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Diablillos

Diablillos is a 7,919 ha property located in the Argentine Puna region, which is the southern extension of the Altiplano of southern Peru, Bolivia, and northern Chile. It is a high plateau, separating the Cordillera Oriental to the east from the Andean Cordillera (Cordillera Occidental) to the west. Other major deposits in this region include Taca Taca, Escondida, and Pirquitas.

There are currently seven known mineralized zones on the Diablillos property, with the Oculto zone being the most important and the best explored. Oculto is a high-sulphidation epithermal silver-gold deposit derived from remnant hot springs activity following Tertiary-age local magmatic and volcanic activity with strong supergene overprinting.

Ownership 100% AbraPlata
Remaining payments to SSR of US$5M due in 2023 and US$7M due in 2025
Geology High-sulphidation epithermal silver-gold deposit
Location Salta Province, Argentina
Approx. 160 km southwest of city of Salta, along border between Provinces of Salta and Catamarca
Elevation Between 4,100 to 4,650 MASL
Nearby Projects in Salta Lindero (Fortuna Silver)
Taca Taca (First Quantum)
Rio Grande (Aldebaran)
El Quevar (Golden Minerals)
Drilling to Date Approx. 90,000m with expenditures of +US$35 million
Stage PEA completed in 2018.
After-tax IRR of 30.2% and NPV 7.5% of US$212M (at $20/oz Ag and $1,300/oz Au)
Category Deposit Tonnage
(000t)
Ag
(g/t)
Au
(g/t)
Contained Ag
(000 oz)
Contained Au
(000 oz)
Indicated Oculto 26,850 93.0 0.85 80,300 732
  Fantasma 200 98.3 - 650 -
Total 27,100 93.1 0.84 80,940 732
Inferred Oculto 1,000 46.8 0.89 1,510 29
Fantasma 80 75.3 - 190 -
Total 1,100 48.8 0.83 1,690 29
Notes:
  1. CIM (2014) definitions were followed for Mineral Resources.
  2. Mineral Resources are estimated at a cut-off grade of 40 g/t AgEq for Oculto and 40 g/t Ag for Fantasma.
  3. Mineral Resources are estimated using long-term metal prices of US$1,500/oz Au and US$23/oz Ag.
  4. Average bulk density is 2.22 t/m3 for the Indicated category and 2.29 t/m3 for Inferred for Oculto and 2.00 t/ m3 for both Indicated and Inferred categories for Fantasma.
  5. The estimate is constrained by a pit shell for both Oculto and Fantasma.
  6. Numbers may not add due to rounding.

Qualified Person

Mineral Resources: The Mineral Resources disclosed have been estimated by Mr. David Rennie, P. Eng., an employee of RPA and independent of AbraPlata. By virtue of his education and relevant experience, Mr. Rennie is a "Qualified Persons" for the purpose of National Instrument 43-101. The Mineral Resources have been classified in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves.

Abraplata is currently conducting a diamond drill program of up to 3,000 metres (approximately 7 or 8 holes) on the Oculto deposit. Drilling is designed to evaluate the potential for additional high grade gold mineralization beneath the current mineral resource and into the basement rocks.

On January 27, 2020, the Company announced assay results from the first two diamond drill holes which included multiple high-grade intercepts including:

  • 17.5m at 604 g/t Ag
  • 15.0m at 10.4 g/t Au and 285.7 g/t Ag
    • including: 7.0m at 20.6 g/t Au and 202.1 g/t Ag

On February 19, 2020, the Company announced assay results from the third diamond drill hole which included multiple high-grade intercepts including:

  • 14m at 6.40 g/t Au and 197 g/t Ag
  • 15.0m at 5.1% Cu, 2.35 g/t Au and 658g/t Ag

Drill Results Highlights -

Drill Hole   From
(m)
To
(m)
Type Interval
(m)
True
Width
(m)
Au
g/t
Ag
g/t
AgEq1
g/t
DDH-19-001   166 231 Oxides 65.0 54 0.2 104.9 102
DDH-19-001 incl. 201 204 Oxides 3.0 2 0.3 345.5 307
DDH-19-002   56 78 Oxides 22.0 18 2.7 16.8 220
DDH-19-002   137.5 155 Oxides 17.5 14.6 0.1 603.9 504
DDH-19-002   242 257 Oxides 15.0 12.5 10.4 285.7 1,017
DDH-19-002 incl. 250 257 Oxides 7.0 5.8 20.6 202.1 1,715
DDH-19-002   367 376 Sulphides 9.0 4.5 7.3 48.9 589

Qualified Persons

David O’Connor P.Geo., Chief Geologist for AbraPlata, is the qualified person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects, has reviewed and approved the scientific and technical information contained on the site.

