectrometer ............................................................................. ICP-MS
Instituto Geológico Minero Metalúrgico ................................................................................. INGEMMET
intermediate leach solution .................................................................................................... ILS
internal rate of return .............................................................................................................. IRR
International Finance Corporation .......................................................................................... IFC
International Organization for Standardization...................................................................... ISO
iron ............................................................................................................................................ Fe
joint venture ............................................................................................................................. JV
Ley del Sistema Nacional de Evaluación de Impacto Ambiental .......................................... Ley del SEIA
life-of-mine ............................................................................................................................... LOM
locked cycle tests..................................................................................................................... LCTs
London Metal Exchange .......................................................................................................... LME
Maintenance and Repair Contract.......................................................................................... MARC
material take-offs..................................................................................................................... MTOs
Maximum Permissible Levels ................................................................................................. MPLs
mechanically stabilized earth ................................................................................................. MSE
metal leaching.......................................................................................................................... ML
methyl isobutyl carbinol........................................................................................................... MIBC
Minera AQM Copper Peru S.A.C. ............................................................................................. MAQM
Ministerio de Energía y Minas ................................................................................................. MEM
National Instrument 43-101 ................................................................................................... NI 43-101
NCL Ingeniería y Construcción S.A. ......................................................................................... NCL
net present value ..................................................................................................................... NPV
net smelter royalty ................................................................................................................... NSR
non-acid generating ................................................................................................................. NAG
operation, maintenance and surveillance manual ................................................................ OMS

xiv 1295840200-REP-R0001-04
ordinary kriging ........................................................................................................................ OK
organic/aqueous ..................................................................................................................... O/A
Personal Protective Equipment............................................................................................... PPE
piping and instrumentation diagrams .................................................................................... P&IDs
Plenge Laboratories................................................................................................................. Plenge
polyethersulfone ...................................................................................................................... PES
polyvinyl-pyrollidone................................................................................................................. PVP
potassium amyl xanthate ........................................................................................................ PAX
potentially acid generating ...................................................................................................... PAG
pregnant leach solution........................................................................................................... PLS
preliminary economic assessment ......................................................................................... PEA
process design criteria ............................................................................................................ PDC
Project Execution Plan ............................................................................................................. PEP
project management system .................................................................................................. PMS
project management team...................................................................................................... PMT
project procedures manual ..................................................................................................... PPM
pyrite ......................................................................................................................................... Py
Qualified Person....................................................................................................................... QP
quality assurance/quality control ........................................................................................... QA/QC
request for proposal ................................................................................................................ RFP
reverse circulation ................................................................................................................... RC
reverse osmosis ....................................................................................................................... RO
rock quality designation .......................................................................................................... RQD
run-of-mine ............................................................................................................................... ROM
SAG Mill Comminution ............................................................................................................. SMC
salt water reverse osmosis ..................................................................................................... SWRO
selective mining unit................................................................................................................ SMU
semi-autogenous grinding ....................................................................................................... SAG
semi-detailed Environmental Impact Assessment ................................................................ EIAsd
sewage treatment plant .......................................................................................................... STP
SGS Lakefield Research Ltd.................................................................................................... SGS Lakefield
Shareholders Agreement......................................................................................................... SHA
SociedadTerral S.A................................................................................................................... Terral
solvent extraction-electrowinning ........................................................................................... SX-EW
sulphur...................................................................................................................................... S
tailings management facility ................................................................................................... TMF
Teck Resources Ltd ................................................................................................................. Teck
time-domain electromagnetic ................................................................................................. TEM
Traffic and Logistics ................................................................................................................. T&L
tunnel boring machine ............................................................................................................ TBM
Universal Transverse Mercator ............................................................................................... UTM

xv 1295840200-REP-R0001-04
volume to volume .................................................................................................................... v/v
World Geodetic System ........................................................................................................... WGS
Zafranal Project........................................................................................................................ the Project
Zafranal Property ..................................................................................................................... the Property

xvi 1295840200-REP-R0001-04
1.0 SUMMARY

1.1 INTRODUCTION
Tetra Tech was retained by AQM Copper Inc. (AQM), on behalf of the joint venture
company, Compañia Minera Zafranal (CMZ), to prepare a National Instrument 43-101
(NI 43-101) compliant updated preliminary economic assessment (PEA) for the Zafranal
Project (the Project) in Peru. CMZ is a 50/50 joint venture company formed by Teck
Resources Ltd (Teck) and Minera AQM Copper Peru S.A.C. (MAQM). The objective of this
PEA update is to develop a smaller, less initial capital-intensive project and focus on the
high-grade mineralization to be processed in early years with the potential for future
expansion of the mine in later years.

The 44,000 t/d throughput was selected for the PEA update as a result of the strategic
mine planning conducted to produce the best possible economic results while utilizing
the maximum capacity of the selected mining equipment and the concentrator.

All dollar figures presented in this report are stated in US dollars, unless otherwise
specified.

The updated PEA is based on a current resource estimate completed in 2013. The
current estimate differs from the 2012 estimate in the following respects:

• The current estimate has been constrained by a 0.1% copper grade shell
whereas the 2012 estimate was constrained by a mineralized envelope that
represented the geological limits of the mineralized zones at approximately a
0.2% copper cut-off grade.
• The current estimate uses kriging within hard boundaries between the
mineralized zones with the exception of hypogene zone which included the
influence of adjacent mineralized zones given the gradational nature of
mineralization on either side of this boundary. The 2012 estimate used all hard
boundaries.
• The current estimate incorporates data from 39 additional drillholes and
updated geological models for the Zafranal Main and Victoria Zones.
• The current estimate employs continuous compositing of drill assays to better
account for grade dilution at the mineral type boundaries, whereas the 2012
estimate was composited within the mineralized envelope for each mineral type.
• The current estimate pertains only to the Zafranal Main and Victoria Zones; the
Sicera Norte and Sicera Sur Zones that formed part of the 2012 estimate have
not been included in the current estimate.

AQM Copper Inc. 1-1 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 The Zafranal Property (the Property) is located approximately 90 km northwest of the city
of Arequipa in southern Peru (Figure 1.1). The Property contains four zones of porphyry-
style copper mineralization: Zafranal Main, Victoria, Sicera Norte and Sicera Sur zones.
The first two of these zones are included in the current open pit design. The concentrator
has been designed to process 44,000 t/d of copper-gold porphyry material from an open
pit operation and produce a marketable copper concentrate of 28% copper containing
about 3 g/t gold. The leach facility has been designed to treat approximately 17,000 t/d
of oxide and secondary copper material to produce 10,000 t/a of copper cathode.

Figure 1.1 Property Location Map

AQM Copper Inc. 1-2 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 General information for the Project is summarized in Table 1.1.

