Proyecto Minero Magistral ffs 43-101

SE Samuel Engineering, Inc.
We Provide Solutions
Inca Pacific Resources Inc.
Technical Report
Magistral Property
Feasibility Study
January 17, 2008

1.0 TITLE PAGE
1.1 Technical Report:
Magistral Property Feasibility Study
Submitted to: Inca Pacific Resources, Inc.
1.2 Mineral Project Location: The Magistral property is located in the Ancash
Department of Northern Peru.
1.3 Qualified Persons:
Samuel Engineering, Inc. (Richard Kunter, QP, FAus IMM (CP), BS, MS,
Metallurgical Engineer)
Mine Development Associates, Inc. (Neil Prenn, PE, Mining Engineer, Steven
Ristorcelli, P.Geo)
Vector Peru (Scott Elfin, PE)
1.4 Effective Date of Report: January 17, 2008
Samuel Engineering, Inc.
8450 East Crescent Parkway, Suite 200
Greenwood Village, Colorado 80111-2816
Telephone: 303.714.4840
Fax: 303.714.4800
Technical Report
Magistral Property
Page 1

2.0 Table of Contents
1.0 TITLE PAGE ......................................................................................................... 1
3.0 SUMMARY............................................................................................................ 9
4.0 INTRODUCTION AND TERMS OF REFERENCE ............................................. 13
5.0 RELIANCE ON OTHER EXPERTS .................................................................... 17
5.1 DISCLAIMER .......................................................................................................17
5.2 RELIANCE ON OTHER EXPERTS .....................................................................17
5.3 LAND....................................................................................................................17
5.4 PERMITTING .......................................................................................................17
5.5 GEOTECHNICAL REPORTS ..............................................................................17
5.6 PREVIOUS TECHNICAL REPORT.....................................................................18
6.0 PROPERTY DESCRIPTION AND LOCATION .................................................. 19
6.1 LOCATION...........................................................................................................19
6.2 MINERAL RIGHTS...............................................................................................19
6.3 SURFACE RIGHTS..............................................................................................24
6.4 ENVIRONMENTAL AND PERMITTING..............................................................25
7.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY... 33
7.1 ACCESSIBILITY ..................................................................................................33
7.2 CLIMATE..............................................................................................................34
7.3 LOCAL RESOURCES AND INFRASTRUCTURE..............................................35
7.4 PHYSIOGRAPHY.................................................................................................34
8.0 HISTORY ............................................................................................................ 35
9.0 GEOLOGICAL SETTING.................................................................................... 36
9.1 REGIONAL GEOLOGY .......................................................................................36
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Magistral Property
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9.2 LOCAL GEOLOGY..............................................................................................39
9.3 PROPERTY GEOLOGY.......................................................................................39
9.4 DEPOSIT GEOGRAPHY .....................................................................................44
10.0 DEPOSIT TYPES................................................................................................ 55
11.0 MINERALIZATION.............................................................................................. 56
11.1 MINERALIZATION EXPOSED AT SURFACE AND IN UNDERGROUND WORKINGS.56
11.2 MINERALIZATION IN MIXED ZONE AND INTRUSIVE ROCKS .......................59
11.3 MINERALIZATION IN PROGRADE AND DISTAL SKARN ...............................61
11.4 LATE STAGE QUARTZ-CALCITE-SULFIDE VEINS .........................................63
11.5 IMPLICATIONS TO MODELING .........................................................................64
12.0 EXPLORATION .................................................................................................. 66
12.1 TOPOGRAPHIC SURVEYS.................................................................................66
12.2 GEOLOGICAL MAPPING....................................................................................68
12.3 SURFACE SAMPLING ........................................................................................69
12.4 UNDERGROUND MAPPING AND SAMPLING..................................................71
12.5 GEOPHYSICAL STUDIES...................................................................................73
12.6 PETROGRAPHIC STUDIES................................................................................75
12.7 MINERALOGICAL STUDIES...............................................................................76
13.0 DRILLING ........................................................................................................... 77
14.0 SAMPLING METHOD AND APPROACH .......................................................... 81
15.0 SAMPLE PREPARATION, ANAYSES AND SECURITY................................... 82
15.1 SAMPLE PREPARATION ...................................................................................82
15.2 QUALITY CONTROL...........................................................................................82
15.3 SECURITY ...........................................................................................................87
16.0 DATA VERIFICATION........................................................................................ 88
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Magistral Property
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17.0 ADJACENT PROPERTIES................................................................................. 89
18.0 MINERAL PROCESSING AND METALLURGICAL TESTING.......................... 90
18.1 REVIEW OF METALLURGICAL TEST WORK...................................................90
19.0 MINERAL RESOURCES AND MINERAL RESERVES ESTIMATES................ 92
19.1 MINERAL RESOURCE ESTIMATE ....................................................................92
19.2 MINERAL RESERVES.........................................................................................93
20.0 OTHER RELEVANT DATA AND INFORMATION ............................................. 95
20.1 PROJECT INFRASTRUCTURE AND SUPPORT FACILITIES ..........................95
20.2 TAILINGS STORAGE FACILITY.......................................................................101
20.3 WATER MANAGEMENT...................................................................................103
20.4 SOCIOECONOMIC CONDITIONS ....................................................................104
20.5 PROJECT DEVELOPMENT..............................................................................105
21.0 INTERPRETATION AND CONCLUSIONS ...................................................... 107
21.1 OPPORTUNITIES ..............................................................................................107
21.2 RISKS.................................................................................................................108
22.0 RECOMMENDATIONS..................................................................................... 109
22.1 MINING...............................................................................................................109
22.2 METALLURGICAL OPTIMIZATION..................................................................109
22.3 WATER TREATMENT .......................................................................................110
22.4 TAILINGS DAM CONSTRUCTION ...................................................................110
23.0 REFERENCES.................................................................................................. 111
24.0 DATE AND SIGNATURE.................................................................................. 118
25.0 ADDITIONAL REQUIREMENTS FOR ADVANCED PROJECTS.................... 119
25.1 MINING OPERATIONS......................................................................................119
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Magistral Property
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25.2 RECOVERABILITY............................................................................................126
25.3 PROCESS DESCRIPTION ................................................................................127
25.4 MARKETS..........................................................................................................130
25.5 CONTRACTS.....................................................................................................131
25.6 ENVIRONMENTAL CONSIDERATIONS ..........................................................131
25.7 TAXES................................................................................................................132
25.8 CAPITAL AND OPERATING COST ESTIMATES............................................132
25.9 ECONOMIC ANALYSIS.....................................................................................133
25.10 CAPITAL PAYBACK .........................................................................................139
25.11 MINE LIFE..........................................................................................................139
26.0 ILLUSTRATIONS.............................................................................................. 140
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Magistral Property
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Technical Report
Magistral Property
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List of Tables
Table 3.1 Magistral Mineral Resource Estimate ...............................................................11
Table 3.2 Magistral Proven and Probable Reserves ........................................................12
Table 4.1 Consultant Companies Commissioned for the Magistral Property Report ...................14
Table 6.1 Effects Related to the Project............................................................................29
Table 7.1 Average Monthly Meteorlogical Measurements ..............................................35
Table 12.1 Magistral Exploration History..........................................................................66
Table 12.2 Reference Survey Cordinates on the Magistral Property (after Acuña, 2001) .............68
Table 12.3 Geochronology of Magistral Rocks (after Kerr, 2004)...................................69
Table 13.1 Magistral Project Drilling Summary................................................................79
Table 15.1 Types and Frequencies of QA/QC Samples Inserted in the 2005 Drill Campaign ........84
Table 15.2 2005 Standard Sample Data: WCM Cu113.....................................................86
Table 15.3 2005 Standard Sample Data: WCM Cu117.....................................................86
Table 15.4 2005 Standard Sample Data: GBM396-6C .....................................................86
Table 19.1 Magistral Mineral Resource Estimate .............................................................93
Table 19.2 Magistral Proven and Probable Reserves ......................................................94
Table 19.3 Magistral Mineralized Material Included in the Final Pit and Treated as Waste ...........94
Table 20.1 Tailings Dam Design Criteria.........................................................................101
Table 25.1 Magistral Ore Production Schedule..............................................................122
Table 25.2 Magistral Contractor Mining Fleet (Number of Units) .................................123
Table 25.3 Magistral Owner Mining Fleet........................................................................124
Table 25.4 Magistral Contractor Manpower....................................................................125
Table 25.5 Magistral Owner Mine Manpower..................................................................126
Table 25.6 Metals Prices Outlook 2011-2020 ..................................................................130

Table 25.7 Summary of Capital Costs .............................................................................132
Table 25.8 Average Life of Mine Operating Costs for the Magistral Mine and Concentrator.......133
Table 25.9 Base Case Sensitivities..................................................................................133
Table 25.10 Cost and Price Sensitivities.........................................................................134
Table 25.11 Capital Cost and Operating Cost Sensitivities ..........................................134
Table 25.12 Sensitivities on Recovery ............................................................................135
Table 25.13 Sensitivities on Grade ..................................................................................136
Table 25.14 Sensitivity of Molybdenum and Copper for Various Cases......................137
Table 25.15 LoM Base Case Cash Flow Financial Model ..............................................138
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Magistral Property
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Technical Report
Magistral Property
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List of Figures
Figure 6.1 Map of Peru........................................................................................................19
Figure 6.2 Magistral Concessions .....................................................................................20
Figure 7.1 Mine Access Routes .........................................................................................33
Figure 9.1 Regional Geology and Structures ...................................................................38
Figure 9.2 Stratigraphic Column of the Magistral Property ............................................40
Figure 9.3 Geology of the Magistral Property ..................................................................41
Figure 9.4 Geologic Section Through the Magistral Property ........................................43
Figure 9.5 Geology and Drill Hole Locations (pre-2005 drilling) ....................................45
Figure 9.6 Locations and Ages of Intrusive Stocks in the Magistral Area ....................46
Figure 9.7 Section 1450NE Geology..................................................................................46
Figure 9.8 Example of Orpiment/Realgar Mineralization in Limestone..........................54
Figure 11.1 Quartz-Sulfide Vein Stockwork in Retrograde-Altered Skarn.....................59
Figure 11.2 Quartz-Chalcopyrite-Molybdenite Vein Stockwork in San Ernesto Intrusion.......61
Figure 11.3 Late-Stage Quartz Vein with Gray Sulfide Selvages....................................63
Figure 12.1 Polygonal Survey Line at Magistral...............................................................67
Figure 12.2 Rock Geochemistry in the Magistral Deposit Area......................................70
Figure 12.3 Sampling and Mapping of the San Ernesto and Arizona Drifts ..................72
Figure 12.4 Total Field Magnetic Map ...............................................................................74
Figure 13.1 Magistral Drill Plan Map..................................................................................78
Figure 20.1 Mine Access Routes .......................................................................................96
Figure 20.2 – Tailings Impoundment Storage Capacity ................................................102
Figure 25.1 Magistral Ultimate Pit....................................................................................121