  From (m) To (m) Type Interval (m) Silver g/t Gold g/t AgEq1 g/t Copper %
  146 160 Oxides 14 133 0.10 117 -
  165 191 Oxides 26 264 0.03 220 -
  260 290 Mixed 29 430 4.30 630 2.77
Including 261 275 Transition 14 197 6.40 574 2.53
and 275 290 Sulphides 15 658 2.35 691 5.10

Qualified Persons

David O’Connor P.Geo., Chief Geologist for AbraPlata, is the qualified person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects, has reviewed and approved the scientific and technical information contained on the site.

All dollar amounts refer to US dollars.

Pre-Tax Net Present Value ("NPV")7.5% US$368 Million
Pre-Tax Internal Rate of Return ("IRR") and Payback 40.7% and 2.9 years
After-Tax NPV7.5% US$212 Million
After-Tax IRR and Payback 30.2% and 3.1 years
Average Head Grade 125.1 g/t Ag and 0.72 g/t Au
Average Annual Production 9.8 Moz AgEq or 136,000 oz AuEq
Mine Life 8 years
Average All-in Sustaining Cost per Ounce Produced $7.52/AgEq oz or $542/AuEq oz
Initial Capital $293 Million
Metal Price Assumptions Ag: $20.00/oz and Au: $1,300/oz
Calculated Metal Net Smelter Return ("NSR") Values Ag: $15.20/oz and Au: $1,097/oz

The PEA is preliminary in nature and includes inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that PEA results will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Technical Report on the Diablillos Project, Salta Province, Argentina, dated April 16, 2018, was prepared by RPA Inc., and is available on www.SEDAR.com. The scientific and technical information with respect to the PEA has been reviewed and approved by Scott Ladd, P.Eng. and David Rennie, P.Eng. of RPA, and Gerry Neeling, FAusIMM of GRES, each of whom is an independent "qualified person" under National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI-43-101").

View NI 43-101 Technical Report

PEA Sensitivity to Silver Price

Silver Price (US$/oz Ag) After-Tax NPV7.5% (US$) After-Tax IRR After-Tax Pay Back
$16/oz Ag $108 Million 20.3% 3.7 Years
$18/oz Ag $153 Million 25.3% 3.4 Years
$20/oz Ag $197 Million 30.2% 3.1 Years
$22/oz Ag $241 Million 34.9% 3.0 Years
$24/oz Ag $285 Million 39.5% 2.8 Years

Over US$35 million has been spent on exploration at Diablillos totalling approximately 90,000 meters of drilling in over 400 holes.

Year Operator Description
1983 Secretaría de Minería de la Nación 1,409 rock chip samples (includes 190 outcrop and 271 slope debris samples from Diablillos Sur)
1984 - 1987 Shell C.A.R.S A Rock geochemical survey; three Winkie drill holes
1987 Ophir Partnership 37 rotary drill holes (approximately 30 m deep) in the Corderos, Pedernales, Laderas, and Jasperoide areas
1989 - 1991 BHP Geological mapping (1:1,000 to 1:7,500 scale); 380 rock chip samples; 1,200 m of bulldozer trenches; 55 air RC holes (6,833 m)
1993 Pacific Rim Mining Corporation Five diamond drill holes (1,001.8 m) in the Oculto Zone
1994 Pacific Rim Mining Corporation 148 km of chain and compass grid; geological mapping; 122 line-km of ground magnetic survey; 34 line-km of induced polarization (IP) survey; 213 hand auger samples; 2.5 km of trenching; 250+ rock chip samples; 12 diamond drill holes (2,013.9 m)
1996 - 1997 Barrick Gold Corp Geological mapping; surface sampling; RC drilling; CSAMT survey; mag survey; environmental impact study; metallurgical test work
2003 Pacific Rim Mining Corporation
(for Silver Standard)
20 diamond drill holes (3,046 m)
2005 Pacific Rim Mining Corporation
(for Silver Standard)
Five diamond drill holes each at Renacuajo and Alpaca
2007 Pacific Rim Mining Corporation
(for Silver Standard)
45 diamond drill holes (9,600 m) on Oculto; one hole (203 m) at Laderos; three holes (unknown length) at Pedernales; five holes (unknown length) at Los Corderos; four HQ-size diamond drill holes sampled for metallurgical tests
2008 Pacific Rim Mining Corporation
(for Silver Standard)
52 diamond drill holes (7,910 m), three of these for geotechnical studies; additional metallurgical studies
2011 - 2012 Silver Standard Resources Inc. Internal Preliminary Economic Assessment, rock chip sampling, 1,684 m diamond drilling
2016 - Present AbraPlata acquired property from Silver Standard Resources PEA on open pit scenario completed in 2018.

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