Table 1.1 General Project Information

Description Unit Amount
Estimated Mineral Resources (Measured and Indicated)1 t 620,942,335
Estimated Mineral Resources (Inferred) t 49,232,307
Concentrator Feed t 352,636,712
Leach Facility Feed t 61,096,182

Life-of-mine (LOM)2 years 25

Milling Rate t/d 44,000
Strip Ratio waste/mineralized material 0.7
Total Project Initial Capital Cost $ million 1,122
Concentrator Operating Cost $/t processed 8.44
Leach Operating Cost $/t leached 5.47
Net Present Value (NPV) at 8% Discount Rate before Tax $ million 1,261
and Government Royalties
Pre-tax Payback After Start of Mill Production years 2.6
Pre-tax Internal Rate of Return (IRR) % 25.4
Net Present Value (NPV) at 8% Discount Rate after Tax $ million 616
and Government Royalties
Post-tax Payback After Start of Mill Production years 3.2
Post-tax Internal Rate of Return (IRR) % 18.2
Notes: 1Above 0.2% copper cut-off grade.
2Includes 2 years pre-stripping, 21 years of mining and 2 years of stockpile feed processing.

This PEA report has been prepared by Tetra Tech for MAQM based on work by the
following independent consultants:

• CESEL Ingenieros (CESEL): completed a conceptual level study to determine the

point at which electrical infrastructure to the Project site could reasonably
interconnect with the Peruvian electric power system.
• Transmin Metallurgical Consultants (Transmin): supervised metallurgical test
work for the Project.
• Abeinsa Infrastructuras Medio Ambiente S.A. (ABEIMA): performed engineering
for the water supply and pipeline.

Each section of this report has been prepared by a Qualified Person (QP). Details of the
QP’s responsibility for each section of this report are provided in Section 28.0.

AQM Copper Inc. 1-3 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
1.2 PROPERTY DESCRIPTION
The Property is located in southern Peru about 150 km by road (90 km straight-line
distance) northwest of the city of Arequipa on the border between the District of
Huancarqui in the Province of Castilla and the District of Lluta in the Province of
Caylloma. The approximate centre of the Property is located at 16°02’ 28” south
latitude and 72°14’ 19” west longitude (Universal Transverse Mercator (UTM) 18S
794000E/8224000N using the World Geodetic System (WGS) (WGS84).

The nearest major centre is Arequipa which is serviced by scheduled flights and is the
major supply center for regional mining activity. Approximately 85 km of the estimated
150 km of the existing road between Arequipa and the Property is paved, which includes
a section of the Pan-American Highway. The last 65 km is gravel, of which 15 km is via
private access road constructed to access the Property. Within the Property, MAQM has
constructed and maintains a network of access and drill roads.

The regional climate is arid, with temperatures ranging between about 12°C in winter
and 28°C in summer. Precipitation is scarce and agriculture generally possible only in
river valleys with accesible irrigation. The Property is located outside zones of agricultural
activity and there are no communities located on the Property. Characteristic vegetation
is comprised generally of scarce grasses, cacti and shrubs. Valley bottoms within the
Property are typically filled with active alluvium and are bare of vegetation.

1.3 HISTORY
The mineral potential of the Main Zone deposit was initially discovered by artisanal small-
scale miners (ASM) working the narrow gold veins in the nearby batholith formation.
Through their exploration of the area, they became aware of surface exposures of copper
mineralization and in 2003 brought this mineralization to the attention of Teck geologists
who were conducting regional exploration for porphyry deposits. The Zafranal Main Zone
was immediately staked by Teck. Currently, ASM activity continues on the periphery of
the Zafranal porphyry systems where artisanal miners are allowed to actively mine narrow
auriferous quartz veins.

1.4 GEOLOGICAL SETTING

Bedrock within the Property area includes Jurassic volcaniclastic and sedimentary rocks,
Cretaceous granodiorite and Paleocene to late Cenozoic diorite intrusives and dikes.
Most of these units have been deformed by regional-scale and local shear zones, often
resulting in schistose and gneissose textures. The four mineral zones of interest,
Zafranal Main, Victoria, Sicera Norte and Sicera Sur, have similar bedrock geology but
differ sufficiently to warrant the separate descriptions that follow.

AQM Copper Inc. 1-4 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
1.5 MINERAL RESOURCES
Mineral resources for the Project were classified in accordance with NI 43-101
requirements. Table 1.2 summarizes the estimated Measured, Indicated, and Inferred
Mineral Resources at 0.2% copper cut-off.

Table 1.2 Zafranal Property Resource Estimate Synopsis at 0.2% Copper Cut-off
Tonnes Cu Au
Resource (t) (%) (g/t)
Kriged: Measured
Zafranal Main Zone Measured Total 185,431,843 0.45 0.09
Victoria Zone Measured Total 27,303,118 0.29 0.04
Kriged: Total Measured 212,734,961 0.43 0.08
Kriged: Indicated
Zafranal Main Zone Indicated Total 340,207,216 0.35 0.08
Victoria Zone Indicated Total 68,000,158 0.26 0.03
Kriged: Total Indicated 408,207,374 0.34 0.07
Kriged: Total Measured + Indicated 620,942,335 0.37 0.08
Kriged: All Zones Inferred
Zafranal Main Zone Inferred Total 36,692,919 0.27 0.11
Victoria Zone Inferred Total 12,539,388 0.26 0.04
Kriged: Total Inferred 49,232,307 0.26 0.09
Note: Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Inferred mineral resources have a high degree of uncertainty as to their existence, and a great
uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of
an Inferred resource will ever be upgraded to a higher category.

1.6 MINERAL PROCESSING AND METALLURGICAL TESTING

1.6.1 MINERAL PROCESSING

The Project will be an open pit operation at a mill feed rate of 44,000 t/d. The
concentrator will process copper-bearing plant feed based on crushing, grinding and
flotation methodology. The final concentrate will be transported from site by truck to a
regional port site facility. The process method includes a single semi-autogenous
grinding (SAG) mill followed by a single ball mill.

The tailings will be thickened to an approximate pulp density of 65% solids by weight,
then transported by pipeline using gravity to the tailings management facility (TMF)
roughly 1.6 km downhill from the process plant to a natural basin.

The recovery of copper from oxidized copper-bearing and secondary sulphide material will
also be conducted. A solvent extraction-electrowinning (SX-EW) facility has been
conceptually designed to produce 10,000 t of cathode copper per year from the dump
leaching of 16,374 t/d of mineralized material grading between 0.15% and 0.5% copper
with an average grade of 0.34% copper. During the first 13 years of operation the facility

AQM Copper Inc. 1-5 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 will treat on average 11,511 t/d of material with a feed grade of about 0.34% copper.
The feed to the facility will undergo primary crushing and then be transported and
dumped on suitably prepared leach pads and treated with acid solution. The overall
copper recovery is estimated to be 60%. After upgrading the copper-bearing solution by
solvent extraction, the copper will be recovered by electrowinning.