3.0 SUMMARY
Inca Pacific Resources Inc. (IPR) commissioned Samuel Engineering, Inc. (SE) to complete
a final feasibility study of its Magistral Project (Magistral or “the project”) and an independent
Qualified Person’s Review and Technical Report. The purpose of this report is to support
IPR’s news release of December 3, 2007. This report is based on the results of a recently
completed feasibility study. The resource estimate for the feasibility study has been
updated since the prefeasibility-level Technical Report completed by SRK Consulting and
filed on SEDAR on November 2, 2006.
Richard Kunter, QP, FAus, IMM (CP), Metallurgical Engineering, served as the Qualified
Person responsible for the preparation of this Technical Report, as defined in National
Instrument 43-101, Standards of Disclosure for Mineral Projects (NI 43-101), and in
compliance with Form 43-101F1 (the Technical Report).
IPR is an established Canadian company that was incorporated in 1983. IPR owns 100
percent of the property through its Peruvian subsidiary company, Minera Ancash Cobre S.A.
Magistral is a copper-molybdenum deposit with an anticipated mine life of approximately 15
years.
The Magistral property is located in the Peruvian Andes approximately 260 kilometers east
of the seaports of Trujillo and Chimbote, and 450 kilometers north-northwest of Lima. The
property is located at latitude 8°13'S and longitude 77°46'W in the District of Conchucos,
Province of Pallasca, Department of Ancash. Elevations on the property range from 3,900
to 4,700 meters above sea level (masl).
In total, the Magistral property consists of 24 registered mining concessions, plus two that
are currently in application. The total area of the registered concessions is 11,901.72
hectares, while the total of all concessions is 13,150 hectares.
Magistral will be mined as an open pit. At full production, the mine will supply 7 million
tonnes of ore per year, an average of 20,000 tonnes per day for 365 days per year.
Processing will be by crushing, grinding, and flotation to produce copper and molybdenum
concentrates. Concentrate will be transported by truck to the seaport of Salaverry, near the
city of Trujillo, where a facility will be constructed to store the concentrate and load it into
ships for transport to overseas smelters.
The Magistral copper-molybdenum deposit is located near the northeastern end of the
Cordillera Blanca, a region underlain mainly by Cretaceous carbonate and clastic rocks.
Magistral stratigraphy is dominated by limestone of the north-striking, west-dipping
Cretaceous Jumasha formation. In the late Tertiary, the Jumasha limestone was intruded by
a quartz-monzonite stock. The intrusion has an irregular elliptical shape in plan with
dimensions of about 600 meters east-west by 400 meters north-south, at about 100 meters
below the surface.
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Magistral Property
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The Magistral intrusion has been subdivided into three facies, named the San Ernesto,
Sara, and H. The facies are distinguished by important differences in the style and intensity
of alteration, quartz-sulfide veining, and copper-molybdenum mineralization.
The skarn surrounding the Magistral intrusion has been subdivided into three categories:
distal skarn, which occurs outside the main skarn-limestone contact; skarn, a proximal
phase that contains no dykes or sills; and mixed zone, a skarn phase that is intruded by
numerous dikes or sills and lies adjacent to the main intrusive contact.
The most important and abundant copper-molybdenum mineralization occurs in stockwork
and sheeted zones of quartz-sulfide veins that are most common in the border zone of the
Magistral stock and near the intrusion/skarn contact, especially in the mixed zone. The
dominant sulfides are pyrite, chalcopyrite, and molybdenite. These minerals are also
disseminated in the wall rocks; however, where quartz-sulfide veins are absent, the copper
and molybdenum grades are low. In the porphyry-style mineralization in the Magistral stock
and the mixed zone, chalcopyrite and molybdenite occur together in quartz-sulfide veins and
disseminated in wall rocks. Grades in two-meter core samples from the best-mineralized
sections of the stock and the mixed zone can exceed 1.5% Cu and 0.15% Mo. The highest-grade
copper mineralization in the deposit (ranging to over 5% Cu in individual two-meter
core samples) forms mantos and lenses of semimassive chalcopyrite and pyrite in skarn.
Less commonly, molybdenite also occurs in high-grade mantos in skarn, where Mo grades
can exceed one percent in individual samples. As a rule, the copper mantos contain very
little molybdenite, and the molybdenite mantos have low copper grades.
Copper-molybdenum mineralization has been adequately explored to approximately 300
meters below the surface in most parts of the Magistral stock and the adjacent skarn zones.
Nevertheless, the section of the San Ernesto skarn zone above the valley level has not been
adequately drilled. This is due to steep and rocky surface topography and the blocky
landslide debris in this area, which have prevented construction of surface drilling platforms.
The deeper sections of the Magistral deposit are only partially explored by drilling. Since the
first Anaconda drill program in 1999, the exploration approach by all operators has
consistently confined the drilling to a pattern based on expected open-pit geometries. As a
consequence, many holes were stopped short in copper-molybdenum mineralization, and in
some cases this was in very good grade. The geological evidence provided by some drill
holes in the western and northwestern sections of the deposit indicates that the Magistral
mineralization, which at shallow depths is concentrated in the mixed zone and the outer
shell of the Magistral stock, continues to depth to the west and northwest.
Between 1969 and 1973, Minera Magistral drilled 14 shallow underground drill holes totaling
1,287.8 meters. In 1999, 2000, and 2001, Anaconda drilled 76 diamond drill holes totaling
24,639.58 meters. In 2004, Ancash Cobre completed 34 drill holes, totaling 7,984.85
meters. In 2005, Ancash Cobre drilled 14,349.35 meters in 60 holes. In 2006 and 2007,
Ancash Cobre drilled 25,295.85 meters in 165 drill holes. All the drilling has been surface
core drilling with the exception of the work between 1969 and 1973.
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Magistral Property
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Updated NI 43-101-compliant resource models were completed. The work was prompted by
the 2006/2007 drilling. Resource models were completed for rock density, copper,
molybdenum, arsenic, and silver; an antimony model was partially completed.
The new NI 43-101 mineral resource estimate is based on assay results from 65,214 meters
of core drilling in 286 holes and at a 0.4% Cu equivalent cut-off is as shown in Table 3.1.
Copper equivalent calculation of five to one reflects metal prices used in the prefeasibility
study (Cu - US $1.20/lb, Mo - US $6.00/lb) with no adjustment for metallurgical recoveries
and relative processing and smelting costs.
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Magistral Property
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Table 3.1
Magistral Mineral Resource Estimate
Cutoff
%CuEq
(1)
Tonnes Grade
%CuEq
(1)
Grade
% Cu
Tonnes
Copper
Pounds
Copper
Grade
%Mo
Tonnes
Molybdenum
Pounds
Molybdenum
Grade
g Ag/t
Ounces
Silver
Measured
0.40 108,839,000 0.79 0.52 561,100 1,236,900,000 0.06 60,400 133,170,000 2.5 8,907,000
Indicated
0.40 86,716,000 0.74 0.51 441,800 974,000,000 0.05 40,700 89,660,000 2.6 7,349,000
Measured and
Indicated
0.40 195,555,000 0.77 0.51 1,002,900 2,210,900,000 0.05 101,100 222,830,000 2.6 16,256,000
Inferred
0.40 55,399,000 0.67 0.55 305,400 673,300,000 0.02 12,900 28,335,000 1.5 2,624,000
1) Copper equivalent grade based on 5:1 molybdenum to copper ratio, Note this ratio was used for the cutoff grade
2) Copper equivalent grade based on 6.5:1 molybdenum to copper ratio, Note this ratio is based on the approximate long term price
ratio and differences in recoveries.
Based on the calculated block values after processing, smelting, refining, and royalty, an
internal cutoff of $5.25 per tonne was used to calculate the project reserves. Measured and
indicated blocks inside the final pit design become proven and probable reserves if they
meet the cutoff grade criteria. Table 3.2 summarizes the proven and probable pit reserves.

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Magistral Property
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Table 3.2
Magistral Proven and Probable Reserves
Class Material Tonnes % Cu % Mo g Ag/t % As g Sb/t % Cueq Value
000s $/tonne
Measured Porphyry 45,668.1 0.39 0.049 2.04 0.021 25.6 0.64 $15.53
Indicated Porphyry 6,672.1 0.37 0.041 2.33 0.019 21.0 0.57 $13.96
M + I Porphyry 52,340.2 0.39 0.048 2.07 0.021 25.0 0.627 $15.33
Measured Mixed 18,973.2 0.56 0.056 2.32 0.052 72.3 0.84 $18.62
Indicated Mixed 12,538.9 0.58 0.050 2.50 0.050 55.7 0.83 $18.35
M +I Mixed 31,512.1 0.56 0.054 2.39 0.051 65.7 0.84 $18.51
Measured Skarn 12,958.4 0.68 0.050 3.84 0.064 37.9 0.93 $20.20
Indicated Skarn 19,956.4 0.50 0.046 3.26 0.059 30.3 0.73 $16.11
M + I Skarn 32,914.8 0.57 0.048 3.49 0.061 33.3 0.81 $17.72
Measured All 77,599.6 0.48 0.051 2.41 0.036 39.1 0.73 $17.06
Indicated All 39,167.5 0.50 0.047 2.86 0.049 36.9 0.74 $16.46
M + I All 116,767.1 0.49 0.049 2.56 0.040 38.3 0.73 $16.86
Hi As Porphyry 251.6 0.29 0.028 1.99 0.139 62.2 0.43
Mixed 1,307.2 0.35 0.030 1.74 0.176 96.7 0.50
Skarn 1,627.1 0.30 0.036 2.60 0.308 78.6 0.48
Hi As All 3,185.9 0.32 0.033 2.19 0.241 84.7 0.49
M + I Total less Hi As 113,581.2 0.49 0.050 2.57 0.035 37.0 0.74
Magistral Reserves
M + I Production Schedule 102,912.8 0.52 0.053 2.70 0.034 37.5 0.79
Material
M + I Stockpiled Material 10,668.3 0.18 0.019 1.27 0.037 32.3 0.28
The Magistral Project has an estimated mine life of 15 years. The total estimated cost to
design, procure, and construct the facilities described in this report is $401,333,526. The
average annual LOM operating cost for the mine and concentrator is estimated at
$56,979,979, or $8.305 per ton of ore. The net present value (NPV) at a discount rate of
eight percent over the assumed mine life is $151,989,802. The IRR is 15.2 percent, and the
payback is estimated at approximately 40 months.

