EX-99.1 2 a19-19176_3ex99d1.htm EX-99.1

Exhibit 99.1

 

Technical Report on the Shahuindo Mine

 

Cajabamba, Peru

 

 

Prepared by:

 

Carl E. Defilippi, SME Registered Member — Kappes, Cassiday & Associates

 

Charles V. Muerhoff, SME Registered Member — Tahoe Resources Inc.

 

Tim Williams, FAusIMM — Tahoe Resources Inc.

 

January 25, 2016

 


 

DATE AND SIGNATURE PAGE

 

The authors of this report, Technical Report on the Shahuindo Mine, Cajabamba, Peru, are Qualified Persons as defined by Canadian National Instrument 43-101. The effective date of this report is 01 January 2016. The effective date of the Mineral Resource estimate is 15 April 2015. The effective date of the Mineral Reserve estimate is 01 November 2015. The report was completed and signed on 25 January 2016.

 

Signed this 25th day of January, 2016

 

/s/ Carl E. Defilippi

 

Carl E. Defilippi, M.Sc., C.E.M.

 

SME Registered Member 775870RM

 

Project Manager

 

Kappes, Cassiday & Associates

 

 

 

/s/ Charles V. Muerhoff

 

Charles V. Muerhoff, B.Sc.

 

SME Registered Member 4182272RM

 

Vice President Technical Services

 

Tahoe Resources Inc.

 

 

 

/s/ Tim Williams

 

Tim Williams, M.Sc.

 

FAusIMM

 

Vice President Operations & Peru Country Manager

 

Tahoe Resources Inc.

 

 


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

CONTENTS

 

 

 

 

 

LIST OF FIGURES

XI

 

 

 

LIST OF TABLES

XIV

 

 

 

1.0

EXECUTIVE SUMMARY

1

 

 

 

1.1

Introduction

1

1.2

Principal Findings

1

1.3

Property Description and Location

3

1.4

Mineral Tenure

3

1.5

Permits

3

1.6

Environment

4

1.7

History

4

1.8

Geology and Mineralization

4

1.9

Drilling

5

1.10

Sample Preparation and Analysis

5

1.11

Data Verification

6

1.12

Mineral Processing and Metallurgical Testing

6

1.13

Mineral Resource and Mineral Reserve Estimates

7

1.13.1   Mineral Resources

8

1.13.2   Mineral Reserve Estimate

9

1.14

Mining Method and Mine Production Schedule

9

1.15

Processing

11

1.16

Infrastructure

12

1.17

Mine Closure

12

1.18

Capital and Operating Costs

13

1.18.1   Operating Costs

13

1.18.2   Capital Costs

13

1.18.3   Financial Analysis

14

1.19

Exploration Status

15

1.20

Conclusions and Recommendations

15

 

 

 

2.0

INTRODUCTION

17

 

 

 

2.1

Purpose and Basis of Report

17

2.2

Sources of Information

17

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

2.3

Qualified Persons and Site Visits

18

2.4

Effective Dates

18

2.5

Units of Measurements

19

2.6

Abbreviations and Acronyms

19

 

 

 

3.0

RELIANCE ON OTHER EXPERTS

21

 

 

 

4.0

PROPERTY DESCRIPTION AND LOCATION

22

 

 

 

4.1

Location

22

4.2

Mineral Tenure and Title

22

4.3

Surface Rights

25

4.4

Informal Mining Activity

25

4.5

Environmental Considerations

26

4.5.1   Environmental Regulations

26

4.6

Permits

27

4.6.1   Environmental Laws

29

4.6.2   Mine Development, Exploitation and Processing Activities

30

4.6.3   Mine Closure and Site Remediation

30

4.6.4   Existing Environmental Conditions

30

4.7

Royalties, Taxes and Fees

30

4.7.1   Maintenance Fees

30

4.7.2   Minimum Production Obligation

31

4.7.3   Royalties, OSINERGMIN Contribution and OEFA Contribution

31

4.7.4   Ownership of Mining Rights

32

4.7.5   Taxation and Foreign Exchange Controls

33

4.7.6   Worker Participation

33

4.7.7   Regulatory and Supervisory Bodies

34

4.8

Risks that may affect Access, Title, or the Right or Ability to Perform Work

34

 

 

 

5.0

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

36

 

 

 

5.1

Accessibility

36

5.2

Climate

37

5.3

Local Resources & Infrastructure

37

5.4

Physiography

38

5.5

Seismology

39

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

5.6

Population Centers

39

5.7

Local Infrastructure and Services

40

 

 

 

6.0

HISTORY

42

 

 

 

 

6.1

Ownership History

42

6.2

Exploration History

42

6.3

Historical Mineral Resource and Mineral Reserve Estimates

44

6.3.1   Pre-NI 43-101 Mineral Resource Estimates

44

6.3.2   Prior NI 43-101 Mineral Resource Estimates

45

6.3.3   Prior NI 43-101 Mineral Reserve Estimates

49

6.4

Historical Production

51

 

 

 

7.0

GEOLOGICAL SETTING AND MINERALIZATION

52

 

 

 

7.1

Regional Geology

52

7.2

Project Geology

56

7.3

Mineralization

65

7.4

Structural Geology

66

7.5

Hydrothermal Alteration

69

7.6

Geometallurgy

73

 

 

 

8.0

DEPOSIT TYPES

74

 

 

 

8.1

Deposit Types

74

 

 

 

9.0

EXPLORATION

76

 

 

 

9.1

Exploration Strategy

76

9.2

Geophysical Surveys

76

9.3

Geochemistry

79

 

 

 

10.0

DRILLING

81

 

 

 

10.1

Introduction

81

10.2

Drilling Methods and Equipment

83

10.3

Collar Surveys

84

10.4

Downhole Surveys

85

10.5

Drill Logging

86

10.6

Drill Database

86

10.7

Core Recovery

86

10.8

Comparison of Core and Reverse Circulation Drilling

87

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

10.9

Tahoe 2015 Drill Program

89

10.9.1   Infill Drilling

91

10.9.2   Step-Out Drilling

91

10.9.3   Exploration

91

10.9.4   Other Drilling

91

 

 

 

11.0

SAMPLE PREPARATION, ANALYSES AND SECURITY

93

 

 

 

11.1

Drill Sampling

93

11.1.1   Diamond Drill Core Sampling

93

11.1.2   Reverse Circulation Chip Sampling

93

11.1.3   Sample Storage

95

11.2

Sample Preparation and Analysis

95

11.2.1   Atimmsa

95

11.2.2   Asarco

95

11.2.3   Southern Peru

96

11.2.4   Sulliden

96

11.2.5   Rio Alto

97

11.3

Bulk Density Determinations

97

11.4

Sample Security

98

11.5

Quality Assurance/Quality Control

98

11.5.1   Asarco

98

11.5.2   Other Drilling Programs Prior to Sulliden

98

11.5.3   Sulliden

98

11.5.4   Rio Alto

100

11.5.5   Blanks

100

11.5.6   Field Duplicates

101

11.5.7   Standards

103

11.6

Summary Statement

106

 

 

 

12.0

DATA VERIFICATION

107

 

 

 

12.1

Met-Chem 2003/2004 Audit

107

12.2

AMEC 2009 Database Audit and Verification

107

12.3

MDA 2012 Database Audit

107

12.4

Tahoe 2015 Database Audit

108

12.5

Statement on Data Verification

108

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

13.0

MINERAL PROCESSING AND METALLURGICAL TESTING

109

 

 

 

13.1

Metallurgical Testing Summary

109

13.2

Pre-2014 Metallurgical Test Summary

111

13.2.1   Heap Leach Consultants Test Program

111

13.2.2   2009 to 2012 Kappes, Cassiday & Associates Test Program

112

13.3

2014 Kappes, Cassiday & Associates Test Program

116

13.4

2014 and 2015 Test Programs

116

13.4.1   Rio Alto, Tahoe Resources and SGS Column Leach Tests

116

13.4.2   Discussion on the Results of the Rio Alto and SGS Column Leach Tests

121

13.4.3   SGS Bottle Roll Tests

123

13.4.4   Compacted Permeability Tests

124

13.5

Estimated Field Recoveries, Leach Times and Reagent Requirements

127

13.5.1   ROM Field Design Parameters

127

13.5.2   Primary Crushed Ore Field Design Parameters

130

13.6

Recommendations and Conclusions

133

 

 

 

14.0

MINERAL RESOURCES ESTIMATE

135

 

 

 