1.6.2 METALLURGICAL TESTING

Metallurgical test work conducted at various laboratories has defined the process
parameters required for the overall design of the concentrator. These parameters
include, amongst others, a mineralogical investigation to describe the copper-bearing
phases and the gold present in the plant feed material, the determination of the
crushability, grinding and abrasion index values required for the design of the
comminution circuit, and various flotation details such as duration of flotation, the
amount of reagents required, and establishing the recovery and concentrate grade of the
final product. The concentrate produced will have a copper grade of 28% copper and
contain about 3 g/t of gold with the respective recoveries of 86% copper recovery from
supergene material, 89% copper recovery from hypogene material and 49.0% gold
recovery from all rock types. Limited test work was carried out to recover copper from
oxide and secondary sulphide material using acid and bacterial leaching processes
followed by SX-EW.

1.7 MINING
The Project will be an open pit mine utilizing a truck-and-shovel mining method. A mine
production schedule was developed for the 25-year project starting with approximately
2 years of pre-stripping, followed by 21 years of mining and 2 years of low-grade stockpile
rehandling to process mineralized material by the concentrator.

Annual mine production, comprised of plant feed material, leach feed material, and
waste, peaks at around 50 Mt/a, with a 25-year LOM stripping ratio of 0.70. The pit
optimization was based on a Gemcom Whittle™ pit generated using a base case price of
$3.00/lb copper and $1,274/oz gold.

A $2.46/lb copper pit shell was selected for the final pit design. The selected pit shell
has a higher grade, a substantially lower stripping ratio, and provides process feed for
more than 23 years of the mine life, therefore it was selected for the detailed pit design
production scheduling and economic evaluation. Table 1.3 summarizes the mining
details.

AQM Copper Inc. 1-6 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Table 1.3 Summary of Mining Details
Description Unit Amount
Mine Life (pre-stripping, production and stockpile rehandling) years 25
Mining Inventory (waste and mineralized material) Mt 705.09
Mining Operating Cost (excluding two-year pre-stripping) $/t mined 1.57
Strip Ratio waste:mineralized material 0.70
Total Feed (mill and leach) Mt 413.73
Mining Operating Cost (total feed material) $/t milled and leached 2.50
Mining Operating Cost (concentrator feed material) $/t milled 2.94

1.8 PROJECT INFRASTRUCTURE

As a comprehensive greenfield development, the Project will require the development of
supporting infrastructure.

These items include:

• a process plant or concentrator that will include crushing, grinding, flotation,

regrinding, concentrate filtration, concentrate thickener, tailings thickener
facilities and assay laboratory
• separate structures that will be erected for facilities such as a warehouse,
maintenance shop, administration offices, and other supporting infrastructure
• a partially-lined TMF, using geomembrane, and two structural earth dams, two
waste rock dumps and a low grade sulphide stockpile
• a leach facility including an SX-EW plant and heap leach pads
• a tunnel connecting the pit with the process plant, equipped with conveyor for
transporting the mill and leach feed material,
• a network of access and on-site roads
• a fresh water supply and distribution system
• power supply and distribution infrastructure, including a 220 kV substation
• other infrastructure including truck shop, temporary construction camp,
permanent camp, and laydown areas.

Details of the Project infrastructure are provided in Section 18.0.

AQM Copper Inc. 1-7 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
1.9 ENVIRONMENTAL
A preliminary baseline study based on the Ley del Sistema Nacional de Evaluación de
Impacto Ambiental (Ley del SEIA) or National Environmental Impact Assessment System
Law was performed for the Project in 2011 and 2012 and covered physical, biological,
socio-economic, and cultural areas. Environmental settings, permits and registrations,
and environmental management strategies that may be required for the Project are
summarized in Section 20.0. The Project will be subject to an environmental assessment
in the future. A conceptual level Plan de Manejo Ambiental or Environmental
Management Plan (EMP) was prepared and potential impacts associated with the
Zafranal TMF were identified as part of this PEA. Further details are discussed in Section
20.0.

A more detailed environmental management and closure plan for the Project will be
developed in the prefeasability study. However, a cost estimate has been included in this
PEA as part of the capital and operating cost estimates.

A preliminary environmental baseline study was performed for the Project. This study will
be used to define the scope of work for the formal baseline study, which will commence
during the next stage of project evaluation and is mandatory in order to complete an
obligatory Environmental Impact Assessment (EIA) and secure the mine operating
permits. MAQM has had a limited EMP in place for the past 34 months as a result of a
semi-detailed Environmental Impact Assessment (EIAsd) that was submitted for
exploration activities only, and subsequently approved for the Project by the Peruvian
government.

Peruvian mining environmental guidelines provided by the Mining and Energy Ministry
cover monitoring protocols for air and water quality, water management, mine acid rock
drainage management, the evaluation of impacts resulting from mining-metallurgical
activities and others.

With regards to tailings water management, free water from discharged tailings and
seasonal runoff will collect in a small pond in the south end of the tailings impoundment,
from which the water will be reclaimed using a barged-mounted pump and pipeline back
to the concentrator. No operational spillway will be required for the impoundment during
operations; however, a spillway will be constructed at closure. Sufficient freeboard to
contain extreme precipitation events will be maintained during mine operations. The
TMF will be a zero-discharge facility and the tailings embankments will incorporate a
geomembrane liner and grout curtains to minimize seepage to the environment (as
required).

AQM Copper Inc. 1-8 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
1.10 CAPITAL AND OPERATING COSTS

1.10.1 CAPITAL COST ESTIMATE

As summarized in Table 1.4, an initial capital cost of $1,122 million is estimated for the
Project. The accuracy range of the capital cost estimate is ±35%.

This estimate is prepared with a base date of Q1 2013 and does not include any
escalation past this date. CESEL provided some equipment prices and the remainder
were obtained from recent historical data. Freight costs and taxes were provided by
MAQM. For non-major equipment (i.e. equipment less than $100,000), costing was
based on in-house data or quotes from recent similar projects.

All equipment and material costs include Free Carrier (FCA) manufacturer plant
Incoterms® 2010. Other costs such as spares, taxes, duties, freight, and packaging were
covered separately in the indirects section of the estimate.

Table 1.4 Capital Cost Summary

Capital Cost
Description ($'000)
Mining and Pre-production Development 186,561
Process Plant 177,868
Leach Facility 48,166
Tailing and Water Management 43,230
Plant Infrastructure 131,401
Fresh Water Supply 68,313
Power Supply and Distribution 38,567
Subtotal – Direct Costs 694,106
Indirects
Owner’s Costs 82,770
Indirects 206,374
Contingency 138,821
Total Capital Cost 1,122,071

1.10.2 OPERATING COST ESTIMATE

On-site operating costs are estimated to be $8.44/t of mineralized material processed by
concentrator and $5.47/t of mineralized material processed by leaching. An average
LOM operating cost is estimated to be $1.09/lb of copper produced from mineralized
material processed and include mining, re-handling, milling, leaching, general and
administrative (G&A), and plant services cost. The unit costs shown in Table 1.5 are
based on treatment of 352,636,712 t by flotation and 61,096,182 t by leaching during
the LOM operation.