The project development schedule is based on a duration of 36 months from the completion
of the feasibility study to plant startup. The schedule has been developed through analysis
of vendor quotations, contractor quotations, and historical data for similar high-altitude
mining projects in South America. Certain key events must take place during a 13-month “at
risk” period, prior to receipt of full project financing, in order to meet the planned date for
project completion.
Based on the results of this NI 43-101 compliant Technical Report, SE through Richard
Kunter, the Qualified Person with respect to the feasibility study, recommends that IPR
proceed with detailed engineering, procurement, and construction of the Magistral Project.
4.0 INTRODUCTION AND TERMS OF REFERENCE
Inca Pacific Resources Inc. (IPR) commissioned Samuel Engineering Inc. (SE) to provide a
final feasibility study of the Magistral Project (Magistral or “the project”) and an independent
Qualified Person’s review and technical report. Richard Kunter, QP, FAus, IMM (CP), an SE
metallurgical engineer, served as the Qualified Person responsible for the preparation of this
technical report as defined in National Instrument 43-101, Standards of Disclosure for
Mineral Projects, and in compliance with Form 43-101F1 (the Technical Report). Mr. Kunter
is a licensed professional metallurgical engineer with degrees in metallurgical engineering
and mineral dressing engineering and more than 41 years of experience in the mining
industry, primarily in process engineering, including plant design and plant audits.
Richard Kunter traveled to the Magistral site on August 18th and 19th, 2007. During this visit,
he observed access roads and the transportation routes to the site, the general site location,
location of the deposit and drill-hole locations, surface geology, and proposed location of the
process and waste storage facilities. He also examined drill core at the site core storage
warehouse.
In Lima, Peru, Mr. Kunter visited the offices of Inca Pacific Resources and Minera Ancash
Cobre, where he viewed geological maps, prior study documents, and technical information.
Mr. Kunter is not an associate or affiliate of IPR, or of any associated company. Fees paid
for this technical report are not dependent in whole or in part on any prior or future
engagement or understanding resulting from the conclusions of this report. These fees are
in accordance with standard industry fees for work of this nature.
Persons taking responsibility for certain sections of this report including related figures and
tables for the purposes of NI 43-101 are set out in Table 4.1 below.
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Magistral Property
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Magistral Property
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Table 4.1
Consultant Companies Commissioned for the Magistral Property Report
Contributor(s)
Independent
QP Consultant Section Title
Paul Farley No (RK) SE 3.0 Summary
Paul Farley No (RK) SE 4.0 Introduction
Gordon Shepherd No (RK) SE 5.0 Reliance on Other Experts
6.0 Property Description
Anthony Floyd No (RK) IPR 6.1 Location
Anthony Floyd No (RK) IPR 6.2 Mineral Rights
Anthony Floyd No (RK) IPR 6.3 Surface Rights
Thomas Furst No (SE) Vector 6.4
Environmental and
Permitting Requirements
Accessibility, Climate,
Local Resources,
Infrastructure and
Physiography
Anthony Floyd No (RK) IPR 8.0 History
Steven Ristorcelli Yes MDA 9.0 Geological Setting
Steven Ristorcelli Yes MDA 10.0 Deposit Types
Steven Ristorcelli Yes MDA 11.0 Mineralization
Steven Ristorcelli Yes MDA 12.0 Exploration
Steven Ristorcelli Yes MDA 13.0 Drilling
Steven Ristorcelli Yes MDA 14.0
Sampling Method and
Approach
Steven Ristorcelli Yes MDA 15.0 Sample Preparation
Steven Ristorcelli Yes MDA 16.0 Data Verification
Neil Prenn Yes MDA 17.0 Adjacent Properties
18.0 Mineral Processing
Richard Kunter Yes SE 18.1
Review of Metallurgical Test
Work

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Magistral Property
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Table 4.1
Contributor(s)
Independent
19.0
Mineral Resources and
Mineral Reserves
Steven Ristorcelli Yes MDA 19.1 Mineral Resources
Neil Prenn Yes MDA 19.2 Mineral Reserves
Various 20.0 Other Relevant Data
Scott Elfen Yes Vector 20.1.1 Haul Roads
Scott Elfen Yes Vector 20.1.2 Site Roads
Scott Elfen Yes Vector 20.1.3 Access Roads
Gordon Shepherd No (RK) SE 20.1.4
Power Supply and
Electrical Distribution
Scott Elfen Yes Vector 20.1.5 Water Supply
Gordon Shepherd No (RK) SE 20.1.6
Sewage and Water
Treatment
John Bell No (RK) MTB 20.1.7 Communications
Gordon Shepherd No (RK) SE 20.1.8 Fire Protection
Gordon Shepherd No (RK) SE 20.1.9 Security and Fencing
Gordon Shepherd No (RK) SE 20.1.10 Site Ancillary Facilities
John Bell No (RK) MTB
20.1.11 Employee Housing and
Transportation
Gordon Shepherd No (RK) SE 20.1.12 Port Facility
John Bell No (RK) MTB 20.1.13 Offsite Offices
Scott Elfen Yes Vector 20.2 Tailings Storage Facility
Scott Elfen Yes Vector 20.3 Water Management
20.4 Socioeconomic
Thomas Furst No (SE) Vector
Conditions
Gordon Shepherd No (RK) SE 20.5 Project Development
Gordon Shepherd No (RK) SE 21.0
Interpretation and
Conclusions
Gordon Shepherd No (RK) SE 22.0 Recommendations
All QPs 23.0 References
All QPs 24.0 Date and signature pages
25.0 Additional Requirements
Neil Prenn Yes MDA 25.1 Mining Operations
Richard Kunter Yes SE 25.2 Recoverability
Gordon Shepherd No (RK) SE 25.3 Process Description
John Bell No (RK) MTB 25.4 Markets
Gordon Shepherd No (RK) SE 25.5 Contracts

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Magistral Property
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Table 4.1
Contributor(s)
Independent
Environmental
Considerations
Gordon Shepherd No (RK) SE 25.7 Taxes
David Weber No (RK) SE 25.8 Capital Costs
John Bell No (RK) MTB 25.8 Operating Costs
John Bell No (RK) MTB 25.9 Economic Analysis
John Bell No (RK) MTB 25.10 Capital Payback
Neil Prenn Yes MDA 25.11 Mine Life
No (RK) SE 26.0 Illustrations
For contributors who are not Qualified Persons, the Qualified Person who has ensured that
the information relied upon is sound is indicated in parenthesis: Richard Kunter (RK), Neil
Prenn (NP), Scott Elfen (SE).
All qualified persons authoring this report visited the site.
• Richard Kunter of SE is the overall Qualified Person for this report.
• Neil B. Prenn P.E., of MDA, is the Qualified Person with regard to the reserve and
resource estimate and all information presented relative to geology and mining. Mr.
Prenn visited the site October 10th and 11th, 2006
• Scott Elfen, P.E., of Vector Engineering, is the Qualified Person with regard to
geotechnical investigation and analysis, design of tailings and waste rock storage
facilities, environmental and permitting, and socioeconomic conditions. Mr. Elfen
visited the site October 10th and 11th, 2006
This report is based on information known to SE as of January 17, 2008. In preparing this
report, SE relied on geological reports and maps, miscellaneous technical papers listed in
the References section at the conclusion of this report, as well as the extensive experience
of IPR personnel. The feasibility study and this Technical Report have built upon previous
information on the Magistral property, including the most recent Technical Report,
completed by SRK and filed on SEDAR on November 2, 2006.
All costs are stated in 4th Quarter 2007 US dollars unless noted otherwise.

5.0 RELIANCE ON OTHER EXPERTS
5.1 Disclaimer
This report is directed solely for the development and presentation of data with
recommendations to allow IPR to reach informed decisions.
This report is intended to be read as a whole, and sections should not be read or relied upon
out of context.
This report contains the expression of the professional opinions of the contributors to this
report and other consultants, based on information available at the time of preparation. The
quality of the information, conclusions and estimates contained herein are consistent with
the intended level of accuracy as set out in this report, as well as the circumstances and
constraints under which the report was prepared, which are also set out herein.
5.2 Reliance on Other Experts
In preparing its sections of this report, Samuel Engineering, Inc. has relied upon certain
reports, opinions and statements of other experts. The extent of reliance is described
below. Samuel Engineering Inc. hereby disclaims liability for such reports, opinions and
statements to the extent that they have been relied upon in preparation of this report as
described below.
5.3 Land
IPR has provided copies of legal documentation regarding the mineral rights and surface
use rights covering the Magistral Project.
Although SE is not a Qualified Person for assessing the validity of unpatented claims, IPR
has completed a due diligence review of the claims and legal opinion regarding the land
tenure provided by the law firm of Rodriguez-Mariategui & Vidal in Lima, Peru.
5.4 Permitting
The permitting requirements description contained in Section 6.4 of this report was provided
by Vector Peru S.A. Vector has considerable experience providing environmental,
permitting, and socioeconomic studies for mining projects in Peru.
5.5 Geotechnical Reports
Several geotechnical reports have been prepared for the project. Vector Peru S.A.
completed geotechnical investigations and analyses for all areas outside of the open pit. Pit
geotechnical investigation and analysis was conducted, and pit-slope design parameters
provided, by Piteau Associates Engineering Inc.
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5.6 Previous Technical Report
A prefeasibility-level Technical Report on the IPR property was prepared by SRK Consulting
and filed with Sedar on November 2, 2006. Certain information from that report remains
valid and is cited herein as indicated.
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6.0 PROPERTY DESCRIPTION AND LOCATION
6.1 Location
The Magistral Project is located in the Peruvian Andes approximately 260 kilometers east of
the seaports of Trujillo and Chimbote and 450 kilometers north-northwest of Lima. The
property is located at latitude 8°13'S and longitude 77°46'W in the District of Conchucos,
Province of Pallasca, Department of Ancash (See Figure 6.1). Elevations on the property
range from 3,900 to 4,700 meters above sea level (masl).
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Figure 6.1 Map of Peru
6.2 Mineral Rights
In total, the Magistral property consists of 24 registered mining concessions, plus two that
are currently in application. The total area of the registered concessions is 11,901.72
hectares, while the total of all concessions is 13,150 hectares. Figure 6.2 is a map showing
the coordinate points and boundaries of the Magistral concessions.