14.1

Introduction

135

14.2

Database

135

14.3

Geological Modeling

137

14.3.1   Lithologic Domains

137

14.3.2   Structural Domains

138

14.3.3   Oxidation Domains

139

14.4

Grade Estimation Domains

139

14.4.1   Gold Estimation Domains

139

14.4.2   Silver Estimation Domains

143

14.4.3   Other Estimation Domains

143

14.4.4   Sample Selection and Compositing

143

14.5

Statistics

144

14.5.1   Bulk Density

144

14.5.2   Gold Statistics

144

14.5.3   Silver Statistics

147

14.5.4   Minor Elements

149

14.6

Variography

151

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

14.7

Block Modelling

152

14.8

Grade Estimation

154

14.9

Mineral Resources

157

14.9.1   Mineral Resource Definitions

157

14.9.2   Shahuindo Mineral Resources

158

14.10

Resource Model Checks

162

14.10.1   Composites vs Model Grades

162

14.10.2   Nearest Neighbor Check Estimate

163

14.10.3   Visual Comparisons

165

14.10.4   Additional Information and Discussion

165

 

 

 

15.0

MINERAL RESERVE ESTIMATES

169

 

 

 

15.1

Mineral Reserves

169

15.1.1   Mineral Reserve Definitions

169

15.1.2   Shahuindo Mineral Reserves

170

15.2

Cut-off Grade

171

15.3

Assumptions and Parameters

172

15.4

Dilution

173

15.5

Pit Optimization

173

15.6

Pit Optimization Results

174

 

 

 

16.0

MINING METHODS

177

 

 

 

16.1

Geotechnical

177

16.2

Hydrogeology and Hydrology

179

16.3

Mine Layout

181

16.4

Mining

183

16.5

Pit Design

185

16.5.1   Bench Height

185

16.5.2   Final Pit Design

185

16.5.3   Comparison of Final Pit Design to the Optimum Whittle shell

185

16.6

In-pit Inferred Resources

187

16.7

Mine Production Schedule

187

16.7.1   Initial Mining Strategy: Phase 1

187

16.7.2   Mining Strategy: Phase 2

188

16.7.3   Mining Schedule

189

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

16.8

Mining Equipment

191

 

 

 

17.0

RECOVERY METHODS

194

 

 

 

17.1

Phase 1 - Run of Mine Processing

194

17.1.1   Processing Flow Path — Run of Mine Material

194

17.1.2   Run of Mine Leach Process

197

17.1.3   Process Plant

198

17.2

Phase 2 — Crushing and Agglomeration

199

17.2.1   Process and Flow Path

199

17.2.2   Process Plant

202

17.3

Heap Leach Pad Design by Anddes

202

17.4

Phase 1 and 2 Process Parameters

203

 

 

 

18.0

PROJECT INFRASTRUCTURE

204

 

 

 

18.1

Services and Infrastructure

204

18.1.1   Roads

204

18.1.2   Power Supply

205

18.1.3   Water Supply

206

18.1.4   Sewage System

206

18.1.5   Solid Waste Disposal

207

18.2

Project Buildings

207

18.2.1   Truck Shop

207

18.2.2   Explosive Magazine

207

18.2.3   Warehouse and Process Maintenance

208

18.2.4   Fuel Stations

208

18.2.5   Offices

208

18.2.6   Construction and Operations Camps

208

18.2.7   Dining Facilities

209

18.3

Miscellaneous Site Services

209

18.3.1   Laboratory

209

18.3.2   Security

209

18.3.3   Medical Center/Clinic

209

18.3.4   Communications

210

 

 

 

19.0

MARKET STUDIES AND CONTRACTS

211

 

 

 

19.1

Metal Contracts

211

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

19.2

Mining Alliance

211

 

 

 

20.0

ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

213

 

 

 

20.1

Environmental Management Plan

213

20.2

Environmental Studies

213

20.2.1   Environmental Impact Statement

213

20.2.2   Geochemical Characterization

214

20.2.3   Site Monitoring

218

20.2.4   Closure Plan

218

20.2.5   Existing Environmental Conditions

220

20.3

Permits

220

20.3.1   Exploration

220

20.3.2   Mine Construction and Operations

221

20.4

Social Impact

223

20.4.1   Location of the Study Area

223

20.4.2   Social Baseline Study

223

20.4.3   Public Consultation and Engagement Plan

225

20.4.4   Community Development Program

225

 

 

 

21.0

CAPITAL AND OPERATING COSTS

227

 

 

 

21.1

Capital Cost Estimate

227

21.1.1   List of Areas

227

21.1.2   Basis of Estimate

227

21.1.3   Capital Estimate

227

21.2

Operating Cost Estimate

228

 

 

 

22.0

ECONOMIC ANALYSIS

230

 

 

 

22.1

Mine Production Statistics

230

22.2

Process Plant Production Statistics

230

22.3

Capital Expenditures

231

22.3.1   Project Capital

231

22.3.2   Sustaining Capital

231

22.3.3   Working Capital

231

22.4

Salvage Value

232

22.5

Revenue

232

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

22.6

Shipping and Refining

232

22.7

Operating Costs

232

22.8

Total Cash Cost

233

22.8.1   Worker Profit Share and other production taxes

233

22.8.2   Reclamation and Closure

233

22.8.3   Depreciation

233

22.8.4   Taxation

233

22.9

Project Financing

234

22.10

Net Income After Tax

234

22.11

NPV and IRR

234

22.12

Sensitivities

234

22.13

Shahuindo Financial Model

236

 

 

 

23.0

ADJACENT PROPERTIES

240

 

 

 

24.0

OTHER RELEVANT DATA AND INFORMATION

241

 

 

 

24.1

Construction and Mining Activities through 01 January 2016

241

24.1.1   Construction

241

24.1.2   Mine and Plant Commissioning

250

24.2

Exploration Potential

253

24.2.1   San Lorenzo and Choloque

253

24.2.2   Shahuindo Southeast Extension and El Sauce

256

24.2.3   La Chilca Baja Cu-Au porphyry

257

24.2.4   La Chilca Alta

257

24.2.5   Azules

258

24.2.6   Algamarca Au-Ag-Cu Vein system

260

24.2.7   Cantera

262

24.2.8   Malvas

263

 

 

 

25.0

INTERPRETATION AND CONCLUSIONS

264

 

 

 

 

26.0

RECOMMENDATIONS

266

 

 

 

 

27.0

REFERENCES

269

 

 

 

28.0

AUTHORS CERTIFICATES

273

 

 

 

28.1

Certificate of Qualified Person — Carl E. Defilippi

274

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

28.2

Certificate of Qualified Person — Charles V. Muerhoff

275

28.3

Certificate of Qualified Person — Tim Williams

276

 

 

Appendix

 

Post-Resource Drill Intercepts

 

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

LIST OF FIGURES

 

 

 

Figure 4.1-1

Shahuindo Project Location Map

22

Figure 4.2-1

Mineral Claim Location Map

24

Figure 5.1-1

Shahuindo Road Route from Cajamarca

36

Figure 7.1-1

Shahuindo Regional Geology

54

Figure 7.1-2

Shahuindo Regional Cross Section

55

Figure 7.2-1

Shahuindo Local Geology

57

Figure 7.2-2

Local Stratigraphic Column for the Carhuaz/Farrat Formations

58

Figure 7.2-3

Multiphase Intrusion Crosscutting Sedimentary Rocks (Section E1100)

61

Figure 7.2-4

Multiphase Intrusion Crosscutting the Sedimentary Rocks (Section X-X’)

62

Figure 7.2-5

Sedimentological Features for Determining Stratigraphic Sequencing

63

Figure 7.2-6

Intrusive Relationships

64

Figure 7.2-7

Monolithic-Clast Breccia

65

Figure 7.4-1

Combined Structure and Mineralization Map - Shahuindo Project

68

Figure 7.5-1

Jarosite in Outcrop

70

Figure 7.5-2

Hydrothermal Alteration Section — Shahuindo Project (Section E1100)

71

Figure 7.5-3

Hydrothermal Alteration Section — Shahuindo Project (Section XX’)

72

Figure 8.1-1

Spatial Relationship of Intermediate Sulfidation Deposits

75

Figure 9.2-1

Shahuindo — Magnetic Survey Results

77

Figure 9.2-2

Shahuindo — IP Survey Results

78

Figure 9.3-1

Shahuindo — Rock Geochemistry

79

Figure 10.1-1

Shahuindo Drill Hole Location Map

82

Figure 10.8-1

Comparative Plot of Core and RC Gold Assays

88

Figure 10.8-2

Comparison of RC to RC+DDH Model Estimates

89

Figure 10.9-1

Post-Resource Drilling

90

Figure 11.5-1

Blank Analyses 2015 Drill Program

101

Figure 11.5-2

Field Duplicates 2015 RC Drill Program - All Au Grade Ranges

102

Figure 11.5-3

Field Duplicates 2015 RC Drill Program - All Ag Grade Ranges

102

Figure 11.5-4

Field Duplicates 2015 RC Drill Program - Au Grade Range 0.1g/t to 0.3g/t

103

Figure 11.5-5

Chart of Au Analyses of Standard 05

104

Figure 11.5-6

Chart of Au Analyses of Standard 54

104

Figure 11.5-7

Chart of Ag Analyses of Standard 06

105

Figure 11.5-8

Chart of Ag Analyses of Standard 54

105

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Figure 13.1-1

Location of Metallurgical Drill Holes

110

Figure 13.4-1

Permeability Rate and Fines Content at Various Simulated Heap Heights

126

Figure 13.4-2

Permeability Rate and Rock Type at Various Simulated Heap Heights

126

Figure 14.2-1

Plan Projection Displaying Zones of Infill Drilling at 25m x 25m Spacing

136

Figure 14.3-1

Lithologic Domains — Section E400

138

Figure 14.3-2

Plan Projection of Structural Domains

139

Figure 14.4-1

Au Interpretation - Southern Domains (Cross Section E1200)