AQM Copper Inc. 1-9 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Table 1.5 Operating Cost Summary
Cost
Cost Item Unit ($)
Mining $/t milled 2.94
Milling $/t milled 4.54
Tailings Management $/t milled 0.10
G&A $/t milled 0.86
Concentrator $/t milled 8.44
Leaching $/t leached 5.47
Concentrator $/lb Cu produced 1.08
Leaching $/lb Cu produced 1.21
Concentrator & Leaching $/lb Cu produced 1.09

Details of the Project’s capital and operating costs are provided in Section 21.0.

1.11 ECONOMIC ANALYSIS

An economic evaluation of the Project was prepared by Tetra Tech based on a pre-tax
financial model. All currencies in this section are expressed in US dollars. For the 23-
year mine life, the following pre-tax financial parameters were calculated using the base
case metal prices of $3.00/lb copper and $1,274/oz gold:

• 25.4% IRR
• 2.6-year payback on an initial capital cost of $1,122 million
• $1,261 million NPV using an 8% discount rate.

A tax model for the post-tax economic evaluation of the Project was prepared by
PricewaterhouseCoopers LLP (PwC); incorporating applicable taxes and the Peruvian
government’s mining royalty (Section 22.0). The post-tax financial results are as follows:

• 18.2% IRR
• 3.2-year payback on an initial capital cost of $1,122 million
• $616 million NPV using an 8% discount rate.

Metal revenues projected in the cash flow models were based on the average metal
values indicated in Table 1.6.

AQM Copper Inc. 1-10 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Table 1.6 Metal Production from the Project
Description Value
Mine Life – including two years of pre-stripping (years) 25*
Material Milled/Leached
Total Tonnes to Mill (‘000) 352,637
Average Annual Tonnes to Mill (‘000) 15,332
Total Tonnes to Leaching (‘000) 61,096
Average Annual Tonnes to Leaching (‘000)* 2,909
Average Grade
Copper (%) – Mill 0.409
Gold (g/t) – Mill 0.077
Copper (%) – Leaching 0.341
Total Production
Copper (‘000 lb) – Mill 2,766,346
Gold (‘000 oz) – Mill 427
Copper (‘000 lb) – Leaching 275,439
Average Annual Production
Copper (‘000 lb) – Mill 120,276
Gold (‘000 oz) – Mill 19
Copper (‘000 lb) – Leaching 13,116**
Notes: *Concentrator active for 23 years, leaching active for 21 years.
**Based on 21-year leaching life.

1.11.1 SENSITIVITY ANALYSIS

Sensitivity of the Project’s post-tax NPV, IRR to the Project key variables was investigated.
Using the base case as a reference, each of the key variables was changed between
±30% at 10% intervals while holding the other variables constant. The following key
variables were investigated:

• copper price
• gold price
• capital costs
• operating costs.

As shown in Figure 1.2, the Project NPV, calculated at an 8% discount, is most sensitive
to the copper price and, in decreasing order, operating costs, capital costs, and gold
price.

AQM Copper Inc. 1-11 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Figure 1.2 Pre-tax NPV Sensitivity Analysis

3,000

NPV@8% Discount Rate (US$M)

2,500

2,000 Copper price

1,500 Gold price

Capital costs
1,000
Operating costs

500

0
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

As shown in Figure 1.3, the Project IRR is most sensitive to the copper price followed by
the capital costs, operating costs and gold price.

Figure 1.3 Pre-tax IRR Sensitivity Analysis

40%
35%
Internal Rate of Return (%)

30%
25% Copper price

20% Gold price

15% Capital costs

10% Operating costs

5%
0%
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

As shown in Figure 1.4, the payback period is most sensitive to the copper price and less
sensitive to the rest of parameters.

AQM Copper Inc. 1-12 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Figure 1.4 Pre-tax Payback Sensitivity Analysis

6.0

5.0
Payback Period (years)
4.0 Copper price
3.0 Gold price
Capital costs
2.0
Operating costs
1.0

0.0
-30% -20% -10% 0% 10% 20% 30%
% Change from Base Case

1.12 PROJECT DEVELOPMENT PLAN

The Project will take approximately three years of construction activities to complete from
the time all engineering is completed and permits granted. A high-level project
development plan and schedule is provided in Section 24.0.

1.13 OPPORTUNITIES AND RECOMMENDATIONS

Based on the work carried out in this PEA and the resultant economic evaluation, this
study should be followed by an additional study in order to further assess the economic
viability of the Project.

Detailed risks, opportunities and recommendations for the Project are provided in
Section 26.0.

AQM Copper Inc. 1-13 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
2.0 INTRODUCTION

Tetra Tech prepared this technical report for the Project in general accordance with the
guidelines provided in NI 43-101 Standards of Disclosure for Mineral Projects.

A summary of QPs responsible for each section of this report is provided in Table 2.1.

Table 2.1 Summary of QPs

Report Section Company QP
1.0 Summary All Sign off by Section
2.0 Introduction Tetra Tech Hassan Ghaffari, P.Eng.
3.0 Reliance on Other Experts Tetra Tech Hassan Ghaffari, P.Eng.
4.0 Property Description and Location Tetra Tech Gregory Z. Mosher, P.Geo.
5.0 Accessibility, Climate, Local Resources, Tetra Tech Gregory Z. Mosher, P.Geo.
Infrastructure and Physiography
6.0 History Tetra Tech Gregory Z. Mosher, P.Geo.
7.0 Geological Setting and Mineralization Tetra Tech Gregory Z. Mosher, P.Geo.
8.0 Deposit Types Tetra Tech Gregory Z. Mosher, P.Geo.
9.0 Exploration Tetra Tech Gregory Z. Mosher, P.Geo.
10.0 Drilling Tetra Tech Gregory Z. Mosher, P.Geo.
11.0 Sample Preparation, Analyses, and Security Tetra Tech Gregory Z. Mosher, P.Geo.
12.0 Data Verification Tetra Tech Gregory Z. Mosher, P.Geo.
13.0 Mineral Processing and Metallurgical Testing Tetra Tech Marinus Andre De Ruijter, P.Eng.
14.0 Mineral Resource Estimates Tetra Tech Gregory Z. Mosher, P.Geo.
15.0 Mineral Reserve Estimates Consultant Anoush Ebrahimi, P.Eng.
16.0 Mining Methods Consultant Anoush Ebrahimi, P.Eng.
17.0 Recovery Methods Tetra Tech Marinus Andre De Ruijter, P.Eng.
18.0 Project Infrastructure Tetra Tech Hassan Ghaffari, P.Eng.
19.0 Market Studies and Contracts Tetra Tech Sabry Abdel Hafez, Ph.D., P.Eng.
20.0 Environmental Studies, Permitting and Social or Consultant Monica Danon-Schaffer, Ph.D.,
Community Impact P.Eng.
21.0 Capital and Operating Costs - -
21.1 Capital Cost Estimates - -
21.1.1 Introduction Tetra Tech Hassan Ghaffari, P.Eng.
21.1.2 Estimate Base Date and Validity Tetra Tech Hassan Ghaffari, P.Eng.
Period Exchange Rate
21.1.3 Estimate Approach Tetra Tech Hassan Ghaffari, P.Eng.
21.1.4 Cost Basis by Project Area Tetra Tech Hassan Ghaffari, P.Eng.
21.1.5 Owner’s Costs Tetra Tech Hassan Ghaffari, P.Eng.
21.1.6 Sustaining Capital Tetra Tech Hassan Ghaffari, P.Eng.
table continues…

