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Geology, Exploration and Production Studies

Geology and Exploration

Geology

The La India epithermal gold system is near the southwestern margin of a broad belt of Tertiary-aged volcanic rocks that forms the Central Highlands of Nicaragua.

Gold mineralisation occurs in quartz veins, often with a component of adularia and rarely calcite. The majority of the quartz veins are fissure veins that filled open spaces in extensional structures: planar veins filling open faults and fractures, and breccia matrix and stockwork veins infilling spaces formed along strike, in the footwall and at the intersection of faults.

On a regional scale, the structures that host gold veins are orientated on at least three different strike directions, with the dominant trend at 320-130° parallel to the margin of the Nicaraguan Depression. The mineralised structures can all be attributed to extensional tectonic stresses directed to the west to southwest.

Resources and Reserves:

The MRE presented here is based on some 82,019 metres of drilling, 19,136 metres of trench sampling and over 9,000 original underground mine grade control channel samples on 9 veins within the La India Project area. The effective date of the Mineral Resource statement is 28 February 2022.

Latest (28 Feb 2022) NI 43-101 Mineral Resource estimate includes Indicated resources of 9.7 Mt @ 6.2 g/t Au and Inferred resources of 8.6 Mt @ 4.3 g/t Au.

Exploration Upside:

Near mine potential could extend mineralised zones at depth as a number of zones are open. The Property has good potential for the discovery of mineralisation along the Mojarra Prospect Trend in areas that are currently outside of the Mineral Resource Estimate.

Production Studies

Key operational and financial highlights
ParameterUnitsSRK Consulting BFS 2022
(updated gold price)
MTL 2025 Internal study
LoMYears8.412.4
Mining MethodN/AOpen PitOpen pit / Underground
Annual Production (Au)Oz71,600145,000
Yearly Ore ProductionKtpa8901,400
Grade (Au)g/t2.563.53
Production LoMOz548,0001,800,000
Commodity Price (Au)US$/oz2,5002,500
Initial CapexUS$mm116122
All in Sustaining CostsUS$/oz1,0581,176
NPV (6%)US$mm338882
IRR%7154
Promising geology – District scale opportunity

Significant upside potential proving a 5 million gold district conceptual – Copper porphyry style mineralisation

Historic Mine Production

The La India Project hosts the historic La India Gold Mine which processed an estimated 1.7Mt at 13.4g/t for 576,000oz Au between 1938 and 1956, the majority of the production under the ownership of Canadian mining company Noranda Inc. At the height of production in 1953, mine records show an annual production of 41,861 oz gold at a grade of 0.3442 oz/ton (11.8 g/t) and 39,282 oz silver (equivalent to 11.0 g/t). The mine worked a dozen narrow high-grade veins using traditional back-stoping techniques with mine drainage achieved and ore transport to a central mill achieved via an extensive network of interconnected drainage and transport adits. The mining was concentrated on two veins; La India vein where a 1200 m strike length was mined to a depth of up to 200 m below surface and the America-Constancia vein where a 2200 m strike length was mined to 250 m below surface. Mine development at these locations and at the smaller satellite workings was incomplete, and in some cases had not advanced beyond exploratory stope development, when mining was halted in 1956. Since the closure of La India gold mine and continuing to the present day, artisanal miners have intermittently worked the most accessible upper levels of the mine and extracted ore from small pits throughout the district.