141

Figure 14.4-2

Au Interpretation - Northern Domains (Cross Section E400)

142

Figure 14.5-1

Gold statistics plots for all domains

145

Figure 14.5-2

Silver statistics plots for all domains

147

Figure 14.6-1

Horizontal Variogram Fan for Gold Domain 1001

151

Figure 14.6-2

Variograms of Samples Along Strike

152

Figure 14.10-1

Inverse Distance (ID3) vs Nearest Neighbor Estimate by Easting

164

Figure 14.10-2

Inverse Distance (ID3) vs Nearest Neighbor Estimate by Northing

164

Figure 14.10-3

Inverse Distance (ID3) vs Nearest Neighbor Estimates by Elevation

164

Figure 14.10-4

Shahuindo Resource Model (Section 500N)

167

Figure 14.10-5

Shahuindo Resource Model - Section 1100N

168

Figure 15.6-1

Graph of Whittle Results

174

Figure 15.6-2

Plan of Whittle Shell 36

176

Figure 16.1-1

Geotechnical Zone Areas

179

Figure 16.3-1

Shahuindo Mine Layout Plan

183

Figure 16.5-1

LOM Pit Design

186

Figure 16.7-1

Site Plan at the end of 2017

188

Figure 16.7-2

Final Phase 2 Site Plan

189

Figure 17.1-1

ROM Process Flow Sheet

196

Figure 17.2-1

Crushing, Stockpile, Screening and Agglomeration Flow Sheet

200

Figure 17.2-2

Overland Conveyor and Stacking System Flow Sheet

201

Figure 18.1-1

Mine Access Road

205

Figure 20.2-1

Annual Distribution of Extracted GEU

217

Figure 20.4-1

Location of Direct Influence Area

224

Figure 24.1-1

Access Road Improvements

241

Figure 24.1-2

Water Storage Pond

242

Figure 24.1-3

Haul Road Construction

242

Figure 24.1-4

New Camp under Construction

243

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Figure 24.1-5

Sewage Treatment Plant under Construction

243

Figure 24.1-6

Emulsion Silo

244

Figure 24.1-7

Temporary Workshop under Construction

245

Figure 24.1-8

Fuel Farm under Construction

245

Figure 24.1-9

Leach Pad 1A under Construction

246

Figure 24.1-10

Leach Pad 1A completed with Collection Piping

246

Figure 24.1-11

Leach Pad 1A with Overliner Being Placed

247

Figure 24.1-12

Lime Storage Shed

247

Figure 24.1-13

ADR Plant

248

Figure 24.1-14

PLS Pond

248

Figure 24.1-15

ADR Plant and PLS Pond

248

Figure 24.1-16

Leach Pad 2B Foundation and Sub-Drain Excavation

249

Figure 24.1-17

Leach Pad 2B Foundation Construction

250

Figure 24.1-18

Schematic of Starter Pit, ROM Pad and Haul Roads

251

Figure 24.1-19

Overview of Starter Pit, ROM Pad and Haul Roads

251

Figure 24.1-20

Initial Drill Pattern — November 2015

252

Figure 24.1-21

Ore Place on Pad 1A — December 2015

252

Figure 24.1-22

Pad 1A Irrigation Commissioning — December 2015

252

Figure 24.2-1

Major Exploration Targets around the Shahuindo Project

253

Figure 24.2-2

San Lorenzo and Choloque Drill Hole Location Map

255

Figure 24.2-3

Azules Drill Hole Location Map

260

Figure 24.2-4

Algamarca Sample Location Map (4 and 5 Levels)

261

Figure 24.2-5

Algamarca — Descubridora Vein on Levels 4 and 5

262

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

LIST OF TABLES

 

Table 1.12-1

Metallurgical Test Results

7

Table 1.13-1

Shahuindo Mineral Resources

8

Table 1.13-2

Shahuindo Mineral Reserve

9

Table 1.14-1

Life of Mine Mining Schedule

10

Table 1.15-1

Processing Design Parameters

11

Table 1.15-2

Life of Mine Process Plant Throughput

12

Table 1.18-1

Operating Cost Summary

13

Table 1.18-2

Project Capital

13

Table 1.18-3

Sensitivity Analysis — NPV and IRR after Taxes

14

Table 2.3-1

Qualified Persons — Site Visits and Report Responsibilities

18

Table 2.6-1

List of Abbreviations

20

Table 4.2-1

Mineral Title Summary

23

Table 4.5-1

Summary of Environmental Requirements for Mining Exploration Programs

27

Table 4.6-1

List of Permits and Status

28

Table 4.7-1

Corporate Income Tax

33

Table 5.5-1

Summary of PGA Values for Different Return Periods

39

Table 6.2-1

Summary of Prior Exploration Activities on the Shahuindo Property

43

Table 6.2-2

Summary of Sulliden Exploration Activities

44

Table 6.3-1

Pre-NI 43-101 Mineral Resource Estimates

45

Table 6.3-2

Prior NI 43-101 Mineral Resource Estimate Summary

45

Table 6.3-3

2004 Mineral Resource Estimate

46

Table 6.3-4

2005 Mineral Resource Estimate

46

Table 6.3-5

2009 Mineral Resource Estimate

47

Table 6.3-6

2011 Mineral Resource Estimate

48

Table 6.3-7

2012 Mineral Resource Estimate

49

Table 6.3-8

2012 Pit Optimization Parameters

50

Table 6.3-9

2012 Mineral Reserve Estimate

51

Table 7.1-1

Shahuindo Regional Stratigraphic Column

52

Table 10.1-1

Shahuindo Drilling Summary

81

Table 10.8-1

Core and RC Gold Analyses

87

Table 10.9-1

Post-Resource Drilling

90

Table 11.5-1

Summary of QAQC Program Applicable for 2015 Resource Estimate

100

 

xiv


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Table 11.5-2

Summary of Analysis of Standards Used in 2015 Drill Program

103

Table 13.1-1

Cyanide and Flotation Testing Programs on Shahuindo

109

Table 13.1-2

Metallurgical Test Work Results

110

Table 13.2-1

Summary of HLC Column Leach Tests

111

Table 13.2-2

Summary of KCA Column Leach Tests

113

Table 13.2-3

Summary of KCA Bottle Roll Leach Tests

114

Table 13.4-1

Rock Type Summary

117

Table 13.4-2

Rio Alto Column Leach Test Results on Surface Samples

118

Table 13.4-3

Rio Alto Column Leach Test Results on Drill Core Composites

119

Table 13.4-4

SGS Column Leach Test Results

120

Table 13.4-5

SGS and Rio Alto Column Leach Test Results by Size and Rock Type

122

Table 13.4-6

Summary of SGS 72-hour Bottle Roll Tests

123

Table 13.4-7

Copper, Iron, Arsenic and Sulfur Levels in the SGS Composites

124

Table 13.4-8

Compacted Permeability Test Results

125

Table 13.5-1

KCA Oxide Ore Parameters - No Permeability or Fines Migration Issues

128

Table 13.5-2

Column Test Results Used in Estimating Field Design Criteria

129

Table 13.5-3

KCA Oxide Ore Recommendation - Crushed to p80 (60mm - 85mm range)

