Description of the Guayuco Project

The Guayuco Project covers a total area of 1141 hectares in the Department of Antioquia, in the north east of Colombia. It is located in the lower Nechi River Valley, approximately 5 hours by the Panamerican Highway, and then 1 hour through a paved secondary road.

The company has completed a thorough reconnaissance of the property, with emphasis the Guayuco vein. Small mining operations expose the vein and it was followed for over 1 mile where samples were taken in existing tunnels. The study indicates that the future of a gold mine is high grade, underground and economically robust.

The project intends to upgrade an existing small mine that extracts gold from Guayuco vein. The actual operation is mining 2 tons of mineral per day and will be upgraded to a medium size mine in a period of seven years. A scoping analysis of the initial project is being developed taking into account only the Guayuco vein given the higher degree of information obtained in the reconnaissance.

 It is important to highlight that the establishment of Inca seed plantations is considered strategic for the well being of the surrounding community.

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Highlights of the Reconnaissance

• The analysis of the samples of the Guayuco vein average a grade of 13 g/t of gold and 16 g/t of silver. This is a high grade structure that favors lower costs per unit of gold.

• The vein was found to be continuous for over a mile and no signs of major faulting was detected. Given the  horizontal continuity of the Guayuco vein, the continuity observed in the deeper excavations and the consistency of the mineralization mineral resources for this part of this sole structure are projected at 320,000 tons.

• At least six more veins were identified and are programmed for further study giving the property a high potential for growth

• The recovery of gold and silver in the small local processing unit was of 93% and 56% respectively which is an indication that the minerals are amicable to the extraction process.

• The area has geographical and logistics advantages for the development of a low cost operation.

• All the gold bearing structure known outcrop favoring production in early stages.

• The host rock is very stable which allows to use little reinforcement in the underground excavations

• All veins dip more than 65 ° which classifies them as vertical structures and added to the width allows to develop a low cost mining method of cut and fill

• The Establishment of plantations is favored by the government giving tax exemptions benefits

 

Advances of the Scoping Economic Study

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• The price of gold is set at USD$1100 per troy ounce and 10 for troy ounce of silver

• The operation is projected to 300 tons per day in a period of five years on the sole Guayuco vein. There will be space for greater expansion as the other gold bearing structures are tested.

• The recovered grade of gold is estimated in 10 g/ton and 8 g/ton of silver

• Operational costs per ground ton including royalties, transport of ore and refinement charges are estimated at USD $120, which is roughly USD$ 400 per troy ounce, when the operation is upgraded to 300 tons. This is in the lower Quartile of cash costs in the mining industry

• The first year the project will produce over four million dollars in gross revenue, growing up to forty five in the fifth year. Gold produced will grow from actual 7 kg per year to 900 kg per year.

 

Social approach

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Sustainability of the project is a factor taken very seriously, with both social and environmental care strategically considered. The property is surrounded by land appropriate for the harvesting of Inca Seeds (Sacha Inchy) and the project will use the knowhow and commercial development of Inca World Wide to utilize this land for the local community.

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Location of the Property

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The project Guayuco is located in a low valley, with maximum elevation of 60 meters above sea level. The zone of the property has very low hills with steepness of less than 30% and is adjacent to the river Nechí.

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Infrastructure

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A dirt road of 1.6 miles goes from Puerto Claver, the nearest town, to the property. The project has access to abundant water and power to supply its needs. The closest airport is in El Bagre, 45 minutes from the project.

 

 

Geology

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The mineralization explored up to now is a multiple siliceous vein system. The entire property is over the batholith of Segovia, a major source of gold produced in the country. The high-grade mineralization occurs over important intervals of more than one kilometer in depth, as has been found in other exploitations in the same batholith. The mineralization is rich in sulfides with abundant pyrite and lesser amounts of galena and sphlerite.

Six major high-grade veins have been found in the area with considerable width and continuity. The mineralization is similar and there are sub parallel structures. All of the veins have been mined by small-scale miners, within the limitations of this rudimentary practice. These structures are to be tested and there is good evidence of more enriched zones that have not been uncovered. The existing zones prove the high potential of further gold reserves.

Small-scale mining

Historically, the property has been mined by small-scale mining in the absence of explosives and in many cases small generators have generated the electric power. This has limited the operations to shallow depths that don’t surpass 30 feet. Only two operations have been using some mechanization and were able to develop works to a depth of over 200 feet, well into fresh rock.

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Guayuco Vein

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In the area of Puerto Claver in the lower Nechí Valley, the existence of mineralized systems has been object of geological studies and mining projects. These systems are structurally associated  to regional faulting. These ype of mineralized structures are known as lode deposits.

The host rock is a regional unit called Batholith of Segovia, known to house multiple systems that have been historically mined and continue to do so. The systems of El Silencio, Providencia and Sandra K in Segovia, El Limón in Saragoza, La Y in El Bagre, Morro Puto in Nechí and Guayuco in Puerto Claver. The host body is principally conformed of Diorites, with a wide range of textural variations (from massive to slightly laminated and gneissic in zones of strong faulting) and compositional (quartz diorites to hornblendic gabbros). Its' mineralogy is conformed in essence by  intermediate plagioclases (Andesine), quartz, feldspar-K (Orthoclase), hornblende and biotite. As accessory minerals it if frequent to find Allanite, magnetite- hilmenite, apatite, pyrite and zircon. 

In Guayuco the mineralized structures have vein forms, contained in the Batholith of Segovia. The vein has a an orientation and dip of N30E/65NW with slight variations observed in the mine tunnel. The width of the vein is approximately of 3 feet. The mineralogy is principally Quartz, Pyrite and Galena ( small amounts of sphalerite) forming ribbons and knots. The total amount of sulfides amounts to around 10% of the vein. Towards the north east the vein is in direct contact with clay material (around six inches of thickness), that follows the vein (roof of the vein) which has proven to have around 20% sulfides and very high grades of gold.

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Chain of custody

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Each sample has a unique mark written in different  places of the packing bag

Samples are stored in a close garage, there is just one copy of the key one person authorized to to use the key

The samples are divided in two batches one for the lab and the other to stay as duplicate

Samples are packed in clean rice bags. The bags are marked with a unique id and the samples contained in it are listed in digital and printed format

The samples for assays are sent to the lab in the car with the geologist that helped in the regional reconnaissance

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