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Figure 6.2 Magistral Concessions

The law firm of Rodriguez-Mariategui & Vidal in Lima, Peru, an independent law firm,
provided legal opinions on land tenure in November 2005. At that time, the Magistral
property consisted of 15 registered mining concessions registered to Ancash Cobre. The
following summary of the legal description is based on that 2005 legal opinion:
According to the mineral title registry files, the property covers 5,776.03 hectares
(Rodriguez-Mariategui, 2006). The Magistral 12, 13 and 14 concessions were staked over
several much smaller and older concessions owned by other parties. These small
concessions were staked and registered before the Catastro UTM coordinate-based system
was introduced in Peru and so are irregular in shape.
The areas covered by each of these old concessions were originally determined by
conventional surveying methods (at best), so their areas as recorded in the mineral titles
registry are approximate.
AMEC (2004) made area measurements of the Magistral concessions and the older
concessions using Arcview GIS calculations from UTM coordinates, and noted small
discrepancies between its data and the areas recorded in the mining registry. Based on the
AMEC Arcview GIS calculations, the Magistral property covers 5,807 hectares, excluding
the concessions owned by other parties (AMEC, 2004). Notwithstanding AMEC’s findings,
the area of coverage of each concession set forth in the mineral registry files determines the
annual fees and/or penalties to be paid for each concession.
The Magistral 14 concession was staked over two previously existing concessions owned by
Compañia Minera Aurifera del Sur S.A. These older concessions have an area of 35.99
hectares. The Magistral 13 concession surrounds a group of six older concessions owned
by Compañia Minera Potosi S.A. that cover 257.01 hectares.
A 100-hectare property between the Magistral 12, Magistral 13 and Magistral 14
concessions is also held by Compañia Minera Potosi S.A. (AMEC 2004). All the
concessions owned by Compañia Minera Aurifera del Sur and Compañia Minera Potosi S.A.
were registered before the Inca Pacific concessions. None of these third-party properties
impinges upon the Ancash Cobre Magistral resource.
The Magistral Concessions are subject to a Transfer of Ownership Contract (“transfer deed”)
dated January 18, 2001, and an addendum between Ancash Cobre and Centromin dated
August 27, 2004. The terms of the Transfer of Ownership Contract of those five Magistral
Concessions are summarized below.
The five Magistral Concessions have a total contiguous surface area of 250 hectares. The
Magistral copper-molybdenum deposit is located within these concessions.
According to the original transfer deed, Ancash Cobre was committed to put a mining-metallurgical
project into production within five years of exercising the option (the deadline
was January 8, 2006).
However, this transfer deed allowed Ancash Cobre the option to extend the January 8,
2006, deadline by up to two years, provided that the deadline date was changed to
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December 31 of each extension year, and that penalties of $200,000 for the first year (until
December 31, 2006) and $400,000 for the second year (until December 31, 2007) are paid.
For each additional year requested, notice has to be given and payments made on or before
December 31 of the previous Year.
Consequently, the first extension to December 31, 2006, was requested on December 16,
2005, and the first payment of $200,000 also was made on December 16, 2005 (Rodriguez-
Mariategui, 2006). Under the terms of the original deed, by requesting these extensions and
making the required payments, Ancash Cobre would be required to prepare and file a
feasibility study for a 15,000-tonnes-per-day (tpd) mining operation by December 31, 2006,
and a bankable feasibility study by December 31, 2007.
Pursuant to an addendum to the transfer deed, approved on August 27, 2004, an extension
for a further four years was granted, subject to the payment of $400,000 for each year of the
extension.
In each case, these payments are to be made by the end of the year preceding the year of
extension (e.g., the payment for the extension year 2008 must be made on or before
December 31 2007). The Addendum will lapse on December 31, 2011.
As a further consequence of the rescheduling provided for in the addendum, Ancash Cobre
proved, before December 31, 2005, that it has expended over $1 million in exploration at
Magistral in the years 2004 and 2005. In the opinion of the law firm Rodriguez - Mariategui
& Vidal, Ancash Cobre spent at least $1 million in that period. Ancash Cobre has also made
annual concession fee and penalty payments as required (Rodriguez-Mariategui, 2006).
The terms of the Transfer of Ownership Contract entered into by Banco Minero del Peru
(now in liquidation), Centromin, and Ancash Cobre on January 18, 2001, and an addendum
to the Transfer Deed entered into by the same parties on September 2, 2004, include the
following provisions:
• Payment of $400,000 to Centromin at the date of execution of the Transfer Deed.
• Submission of a technical-economic study to reveal the optimum production that
could be forecast for Magistral. This was a condition for obtaining the Transfer Deed
from Centromin. The original study stated that a production rate of 25,000 tpd could
be obtained. An amended study, based on the results of exploration work, was later
filed stating that a mining rate of 15,000 tpd was preferred.
• Extension of the investment term by four years from December 31, 2007, until
December 31, 2011, provided that payments of $400,000 are made before the start
of each additional year.
• Payment of an Annual Retribution (RA), which must be made each year as of the
beginning of commercial production. For the first five years the RA will be a
minimum of 0.5 percent of the net value of sales. Commencing with the sixth year of
production, the minimum RA will increase to 0.75 percent of net value of sales. The
operator of the mine has to deliver the previous year’s audited financial statements
or income tax return to Centromin on April 1st of each year after commercial
production is achieved.
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• Ancash Cobre shall spend a total of $1 million in exploration during 2004-2005 (until
December 31, 2005).
• Not later than December 31, 2006, Ancash Cobre shall submit a feasibility study that
shall establish the basic characteristics of the mining-metallurgical project, with a
minimum capacity of 15,000 tpd.
• Ancash Cobre shall prepare and file a bankable feasibility study, and seek and
obtain financial approval for the project not later than December 31, 2007.
Centromin shall have 60 days to study and approve the bankable feasibility study, or
to request more information. The bankable study will establish the total investment
required for project development, and a schedule for construction of the mine.
Ancash Cobre will be required to commit to an investment of at least 80 percent of
the total capital expenditure required to build the mine.
• At the time of approval of the bankable feasibility study, Ancash Cobre shall submit a
performance bond to Centromin. This collateral will cover expenditures up to 30
percent of the scheduled investment commitment for the first year, and it will be
renewed up to an amount of 30 percent for the second year, minus the actual
investment made in the previous year. This same procedure will apply every year
until the completion of the scheduled investment commitment, on or before
December 31, 2011.
The 15 Ancash Cobre mining concessions are part of UEA Magistral 2000, a grouping of
mining concessions within a five-km radius as allowed by Peruvian mining law. The title
date of the oldest concession in any UEA determines the date of commencement of
obligations regarding production and investment, or the payment of penalties for
nonperformance of these obligations. The five privatized Magistral concessions are the
oldest concessions in the UEA Magistral 2000 (they were titled in 1934 to 1945).
However, they were privatized in January 2001, and according to Peruvian law they are not
required to show evidence of minimum capital investments and mining production until
2007.
Ancash Cobre has taken the legal position that the other ten mining concessions in the
Magistral UEA 2000 have exactly the same status as the privatized Magistral concessions
and should not be required to show evidence of production, or become liable for penalty
payments in lieu until 2007. The Ancash Cobre argument is based on the premise that
since the Magistral concessions are the oldest in the Magistral UEA, all the other
concessions are subject to the same conditions. Further, because the Magistral
concessions, by law, are not required to meet obligations regarding production and
investment, or the payment of penalties in lieu, until 2007, then all of the concessions in the
Magistral UEA should be subject to the same requirements (Rodriguez-Mariategui, 2005).
This interpretation was in dispute at the highest mining administrative level, the Consejo de
Mineria.
Pending the decision of the Consejo de Mineria, Ancash Cobre had made the required
penalty payments for the Magistral 11 to 18, Marita Uno and Marita Dos concessions on an
annual basis since commencing its obligation in 2001.
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In 2006, the Consejo de Mineria ruled in favor of Ancash Cobre, and the company was
reimbursed for the penalty payments made to date (Rodriguez-Mariategui, 2006).
Because the privatized Magistral concessions are already subject to an Annual Retribution
(RA) based on net concentrate sales from the first year of production forward, Ancash Cobre
has received an exemption from the new mining royalties that came into effect during 2004
(pers. comm., Luis Rodriguez-Mariategui, 2005.
Concession fees for mining concessions become due on January 1st of each year, and
must be paid before June 30th of that year. If the titleholder fails to pay the concession fee
for one year, it is permitted to pay it until June of the following year. If the titleholder
accumulates two years without paying the concession fee, the mining concession will lapse
(Rodriguez-Mariategui, 2005). Six-year-old mining concessions are required to pay an
annual fine (Penalidad) of $6.00 per hectare. The payment is due at the end of the first
semester of the seventh year after the mining concession was titled (i.e., June 30th).
Titleholders are not required to pay the fine if they can prove that they have achieved a
minimum production equal to $100 per hectare in the previous calendar year. No allowance
has been made in the project cost estimate for these payments.
The fine can be avoided if the titleholder can prove that a minimum investment of ten times
the applicable fine was made in the mining concession in the previous calendar year.
Samuel Engineering has not completed an independent review of the mineral titles or
agreements to assess the validity of the stated ownership of the mining concessions, and
has relied on the legal opinion of the law firm of Rodriguez-Mariategui & Vidal, Lima, Peru,
as put forth in its documents dated September 2006.
6.3 Surface Rights
The surface overlying the Magistral Project is owned by different peasant communities
(Comunidades Campesinas), mainly by the community of Conchucos. The Conchucos
community held an assembly in which they unanimously approved granting a usufruct, or
permission to use the land, to Minera Ancash Cobre S.A. A legal opinion from the law firm
Hernandes & Cia. of Lima provides greater detail of this usufruct, as well as a translation of
the minutes of the assembly.
The legal opinion states “…any community has the right to decide on its own on how to
administrate and dispose of their community land. The communities may decide what kind
of agreement they shall enter in connection with their own land. Other than the formality of
having the resolution approved in assembly by two thirds of all the members of the
community, there are no other obligations or limitations for selling or granting rights upon
community land to third parties.”
The legal opinion concludes that; the community can sell its property or grant a usufruct to a
third party, provided that it is approved by an assembly resolution by two thirds of its
members. Difference between ownership and usufruct is mainly that the usufruct-holder
cannot dispose or claim the good. The usufruct in favor of a legal entity, as a company, is