131

Table 13.5-4

Test Results Used to Determine Field Parameters on Coarse Crushed Ore

132

Table 14.2-1

Grid Transformation Applied to Collar Data in Database

135

Table 14.5-1

Descriptive Statistics of Shahuindo Density Values by Rock Type

144

Table 14.5-2

Descriptive Statistics for Gold Oxide Domains

146

Table 14.5-3

Descriptive Statistics for Silver Oxide Domains

148

Table 14.5-4

Hard Domains Used for Minor Element Estimation

149

Table 14.5-5

Description Statistics for Minor Elements

150

Table 14.7-1

Block Model Parameters

152

Table 14.7-2

Block Model Attributes List

153

Table 14.8-1

Search Parameters Used for Gold and Silver Estimation

155

Table 14.9-1

Shahuindo Mineral Resources — Oxide

159

Table 14.9-2

Measured Oxide Resources - Grade Tonnage

159

Table 14.9-3

Indicated Oxide Resources - Grade Tonnage

160

Table 14.9-4

Inferred Oxide Resources - Grade Tonnage

160

Table 14.9-5

Shahuindo Mineral Resources — Sulfide

161

Table 14.9-6

Inferred Sulfide Resources - Grade Tonnage

162

Table 14.10-1

Composites vs Resource Model Grades

163

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Table 14.10-2

Confidence Levels of Key Criteria

165

Table 15.1-1

Shahuindo Mineral Reserves

170

Table 15.2-1

Cut-Off Grade Assumptions

172

Table 15.3-1

Pit Optimization Parameters for Shahuindo Mineral Reserve

172

Table 15.6-1

Pit Size vs Value

175

Table 16.1-1

Anddes and Associates Geotechnical Parameter Recommendations

177

Table 16.1-2

Shahuindo Geotechnical Parameters

178

Table 16.2-1

Predicted Water Inflows during Mining

180

Table 16.3-1

Waste Dump Volumes

182

Table 16.4-1

Drill and Blast Technical Parameters

184

Table 16.5-1

Comparison of Pit Design to Whittle Shell

185

Table 16.7-1

Mine Production Schedule

190

Table 16.8-1

Primary Mining Equipment Required for Shahuindo

191

Table 16.8-2

Ancillary Equipment Fleet Size

192

Table 16.8-3

Maximum Loader Productivity Estimate

192

Table 17.1-1

Phase 1 Leach Pad Schedule

198

Table 17.3-1

Phase 2 Leach Pad Design Criteria

202

Table 17.4-1

Phase 1 and Phase 2 Process Parameters

203

Table 20.2-1

Sulfur Analysis

215

Table 21.1-1

Estimated Capital Expenditure Summary by Year (US$M)

228

Table 21.1-2

Major Component Capital Expenditures — Life of Mine

228

Table 21.2-1

Operating Cost Summary

229

Table 22.1-1

Life of Mine Production

230

Table 22.3-1

Project Capital

231

Table 22.3-2

Sustaining Capital

231

Table 22.5-1

Gold and Silver Prices

232

Table 22.6-1

Gold and Silver Refining Terms

232

Table 22.7-1

Life of Mine Operating Cost

233

Table 22.11-1

Economic Indicators (US$M)

234

Table 22.12-1

NPV Sensitivity Analysis on Metal Prices

235

Table 22.12-2

NPV Sensitivity Analysis on Operating Cost

235

Table 22.12-3

NPV Sensitivity Analysis on Total Capital

235

Table 22.12-4

Sensitivity Analysis on Metal Recovery

235

Table 22.13-1

LOM Base Case Summary - Assumptions

236

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Table 22.13-2

Shahuindo Life of Mine Financial Model

237

Table 24.2-1

San Lorenzo — Select Drill Results

254

Table 24.2-2

Choloque — Select Drill Results

255

Table 24.2-3

Southeast Extension — Select Drill Results

256

Table 24.2-4

El Sauce — Select Drill Results

256

Table 24.2-6

La Chilca Baja — Select Drill Results

257

Table 24.2-7

Azules — Sulliden Drill Results

259

Table 24.2-8

Algamarca — Sample Results from the Descubridora Vein

261

 

xvii


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

1.0                               EXECUTIVE SUMMARY

 

1.1                               Introduction

 

Tahoe Resources Inc. (Tahoe or Company), whose common shares are listed for trading on the Toronto Stock Exchange (TSX:THO), New York Stock Exchange (NYSE:TAHO) and Bolsa de Valores: Peru (BVL:THO), has prepared this Technical Report in accordance with Canadian National Instrument 43-101 (NI 43-101) for the Shahuindo mine, Cajabamba, Peru. This technical report summarizes the prefeasibility study of the technical and economic viability of the Shahuindo mine.

 

The following events triggered an updated NI 43-101 report for the Shahuindo mine:

 

·                  On 09 February 2015, Tahoe and Rio Alto Gold (Rio Alto) entered into a definitive agreement to combine their respective businesses and finalized the transaction on 01 April 2015. Through this merger, Tahoe Resources acquired 100% ownership of the mining assets of Rio Alto which included the Shahuindo project.

 

·                  The Mineral Resources and Mineral Reserves estimates have been updated as the result of data obtained from drilling and additional engineering studies conducted in 2014 and 2015. Mining studies incorporate updated cost estimates and financial analyses.

 

·                  Tahoe has revised the mining strategy for the Shahuindo mine.

 

·                  Tahoe has conducted further metallurgical testing on the ore at Shahuindo and has revised the metallurgical assumptions and flowsheet for the project.

 

This report has been completed having an effective date of 01 January 2016. The effective dates of the Mineral Resources estimate and Mineral Reserves estimate are 15 April 2015 and 01 November 2015, respectively. Unless otherwise noted, monetary values are expressed in United States dollars ($) and units are metric.

 

1.2                               Principal Findings

 

Tahoe, through its wholly owned subsidiary, Shahuindo SAC, owns and operates the Shahuindo mine in Peru. The Shahuindo deposit is an intermediate-sulfidation sediment-hosted epithermal gold-silver deposit which the Company has initiated open pit mining and heap leaching of oxide ore. Metal recovery is by carbon-in-column adsorption-desorption-refining (ADR) processes which produces a gold-rich doré for sale to international refineries.

 

Construction of the Shahuindo mine commenced in mid-2014, with commissioning of the mine and processing facilities in the fourth quarter of 2015. The Company anticipates achieving commercial production at Shahuindo in the second quarter of 2016.

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Production at Shahuindo is scheduled in two phases: Phase 1 processes coarse-grain run-of-mine (ROM, i.e., no crushing required) material at an initial rate of 10,000 tonnes of ore per day (tpd) in 2016; a second adsorption column circuit will be installed in mid-2016 to increase the plant processing capacity to accommodate increased mining rates. Phase 2 begins in 2018 and continues through the end of the current mine life with the plant capacity increased to 36,000 tpd to process mixed coarse- and fine-grain ore that requires crushing and agglomeration prior to leaching. The phased approach enables gold production as soon as possible with minimal capital expenditure, thus generating cash flow early in the project.

 

Throughout this report, references made to Phase 1 and Phase 2 production rates refer to process plant capacity rather than mining rates, though plant capacity and mining rates (ore placed on leach pads) do coincide later in the mine life. An ore stockpile will be utilized to store mine production in excess of plant capacity, with stockpiled ore incrementally added to the leach pads over the life of mine.

 

The prefeasibility study supports the declaration of Proven and Probable Mineral Reserves. The study provides economic parameters for the Shahuindo mine from 01 January 2016 forward.

 

Highlights of the study include:

 

·                  Measured and Indicated Mineral Resources of 143.1 million tonnes and 2.28 million oxide gold ounces at an average gold grade of 0.50 gram per tonne (g/t).

 

·                  Proven and Probable Mineral Reserves of 111.9 million tonnes at an average gold grade of 0.53 g/t, containing 1.91 million ounces of gold.

 

·                  Average annual gold production (i.e., gold in doré) of 78,000 ounces in the first two years of production (Phase 1) and 169,000 ounces in years three through ten (Phase 2). Total gold produced in doré over the LOM is estimated to be 1.504 million ounces.

 

·                  As of 01 January 2016, capital costs are estimated at $179.6 million for project (construction) capital and $140.7 million for sustaining capital over the LOM.

 

·                  After tax net present value at a 5% discount rate (NPV5) of $318.9 million and an internal rate of return (IRR) of 40.6% with a payback period of 4.1 years at the base case metal prices.

 

·                  Exploration conducted by previous owners and by Tahoe demonstrates considerable potential to add additional gold ounces to the production profile at Shahuindo and has identified multiple exploration prospects in the district.

 

Mineral Resources and Mineral Resources are reported using metal prices of $1,200/oz Au and $15/oz Ag. Mineral Resources are reported within a $1,400/oz Au pit shell at a gold-equivalent (AuEq) cut-off grade of 0.14 g/t. The financial analysis uses escalating metal prices over the LOM beginning with $1,100/oz Au in 2016 and increasing in $100/oz increments annually to $1,400/oz Au in 2019 where it

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

remains constant through the end of the mine life. Likewise, silver prices used are $14.75/oz in 2016, $17.25/oz in 2017, $20.00/oz in 2018, and $23.50/oz in 2019 and forward to the end of the mine life. Silver has a negligible contribution to the mine economics.

 

1.3          Property Description and Location

 

The Shahuindo mine is located in the district of Cachachi, province of Cajabamba, department and region of Cajamarca, Peru. It is situated approximately 59 kilometers southeast of the town of Cajamarca and 14 kilometers west of the town of Cajabamba. The project can be accessed from Cajabamba via a combination of asphalt, gravel and dirt roads. Access can be gained all year round.