AQM Copper Inc. 2-1 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Report Section Company QP
21.1.7 Elements of Costs Tetra Tech Hassan Ghaffari, P.Eng.
21.1.8 Mining Capital Cost Estimate Tetra Tech Sabry Abdel Hafez, Ph.D., P.Eng
21.1.9 Process Plant Capital Cost Estimate Tetra Tech Hassan Ghaffari, P.Eng.
21.1.10 Tailings Management Facility Capital Tetra Tech Hassan Ghaffari, P.Eng.
Cost Estimate
21.1.11 Leach/SX-EW Facility Tetra Tech Hassan Ghaffari, P.Eng.
21.1.12 Power Supply Tetra Tech Hassan Ghaffari, P.Eng.
21.1.13 Water Supply Tetra Tech Hassan Ghaffari, P.Eng.
21.1.14 Infrastructure Tetra Tech Hassan Ghaffari, P.Eng.
21.2 Operating Cost Estimates - -
21.2.1 Summary Tetra Tech Marinus Andre De Ruijter, P.Eng.
21.2.2 Mining Operating Cost Estimate Tetra Tech Sabry Abdel Hafez, Ph.D., P.Eng
21.2.3 Process Plant Operating Cost Estimate Tetra Tech Marinus Andre De Ruijter, P.Eng.
21.2.4 Leach/SX-EW Operating Cost Estimate Tetra Tech Marinus Andre De Ruijter, P.Eng.
21.2.5 Water Supply Operating Cost Estimate Tetra Tech Marinus Andre De Ruijter, P.Eng.
22.0 Economic Analysis Tetra Tech Sabry Abdel Hafez, Ph.D., P.Eng.
23.0 Adjacent Properties Tetra Tech Gregory Z. Mosher, P.Geo.
24.0 Other Relevant Data and Information Tetra Tech Hassan Ghaffari, P.Eng.
25.0 Interpretations and Conclusions All Sign off by Section
26.0 Recommendations All Sign off by Section
27.0 References All Sign off by Section
28.0 Certificates of Qualified Persons All Sign off by Section

AQM Copper Inc. 2-2 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
3.0 RELIANCE ON OTHER EXPERTS

In preparation of this report, Tetra Tech has relied upon others for information, and
disclaims responsibility for information derived from reports pertaining to mineral tenure,
property ownership, surface rights, environment, royalties, and social issues. Neither
Tetra Tech nor the authors are qualified to provide extensive comment on legal issues,
including mineral tenure status associated with the Project, and therefore, ownership
information is provided for information purposes only.

Tetra Tech has reviewed and analyzed data and reports provided by AQM, together with
publicly available information augmented by direct field examination, drawing its own
conclusions. Information from third-party sources is quoted or referenced throughout
this technical report and is disclosed in Section 27.0. Tetra Tech used (or relied upon)
information from these sources under the assumption that the contents are accurate.

The QPs who prepared this report relied upon information provided by the following
experts who are not QPs for the purposes of this report:

• Mr. Alvaro Fernandez-Baca, Consulting Geologist of AQM/MAQM has been relied

on for advice on matters relating to geological exploration, drilling and quality
assurance/quality control (QA/QC).
• Mr. Lorenzo de la Puente, General Manager of MAQM has been relied on for
advice on matters relating to the mineral concessions and ownership of the
Project and permitting requirements pertaining to the Project.
• PricewaterhouseCoopers LLP (PwC) and PwC – Dongo-Soria, Gaveglio y
Asociados Sociedad Civil has been relied on for advice on matters relating to
taxes in the economic modelling.
• Mr. Carlos Derpsch of Ayrmin Consultorias y Representacions Ltda (Ayrmin)
located in Santiago, Chile, has been relied on for advice on matters relating to
smelting, refining and transportation terms for copper concentrate as well as
copper cathode.

AQM Copper Inc. 3-1 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Perú
4.0 PROPERTY DESCRIPTION AND LOCATION

The Property is located in southern Peru about 150 km by road (90 km straight-line
distance) northwest of the city of Arequipa on the border between the District of
Huancarqui in the Province of Castilla and the District of Lluta in the Province of Caylloma.
The approximate centre of the Property is located at 16°02’ 28” south latitude and 72°14’
19” west longitude UTM 18S 794000E/8224000N using WGS84 (Figure 4.1). The datum
selected for the Project reporting is WGS84 coordinate system using the UTM 18S
horizontal projection. Earlier work was performed using the datum of PSAD 56 and where
appropriate this work has been re-stated in WGS84.

The Property is 34,152.19 ha in area and is comprised of 43 concessions and three mining
claims, the details of which are presented in Table 4.1 and shown in Figure 4.2.

Ownership of a concession carries the right to both explore and exploit a property,
although additional permits are necessary prior to obtaining the actual right to explore
and mine. Concessions are held for as long as annual “Mining Good Standing Fees” are
paid. Failure to pay the annual “Mining Good Standing Fees” for two consecutive years
will result in the mining title being terminated.

The “Mining Good Standing Fee” is equivalent to $3.00/ha is payable on an annual basis
to maintain the concessions in good standing. In addition, a penalty of $6.00/ha is
charged for those concessions older than seven years that have not recorded a minimum
investment by MAQM. In June 2013, MAQM paid a total of $229,196.73 in concession
fees. Table 4.1 shows the next annual “Mining Good Standing Fees” payment, which is
due on June 30, 2014.

For the purposes of this report, there are two mineral zones of interest: Zafranal Main
and Victoria zones. The approximate locations of these zones are also shown on Figure
4.2. The Property includes the Chicharron option (4,700 ha) that Teck Peru purchased
from BHBP Minerals (BHBP) but remains subject to a 1.5% net smelter royalty (NSR)
capped at $2.0 million. None of the four mineral zones discussed in this report falls
within the Chicarron option area. The Property also includes the purchase option that
MAQM Peru signed in June 2013 with Minera Huanzo SAC for the mining claim Santuario
2009 for 100 ha for a total consideration of US$100,000, with $15,000 paid at the
signing of the option contract, $20,000 on the 12th month and $65,000 on the 24th
month since signing the option contract. No royalty payments or work commitments are
included in the option agreement.

In 2009, AQM, through its wholly-owned Peruvian subsidiary Minera AQM Copper Peru
SAC (AQM Peru), acquired from Teck Peru the right to earn a 51% interest in the Property.
Teck Peru retained the right to earn back to a 60% interest in the Property. In the event
Teck Peru did not elect to exercise the back-in, AQM had the right to increase its interest
up to 100%.

