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A NEW COPPER PRODUCER IN CHILE

Nora & Berta

Operating Nora SWEW Plant and Development of the Berta Copper Deposit
Location:
Chañaral Province, III Region, Northern Chile

Background
SCM Berta S.A. ("SCMB") completed the purchase of the existing Nora Plant in August 2015 which is located 5km north of the town of Diego de Almagro, to process Pregnant Leach Solution (PLS) from its Berta deposit located approximately 20km west of the village of Inca de Oro.

In February 2016, the Company announced the newly refurbished Nora SXEW plant had completed commissioning and that it intends to commence production through the processing of further dump material and of higher grade material trucked from the Berta deposit. SCMB is in the process of expanding the capacity of the Nora plant from 3 to 5ktpy of cathode copper

Nora Plant
The Nora plant was built in 2009 and comprises a 750ktpy crushing circuit and a 3ktpy SXEW plant with associated heap leach pads, spent ore stockpiles, piping, PLS ponds etc., together with certain mining properties and surface rights.

Existing Dumps
SCMB has identified dumps within trucking distance of Nora that will comprise the initial feed. These dumps will be processed first and were not included in the PEA for Berta as no NI43-101 resources have been estimated for them. It is currently anticipated that the Company will be able to fill the plant with these dumps and some of the existing ripios from Nora for the first several months of operation.

Berta Deposit
SCMB completed an Updated Preliminary Economic Assessment in June 2015 and will initially truck high grade material from Berta to Nora for the first 11 months of operation. Concurrently, the Nora plant capacity will be expanded from 3ktpy to 5ktpy copper cathode and a crushing circuit, agglomerator and leach pads installed at Berta with transport of PLS, water and raffinate between Berta and Nora via a pipeline.

Admended & Updated Preliminary Economic Assessment ("PEA")
The conclusions from the Updated PEA were announced on June 16, 2015, and an Admended & Updated NI 43-101 Compliant Technical Report was filed on Oct 8, 2015. The conclusions were:
  • In pit Measured and Indicated Resources of 17.6mt at 0.37%CuT at a cutoff grade of 0.1%CuT
    • Measured Resources 14.1mt at 0.38% CuT
    • Indicated Resources 3.5mt at 0.29% Cut
  • Open Pit Mine Plan
    • High grade trucking material 0.4mt @ 0.83%CuT for 2.7kt copper cathode production
    • Heap leach material 6.8mt @ 0.56%CuT for 29.5kt copper cathode production
    • Dump leach material 5.9mt @ 0.20%CuT for 5.3kt copper cathode production
    • Total copper production of 37.8kt of copper cathode production
    • Waste of 5.3mt
    • Life of mine strip ratio of 0.4:1
    • Mine Life of 8 years
  • Reprocessing of Nora spent ore stockpiles for anticipated production of ~30 tpm of copper cathode for ~12 months
  • Base Case copper price of $2.80/lb
  • Average life of mine cash operating costs of $1.59/lb Cu
  • Phase 1 capital costs of $7.2m, Phase 2 capital costs of $12.6m with total LOM capital costs of $23.0m (including closure costs and sustaining Capital)
  • Base Case pre-tax NPV (8%) of $46.4m with an IRR of 83%.
  • Base Case after tax NPV (8%) of $35.2m with an IRR of 75%.
  • Sensitivity to copper price;
Cu Price $2.60/lb $2.80/lb $3.00/lb
NPV ($ millions) Pre tax After tax Pre tax After tax Pre tax After tax
5% 42.3 32.3 55.2 41.8 68.1 52.1
8% 35.1 26.8 46.4 35.2 57.7 44.3
10% 31.1 23.7 41.5 31.5 51.8 39.9
IRR 62% 56% 83% 75% 106% 98%

Disclosure & Risks
In mid-2014, SCMB was presented with the opportunity of acquiring the existing Nora SXEW plant, which would give SCMB the ability to achieve production earlier than otherwise possible, and with a significantly reduced execution risk and cost, by not having to build a standalone SXEW Plant at Berta. The purchase of the Nora Plant and the ability to process material from Berta is dependent upon financing. The Company has now closed all the tranches of the ~$9.0 million Greenstone Financing.

