EL COBRE EXPLORATION OVERVIEW

DRILL SUMMARY

DRILLING AT EL COBRE

The five copper-gold porphyry zones currently known within the El Cobre Project, Norte, Villa Rica, El Porvenir, Suegro, and Encinal, are defined by distinct Cu-Au soil anomalies, discrete, positive magnetic features and a large IP chargeability anomaly.

• Norte Zone: All five holes drilled in the Norte Zone prior to 2016 intersected porphyry-style mineralisation. Hole 08-CBCN-022, one of the deepest holes drilled at Norte in 2008, returned values of 0.14% Cu with 0.19 g/t Au over 259 m and 08-CBCN-19 intersected 41.15 metres averaging 0.42 g/t gold and 0.27% copper to the end of the hole at 187.45 metres. Drilling at the Norte Zone in 2016 and 2017 resulted in intersections including 114.60 metres grading 1.33 g/t Au and 0.48% Cu (Hole EC-17-018, see press release of April 5, 2017), 80.50 metres grading 1.34 g/t Au and 0.46% Cu (Hole EC-16-012, see press release of October 24, 2016), and 70.45 metres grading 2.32 g/t Au and 0.59% Cu (Hole EC-17-026, see press release of July 25, 2017). Continued drilling through 2018 and 2019 has culminated in the mineral resource estimate announced on September 29, 2020.
• Villa Rica Zone: The Villa Rica Zone is located about 1.8 km south of the Norte zone, and comprises a roughly 2.5 kilometre by 1 kilometre area of hydrothermal alteration defined also by a strong north-northwest trending magnetic-chargeability high and associated copper-gold soil geochemical anomalies. Past mapping and sampling defined several areas of exposed porphyry mineralisation within the Villa Rica zone, including the Raya Tembrillo target and the Naranjo target, both at the north end of the Villa Rica zone. Initial drilling in 2017 on the Raya Tembrillo target intersected two styles of mineralisation; hypogene copper-gold porphyry mineralisation (115.00 metres of 0.57 g/t gold and 0.27% copper, see press release of November 28, 2017) and near surface exotic enriched copper mineralisation with an apparent tabular distribution (94.00 metres of 1.36% copper; see press release of December 13, 2017). The Primotarget area, first announced on October 16, 2019, is also considered to be part of the Villa Rica zone, and is located approximately 1km south of Raya Tembrillo. Primo has been the location of some of the highest copper grades intersected at the Project, such as 200 metres of 0.40 g/t gold and 0.24% copper from 718 metres downhole, which included 86.50 metres of 0.70 g/t gold and 0.42% copper from 831.50 metres (see press release of October 16, 2019).
• El Porvenir Zone: The El Porvenir zone is located about 2 km east of the Villa Rica zone. Significant copper and gold grades have been intersected at El Porvenir, such as 0.16% Cu and 0.39 g/t Au over 290 m in hole DDH04CB1. Results from minimal drilling in 2017 include hole EC-17-040 which intersected 108.00 metres grading 0.88 g/t Au and 0.29% Cu, and hole EC-17-044 which intersected 40.25 metres grading 0.50 g/t Au and 0.25% Cu.
• Suegro Zone: Drilling in 2019 identified this new porphyry centre between the El Porvenir and Encinal Zones. The Suegro Zone is located approximately 250 metres south of the Porvenir Zone, within a large area of alteration associated with more subdued magnetics, and low zinc and manganese in soil. The Suegro mineralisation intersected in the drilling to date is associated with an altered (locally intense phyllic alteration overprinting potassic) intrusive. Intercepts to date include 28.20 m of 0.54 g/t Au and 0.17% Cu (hole EC-19-064; see press release of March 19, 2019).
• Encinal Zone: The Encinal zone is located approximately 1km south of the El Porvenir zone. Previous drilling at Encinal has intersected a highly altered breccia pipe containing fragments of stockwork veining and porphyry mineralisation across which 18.28 metres returned 1.42 g/t Au and 0.10% Cu (Hole CB5). The breccia pipe occurs in a large alteration zone, IP chargeability high and magnetics low which has not been tested to depth. On June 19, 2017 Azucar announced that a new area of exposed stockwork quartz veining and gold mineralisation had been identified in the Encinal Zone. On June 29, 2017 Azucar announced the results of initial drilling on this exposed stockwork (Hole EC-17-025) which returned results including 34.47 metres grading 0.73 g/t Au and 0.20% Cu.

In addition to the above, two surface mineralization areas have been identified to date but not yet drill tested – the Cerro Marin and Miel Zones.