AQM Copper Inc. 4-1 1295840200-REP-0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 In 2010, the option agreement was amended whereby MAQM and Teck Peru formed a
50/50 joint venture (JV) to explore and develop the Property. The JV entity, CMZ, was
constituted in January 2011 and the ownership of the Zafranal mining concessions was
transferred to it from Teck Peru. Teck Peru’s shares in CMZ were then transferred to
Teck. MAQM was immediately vested to a 50% interest in the Property. All cash payment
obligations held by MAQM and all royalties and back-in rights held by Teck Peru were
cancelled in exchange for the granting of 5 million AQM shares to Teck and the
commitment by MAQM to fund $10.7 million in exploration expenditures in addition to
the $7.5 million already spent by MAQM on the Property.

A Shareholders Agreement (SHA) was signed between MAQM and Teck on January 1,
2011, shortly after MAQM completed the total of $18.2 million in exploration
expenditures. Under the terms of the SHA, Teck Resources has the right to become the
Project operator when a production decision has been made. In the meantime, MAQM is
the Project operator.

MAQM completed the process of transferring the exploration intangible associated with
its $18.2 million expenditure in the Property to the JV company, CMZ, on September 12,
2011, and received shares in CMZ equivalent to its 50% ownership in the Company.

The JV partners have recently decided that CMZ will start to directly manage the activities
of the Project and the “Cession Minera”, the agreement that has authorized MAQM to act
on behalf of CMZ, will be terminated. MAQM will begin the process of transferring mining
concessions held in its name, all permits and permissions granted by the authorities to
conduct exploration on the Property to CMZ, and selected personnel who will work
directly for CMZ. The process will be initiated once the new drilling permit has been
granted and it will likely take several months to complete. The termination of the Cession
Minera will not affect MAQM’s operatorship of CMZ.

AQM Copper Inc. 4-1 1295840200-REP-0001-04.1

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Figure 4.1 Property Location

AQM Copper Inc. 4-1 1295840200-REP-0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Table 4.1 Zafranal Property Mineral Concessions
Next Annual
“Mining Good
Area Unique Standing Fee”
Name (ha) Code Holder Payment
Zafranal Concessions
AMALIA GUILLERMINA 200.00 010172503 MAQM 30/06/2014
CAMPANERO 1 1,000.00 010278208 CMZ 30/06/2014
CAMPANERO 2 400.00 010278108 CMZ 30/06/2014
CHARO 1 1,000.00 010554007 CMZ 30/06/2014
CHICHARRON_11 1,000.00 010210403 CMZ 30/06/2014
CHICHARRON_N_5 1,000.00 010209003 CMZ 30/06/2014
CHICHARRON_N_6 700.00 010209103 CMZ 30/06/2014
CHICHARRON_N_7 1,000.00 010209203 CMZ 30/06/2014
CHICHARRON_N_8 1,000.00 010209303 CMZ 30/06/2014
SICERA 1 1,000.00 010248903 CMZ 30/06/2014
SICERA 2 500.00 010295003 CMZ 30/06/2014
SICERA 3 900.00 010313703 CMZ 30/06/2014
SICERA 4 1,000.00 010330303 CMZ 30/06/2014
ZAFRANAL 1 1,000.00 010135403 CMZ 30/06/2014
ZAFRANAL 10 600.00 010360803 CMZ 30/06/2014
ZAFRANAL 11 600.00 010360903 CMZ 30/06/2014
ZAFRANAL 12 1,000.00 010260704 CMZ 30/06/2014
ZAFRANAL 13 1,000.00 010260804 CMZ 30/06/2014
ZAFRANAL 14 1,000.00 010260904 CMZ 30/06/2014
ZAFRANAL 15 500.00 010261004 CMZ 30/06/2014
ZAFRANAL 16 1,000.00 010261104 CMZ 30/06/2014
ZAFRANAL 17 1,000.00 010261204 CMZ 30/06/2014
ZAFRANAL 18 1,000.00 010261304 CMZ 30/06/2014
ZAFRANAL 2 27.20 010175103 CMZ 30/06/2014
ZAFRANAL 21 1,000.00 010261604 CMZ 30/06/2014
ZAFRANAL 3 525.00 010175303 CMZ 30/06/2014
ZAFRANAL 34 1,000.00 010262904 CMZ 30/06/2014
ZAFRANAL 35 700.00 010263004 CMZ 30/06/2014
ZAFRANAL 36 500.00 010263104 CMZ 30/06/2014
ZAFRANAL 4 799.99 010269403 CMZ 30/06/2014
ZAFRANAL 7 1,000.00 010313803 CMZ 30/06/2014
ZAFRANAL 8 500.00 010340003 CMZ 30/06/2014
ZAFRANAL 9 500.00 010357503 CMZ 30/06/2014
AQM IV 500.00 010033810 MAQM 30/06/2014
AQP I 800.00 010209809 MAQM 30/06/2014
AQP II 500.00 010209909 MAQM 30/06/2014
AQP III 900.00 010210009 MAQM 30/06/2014
AQP V 800.00 010145910 MAQM 30/06/2014
table continues…

AQM Copper Inc. 4-2 1295840200-REP-0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Next Annual
“Mining Good
Area Unique Standing Fee”
Name (ha) Code Holder Payment
AQP VII 1,000.00 010294310 MAQM 30/06/2014
AQP VIII 900.00 010479310 MAQM 30/06/2014
AQP X 500.00 010015111 MAQM 30/06/2014
AQP XI 700.00 010166411 MAQM 30/06/2014
AQP XII 1,000.00 010166311 MAQM 30/06/2014
Total Area 33,552.19 - - -
Zafranal Mining Claims
AQM XIII 300.00 010420712 MAQM 30/06/2014
AQP XIV 200.00 010420612 MAQM 30/06/2014
AQP XV 100.00 010218613 MAQM 30/06/2014
Total Area 600.00 - - -

AQM Copper Inc. 4-3 1295840200-REP-0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
Figure 4.2 Zafranal Property Mineral Concessions and Mineral Zone Locations

AQM Copper Inc. 4-4 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 The main permits, required to carry out all current and planned exploration work
including drilling activities are the EIAsd, the authorization for water use, and the surface
access rights to the Property. The second modification of the EIAsd and related drill
permit was approved by the Ministry of Energy and Mines on July 19, 2013 and is valid
for two years. The second modification permits 256 drill platforms in and around the
Zafranal Main Zone and Victoria, to the south of the Main Zone (Ganchos), to the east of
the Main Zone (Campañero), as well as geotechnical and condemnation drilling in areas
of proposed infrastructure, water dams, TMF, waste dumps and stockpiles.