SCMB has elected to develop the project in two phases; Phase 1 involves the acquisition and remediation of the Nora SXEW plant and the trucking of high grade ("HG") material from the Berta Sur deposit for 11 months. Phase 2 involves the installation of the Berta crusher, pads and site facilities; the expansion of the Nora plant to 5ktpy of cathode; and the installation of PLS and water pipelines between Nora and Berta.

The Financing will provide $7.15 million for the Phase 1 capital expenditures requirements at Berta. An additional capital requirement of $12.6 million will be required for the development of Phase 2 at Berta. Using a base case of $2.80/lb copper, it is estimated that Berta will generate approximately $5.9 million in cash flow before and during the Phase 2 development which would be available to fund the Phase 2 capital requirements. SCMB has had advanced discussions with vendors and construction companies and has identified approximately $8.0 million in vendor and construction finance that may be available for Phase 2. SCMB will look to finalize these arrangements or seek alternative financing arrangements for Phase 2 upon completion of the Phase 1 financing.

More detailed engineering studies have not been completed and so the normal progression from PEA to Preliminary Feasibility Study to Feasibility Study has not been followed in respect of making a production decision. Therefore, investors are cautioned that no mineral reserves have been declared and the level of confidence in the resources, metallurgy, engineering and cost estimation is not at a level normally associated with a project reaching a production decision. This may result in the production rates, copper recoveries and operating costs stated in this PEA not being realized.

Geoinvestment's assessments in the PEA are preliminary in nature, mineral resources are not mineral reserves and do not have demonstrated economic viability, and there is no assurance the preliminary assessments will be realized. The outcome of this PEA may be materially affected by the closing of the financing, copper pricing, environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that enable them to be categorized as mineral reserves.

Permitting
The Berta deposit and the Nora plant are both fully permitted. Prior to acquisition the Nora plant was subject to a stop work order issued by the Chilean Mining Authority; SCMB has been notified that all of the requirements needed to lift the suspension order on its Nora SXEW plant have been met and that the formal documentation confirming this is expected shortly.

Berta Deposit
The Berta Deposit is a near surface, copper oxide deposit, with mineralization, as defined by drilling, mapping and geochemistry, occurring in three principal areas; Berta Sur, Berta Central and Berta Norte. It is associated with sub-vertical, elongate, porphyry intrusive bodies and related hydrothermal and intrusive breccias, emplaced into a tonalite stock. Oxidation extends from surface to depths of 50m to 100m. Berta Sur comprises a single, coherent body of mineralization that has not been previously mined, while Berta Central comprises several smaller breccia bodies, located immediately north of Berta Sur, which were the focus for previous small scale artisanal copper oxide production. A resource estimate has been completed for Berta Sur and Central. Berta Norte comprises several, discreet, NW oriented zones of mineralization, largely gravel-covered, and potential for additional copper oxide resources is present elsewhere on the property and in the surrounding district.

Ownership
SCMB is owned 65% by Coro and 35% by ProPipe S.A.. ProPipe is a supplier of consultancy, engineering and project management services to the mining process, infrastructure and environment markets. They provide conceptual and basic design, feasibilities studies, and detailed engineering for mining companies in Chile.

Update
SCMB continues to actively seek to acquire additional resources (including dump material) in the Berta/Nora project area in order to facilitate the extension and/or further expansion of the operation.

The Company recently optioned the Salvadora Copper Project located 30km NW of the Nora Plant and leased the Veronica property located 26km West of the Nora Plant - Salvadora and Veronica News Release.


Figure 1: 2016 Copper Cathode Production from Nora

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Figure 2: 2016 EW Plant Prior to Expansion

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Figure 3: 2016 Leach Pads at Nora
 

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Figure 4: Tertiary Crusher at Nora
 

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Figure 5: 2016 New Mobile Crusher at Nora

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Figure 6: Dozer working at Nora

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Figure 7: 2016 View of Nora Plant

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Figure 8: Berta Location and Other Porphyry Copper Operators

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Figure 9: Area of Berta Sur and Berta Central Oxide Resource

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Figure 10: Grade Distribution at 1710m Elevation

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Figure 11: Berta Proposed Open Pits

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Figure 12: SCMB First Copper Cathode)


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Figure 13: Visual Copper at Berta

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