 

The local climate consists of two major seasons; a cold and dry “dry season” between the months of May to September, and a humid “wet season” between the months of October to April. The average annual precipitation is 999.7mm a year, with an average temperature of 15.7ºC.

 

1.4          Mineral Tenure

 

The Shahuindo property comprises one mineral concession, Acumulacion Shahuindo, which includes 26 mineral titles with an approximate area of 7,339 hectares. The concession is 100% controlled by Tahoe’s wholly owned subsidiary, Shahuindo SAC. The mining rights and surface rights are registered under the name of Shahuindo SAC in the government title registry office. All claims are in good standing as of the effective date of this report.

 

Shahuindo SAC has acquired 381 surface rights within the Shahuindo project area to date, covering a total area of about 2,559 hectares. Some of these surface rights were used to relocate local land owners into new areas.

 

1.5          Permits

 

The Shahuindo mine operates under an initial Environmental Impact Statement (EIA, Estudio de Impacto Ambiental) approved in 2013. The EIA was prepared according to the Ministry of Energy and Mines (MEM) requirements and complies with Peruvian regulations.

 

As of the effective date of this report, most required permits have been obtained, with the remaining permits being in the final stages of approval. The following list describes the status of the required permits for operations as of 01 January 2016:

 

·      Certificate for the inexistence of Archaeological Remains — Approval granted.

 

·      Environmental Impact Assessment (EIA) - Approval granted. Expansion EIA in process.

 

·      Mine Closure Plan — Approval granted

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

·      Beneficiation Concession — Approval granted.

 

·      Water usage permit — Approval granted.

 

·      Mining Plan — Final stage of evaluation with Ministry of Energy and Mines.

 

·      Operations Permits — In process; approvals expected in January 2016.

 

All permits and any new permits will be renewed or obtained as required. It is expected that all remaining permits required for full operations will be obtained in January 2016.

 

1.6          Environment

 

The operating plan will adhere to Tahoe’s mandate that the Shahuindo Project meet or exceed the standards of sustainability and environmental management based on North American practice and regulation. The Company has implemented a comprehensive environmental management plan to regularly and systematically monitor air quality, surface water and groundwater quality, stream sediment geochemistry, blast vibration, noise levels, waste rock geochemistry (ARD monitoring), waste disposal practices, reagent handling and storage, and reclamation and reforestation progress.

 

1.7          History

 

Modern exploration activities have been conducted on the Shahuindo property since 1945 by Minera Algamarca SA (1945-1989), Alta Tecnología e Inversión Minera y Metalúrgica S.A. (Atimmsa, 1990), Asarco LLC (Asarco, 1994-1996), Southern Peru Copper Corporation (Southern Peru, 1997-1998) and Sulliden Gold Corporation (Sulliden, 2002-2012). Rio Alto initiated infill drilling of the resource upon their acquisition of Sulliden in 2014 and Tahoe has continued infill and exploration drilling in the district.

 

1.8          Geology and Mineralization

 

The Shahuindo deposit is located on the eastern flank of the Andean Western Cordillera in northern Peru, within a regional fold and thrust belt of predominantly sedimentary rocks. The region is particularly well-endowed with mineral occurrences varying from low-to-high sulfidation systems and from porphyry through polymetallic to epithermal deposits.

 

Mineralization at Shahuindo is best described as an intermediate-sulfidation epithermal system, though high-sulfidation mineralization occurs at depth and in the core of hydrothermal breccias. Oxidation of mineralization extends to a depth of 150m below surface. In the weathered oxide facies, gold and silver are associated with the presence of jarosite and hematite. In the underlying fresh sulfide facies, gold is typically extremely fine grained with the related mineral species not yet identified.

 

The principal zone of mineralization in the Shahuindo district occurs in a belt between two large-amplitude regional-scale folds, the Algamarca anticline and the San Jose Anticline. The Algamarca

 

4


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

anticline is upright and symmetrical with amplitude of at least 400m, whereas the San Jose fold is an asymmetric, overturned, northeast-vergent fold with a shallowly dipping axial surface and amplitude of at least 300m. Important structural elements include fold limbs and fold axial surfaces, fold-related fractures, faults and related extension fractures, breccia dikes and irregular bodies, and igneous intrusive contacts.

 

Both structure and lithology control the location, shape, and orientation of the mineralization. The mineralization is hosted within the siliciclastic sandstone-dominant Farrat Formation and the underlying sedimentary Carhuaz formation. These sedimentary rocks have been intruded by at least three felsic stocks which tend to be located along faults and cores of anticlinal structures. In addition, the metallurgical recovery of gold is affected by lithology with the identification of five primary geometallurgical domains based on the relationship between lithology and grain size and gold recovery. Modelling the distribution and occurrence of lithologic units / geometallurgical domains is critical to mine planning.

 

1.9          Drilling

 

Mineral Resources were estimated using data from 1,039 diamond core and reverse circulation (RC) drill holes, totaling 164,015 meters, from drilling conducted by Atimmsa, Asarco, Southern Peru, Sulliden and Rio Alto. The cut-off date for drill data inclusion in the mineral resource model was 15 April 2015.

 

Prior to the acquisition by Tahoe in April 2015, Rio Alto drilled predominantly RC holes in the oxide portion of the deposit to bring the drill density to a nominal 25m x 25m spacing. Tahoe has continued drilling diamond core and RC for infill, step-out, geotechnical, hydrology, and condemnation purposes.

 

1.10        Sample Preparation and Analysis

 

Tahoe has limited information about sample preparation and analyses for the drill programs prior to the major drill programs by Sulliden beginning in 2003. The drilling prior to Sulliden’s work is considered to be a minimal risk to the estimate of Mineral Resources, as this dataset accounts for only 15% of the data used in the estimate and many of the holes drilled prior to Sulliden have been twinned or offset with new drill holes.

 

From 2003 to 2012, Sulliden’s sampling and sample dispatch for the Shahuindo project were carried out under the supervision of Sulliden staff. Samples were sent to ALS Minerals (ALS, formerly known as ALS Chemex) in Lima for sample preparation and analysis. Samples were prepared and analyzed using industry-standard practices, including the use of quality assurance and quality control (QA/QC) duplicates, blanks, and assay standards. The ALS laboratory in Lima is ISO 9001:2008 and ISO 17025:2005 certified.

 

5


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Samples from Rio Alto’s 2014-2015 drill programs were analyzed by CERTIMIN (Lima). Gold was assayed with a 50-gram fire assay using an atomic adsorption finish. Fire assays were repeated using with a gravimetric finish for samples whose initial fire assay results were greater than 10 g/t Au. Rio Alto employed a QA/QC program of field duplicates, blanks and assay standards. The CERTIMIN laboratory is ISO 9001 certified for geochemical, metallurgical and environmental sample analyses. Tahoe continues to use the CERTIMIN laboratory in Lima as its primary assay lab for its continued drilling at the Shahuindo project.

 

Drill core and RC sampling procedures, sample analyses, QAQC procedures and sample security employed at Shahuindo are of sufficient quality for use in the resource estimate.

 

1.11        Data Verification

 

The drill hole database has been the subject of three major audits between 2003 and 2012 by independent consulting firms and one audit by Tahoe in 2015. The results of these audits, including the 2015 Tahoe audit, found the database integrity and QAQC results sufficient to ensure the dataset used is reliable for resource estimation purposes. Some discrepancies with silver standards used by Rio Alto and Tahoe in 2015 were identified, though this is not considered material due to the minimal contribution of silver to the value of the project.

 

The result of the verification programs support the estimation of the Shahuindo Mineral Resources and the assignment of Measured, Indicated and Inferred resource classifications.

 

1.12        Mineral Processing and Metallurgical Testing

 

The mineral processing and metallurgical testing that included cyanidation and flotation testing programs have been conducted on composite samples from the Shahuindo project by various companies starting in 1996. These companies include Asarco, Compania Minera Algamarca, Sulliden, Rio Alto and Tahoe, with test work conducted at Dawson Metallurgical Laboratories, Kappes, Cassiday & Associates (KCA), Heap Leach Consultants (HLC), SGS and Tahoe’s La Arena laboratory.

 

Results from the cyanidation tests conducted by KCA from 2009 to 2012 and in 2014, and by Tahoe (Rio Alto) in 2014 and 2015 on core drill hole and surface composites were used in the development of the recovery and leach design parameters for use in the prefeasibility study. The results of the testing program indicate excellent gold recoveries at both run-of-mine (ROM) and coarse crush sizes with low to moderate reagent requirements, implying amenability to heap leaching. Silver recoveries were generally low.

 

Compacted permeability tests on -25mm crushed samples were conducted, both with and without cement. The results are variable with one-third of the tests conducted in 2015 failing. The results from

 

6


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

KCA’s compacted permeability tests on -32mm composites conducted in 2012 indicated that mixing of the more weathered samples with competent material would be required to maintain permeability at 6 kg of cement per tonne of ore. Two of the three KCA tests passed the compacted permeability tests at a simulated heap height of approximately 110 meters.