possible for a maximum tern of 30 years. Term can be extended upon its expiration.
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Usufruct agreement shall prevail over the non-imperative Civil Code regulations. This allows
the parties to structure the usufruct agreement according to their needs. Usufruct for mining
purposes is admissible, provided special provisions as to the activities to be performed are
detailed in the usufruct agreement. Usufruct can be assigned/transferred and encumbered
by the usufruct-holder, unless otherwise contemplated in the usufruct agreement. Content
of the usufruct agreement shall be drafted in such a way that it shall reduce the risk of
incurring in termination causes.
6.4 Environmental and Permitting
The Environmental and Social Impact Assessment (ESIA) for the Magistral Project forms the
principal input for identifying baseline conditions and evaluating the impact of the project.
Mitigation and closure plans, community relations policies and planning, as well as
socioeconomic analysis have also been implemented in the ESIA to assist in promotion of
the project. The ESIA is the basic document provided to the Ministry of Energy and Mines
(MINEM) for evaluation and permitting.
The ESIA has been designed to satisfy requirements of Peruvian legislation and to comply
with internationally accepted guidelines of social and environmental protection, such as the
Equator Principles, followed by such organizations as the World Bank, International Finance
Corporation.
The ESIA, at the time of writing this report, is in preparation with a scheduled submission
date of March 1, 2008.
6.4.1 Legal Framework
The legal and institutional framework in Peru is represented by a number of authorities that
have the jurisdiction to permit and regulate implementation of mining projects. The following
authorities have such authority and are relevant to the Magistral Project:
• Ministry of Energy and Mines
• Ministry of Agriculture
• Ministry of Transportation and Communication
• Ministry of Health
• Ministry of the Interior
• Ministry of Education
• National Council of Environment
• Regional and local governments
The legal framework applicable to the Magistral Project is outlined by the following laws and
documents of environmental protection:
• General Environmental Law (Law 28611)
• Law of the National System of Environmental Impact Assessment (Law 27446)
• Regulation for the Environmental Protection for Mining and Metallurgic Activities
(Supreme Decree 016-93-EM)
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• Guidelines for ESIA elaboration regarding Port Infrastructure (Directorate Resolution
012-2007-MTC-16)
• Guidelines for ESIA elaboration regarding wharfs, peers, and similar (Directorate
Resolution 0283-96-DCG)
• Environmental Regulations for Electrical Activities ( Supreme Decree 029-94-EM)
• Regulations for Public Consultation and Participation in the ESIA approval process
(Ministry Resolution 596-2002-EM/DM)
• General Law of the National Environmental Management System (Law 28245) and
its correspondent regulation (Supreme Decree 08-2005-PCM)
• National System of Evaluation of Environmental Impacts (Law 27466)
• Regulation of Territorial Zoning and Urban Development (Supreme Decree 027-
2003-VIVIENDA)
• Forestry and Wildlife Law (Law 27308) and its correspondent regulation (Supreme
Decree 014-2001-AG)
• General Law of Campesinas Communities (Law 24656) and its correspondent
regulation (Supreme Decree 008-91-TR)
• General Law of National Cultural Heritage (Law 28296);
• Regulation of Archaeological Assessments (Supreme Resolution 004-2000-ED)
• General Water Law (Law Decree 17752) and its correspondent regulations
• National Ambient Air Quality Standards (Supreme Decree 074-2001-PCM)
• National Ambient Noise Quality Standards (Supreme Decree 085-2003-MTC)
• Maximum Allowed Levels for Liquid Effluents for Mining-Metallurgical (Ministry
Resolution 011-96-EM/VMM)
• Maximum Allowed Levels for Gas Emissions (Ministry Resolution 315- 96-EM/VVM)
• General Health Law (Law 26842)
• Unified and Ordered Text of the General Mining Law (Supreme Decree 014-92-EM)
• Jurisdiction and Opinion of INRENA (Supreme Decree 056-97-PCM, Supreme
Decree 061-97-PCM and Supreme Decree 038-2001-AG)
• General Solid Wastes Law (Law 27314) and its regulations (Supreme Decree 057-
2004-PCM)
• Closure Plan Law (Law 28090) and its correspondent regulation (Supreme Decree
033-2005-EM)
6.4.2 Permitting
The ESIA is submitted to regional and central offices of the MINEM. The central office in
Lima is in charge of conducting the evaluation process. The General Directorate of
Environmental Affairs is responsible for studying the document and coordinating its
conclusions with other cooperating agencies. Depending on the location of the project and
its characteristics, at least three other agencies will be involved in the evaluation of the ESIA
(commonly, these are the Institute of Natural Resources, the National Culture Institute, and
the Department of Agriculture).
The ESIA is publicized by placing an announcement in the leading newspaper of the region.
A copy of the entire document is made available to all affected communities. The executive
summary of the ESIA is made available via Internet on the MINEM website (see
www.minem.gob.pe). Then, after 40 or more working days from the date of official
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presentation of the document to the MINEM, the general public has a 30-day window of
opportunity to communicate concerns, observations, and/or comments to the MINEM in
written form.
The regulatory framework allows 60 days for the ministry to issue its observations or request
additional information, which is then followed by a 30-day period for the company to
respond. Two or more observation cycles are allowed. According to recent experience, the
overall approval cycle lasts for approximately six months.
Once the document is approved, the concession to operate is issued. This step is followed
by a site inspection by the MINEM. When construction is completed, permission to operate
is issued.
6.4.3 ESIA Scope
The ESIA was developed to complete the following tasks:
• Identify environmental and socioeconomic resources that could potentially be
affected by the project;
• Predict positive and negative effects and determine to what degree the negative
effects can be mitigated;
• Quantify and evaluate the significance of the effects wherever possible;
• Outline requirements for monitoring of the resources that could be affected by the
project; and
• Provide a conceptual closure plan for the mine site and associated facilities.
In accordance with Peruvian legal requirements, and in keeping with the best international
practices, the ESIA used the following tools and procedures to analyze and identify potential
impacts:
• Quantitative and qualitative information regarding existing environmental conditions;
• Tools and predictive methods to describe quantity and quality characteristics of
future environmental conditions;
• Quantitative and qualitative evaluation of probability and significance of potential
effects, taking into account the factors of baseline conditions, management
objectives, and the difference in opinions of the project developer and various groups
of stakeholders;
• Evaluation of the influence of proposed design characteristics and management
plans on potential adverse effects; and
• Assessment of potential residual effects and evaluation of their consequences for the
environment.
Environmental and social design of the project was regarded as the key to develop
mitigation strategy. To provide adequate evaluations of potential social and environmental
impacts, the engineering design team worked closely with the environmental team during
the project’s planning and development stages. The mitigation measures were developed in
the beginning of the design process, which helped to maximize their effectiveness.
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The spatial extent of the ESIA was defined by the key geography of the study areas, while
the spatial extent of the effects has been determined by the project definition.
The environmental and social areas were selected for the ESIA in terms of the anticipated
areas of influence. For the majority of the environmental disciplines, the studies were
developed on regional bases (indirect effects) as well as on local bases (direct effects).
6.4.4 Baseline Studies
A detailed description of environmental and social aspects of the project area was
developed; the studies began in 2002 and were completed in 2005. Most of the baseline
studies were developed by local professionals. The studies included:
• Physical Components
○ Air quality
○ Climate
○ Geology, geomorphology, and geotechnical study
○ Soils and land use
○ Hydrology (surface and hydrogeology)
○ Landscape
• Biological Components
○ Flora and terrestrial fauna
○ Aquatic ecology
• Socioeconomic Components
○ Demography
○ Infrastructure analysis
○ Qualification of work force and commercial resources
○ Identification of stakeholders' groups
○ Transport
○ Local and regional development programs
○ Archaeology
○ Paleontology
6.4.5 Identification and Evaluation of Effects and Mitigation Measures
The environmental and socioeconomic impacts were identified by monitoring the area
characteristics and comparing them with anticipated results caused by implementation of the
project. In some cases (particularly in air and water study), models were developed to
evaluate magnitude and extent of potential effects. The main effects and corresponding
mitigation measures have been identified and are provided in Table 6.1.
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Table 6.1
Effects Related to the Project
Component Type Of Effect Impact
Agent Duration Of Effect Mitigation Measures
Mine
Ambient air quality Dust emissions Road transit;
Exposed surfaces;
Mineral grinding; Stockpiling of soils
Throughout construction and operation Irrigation with tankers
Ambient air quality Combustion by-products Vehicle operation;
Operation of machinery
Throughout construction and operation
Continuous maintenance of vehicles and machinery
Physiography Terrain Alteration Land movement and ground level-off for component construction
Permanent Topsoil stockpiling
Soils and ground water quality Accidental spills of hydrocarbons and concentrate tailings Material management practices, particularly hydrocarbons;
Concentrate tailings
Localized contamination Special storage areas for dangerous materials
Surface water quality Alteration of surface water quality;
Surface water consumption.
General operation of the mine Throughout construction and operation Surface water control program
Groundwater quality Potential ARD development
Surface waste rock management facilities Long-term Drainage control and monitoring
Land and resource use Alteration to the landscape
Construction of different mining components Permanent
Topsoil stockpiling
Fauna Migration away from project site Increase in human presence, noise and light, traffic
Transitory Replacement of species upon closure
Flora Removal of vegetation Land movement for components construction. Transitory Rescue and removal of sensitive species
Revegetation upon closure
Transport Additional road traffic Movement of trucks and other vehicles Throughout construction and operation Clear demarcation of road hazards, continue general
upkeep and maintenance
Social and cultural context Immigration General operation of the mine Construction Community relations plan
Social and cultural context
Social effects General operation of the mine Long-term Community relations plan
Worker health Air pollution; Dust; Noise All Throughout construction and operation Regulated use of personal safety equipment and
continued monitoring of work environment
Highway
Ambient air quality Dust emissions Road transit Throughout construction and operation Irrigation with tankers
Ambient air quality Combustion by-products Vehicle operation
Throughout construction and operation Continuous Maintenance of vehicles and machinery
Physiography Terrain alteration Land movement and ground level off for construction
Permanent Topsoil stockpiling
Economy, employment and training Increase in demand and supply of labor General operation of the mine Throughout construction
Public facilities, utilities and services
Development opportunities General operation of the mine Long-term
Transmission Line
Ambient air quality Combustion by-products;
Dust emissions
Vehicle operation;
Operation of machinery;
Irrigation with tankers;
Continuous maintenance of vehicles and machinery