Surface rights to the Property are held by the Autoridad Autónoma de Majes (Autodema),
the agency of the Arequipa Regional Government that manages the Majes Siguas Special
Project. MAQM acquires the right of access to the Property from Autodema on an annual
basis through a renewable contract which was recently renewed and became effective on
April 1, 2012. A fee equivalent to $30.00/ha is payable on an annual basis to maintain
access rights to the Property. In April 2012, MAQM paid Autodema $167,000 for the
right of access to 5,531 ha of mining concessions currently being explored on the
Property. MAQM requested and Autodema granted a suspension of the agreement term
in December 2012 until such time as the modified EIAsd drilling permit had been issued
by the Ministry of Energy and Mines. As the new holder of the Right of Access contract,
CMZ will be required to make a similar annual payment to Autodema in November 2013.

To record an investment, MAQM is required to file an annual information form detailing

the investments in mining activities on the Property and the amount of money spent on
sustainability development programs, including community relations and environmental
management programs.

In compliance with the recently approved regulation to formalize artisanal and small
mining activity (informal miners), CMZ is voluntarily engaged in a process to sign an
exploitation agreement with the company formed by approximately 200 artisanal miners
who are operating within the Property (in areas of no interest to the Project). The
informal miners are obliged to comply with all the requirements established by this 2012
legislation and be formalized as artisanal or small miners, including the signing of the
exploitation agreement with CMZ.

AQM Copper Inc. 4-5 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
5.0 ACCESSIBILITY, CLIMATE, LOCAL
RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY

The Property is located in the Cordillera Occidental about 90 km (150 km by road)

northwest of Arequipa. The Property is characterized by steep, dissected topography with
elevations between about 1,000 and 3,300 masl. The four mineral zones of the Project
are located between elevations of 2,000 and 2,850 masl. The Property is well-removed
from agricultural areas and does not contain any communities or settled areas.

The climate in this part of Peru is arid, with temperatures ranging between about 12°C in
winter to 28°C in summer. The climate is such that exploration and mining can be
carried out on a year-round basis. As rain is scarce, agricultural activities are only
possible in river valleys where irrigation is available. However, the area is occasionally
subject to heavy downpours and flash flooding in the river valleys. Characteristic
vegetation on the Property is comprised primarily of grasses, cacti and shrubs. Valley
bottoms within the Property are typically filled with active alluvium and are bare of
vegetation.

The nearest major centre is the city of Arequipa which is serviced by scheduled flights
and is the major supply center for mining activity in this part of Peru. About 85 km of the
150 km of roadway from Arequipa and the Property is paved, including the Pan-American
Highway. Access to the last 65 km of the Property is by gravel road of which 15 km are
via a private access road originally constructed by Teck. Within the Property, MAQM has
constructed and maintains a network of access and exploration roads.

Through an agreement with Autodema, MAQM has the rights to explore and exploit the
Property subject to securing the necessary environmental and sectorial permits. As the
Property and surrounding area is virtually uninhabited and the land used for no other
purpose, it is improbable that any difficulty would be encountered in obtaining the
necessary surface rights for any contemplated mining activity.

There are sufficient areas within the Property for locating processing plants and other
structures for the storage of mining waste and tailings disposal, and for locating leach
pads.

Water does not appear to be readily available within the Property, so various potential
water sources have been and continue to be evaluated. For the purposes of this report,
it was assumed that the water for the Project will be supplied by pumping water from the
Majes River during the rainy season when river flow exceeds 32 m3/s, which occurs from
January to May each year. Water flow during this time is far in excess of the amounts
needed to ensure adequate water for agricultural needs as well as the minimum

AQM Copper Inc. 5-1 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 environmental flow to support healthy river ecosystems. The extraction of water would
not exceed 2 m3/s to cover the Project water needs. In conjunction with the adoption of
this alternative for water supply, MAQM would provide support to infrastructure projects
in communities in the Majes River valley to:

• protect them from river flooding

• improve the intake and distribution of irrigation water
• treat water for human consumption
• treat sewage from these communities to reduce contamination of the river.

Electricity would be obtained from a national grid substation which is accessible within
115 km of the location currently considered most suitable for a processing plant.
Sufficient electricity is expected to be available for a new mining operation with additional
power lines and upgrades of existing lines in Arequipa province and in southern Peru
under construction. Several hydroelectric projects and gas fired power stations are also
planned to be online by the start of mining operations.

Skilled mining personnel are currently available in the general area. Arequipa is a mining
district with a number of large operating mines, however a deficit of trades people is
forecasted as the mining industry grows within the region. Expected shortages of skilled
labour in the future will need to be mitigated by extensive training and recruiting
programs.

AQM Copper Inc. 5-2 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
6.0 HISTORY

Artisanal miners are actively mining for gold in the auriferous quartz veins on the
periphery of the Zafranal porphyry systems. It is not known when the artisanal miners
began working in this area but they were well aware of surface exposures of copper
mineralization in what is now the Zafranal Main Zone. In 2003, these miners brought
this mineralization to the attention of Teck Peru geologists who were conducting regional
exploration for porphyry deposits. The Zafranal Main Zone was immediately staked by
Teck Peru. With the exception of gold production by artisanal miners, there has been no
commercial production from the Property.

6.1 ZAFRANAL MAIN ZONE

Teck Peru explored the Zafranal Main Zone during the period 2003 through 2005,
starting with surface rock sampling that confirmed the extensive presence of porphyry-
style geology, and alteration and copper and gold mineralization.

In 2004 Teck Peru drilled 22 reverse circulation (RC) holes (7,000 aggregate metres) and
four core holes (1,556 aggregate metres). The RC drilling outlined a 1 km-long enriched
copper blanket in porphyritic dioritic intrusive rocks. Mineralized intercepts ranged from
a minimum thickness of 4 m with an average grade of 0.62% copper (ZFRC04-016) to a
maximum intercept of 110 m with an average grade of 1.02% copper (ZFRC04-008).

The core holes were drilled to confirm the RC drill results. Diamond drillhole (DDH)
DDH04-001 which was a twin of ZFRC04-008 intersected 166 m with an average grade
of 1% copper. Two other holes intersected significant intervals of copper mineralization
(ZFDDH04-002 intersected 92 m with an average grade of 0.94% copper and ZFDDH04-
004 intersected 77 m with an average grade of 1.80% copper).

A further 10 RC holes were drilled in 2005 to test for possible eastern, northern and
western extensions of mineralization intersected by previous drill campaigns. Extensions
to the then-known limits of mineralization were found in all three directions.

In 2004, following the first phase of drilling, orientation-scale time-domain

electromagnetic (TEM) and audio-frequency magneto-telluric (ATM) surveys were carried
out. The ATM survey was successful in differentiating between altered and unaltered and
mineralized and unmineralized rocks.

Between 2006 and 2007, Teck Peru conducted scout drilling in peripheral areas of the
Property, looking for possible porphyry targets concealed beneath the Tertiary cover. No
further work was done on the Zafranal Main Zone between 2005 and May 2009 when
MAQM acquired an option on the Property.