 

Table 1.12-1 includes the field gold and silver recoveries, reagent consumptions, and leach times on oxide material, based on the available test work results from both ROM and single-stage crushing tests.

 

Table 1.12-1        Metallurgical Test Results

 

Parameter

 

 

ROM

 

 

Crush

% Au Recovery

 

 

73%

 

 

80%

% Ag Recovery

 

 

7%

 

 

12%

NaCN Consumption

 

 

0.2 kg/t

 

 

0.3 kg/t

Cement

 

 

0

 

 

6 kg/t*

Lime

 

 

2 kg/t

 

 

1 kg/t

Leach Time

 

 

80 days

 

 

70 days

Size, p80

 

 

~ 150mm

 

 

60 to 85mm

 


*Cement addition based on screened minus 75mm material

 

Maintaining heap permeability and minimizing channeling at higher heap heights constitutes a risk to the project, as additional agglomeration and compacted permeability testing is required. Tahoe will conduct further test work on the agglomeration circuit before operations in 2018 (Phase 2). This will include further work on maximizing recovery and determining the maximum leach pad height.

 

1.13        Mineral Resource and Mineral Reserve Estimates

 

The Mineral Resource estimate has been classified as Measured, Indicated and Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters. The Mineral Reserve estimate has been classified as Proven and Probable, applying applicable mining, metallurgical, economic, permitting, and other relevant factors to the Measured and Indicated Mineral Resources. The Mineral Resource and Mineral Reserve estimates have been prepared and reported in accordance with Canadian National Instrument 43-101 (NI 43-101), Standards of Disclosure for Mineral Projects, and classifications adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Council.

 

Tahoe is not aware of any specific metallurgical, infrastructural, environmental, legal, title, political, taxation, socio-economic or marketing issues that would impact the Mineral Reserve Estimate as presented.

 

7


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

1.13.1     Mineral Resources

 

The Mineral Resource estimate for the Shahuindo deposit contains Measured and Indicated Mineral Resources (oxide) of 143.1 million tonnes at average grades of 0.50 g/t Au and 6.7 g/t Ag, containing 2.28 million ounces of gold and 30.7 million ounces of silver. Inferred Mineral Resources (oxide) total 2.6 million tonnes at average grades of 0.42 g/t Au and 7.4 g/t Ag; containing 36,000 ounces of gold and 626,000 ounces of silver. Sulfide resources total 87.7 million tonnes at average grades of 0.71 g/t Au and 21.1 g/t Au; containing 2.0 million ounces of gold and 59.4 million ounces of silver. All sulfide resources are classified as Inferred Mineral Resources. The effective date of the Shahuindo Mineral Resource estimate is 15 April 2015.

 

Table 1.13-1 is a summary of the Shahuindo Mineral Resources, at cut-off grades for oxide material of 0.14 g/t AuEq and sulfide material of 0.50 g/t AuEq.

 

Table 1.13-1        Shahuindo Mineral Resources

 

Material

 

 

Resource

 

 

Tonnes

 

 

Au

 

 

Ag

 

 

Au Ounces

 

 

Ag Ounces

 

Type

 

 

Classification

 

 

(M)

 

 

(g/t)

 

 

(g/t)

 

 

(koz)

 

 

(koz)

 

Oxide

 

 

Measured

 

 

96.5

 

 

0.50

 

 

6.7

 

 

1,546

 

 

20,901

 

 

 

Indicated

 

 

46.6

 

 

0.49

 

 

6.5

 

 

736

 

 

9,778

 

 

 

Measured and Indicated

 

 

143.1

 

 

0.50

 

 

6.7

 

 

2,282

 

 

30,679

 

 

 

Inferred

 

 

2.6

 

 

0.42

 

 

7.4

 

 

36

 

 

626

 

Sulfide

 

 

Inferred

 

 

87.7

 

 

0.71

 

 

21.1

 

 

2,002

 

 

59,441

 

 

Numbers may not add due to rounding

 

Oxide resources are reported within a $1,400/oz Au optimized open pit shell. Gold-equivalent grades were calculated in the Shahuindo resource block model using the individual gold and silver grades for each block and metal prices of $1,200/oz Au and $15/oz Ag using the formula:

 

AuEq g/t = Au g/t + (Ag g/t x 15/1200)

 

The sulfide Mineral Resources at Shahuindo are classified entirely as Inferred due to limited metallurgical characterization and wider drill spacing than in the oxide portion of the deposit. There have been no economic or mining studies of the sulfide portion of the Shahuindo deposit completed to date; the Inferred sulfide resource is reported at a 0.5 AuEq g/t cut-off using the same metal prices as used for calculating the oxide gold-equivalent values.

 

The drill data used for the estimate of Mineral Resources includes data from all drilling completed through April 2015. The drill hole information includes collar location, downhole survey, assay, lithology and oxidation data.

 

8


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Lithological, oxidation and structural models were created to model the distribution of mineralization to the pertinent geologic domains. Gold mineralization domains were created using a 0.1 g/t Au cut-off; these domains were used as hard boundaries to constrain the grade estimate. Silver values have been estimated inside the gold domains. A suite of other elements were also modeled and estimated into the block model, including sulfur, copper, lead, zinc, arsenic, molybdenum, calcium, total iron, sodium and manganese. The economic contribution of these elements is not material to the project.

 

1.13.2     Mineral Reserve Estimate

 

The Shahuindo Proven and Probable Mineral Reserves total 111.9 million tonnes of oxide material at average grades of 0.53 g/t Au and 6.8 g/t silver; containing 1.91 million ounces of gold and 24.5 million ounces of silver at a cut-off grade of 0.18 g/t Au. Mineral Reserves are inclusive of Mineral Resources. There are no sulfide Mineral Reserves reported. The effective date of the Shahuindo Mineral Reserve is 01 November 2015.

 

The Shahuindo Mineral Reserve estimate is summarized in Table 1.13-2.

 

Table 1.13-2        Shahuindo Mineral Reserve

 

 

 

 

Tonnes

 

 

Au Grade

 

 

Ag Grade

 

 

Au Ounces

 

 

Ag Ounces

 

Reserve Classification

 

 

(M)

 

 

(g/t)

 

 

(g/t)

 

 

(000s)

 

 

(000s)

 

Proven

 

 

82.7

 

 

0.54

 

 

6.92

 

 

1,424

 

 

18,400

 

Probable

 

 

29.2

 

 

0.51

 

 

6.54

 

 

483

 

 

6,142

 

Proven & Probable

 

 

111.9

 

 

0.53

 

 

6.82

 

 

1,906

 

 

24,541

 

 

Numbers may not add due to rounding

 

Metal prices used for reporting Mineral Reserves are $1,200 per ounce gold and $15.00 per ounce silver. The Mineral Reserve estimate does not include process recovery factors or plant losses.

 

The cut-off grade for the Mineral Reserve was calculated from operating costs experienced at Tahoe’s La Arena mine, the estimated metallurgical performance sourced from test work and engineering first principles. Proven and Probable reserves include five percent dilution at zero grade and mining losses of two percent. Resources within the mine plan classified as Inferred were considered to have no economic value and have been classified as waste in the mining schedule.

 

1.14        Mining Method and Mine Production Schedule

 

The Shahuindo mine is an open pit heap leach operation. The mining method used is a conventional drill/blast, shovel and dump truck operation. The mining will be executed under an alliance style contract similar to the mining operation at the Company’s La Arena mine.

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

The mining schedule at Shahuindo consists of two phases. Phase 1 entails mining higher grade starter pits providing ROM material to the Phase 1 leach pads in 2016 and 2017; the average mining rates in 2016 and 2017 are approximately 15,800 tonnes of ore per day and 15,300 tonnes of ore per day, respectively. Phase 2, beginning in 2018, includes the addition of a crushing and agglomeration facility, increased plant capacity and an additional leach pad. The mining rate in Phase 2 increases production to meet the Phase 2 plant capacity of 36,000 tonnes of ore per day, which will require an upgraded mining fleet.

 

The LOM production schedule as of 01 January 2016 forecasts the Shahuindo mine to produce and deliver to the processing facilities a total of 110.9 million tonnes of ore at an average gold grade of 0.53 g/t, and average silver grade of 6.86 g/t. The LOM plan is summarized in Table 1.14-1.