Ambient air quality Generation of electromagnetic field Transmission Line Operation Control Program
Land and resource use Alteration to the landscape Construction of transmission line Permanent
Topsoil stockpiling
Fauna Migration away Increase in human presence, noise and light, traffic Transitory Replacement of species upon closure
Flora Removal of vegetation Land movement for construction
Transitory Rescue and removal of sensitive species
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Revegetation upon closure
Transport Additional road traffic and right of way Movement of trucks and other vehicles Throughout construction and operation Clear demarcation of road hazards, continue general
upkeep and maintenance
Economy, employment and training Increase in demand and supply of labor General operation of the mine Throughout construction
Port
Transport Increase in sea traffic Ship Movement Throughout operation Increase ship traffic control and monitoring
Sea sediment Sediment removal Dredging Throughout construction and operation Water quality monitoring program
Ambient air quality Combustion by-products Vehicle operation
Throughout construction and operation Vehicle maintenance program
Fauna Migration away from project site Increase in human presence, noise and light, traffic Transitory Replacement of species upon closure
Water quality Water quality alteration General operation Throughout construction and operation Water quality monitoring program
Waste generation Tires and other industrial wastes All Throughout construction and operation Waste disposal at authorized places
Economy employment and training Increase in demand and supply of labor General operation of the port Throughout construction and operation
Public facilities, utilities and services
Development opportunities General operation of the port Long-term

6.4.6 Community Relations Plan
In order to optimize relations between the community and the project, an integrated
community relations program has been developed with the following objectives:
• Establishment of ties with community leaders to enhance understanding of social
reality of the neighboring populations, their concerns and hopes for development;
• Disclosure and consultation regarding the technical and economic aspects of the
project;
• Identification and establishment of mechanisms to support local development
processes throughout and after project operations period; and
• Enforcement of the institutions through development of consensual programs based
on mutual respect and transparency.
To achieve these objectives, the following activities have been planned and developed:
• Participation by local inhabitants in environmental studies during elaboration of the
feasibility study;
• Disclosure and consultation, starting from the first community workshop and
continuing throughout the project life; and
• Establishment of a development promotion program.
6.4.7 Public Consultation
Peruvian legislation recommends a minimum of three public consultation meetings during
the elaboration of the ESIA. The initial meeting is designed to introduce the communities to
the ESIA process, help them understand their rights and responsibilities, and to describe the
baseline studies that form a part of the permitting process.
In order to reinforce and extend the dialogue to other affected communities, the same
concepts and processes are described in a series of assemblies and meetings with
authorities and local opinion leaders, municipal councils, and the owners or users of surface
and water resources.
Information about the general characteristics of the project (scale, lifecycle, etc.), the
complexity of the mining activity, and the relations that will be established with the local
community are shared in each of these meetings. The emphasis is to facilitate access to
information about how environmental and social data is gathered. The meetings also give
citizens information about how they may participate, based on existing legislation. The legal
obligations of the mining project’s owners, which were created to promote sustainable
development of the areas affected by their operations, are outlined as well.
The participation of the local population is incorporated in the baseline studies, with
community members participating in the field teams specializing in fauna, flora, water, and
soils.
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These experiences serve to develop better understanding among the communities about
what an environmental impact study involves. Ongoing participation by the communities in
the water quality monitoring program is recommended.
6.4.8 Environmental Management Plan
Inca Pacific Resources has committed to instituting an ISO 14001 certification (or
equivalent) for the environmental management of the project. The implementation process
and certification will begin once the authorities have granted permission to proceed with the
project. This will provide a global mechanism to ensure that appropriate environmental
management is maintained during the life of the mine. In addition to the international
certification process, IPR has also developed an environmental management plan for the
project. This plan comprises a chapter of the ESIA and includes:
• Detailed monitoring program for air, water, soil, biological, and social aspects
• Mitigation plan (key elements summarized above)
• Contingency plans
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7.0 Accessibility, Climate, Local Resources, Infrastructure and
Physiography
7.1 Accessibility
The property can be reached by land from either Trujillo or Chimbote, both of which are
northern Peruvian seaport cities. It takes approximately six hours (approximately 425 km) to
drive from Lima to Chimbote via the Pan-American Highway and an additional two hours
(approximately 125 km) to reach Trujillo from Chimbote. The project will be accessed using
the northern route that starts from Trujillo and passes through the communities of Simbal,
Quiruvilca, Quesquenda, and Alto de Tamboras before finally reaching Magistral. Much of
the route is made up of poor dirt roads that traverse steep mountainsides. Extensive road
improvements and new road construction is planned for the project. The access routes are
shown in Figure 7.1.
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Figure 7.1 Mine Access Routes

7.2 Climate
The Magistral Project is located on the east side of the continental divide of the Peruvian
Andes at an elevation of 3,700 to 4,500 masl. The site climatology is considered high
mountain dry tundra (IGN 1989). The project is strongly affected by a microclimate that
typically produces measurable monthly precipitation thoughout the year. The dry season
(winter) is from May to October, and the wet season (summer) is from November to April. In
dry years, rains may not begin until January.
In November 2004, Magistral installed a meteorological station to determine specific climate
conditions on the project site. It has been collecting hourly measurements of precipitation,
temperature, relative humidity, velocity and wind direction, barometric pressure, solar
radiation, and evaporation. The meteorological data is collected by various sensors that are
transferred to a data logger. A summary of the average monthly meteorological
measurements at site is shown in Table 7.1.
The temporate climate will permit year round mining and processing operation.
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Magistral Property
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Technical Report
Magistral Property
Page 35
Table 7.1
Average Monthly Meteorlogical Measurements
Month
Rainfall
(mm)
Evap.
(mm)
Temp.
( C)
Max Mean Temp.
( C)
Min. Mean
Temp.
( C)
Relat. Humidity (%) Wind Speed
(m/s)
Wind Direction
(deg)
Sun Light
(hr)
Net Rad.
(kW/ml)
Jan 121.2 74.0 6.4 11.0 3.4 73.1 2.7 SW 13:00 3.2
Feb 137.3 68.8 6.6 10.7 3.9 74.8 2.9 SW 12:30 3.1
Mar 252.9 74.3 6.2 10.0 3.8 77.6 2.5 SW 12:00 2.7
Apr 117.0 73.6 6.5 10.6 3.8 72.4 2.9 NNE/SW 11:45 2.8
May 36.2 97.6 6.1 11.1 2.2 61.9 3.2 NE 11:05 2.8
Jun 29.2 81.4 5.8 10.3 2.3 62.9 3.4 NE 11:00 3.3
Jul 8.0 135.3 5.8 10.7 1.8 46.9 4.1 NE 11:15 3.6
Aug 19.0 89.8 5.7 10.5 1.9 58.1 2.8 NE/NNE 11:45 3.0
Sep 46.4 97.2 6.0 11.0 2.3 63.6 3.4 NE 12:00 3.4
Oct 146.5 99.3 5.8 11.0 2.3 68.2 2.7 SW/NE 12:30 3.1
Nov 83.1 97.9 5.8 11.1 2.2 63.9 2.8 SW 12:55 3.3
Dec 182.9 127.4 5.9 10.3 3.0 74.8 2.6 SW 13:15 3.1
Annual 1191.2 1131.2 6.0 11.2 2.2 66.5 3.0 SW/NNE 12:05 3.1
7.3 Local Resources and Infrastructure
The Magistral Project is located in a remote mountain setting with few local resources and presently limited infrastructure. The
closest town is Conchucos, which is a small village of only a few hundred inhabitants. There is limited lodging and some food
services available in Conchucos. The nearest major cities are Chimbote and Trujillo on the Peruvian coast; however, the drive time
to these cities on the very poor roads is extreme. New road construction and old road improvement to facilitate project development
and trucking of concentrates will also enable faster and safer travel between the project and Trujillo. The influence of the project will
also improve road infrastructure in and around Conchucos, which will result in an improved economy and greater resources.