DRILL RESULTS - NORTE ZONE

Click here for the Norte target drillhole database to September, 2019

Between 2002 and 2017, 24 drill holes totalling 14,935.65 m were drilled in the Norte Zone. In 2008 and 2009 CHG drilled five BQ-sized drill holes at the Norte Zone. These holes were designed to test significant geochemical and geophysical anomalies identified in the 2007 and 2008 exploration programs. Four holes were drilled in 2008 encountered encouraging gold and copper values, including hole 08-CBCN-019, which intersected 0.27% Cu and 0.42 g/t Au over 41.15 m. The fifth hole, drilled in 2009, tested the eastern extent of the Norte Zone. In 2016, Almadex drilled 6 holes in the Norte. The drill holes intersected mineralization with significant gold values. Drill hole EC-16-010 intersected 0.68 g/t Au and 0.29% Cu over 163.5 m, including 16.5 m of 2.54 g/t Au and 0.63% Cu. In 2017, Almadex drilled an additional 13 holes in the Norte Zone as a continuation of the 2016 drilling program, to test the extents of the mineralization. Drill hole EC-17-029 intersected high grade mineralization and multiple zones of intense stockwork veining and potassic alteration. Gold and copper values reported from this drill hole include 0.90 g/t Au and 0.30% Cu over 534.90 m and 1.96 g/t Au and 0.48 % Cu over 98.0 m.

This drilling led to Azucar’s September 29, 2020 announcement of the initial mineral resource estimate for the Norte Zone (Click here for the see Norte Zone Mineral Resource Estimate).

DRILL RESULTS – VILLA RICA ZONE, RAYA TEMBRILLO

Between 2002 and 2017, 8 drill holes totalling 4,742.73 m were drilled in the Villa Rica Zone. In 2002 Noranda drilled two holes in the Villa Rica zone, CB02-02 and CB02-03. No significant mineralization was intersected in these holes. In 2017 Almadex (Azucar) drilled 6 holes in the Villa Rica Zone after identifying a new outcrop of copper and gold porphyry style mineralization in the northern area of the zone. This resulted in two sub-zones being described within the Villa Rica zone: the Naranjo Target at the north end of the Villa Rica zone and the Raya Tembrillo Target located centrally. All holes intersected a chalcocite dominant enriched copper zone from surface. Hole EC-17-037 also intersected significant hypogene copper and gold grades, while EC-17-039 intersected a stockwork zone with significant gold grades.

Further drilling is needed to define the extent and orientation of both the enriched and hypogene mineralization discovered in this area.

DRILL RESULTS – EL PORVENIR

Between 2002 and 2017, 21 diamond drill holes have been completed in the El Porvenir Zone, totalling 8,278.19 meters. In 2002 Noranda drilled four NQ-sized drill holes, in areas peripheral to the El Porvenir Zone. Pervasive potassic alteration was encountered but no significant mineralization was reported. Two additional holes were drilled by Almaden in 2002. No samples were collected from these holes. In 2004, Almaden completed two NQ-sized holes in the El Porvenir Zone. Gold appeared slightly anomalous in these holes, but no significant assay results were reported (Barham and Noel, 2005). In 2008, CGH drilled five BQ-sized drill holes at the El Porvenir target to extend the mineralized zones intersected in previous drilling. All five holes (08-CBCN-23, -25, -26, -27, -28) encountered mineralized zones. Assay values are reported in table 6-3. Mineralization was consistently associated with intensely altered monzodiorite, with the exception of hole 08-CBCN-027, which displayed a style of mineralization similar to that intersected in CB4. In 2012 and 2013 Almaden drilled 5 deep drill holes to test the El Porvenir target at depth. Drill holes EC-12-004 encountered significant mineralization at depth, and hole EC-12-001 intersected mineralization to the west of the El Porvenir target. In 2017 Almadex (Azucar) drilled three deep drill holes to target a vein observed at surface. Drill holes EC-17-040 and EC-17-042 intersected significant fresh hypogene porphyry alteration.

DRILL RESULTS - ENCINAL ZONE

Between 2002 and 2017, 12 drill holes totalling 7,547.66 m were drilled in the Encinal Zone. Prior to 2017, the Encinal zone was referred to as the Los Banos zone. In 2002, Noranda drilled one hole (CB02-04), no significant mineralization was intersected. In 2016 Almadex drilled 6 holes in the Encinal zone, to test the target and provide alteration vectors for future drilling. Almadex drilled an additional 5 holes in 2017, targeting a newly identified area of exposed stockwork quartz veining and gold mineralization. Drill hole EC-17-025 intersected 0.32 g/t Au and 0.13% Cu over 296.71 m, including 1.14 g/t Au and 0.20% Cu over 6.0 m.