Loma Larga – Location and History
The Loma Larga project (“the Property”) is located in southern Ecuador in the Western Cordillera of the Andes, in Azuay Province, ~480 km south of the capital of Quito and ~30 km southwest of the city of Cuenca. The Property consists of three mining concessions (Cerro Casco, Rio Falso and Cristal) covering an area of ~8,000 hectares.
The Property can be accessed by 40 km of paved road from Cuenca to the town of San Gerardo and 18 km of gravel road. Loma Larga is located at an altitude of 3,500 to 3,900 m above sea level.
The first known systematic exploration in the Loma Larga area was carried out by the United Nations in the late 1970’s to define base metal anomalies.
The Property was acquired by COGEMA (now AREVA) who completed ten holes totaling 1,869 m of diamond drilling on vein and disseminated targets. Gold, silver and copper mineralization was intersected and, in 1993, Newmont Mining and TVX Gold became AREVA’s joint venture partners. A further 7,581 m of diamond drilling in 82 shallow holes was carried out between 1994 and 1996.
IAMGOLD Corporation (“IAMGOLD”) acquired the property from AREVA.
IAMGOLD began exploration at the Cerro Casco and Rio Falso concessions.
The deposit was discovered in 2004, with the discovery hole grading 9.5 g/t, 46.7 g/t silver, and 0.40% copper over 101.4 m. A total of 65,117 m was drilled between 2003 and 2008.
The Government of Ecuador issued a suspension of all mining and exploration activity.
On January 12, 2009, the Government of Ecuador approved a new mining law.
INV Metals completed the acquisition of a 100% interest in the Loma Larga property.
The Company completed its initial exploration program. The program was comprised of 12 diamond drill holes totaling 3,684.7 m, including holes testing step-out targets to extend the deposit, deeper holes to test for stacked lenses, and holes drilled to obtain samples for metallurgical testing. The Company also completed a metallurgical test work program. The results of which support a two-stage flotation circuit.
In July 2013, the Ecuadorian government amended its mining laws and created a new medium-scale mining category. The regulations for the medium-scale mining category have not yet been finalized by the government. The information released to-date indicates that underground production classified in this category would be limited to 1,000 tonnes per day and subject to corporate income taxes, a 4% gold and by-product royalty, value added taxes, 3% employee profit sharing, 12% state profit sharing for social development projects, and a sovereign adjustment. As a medium-sized mining project, the project would not be subject to the same requirements as the large scale mining category, which includes negotiating an exploitation agreement, a minimum 5-8% gold and by-product royalty, advanced royalties and windfall taxes.
INV Metals and its consultants completed a preliminary feasibility study on the Loma Larga deposit. See the Technical Report for a summary of the results of the preliminary feasibility study (“PFS”).
The Company completed a new PFS on Loma Larga with a production rate of approximately 3,000 tonnes per day (“tpd”) and average annual gold production of 150,000 ounces. The PFS estimates that the Project will generate a robust pre-tax internal rate of return (“IRR”) of 35.7%, a post-tax IRR of 26.3% and an after-tax payback 2.7 years. The study is an update of, and replaces, INV Metals’ 2015 PFS. See the Technical Report for a summary of the results of the PFS.