 

Table 1.14-1        Life of Mine Mining Schedule

 

 

 

 

Unit

 

 

2016

 

 

2017

 

 

2018

 

 

2019

 

 

2020

 

 

2021

 

Ore Tonnes

 

 

k tonnes

 

 

5,756

 

 

5,602

 

 

10,289

 

 

13,412

 

 

13,039

 

 

12,352

 

Au Grade

 

 

g/t

 

 

0.68

 

 

0.54

 

 

0.64

 

 

0.48

 

 

0.48

 

 

0.51

 

Ag Grade

 

 

g/t

 

 

5.95

 

 

5.73

 

 

7.24

 

 

6.45

 

 

7.05

 

 

6.47

 

Waste Tonnes

 

 

k tonnes

 

 

4,954

 

 

4,113

 

 

21,835

 

 

18,895

 

 

19,246

 

 

19,893

 

Strip Ratio

 

 

waste:ore

 

 

0.86

 

 

0.73

 

 

2.12

 

 

1.41

 

 

1.48

 

 

1.61

 

Total Tonnes

 

 

k tonnes

 

 

10,710

 

 

9,715

 

 

32,124

 

 

32,306

 

 

32,285

 

 

32,245

 

Au Mined

 

 

k oz

 

 

126

 

 

97

 

 

212

 

 

206

 

 

200

 

 

201

 

Ag Mined

 

 

k oz

 

 

905

 

 

1,090

 

 

2,524

 

 

2,741

 

 

2,954

 

 

2,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit

 

 

2022

 

 

2023

 

 

2024

 

 

2025

 

 

Total

 

 

 

 

Ore Tonnes

 

 

k tonnes

 

 

16,066

 

 

14,405

 

 

12,732

 

 

7,236

 

 

110,890

 

 

 

 

Au Grade

 

 

g/t

 

 

0.50

 

 

0.59

 

 

0.52

 

 

0.49

 

 

0.53

 

 

 

 

Ag Grade

 

 

g/t

 

 

7.79

 

 

7.16

 

 

6.36

 

 

7.30

 

 

6.86

 

 

 

 

Waste Tonnes

 

 

k tonnes

 

 

16,395

 

 

15,922

 

 

17,497

 

 

11,106

 

 

149,855

 

 

 

 

Strip Ratio

 

 

waste:ore

 

 

1.02

 

 

1.11

 

 

1.37

 

 

1.53

 

 

1.35

 

 

 

 

Total Tonnes

 

 

k tonnes

 

 

32,461

 

 

30,327

 

 

30,230

 

 

18,342

 

 

260,485

 

 

 

 

Au Mined

 

 

k oz

 

 

258

 

 

273

 

 

215

 

 

113

 

 

1,900

 

 

 

 

Ag Mined

 

 

k oz

 

 

3,599

 

 

3,143

 

 

2,663

 

 

2,246

 

 

24,470

 

 

 

 

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

1.15        Processing

 

Gold from the Shahuindo mine will be extracted from the ore via heap leach and then processed by carbon-in-column, adsorption-desorption-refining (ADR) operations. The civil and geotechnical design of the leach pads were engineered by Anddes Asociados SAC; the process plant was engineered by Heap Leaching Consulting SAC, both of Lima, Peru.

 

The start-up production plan for the processing of Shahuindo ore is 10,000 tpd (Phase 1) with processing capacity expanded early in the second half of 2016. Average processing rates in 2016 and 2017 are about 12,200 tonnes of ore per day and 16,500 tonnes of ore per day, respectively. The process plant facilities will be further expanded in Phase 2 to 36,000 tonnes per day. The Phase 2 expansion to be implemented in 2018 will include a crushing and agglomeration circuit that includes a single-stage crusher and screen, cement and lime addition to the fines, agglomeration in belt conveyors and stacking system to place ore onto the leach pad.

 

The processing parameters are shown in Table 1.15-1.

 

Table 1.15-1        Processing Design Parameters

 

Parameter

 

 

Phase 1

 

 

Phase 2

Leach Pad Area

 

 

41 Ha

 

 

153

Dry Tonnes of Ore/Day

 

 

10,000

 

 

36,000

Head Grade

 

 

0.64 g/t Au

 

 

0.52 g/t Au

Average Flow Rates

 

 

400 m3/H

 

 

1600-1800 m3/H

Leach Time

 

 

80-90 days

 

 

75-85 days

Lift Height

 

 

8 meters

 

 

8-16 meters

Material Size

 

 

100% minus 300mm

 

 

100% minus 75mm

NaCN Consumption

 

 

0.2 kg/tonne of ore

 

 

0.3 kg/tonne of ore

Lime Consumption

 

 

no addition

 

 

1.0 kg/tonne of ore

Cement Consumption

 

 

n/a

 

 

4-6 kg/tonne

Average Au Recovery

 

 

73%

 

 

80%

 

The Shahuindo mine is scheduled to produce a total of 1.504 million ounces of gold and 2.8 million ounces of silver in doré over a 10 year period. Table 1.15-2 summarizes the life of mine process plant throughput schedule and ounce production.

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Table 1.15-2        Life of Mine Process Plant Throughput

 

 

Unit

2016

2017

2018

2019

2020

2021

Heap Leach Process Tonnes

k tonnes

4,446

6,022

11,179

13,000

13,039

12,352

Process Au Head Grade

g/t

0.79

0.52

0.60

0.48

0.48

0.51

Process Ag Head Grade

g/t

6.59

5.63

6.84

6.56

7.05

6.47

Au ounces recovered

k oz

82.6

74.1

172.9

161.8

160.0

160.8

Ag ounces recovered

k oz

65.9

76.3

294.9

328.9

354.5

308.2

 

 

Unit

2022

2023

2024

2025

Total

Heap Leach Process Tonnes

k tonnes

13,140

13,140

13,140

11,431

110,890

Process Au Head Grade

g/t

0.55

0.62

0.52

0.41

0.53

Process Ag Head Grade

g/t

8.52

7.44

6.30

6.28

6.86

Au ounces recovered

k oz

186.5

209.5

174.5

120.8

1,503.7

Ag ounces recovered

k oz

431.9

377.2

319.6

276.9

2,834.2

 

1.16        Infrastructure

 

The Shahuindo mine is approximately 25 kilometers by road from the town of Cajabamba and 130 kilometers by road from the town of Cajamarca. Access from Cajamarca is via asphalt-paved highway and gravel and dirt roads.

 

During Phase 1 operations, power at the site will be provided by on-site diesel generation capable of sustaining 1.2 MW of power. In 2018, power will be provided via the National Commercial Grid. The long term power requirement for the Shahuindo mine is 7.4MW.

 

All process and domestic water for the operation will be supplied from an 18,000 cubic meter rainwater run-off collection pond, a water well located 300m west of the Shahuindo open pit, and from pit dewatering which will be pumped at the beginning of the second year of operation. Hydrogeological studies indicate sufficient water will be available to supply process and potable water requirements for the life of the mine.

 

At the effective date of this report, buildings required for the initial start-up are in place and are tailored for Phase 1 production. Some of the infrastructure from Phase 1 will be upgraded before Phase 2 production commences.

 

1.17        Mine Closure

 

The entire facility was designed with closure in mind to the greatest extent practicable. The facilities are designed and operated to minimize the footprints and areas of disturbance and utilize the most advanced planning and reclamation techniques available. The disturbance footprint of Shahuindo mine site is

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

approximately 1,348 Ha. Reclamation will commence as soon as practical during operations by placing salvaged topsoil on outer slopes and encouraging vegetation.

 

1.18        Capital and Operating Costs

 

1.18.1     Operating Costs

 

The operating costs for the Shahuindo mine were calculated for each year during the life of mine using the forecasted annual production tonnages. The mining, processing and site general and administration (G&A) costs were derived from first principals, or based on operating costs experienced at Tahoe’s La Arena mine which is comparable to the Shahuindo mine.

 

Table 1.18-1 includes the summary of the anticipated life-of-mine costs.

 

Table 1.18-1        Operating Cost Summary

 

Operating Cost

 

Value

Mining Cost ($/tonne mined)

 

$

1.91

 

Mining Cost ($/ore tonne mined)

 

$

4.50

 

Process Plant Operating Cost ($/tonne processed)

 

$

2.55

 

General Administration ($/tonne processed)

 

$

2.23

 

 


*includes $1.42/tonne ore for crushing and agglomeration beginning in 2018

 

1.18.2     Capital Costs

 

The capital expenditure requirement for the Shahuindo mine is $320.3 million dollars beginning on 01 January 2016. This includes construction capital of $179.6 million and $140.7 million in sustaining capital. Capital expenditures incurred prior to 01 January 2016 are considered as ‘sunk’ costs.

 

The project capital is summarized in Table 1.18-2. The total project capital carried in the financial model for new construction is expended over a three year period.

 

Table 1.18-2        Project Capital

 

Project Capital

 

$ (millions)

Mining

 

$

27.5

 

Process Plant

 

$

105.6

 

Other

 

$

46.6

 

Total

 

$

179.6

 

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

1.18.3     Financial Analysis

 

The Shahuindo mine economic analysis indicates that the project has an Internal Rate of Return (IRR) of 40.6% with a payback period of 4.1 years after taxes and an after-tax Net Present Value using a five percent discount rate (NPV5) of $318.9 M after taxes.