Electrical power is not currently available; however, project plans include construction of
a power line to bring power into the site. Hydrological studies have indicated that
sufficient water exists in the area of the site for all project needs. The local available
workforce is small and oriented to agriculture; however, sufficient manpower should be
available for labor and other low-skill jobs. Personnel for more highly skilled positions
will need to be sourced elsewhere in Peru.
7.4 Physiography
The Magistral Project is located in a deep, U-shaped glacial valley at elevations between
3,900 and 4,700 masl. The mineral deposit, and thus the open-pit mine, is located at the
closed end of the valley. Sufficient area exists below the pit area to construct the
processing plant and ancillary facilities. A tailings dam will be constructed at the open,
downstream end of the valley, and this will impound tails and surface water upstream
toward the plant. Several suitable locations have been identified for proper storage of
mine and other waste rock. See Figure 26.1.
Technical Report
Magistral Property
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8.0 HISTORY
The Pasto Bueno - Conchucos district, of which Magistral is a part, was known early in
the colonial era as a gold-silver producing district. Early records report the production of
22,000 ounces of gold and 44,000 ounces of silver between 1644 and 1647 (Salazar
Suero, 1997). The prominent outcrops of copper oxides at Magistral were probably
known at this time, but the first modern records of exploitation date to 1915 when the
Garagorri Mining Company built a small smelting furnace to exploit high-grade surface
ores from shallow workings in the Arizona and El Indio outcrops. This operation
continued until 1919.
In 1920, engineer D.H. McLaughlin of Cerro de Pasco Corporation conducted a thorough
study of the deposit area, which included topographic and geologic mapping. A total of
854 meters of underground workings were accessible in 1920. The property was
examined and explored intermittently between 1924 and 1953, mainly by representatives
of Cerro de Pasco Corporation, but no records of large-scale exploration programs exist
for this period. Cerro de Pasco purchased the Magistral concessions in 1950, but no
significant work was done until 1969. From 1969 to 1973, Minera Magistral conducted a
surface and underground exploration program that focused on copper-bearing skarn
mineralization on the south side of Magistral valley, at and above the valley floor level.
Buenaventura Ingenieros S.A. conducted a thorough evaluation of the Magistral deposit
in 1980-1981.
In 1997, Minero Peru began the process to privatize Magistral by inviting open bidding.
An option to purchase the titles to the five Magistral mining concessions was awarded to
Inca Pacific on February 18, 1999. Inca Pacific agreed to a three-year, option-to-purchase
agreement contract with Minero Peru S.A. In November 2000, Inca Pacific
S.A. and Minera Anaconda Peru S.A. formed Ancash Cobre, as a holding company to
carry out exploration and development at Magistral.
Anaconda completed 2,491.5 meters of diamond drilling in eight holes in 1999 and
6,167.7 meters in 19 holes in 2000. A further 15,980.38 meters in 49 holes were
completed in 2001. In March 2004, Inca Pacific Resources Inc. acquired Anaconda
Peru’s 51-percent interest in Ancash Cobre for $2.1 million, thus restoring its 100-
percent interest in Magistral.
In 2004, Ancash Cobre completed a 7,984.85-meter, 34-hole, diamond drill hole
program, a geotechnical review, and initiated environmental baseline studies. In 2005,
IPR entered into a joint venture with Quadra Mining.
In 2005 Ancash Cobre (funded by Quadra) drilled 14,349.35 meters in 60 holes. In
October 2005, Quadra withdrew from the joint venture and retained no interest.
In 2006 Ancash Cobre completed a 7,073.5-meter, 49-hole, diamond drilling program,
and a positive preliminary feasibility study was issued by SRK in October 2006. In 2007,
Ancash Cobre drilled 18,222.35 meters in 116 drill holes, prepared a new mineral
resource estimate, and completed this final feasibility study.
Technical Report
Magistral Property
Page 35

9.0 GEOLOGICAL SETTING
This section of the report was taken from Sivertz, et. al. (2005).
The description of the regional geological setting in this report is compiled from
descriptions by Glover (2000), Noblet (2000), Ramos (2005), Wilson, et. al. (1995) and
Ancash Cobre geologists. Descriptions of the Magistral property geology, stratigraphy,
structure, alteration, and mineralization by Allen (2000, 2001), Dick (2004), Glover
(2000), Meinert (1999), Perello, et. al. (2000), and Ramos (2005) were incorporated into
this report. David Kerr, at the request of AMEC, compiled a report on the deposit
geology and prepared a proposal for the 2004 drilling program in collaboration with
Pedro Ramos, Chief Geologist for Minera Ancash Cobre (Kerr, 2004).
9.1 Regional Geology
The Magistral property is near the northeastern end of the Cordillera Blanca, a region
that is underlain predominantly by Cretaceous carbonate and clastic sequences. These
units strike north to northwest and are folded into a series of anticlines and synclines
with northwest-trending axes.
The Cretaceous sedimentary rocks are bounded to the east by an early Paleozoic
metamorphic terrane composed mainly of micaceous schist, gneissic granitoid, and
slate. The Cretaceous sedimentary sequence unconformably overlies these
metamorphic rocks. The Cretaceous rocks are structurally overlain by black shale and
sandstone of the upper Jurassic Chicama formation that were thrust eastward along a
prominent regional structure. The Chicama formation was intruded by granodiorite and
quartz diorite related to the extensive Cordillera Blanca batholith, which has been dated
at 8.2 +/- 0.2 Ma (Dick, 2004).
The Cretaceous sedimentary sequence is divided into a lower member dominated by
clastic sedimentary rocks (sandstone, quartzite, shale, and minor carbonate) and an
upper, dominantly calcareous, member (limestone, marlstone, sandstone, and
calcareous shale).
The clastic sedimentary rocks of the lower member include the Chimu, Santa, Carhuaz,
and Farrat formations, which make up the Goyllarisquizga group. The upper calcareous
units include the Pariahuanca, Chulec, Pariatambo, Jumasha, and Celendin formations.
Several major structural features are evident in the Cretaceous sedimentary rocks in the
Magistral region, including anticlines, synclines, and thrust faults. The trend of the fold
axes and the strike of the faults swing from northwest to north near Magistral (Dick,
2004; Figure 9.1).
The following structural description is taken from Dick (2004): “Regional-scale faults and
folds constitute part of the imbricated tectonic unit of Wilson and Reyes (1967).
Technical Report
Magistral Property
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The leading edge of this unit is the Conchucos fault, and because the imbricate tectonics
of the belt do not seem to have affected the basement, the structural setting of the
region is considered to be thin-skinned, consisting of low-angle thrust faults and
horizontal shortening in the order of 10 km east-west.
Numerous northeast-trending lineaments cut the low-angle features, resulting in
disruption to fold axes, termination of folds, the alignment of intrusive bodies along them,
and appear to have had an affect on the position of Quaternary-age glacial valleys.
Technical Report
Magistral Property
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Figure 9.1 Regional Geology and Structures
Technical Report
Magistral Property
Page 38

9.2 Local Geology
On the district scale, the structural setting is complex, characterized by low-angle
inverse faults and upright to overturned north-striking folds. The Huacchara fault forms a
major break in the stratigraphy to the east and west and is the predominant structural
feature in the area of the property, with a vertical displacement estimated to be at least
1,000 meters. This fault strikes north and dips about 60º to the west, juxtaposing
quartzites of the Chimu formation against the carbonate-dominant Jumasha formation.
The Huacchara fault is one of the most important structures in the district, and can be
traced for over 25 km from Magistral toward the north.
East of the Huacchara fault, the stratigraphy is predominantly in a series of tight, thrust-folded
anticlines and synclines with axes striking and dipping to the northwest and limbs
dipping between 10 and 50º. Between Laguna Pelagatos and Magistral, a large
overturned fold, which is related to the Huacchara fault, is cored by the Pariahuanca,
Chulec, and Pariatambo formations, suggesting that the stratigraphy at Magistral, and in
particular the skarn-hosting Jumasha formation, may be overturned as well.
The reverse faults in the area of Magistral vary between high-angle and low-angle, the
latter constituting bedding plane thrusts striking northwest and affecting primarily the
Jumasha and Celendin formations.
West of the Huacchara fault, the structural setting is similar, consisting of a large
synclinal fold with an arcuate axis, striking approximately northeast.
Geological work in the area (Wilson and Reyes, 1967; Noble et. al., 1990; Wilson et. al.,
1995; and Benavides-Caceres, 1999) documents several stages of deformation, ranging
in age from upper Cretaceous to Miocene. Red beds of the Chota formation situated
south of Magistral have been dated at 50-44 Ma (Noble et. al., 1990) and discordantly
overlie Cretaceous calcareous rocks, evidence of a pre-Eocene event. Since the red
beds are folded and included in thrust faulting, a younger tectonic event is also
indicated. The roughly east-west trending alignment of intrusive stocks in the region of
Magistral indicates that preintrusive structures had an affect on the location of
intrusions.”
9.3 Property Geology
Glover (2000c), Noblet (2000), Dick (2004), and Ramos (2005) provided overviews of
the property geology, and these form the basis for the following section. Figure 9.2
presents a stratigraphic column for the Magistral property and Figure 9.3 illustrates the
geology of the Magistral property.
Technical Report
Magistral Property
Page 39

Figure 9.2 Stratigraphic Column of the Magistral Property
Technical Report
Magistral Property
Page 40

Figure 9.3 Geology of the Magistral Property
Technical Report
Magistral Property
Page 41

The main lithologies can be separated into two principal domains divided by a regional
north-south striking thrust fault, named the Huacchara fault. The stratigraphy on the
east side of the fault is dominated by the Jumasha formation, but contains some units of
the Celendin formation. The easternmost part of the property is underlain by strata of
the Pariahuanca, Chulec, and Pariatambo formations, comprised of sandstones, marls,
and black shales of Cretaceous age.
The Jumasha and Celendin formations are Cretaceous in age. The Jumasha is
composed mainly of medium-to thick-bedded limestone (Noblet, 2000). It includes four
principal stratigraphic members with a total measured thickness of approximately 900
meters and is the principal host to skarn mineralization at Magistral. The Celendin
formation outcrops mainly in the walls of the hanging valleys to the northeast of the
Magistral deposit. It comprises units of gray marlstone, calcareous shale and thinly
bedded limestone, and has a stratigraphic thickness of at least 300 meters (Noblet,
2000).
A complete section of the regional stratigraphy is exposed on the west side of the
Huacchara fault (Section A-B on Figure 9.4). The lowermost unit is a quartzite member
of the Chimu formation, overlain by the Cretaceous (Aptian) clastic sequences of the
Santa, Carhuaz and Farrat formations (Dick, 2004 after Noblet, 2000). These units are
overlain by the Pariahuanca, Chulec and Pariatambo formations, which are, in turn,
overlain by the Jumasha and Celendin formations.
Technical Report
Magistral Property
Page 42