AQM Copper Inc. 6-1 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
6.2 VICTORIA ZONE
The Victoria Zone is contiguous with the eastern end of the Zafranal Main Zone but was
not discovered until 2011 as MAQM extended their drill coverage of the Zafranal Main
Zone in that direction.

AQM Copper Inc. 6-2 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
7.0 GEOLOGICAL SETTING AND
MINERALIZATION

7.1 REGIONAL GEOLOGY

Southern Peru is divisible into three major, northwest-trending tectonic belts, from east to
west, the Sierra Oriental, Altiplano and Sierra Occidental. All three developed as a result
of the subduction of the Nazca oceanic plate beneath the continental South American
Plate. Subduction is estimated to have begun during the Late Triassic, about 200 Ma
and the ongoing process is termed the Andean Orogeny (Figure 7.1).

Figure 7.1 Tectonic Belts of Southeastern Peru

Source: Rivera et al 2010.

AQM Copper Inc. 7-1 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 The Property is located within the Sierra Occidental and is underlain by thin Paleozoic-age
sedimentary strata and by Mesozoic-age intrusive rocks.

Subduction-related igneous intrusive and related volcanic rocks were emplaced into the
Sierra Occidental throughout Mesozoic and Cenozoic time. The Coastal Batholith, of
high-potassium granitoid composition and of Lower Jurassic to Upper Eocene age and
comprised of multiple intrusions, is the dominant feature of the Cordillera Occide. Major
intrusive periods have been dated to around 100, 80, and 75 to 60 Ma before present
day.

Cenozoic-age volcanic and volcaniclastic rocks cap the Cordillera Oriental.

The distribution of mineralization within the Property is controlled by the Iquipi-Clavelinas

Fault System, an east-to-northwest-trending regional-scale system of transcurrent faults
that are related to displacements caused by subduction. These faults are deep-seated
and movement on them within the Property area appears to have developed a dilational
shear system that focused the emplacement of both the host diorites as well as the
porphyry-style copper mineralization that is contained within them.

7.2 PROPERTY GEOLOGY

Bedrock within the Property area includes deformed and metamorphosed intrusive and
mafic volcanic rocks of undetermined age, Jurassic volcaniclastic and sedimentary rocks,
Cretaceous granodiorite and Paleocene to late Cenozoic diorite intrusives and dikes.
Most of these units have been deformed by regional-scale and local shear zones, often
resulting in schistose and gneissose textures. The four mineral zones within the Property,
Zafranal Main, Victoria, Sicera Norte and Sicera Sur, have similar bedrock geology but
differ sufficiently to warrant the separate descriptions that follow. For the purposes of this
report, there are two mineral zones of interest: Zafranal Main and Victoria zones.

7.2.1 ZAFRANAL MAIN ZONE

The Zafranal Main Zone is located within an east-trending block that is bounded by faults
that belong to the Iquipi-Clavelinas Fault System. This block is bounded to the north by
gneissose rocks with local mylonitic bands that formed as a result of at least two phases
of deformation, including movement on the Iquipi-Clavelinas Fault, and to the south by
sedimentary rocks, primarily quartzite, siltstone and wacke, tentatively assigned to the
Upper Jurassic to Lower Cretaceous-age Yura Group that are also tectonically deformed
(Figure 7.2).

AQM Copper Inc. 7-2 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
Figure 7.2 Zafranal and Victoria Geology

AQM Copper Inc. 7-3 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 The fault block contains volcano-sedimentary rocks of the Lower Jurassic-age Guaneros
Formation that have been intruded by several phases of diorite to Quartz-Diorite plugs
and dikes of Upper Cretaceous age. The Guaneros Formation is comprised of siltstone,
sandstone, debris flows, tuff, volcanic breccia and andesitic flows together with sub-
volcanic units of andesitic composition.

Four phases of dioritic intrusive rocks have been identified: Zafranal Diorite, Microdiorite,
Quartz-diorite and Post-mineral Diorites.

The Zafranal Diorite is the oldest and most abundant of the intrusive rocks, is greenish-
grey and porphyritic, and occurs as stocks and dykes. The emplacement of the Zafranal
Diorite is interpreted to have been accompanied by an early hypogene copper-
mineralizing phase of mineralization.

The Microdiorite is fine-crystalline and greenish and occurs at the eastern and western
ends of the Zafranal Main Zone. The Microdiorite cuts the Zafranal Diorite and its
emplacement appears to coincide with the main copper-mineralizing event.

The Quartz-diorite is dark grey, commonly contains disseminated pyrite and magnetite,
and cuts both the Zafranal Diorite and Microdiorite. The Quartz-diorite characteristically
contains low-grade hypogene mineralization.

Post-mineral dikes and minor apophyses are the last-documented intrusive event on the
Property. This phase cuts the preceding three intrusive phases and is unmineralized
although in some areas it is propylitically altered.

7.2.2 VICTORIA ZONE

Mineralization within the Victoria Zone (Figure 7.2) is hosted by a variety of strongly-
deformed and locally metamorphosed extrusive and intrusive rocks of undetermined age,
principally hornblende diorite which appears to have been intruded by mafic to ultramafic
andesitic dykes and later porphyritic diorite bodies similar in texture to the Zafranal
diorite in the Zafranal Main Zone. Primary volcanic textures in mafic units suggest that
the intrusive rocks were emplaced into a sequence of basaltic andesite volcanic tuffs
and/or flows. All of these rock units have been strongly deformed by a regional, dextral
shear zone marking the contact with the Coastal Batholith. The strong deformation
obscures cross-cutting relationships and primary textures and locally the deformation is
so intense that the rocks are mylonitized.

7.2.3 SICERA NORTE ZONE

Sicera Norte is underlain by highly-deformed diorite and quartz-feldspar porphyritic rocks.
These intrusive rocks have been thrust over unaltered and unmineralized andesitic
volcanic and volcaniclastic rocks along a north-west trending, low-angle reverse fault
which marks the southwestern limit of the hydrothermal system (Figure 7.3).

AQM Copper Inc. 7-4 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru
 Figure 7.3 Sicera Norte Zone Geology

7.2.4 SICERA SUR ZONE

Sicera Sur is underlain by a sequence of limestone beds and calcareous sedimentary
units belonging to the Upper Jurassic/Lower Cretaceous-age Yura Group. An east-verging
reverse thrust has placed older, unmineralized and unaltered, Jurassic Guaneros
Formation andesite flows over the Yura Group. This sequence is intruded by at least
three generations of dioritic intrusive stocks, plugs and dykes, all with very similar
compositions but slightly different textures. The emplacement of these bodies appears
to have been controlled by three sets of faults: an older, high-angle northwest-trending
system, a later north-trending reverse system and a late, low-angle northwest-trending
set of reverse faults. Most of these faults have been reactivated as normal faults (Figure
7.4).

AQM Copper Inc. 7-5 1295840200-REP-R0001-04

Technical Report and Updated Preliminary Assessment
of the Zafranal Project, Peru