Santander Mine

Santander is located within the Miocene metallogenic belt of central and northern Perú. It extends for at least 900 km along the Western Cordillera and adjacent Altiplano and is characterized by several hydrothermal mineral deposits of different types that formed between about 6 million and 20 million years ago. The belt is centred east of the Mesozoic and early Palaeocene Coastal batholiths and lies on mature continental crust that has undergone multiple episodes of compressive deformation from at least middle Palaeozoic to latest Neogene time. Mineralization is interpreted to have occurred pre–lower Miocene Quechua I compressive event and spanned later Quechua II tectonism. Mineral deposits are predominantly hosted by shelf carbonates and other sedimentary rocks of Late Triassic, Jurassic, and Cretaceous age and by volcanic and intrusive rocks mainly of Neogene age. Base metal and precious metal mineralization was intimately associated in time and space with the eruption of calc-alkali volcanic rocks of intermediate composition and the emplacement of mineralogically and geochemically similar dykes and stocks.

Santander hosts intrusion-related, carbonate-hosted, distal ‘passive’ replacement deposits, or carbon replacement deposits (CRDs). Controls on mineralization vary, however, with the majority of mineralization displaying very strong structural and lithological controls. The Santander CRDs, in common with those in other districts, displays a strong mineralogic/metallic zonation: a ‘classic’ lateral or vertical zonation (from distal to proximal) would be Mn » Ag » Pb+Ag » Zn » Cu+Au. Santander is underlain by an approximately 2,600-metre thick package of Cretaceous clastic and carbonate sedimentary rocks known as the Goyllarisquisga Group, within which an approximately 1,000-metre thick sequence of massive limestones and limestone-shales of the Jumasha and Chulec Formations are the principal hosts identified to date. Pre-mineralization diabase dykes and sills are locally present within the section. The entire sequence is tightly folded into a series of orogen-parallel, northwest-trending anticlines and synclines. The lower, predominantly clastic part of the section has been thrust over the mainly carbonate-rich upper portion (the favourable host rocks) along the regional northwest-trending Santander Fault Zone. Unconformably overlying the tightly folded Cretaceous sediments are moderately folded and faulted andesitic Tertiary volcanics of the Calipuy Formation. Syn-mineralization intrusive activity, considered to be the heat and fluid sources that produced base metal mineralization, has not been recognized on the property to date. This absence is empirically considered indicative of a relatively large CRD system, and such bodies are inferred to be present at depth (>800 metres) on the property.

Santander (Magistral) Mineral Reserves as at December 31, 2018^{(1, 2)}

	Tonnage	Grade			Metal
Category	Quantity Mt	Zn %	Pb %	Ag g/t	Zn M lbs	Pb M lbs	Ag K oz
Santander Mine 3
Proven	1.11	4.71	0.77	34.54	115.8	19.0	1,238
Probable	1.22	4.62	0.51	29.42	124.5	13.7	1,155
Proven & Probable	2.34	4.67	0.64	31.86	240.3	32.7	2,393

(1) All Mineral Reserves have been estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) — Definition Standards adopted by CIM Council on May 10, 2014 (the “CIM Definition Standards”). Numbers may not add due to rounding.
(2) The technical report entitled “Mineral Reserve Estimation Technical Report for the Santander Zinc Mine, Province de Huaral, Perú” dated March 31, 2017, is the current technical report for the Santander property.
(3) The Santander Magistral Underground Mine Mineral Reserve estimate is reported based on optimized stopes designed on an incremental net smelter return cut-off grade of US$45/tonne with metal prices of: US$1.13/lb zinc, US$0.95/lb lead, US$14.50/oz silver. The Santander Magistral Underground Mine Mineral Reserve estimate has been prepared by non-independent Mine engineering consultants to the company with an effective date of December 31, 2018, under the supervision of and approved by Professional Engineer Barbara Rose (P.Eng.), a Qualified Person as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Ms. Rose is Principal Mine Engineer of the Company and accordingly, is not independent.

Santander (Magistral) Mineral Resources as at December 31, 2018^{(1, 2)}

	Tonnage	Grade			Metal
Category	Quantity Mt	Zn %	Pb %	Ag g/t	Zn M lbs	Pb M lbs	Ag K oz
Santander Mine(3)
Measured	1.42	5.63	0.92	33.96	176	29	1,552
Indicated	1.66	5.09	0.59	31.78	186	22	1,692
Measured & Indicated	3.08	5.34	0.74	32.79	362	50	3,244
Inferred	1.43	4.60	0.21	22.19	145	7	1,022

(1) All Mineral Resources have been estimated in accordance with the CIM Definition Standards. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Numbers may not add up due to rounding.
(2) The technical report entitled “Mineral Reserve Estimation Technical Report for the Santander Zinc Mine, Province de Huaral, Perú” dated March 31, 2017, is the current technical report for the Santander property.
(3) The Santander Magistral Underground Mine Mineral Resource estimate is reported based on net smelter return cut-off grade of US$40/tonne with metal prices of: US$1.13/lb zinc, US$0.95/lb lead, US$14.50/oz silver. The Santander Magistral Underground Mine Mineral Resource estimate has been prepared by the mine geology department and non-independent Resource geology consultants to the company with an effective date of December 31, 2018, under the supervision of and approved by Yan Bourassa (P.Geo.), a Qualified Person as defined in NI 43-101. Mr. Bourassa is Vice President Mineral Resources Management of the Company and accordingly, is not independent.

Santander (Pipe) Mineral Resources as at December 31, 2018^{(1, 2)}

	Tonnage	Grade			Metal
Category	Quantity Mt	Zn %	Pb %	Ag g/t	Zn M lbs	Pb M lbs	Ag K oz
Santander Pipe Project(4)
Indicated	2.77	6.81	0.09	13.39	416	5	1,193
Inferred	0.82	5.59	0.02	10.00	101	0.4	263

(1) All Mineral Resources have been estimated in accordance with the CIM Definition Standards. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Numbers may not add up due to rounding.
(2) The technical report entitled “Mineral Reserve Estimation Technical Report for the Santander Zinc Mine, Province de Huaral, Perú” dated March 31, 2017, is the current technical report for the Santander property.
(4) The Santander Pipe Underground Deposit Mineral Resource estimate is reported based on net smelter return cut-off grade of US$40/tonne with metal prices of: US$1.13/lb zinc, US$0.95/lb lead, US$14.50/oz silver. The Santander Pipe Underground Deposit Mineral Resource estimate has been prepared by the exploration geology department and non-independent Resource geology consultants to the company with an effective date of December 31, 2018, under the supervision of and approved by Yan Bourassa (P.Geo.), a Qualified Person as defined in NI 43-101. Mr. Bourassa is Vice President Mineral Resources Management of the Company and accordingly, is not independent.

Santander Zinc Mine Reserves and Resources Report (March 31, 2017)