Figure 9.4 Geologic Section Through the Magistral Property
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Magistral Property
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Intrusive rocks are represented by small stocks and dikes of Miocene diorite to quartz
monzonite composition. The intrusions, including the Magistral stock, were emplaced
along a northeast-trending zone extending along the Magistral valley. (Dick, 2004).
Thick accumulations of unconsolidated gravel, lacustrine deposits, and talus are found at
lower elevations, and are related to fluvioglacial and lacustrine environments associated
with alpine glaciation and earthquake activity.
The massive blocky talus on the southeast side of the Magistral valley (Arizona and El
Indio areas) is the result of landslides caused by the 1946 earthquake (Sassarini, 1973).
9.4 Deposit Geography
The stratigraphy is dominated by the Jumasha formation limestone, which generally
strikes north and dips west. The limestone was intruded by the Magistral stock (Figure
9.5 and Figure 9.6), a diorite to quartz monzonite intrusion with dimensions of about 600
meters east-west by 400 meters north-south at the 3,950-meter level. The upper
surface or hanging wall of the stock plunges westerly at about -45º to -60º. During the
emplacement of the Magistral stock, zones of metasomatic alteration, or skarn, were
formed around its borders. Jumasha limestone, skarn, and intrusive rocks have been
affected by normal and reverse faulting that caused displacements of 5 to 60 meters in
all units.
Technical Report
Magistral Property
Page 44

Figure 9.5 Geology and Drill Hole Locations (pre-2005 drilling)
Technical Report
Magistral Property
Page 45

Figure 9.6 Locations and Ages of Intrusive Stocks in the Magistral Area
To support the descriptions of deposit geology, this report includes cross sections from
the same northeast lines used in previous technical reports by AMEC (2004) and Dick
(2004). This allows direct comparisons between the 2005 drilling and earlier work.
Figure 9.7 presents sectional illustrations.
Technical Report
Magistral Property
Page 46

Technical Report
Magistral Property
Page 46
Figure 9.7 Section 1450NE Geology

9.4.1 Lithology
Stratigraphy
Well-bedded, dark-gray recrystallized micrite limestone of the Jumasha formation is the
principal sedimentary rock, but the limestone sequence also contains thin beds of
calcareous shale, siliceous carbonate sediment, and recrystallized sandstone. The
sedimentary rocks dip to the west at approximately 45º.
The limestone becomes progressively more bleached of its carbon content as the
Magistral deposit alteration zone is approached. Toward the intrusive, a sharp contact
generally separates unaltered limestone from metasomatically altered rock or skarn.
Distal bodies of skarn can occur in limestone up to 150 meters outboard of the main
skarn contact. Remnants of limestone or marble within the alteration aureole of the
Magistral deposit are usually bleached white, and are generally coarser grained than
those outside the aureole.
Intrusive Rocks
The Magistral intrusive stock has an irregular elliptical shape in plan view, and measures
approximately 600 meters east-west by 400 meters wide at the 3,950-meter elevation.
At this level, the intrusion occupies approximately 0.24 km2 of area.
As shown on the northeast sections, the body appears to plunge toward the west at
approximately -45º to -60º and is up to 350 meters wide orthogonal to the plunge axis.
Drilling has fairly well bracketed the areal extent of the intrusive body near the present
surface, although its shape and attitude below the 3,900-meter level are less well
understood.
It should be noted that the evidence for a westerly plunge is provided mainly by the
attitude of the hanging-wall contact, as drilled above the 3,900-meter level. Deeper
drilling, cutting completely through the deposit, will be needed to confirm this orientation.
Based on postalteration textures and compositions, the degree of alteration, the density
of veins, and the tenor of copper and molybdenum mineralization, three different facies
of intrusive rocks have been mapped. These different rock types are often readily
identifiable in hand specimen, but the distinguishing characteristics are secondary.
Primary intrusive textures and compositional criteria do not serve to distinguish each
facies because equigranular to porphyritic textures and diorite to quartz monzonite
compositions are characteristic of the entire Magistral stock (Allen, 2001). The three
facies distinguished in the field are named San Ernesto, Sara, and H. The H facies was
named for its weakly mineralized nature.
The present writers and others consider the stock to represent one intrusive body, and
the apparent textural and compositional differences among the intrusive facies mapped
by Ancash Cobre field workers actually reflect variable intensities of hydrothermal
alteration, veining, and sulfide mineralization (Glover, 2000; Dick, 2004), or possibly the
effects of magmatic differentiation (proposed by Allen, 2001).
Technical Report
Magistral Property
Page 47

Based on the available field and petrographic evidence, the San Ernesto, Sara, and H
intrusive facies are considered to be distinctive alteration facies and not separate
primary phases of the Magistral intrusion, an interpretation that would not change the
current resource estimate. More petrographic studies and field alteration mapping are
required to resolve this question.
In this report, the field terms San Ernesto porphyry, Sara porphyry, H porphyry (or
porphyry H), and Magistral porphyry, which are embedded in the Magistral literature, are
used interchangeably with their equivalents San Ernesto facies, Sara facies, H facies,
and Magistral intrusion. Both sets of terms serve in a general sense to distinguish the
three main alteration/mineralization facies and to refer to the Magistral intrusion. In strict
scientific usage, the general term “porphyry” is avoided in the contexts above because of
its genetic and textural connotations.
The San Ernesto facies has the best-developed porphyry-style alteration and
mineralization and is characterized by moderate to locally strong potassic and sericite-quartz
alteration. Copper and molybdenum grades are higher than in the Sara and H
facies, due to the greater incidence of quartz-sulfide veinlets associated with the sericite-quartz
alteration. The Sara facies has weak potassic and phyllic alteration, and much
weaker copper and molybdenum mineralization. The H facies has highly variable
sericite-pyrite alteration.
One of the definitive characteristics of the H facies, allowing easy recognition in drill
core, is the presence of dense stockwork and sheeted zones of late-stage, barren quartz
veins. These veins are so closely spaced in some areas that they almost completely
replace the original intrusive rock and earlier mineralized veins. These late-vein swarms
also cut skarn, leaving a texture of angular silicified fragments and relict segments of
skarn in a dense stockwork of translucent to white quartz veins.
A complex of porphyritic dykes and/or sills was emplaced into the Jumasha sediments,
forming an intrusive-and-skarn zone (the mixed zone) primarily on the western, or
hanging-wall side of the intrusive stock.
The mixed zone intrusions were emplaced prior to mineralization, and were likely
coincident with the emplacement of the stock. However, intermineral dikes cutting the
San Ernesto intrusion appear similar in texture and composition to the dikes or sills in
the hanging wall of the stock, suggesting that later intrusive pulses continued after the
main intrusive event. Low-angle, roughly bedding-parallel fault zones may have acted
as zones of weakness along which the sills in the mixed zone were injected. Since the
intrusive stock dips steeply to the west, subparallel to the dip of the Jumasha sediments,
the emplacement of the entire intrusive body may have been guided by bedding plane
faults (Dick, 2004).
Technical Report
Magistral Property
Page 48

San Ernesto Facies
The San Ernesto facies is the most important alteration facies in the Magistral stock. It
hosts the greater part of the copper and molybdenum mineralization in the deposit,
mainly in stockwork and sheeted zones of quartz-sulfide veins. Disseminated copper
and molybdenum mineralization also occurs in the wall rock.
The dominant composition of the San Ernesto facies is quartz monzonite, but its quartz
content and the ratio of orthoclase to total feldspar vary, so compositions range from
diorite to quartz monzonite as orthoclase and quartz contents increase.
Some minor porphyritic phases, interpreted to have intruded the main porphyry, have
quartz phenocrysts and a distinctly different porphyritic texture.
Textures range from medium-grained equigranular to porphyritic, with grains (in
equigranular rocks) and phenocrysts ranging from 0.5 to five millimeters. Porphyritic
varieties have a microcrystalline to granular groundmass of fine aggregates of quartz,
potassium feldspar, and minor ferromagnesian minerals. The rock typically contains
between 25 and 35 percent plagioclase grains or phenocrysts and up to 10 percent
amphibole and biotite. Plagioclase and hornblende phenocrysts are subhedral to
euhedral; biotite is anhedral.
The San Ernesto facies is characterized by moderate to locally strong hydrothermal
alteration. The earliest alteration is calcium-silicate (clinopyroxene, tremolite/actinolite).
This was followed by potassic (secondary biotite-orthoclase-quartz) and late,
overprinting phyllic (sericite-pyrite) phases.
The San Ernesto facies locally contains well-developed systems of multidirectional
quartz-sulfide veinlets. In drill core, veinlet densities can reach 30 to 40 per meter. In
the Sara facies, the veins are similar but are much less frequent.
Sara Facies
The Sara facies is weakly altered and occupies the eastern part of the Magistral deposit
where it is in contact with skarn in the Asturias, La Gringa, and El Indio areas. Like the
San Ernesto, the composition ranges from diorite to quartz monzonite. Alteration in the
Sara is weak to moderate potassic, with secondary biotite replacing amplibole and
primary biotite. Zones of endoskarn are present near the contacts with exoskarn. The
Sara facies is interpreted to be the core of the Magistral intrusion.
The central zone of the Sara facies has a coarse-grained equigranular texture, but
border phases near skarn contacts are sometimes porphyritic. Phenocrysts comprise
plagioclase (40 percent), hornblende (eight to 10 percent) and biotite (six to eight
percent) in an interstitial matrix (or groundmass, in porphyritic phases) of plagioclase,
potassium feldspar, quartz, amphibole, and biotite.
Technical Report
Magistral Property
Page 49

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