 

Sensitivity analyses were conducted using changes in metal prices, operating cost, initial capital, and recovery; the results of which are summarized in Table 1.18-3. Changes to metal prices have the greatest impact on the NPV and IRR of the project.

 

Table 1.18-3        Sensitivity Analysis — NPV and IRR after Taxes

 

Variable

 

Change

NPV @
0%

NPV @
5%

NPV @
10%

IRR%

Payback

Change in

Metal Prices

 

+20%

 

$

723,045

 

$

508,619

 

$

362,690

 

67.7

%

3.3

 

 

+10%

 

$

597,309

 

$

413,960

 

$

289,289

 

53.1

%

3.6

 

 

Base Case

 

$

471,200

 

$

318,863

 

$

215,413

 

40.6

%

4.1

 

 

-10%

 

$

342,701

 

$

221,333

 

$

139,143

 

29.0

%

4.8

 

 

-20%

 

$

202,022

 

$

113,741

 

$

54,457

 

17.1

%

6.1

 

Change in

Operating

Cost

 

+20%

 

$

348,725

 

$

225,158

 

$

141,508

 

29.0

%

4.9

 

 

+10%

 

$

411,022

 

$

273,026

 

$

179,417

 

34.8

%

4.4

 

 

Base Case

 

$

471,200

 

$

318,863

 

$

215,413

 

40.6

%

4.1

 

 

-10%

 

$

530,361

 

$

363,820

 

$

250,632

 

46.7

%

3.8

 

 

-20%

 

$

588,728

 

$

407,955

 

$

285,031

 

53.1

%

3.6

 

Change in

Total

Capital

 

+20%

 

$

409,200

 

$

263,661

 

$

165,625

 

29.1

%

4.8

 

 

+10%

 

$

440,142

 

$

291,213

 

$

190,477

 

34.2

%

4.5

 

 

Base Case

 

$

471,200

 

$

318,863

 

$

215,413

 

40.6

%

4.1

 

 

-10%

 

$

502,354

 

$

346,596

 

$

240,419

 

49.0

%

3.7

 

 

-20%

 

$

533,592

 

$

374,233

 

$

265,224

 

60.2

%

3.4

 

Change in

Metal

Recovery

 

2%

 

$

508,599

 

$

347,156

 

$

237,466

 

44.2

%

3.9

 

 

1%

 

$

489,905

 

$

333,014

 

$

226,443

 

42.4

%

4.0

 

 

Base Case

 

$

471,200

 

$

318,863

 

$

215,413

 

40.6

%

4.1

 

 

-1%

 

$

452,456

 

$

304,682

 

$

204,358

 

38.9

%

4.2

 

 

-2%

 

$

433,662

 

$

290,459

 

$

193,265

 

37.2

%

4.3

 

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

1.19        Exploration Status

 

Numerous oxide and sulfide exploration targets that have considerable potential to increase the resource and reserve base at Shahuindo have been identified through surface mapping, rock-chip and soil sampling surveys, geophysical surveys and drilling conducted by previous owners of the Shahuindo property and by drilling conducted by Tahoe subsequent to its merger with Rio Alto in April 2015.

 

Drilling around the periphery of the currently-designed pit limits in the second half of 2015 successfully identified mineralization outside of the northeast and southwest margins of the Phase 2 pit shell that will be incorporated into future mine plans. Likewise, condemnation drilling in the planned waste dump area identified shallow mineralization that represents an extension to the known resource; a portion of which will be mined and delivered to the leach pad or stockpile prior to construction of the waste dump foundation.

 

Other drilling in 2015 identified metal grades and mineralogy similar to Shahuindo at the San Lorenzo, Choloque and La Chilca prospects proximal to the Shahuindo pit. These targets represent near-term opportunities to increase the resource base as Shahuindo.

 

1.20        Conclusions and Recommendations

 

The results of this study demonstrate that:

 

1.              The Shahuindo mine is economically viable from 01 January 2016 through to the end of the estimated mine life, supporting the declaration of Proven and Probable Mineral Reserves.

 

2.              The Shahuindo mining strategy consists of two phases. The first phase will process ROM ore at an initial rate of 10,000 tonnes of ore per day, ramping up to an average of 12,200 tonnes of ore per day in 2016 and 16,500 tonnes of ore per day in 2017; the second phase will include a crushing and agglomeration circuit that will increase production to 36,000 tonnes per day. The phased approach enables gold production as soon as possible with minimal capital expenditure, generating cash flow early in the project.

 

3.              The results of laboratory testing program indicate excellent gold recoveries at both ROM and moderate crush sizes with low to moderate reagent requirements, implying amenability to heap leaching. Silver recoveries are generally low.

 

4.              The Shahuindo district holds excellent opportunities for further discovery and definition of additional oxide and sulfide mineralized bodies that have potential to increase the resource base at Shahuindo.

 

The authors of this report recommend the Company to:

 

1.              Initiate field and laboratory studies investigate the potential to reduce capital and operating costs related to the Phase 2 crushing and agglomeration scheme. Conduct pilot scale heap leach tests

 

15


 

Shahuindo Mine, Peru
NI 43-101 Technical Report

 

on the current ROM leach pad to investigate field-scale performance on composites with varying degrees of coarse-to-fines ratios. The metallurgical facilities at the Company’s La Arena mine should be utilized to conduct further permeability and compaction tests.

 

2.              Investigate the ability of the siltstones and breccia with high fines content to percolate in the ROM leach pad.

 

3.     Conduct additional metallurgical testing on drill samples.

 

4.              Improve the geometallurgical model. Further refinement of the geologic model at Shahuindo will greatly aid in mine planning and scheduling, and increase confidence in the material types scheduled for delivery to the leach pad to optimize material blending schemes.

 

5.              Aggressively explore the Shahuindo district and accelerate district exploration with the goal of discovering additional resources amenable to the Shahuindo processing facility.

 

6.              Evaluate the mineralized zones on the periphery of the Shahuindo deposit to expand the resource and incorporate these extensions into a new pit design.

 

7.              Improve the QA/QC procedures by including a wider-range of certified assay standards, particularly assay standards at or near the operational gold cut-off grade. Create assay blanks from coarse RC drilling rejects. Utilize a second commercial laboratory or the La Arena laboratory for check assays of exploration samples.

 

8.     Update and refine the resource estimate as additional drill hole information becomes available.

 

9.     Evaluate the economic potential of the sulfide mineralization below the Shahuindo pit.

 

After reaching commercial production, the authors recommend the Company systematically evaluate mining, processing and other surface operations to optimize processes and procedures and reduce capital and operating costs. Examples include the following trade-off studies to evaluate:

 

a)             the potential to reduce or eliminate the requirement for the crushing and or agglomeration circuit, and the impact to metal recoveries;

 

b)    the economic benefit of implementing a secondary crushing circuit to increase recovery;

 

c)              the potential to increase the overall slope angle of the pit to increase the NPV of the project through further geotechnical and hydrogeological analyses; and

 

d)             the potential to reduce operating costs by evaluating the suitability by backfilling mined waste rock into the pit.

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

2.0          INTRODUCTION

 

2.1          Purpose and Basis of Report

 

Tahoe Resources Inc. (Tahoe or Company), whose common shares are listed for trading on the Toronto Stock Exchange (TSX:THO), New York Stock Exchange (NYSE:TAHO) and Bolsa de Valores: Peru (BVL:THO), has prepared an updated Technical Report (the Report) for the Company’s Shahuindo mine in Peru. This report presents the results of a prefeasibility study of the technical and economic viability of the Shahuindo mine.

 

The following events have triggered an updated NI 43-101 Technical Report for the Shahuindo mine:

 

·                  On 09 February 2015, Tahoe and Rio Alto Gold (Rio Alto) entered into a definitive agreement to combine their respective businesses and finalized the transaction on 01 April 2015. Through this merger, Tahoe Resources acquired 100% ownership of the mining assets of Rio Alto which included the Shahuindo project.

 

·                  The Mineral Resources and Mineral Reserves estimates have been updated as the result of data obtained from drilling and additional engineering studies conducted in 2014 and 2015. Mining studies incorporate updated cost estimates and financial analyses.

 

·      Tahoe has revised the mining strategy for the Shahuindo mine.

 

·                  Tahoe has conducted further metallurgical testing on the ore at Shahuindo and has revised the metallurgical assumptions and flowsheet for the project.

 

This report has been completed in accordance with the disclosure and reporting requirements set forth in the Toronto Stock Exchange Manual, National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101), Companion Policy 43-101CP to NI 43-101, and Form 43-101F1 of NI 43-101.

 

2.2          Sources of Information

 

Information contained in this Report was obtained from prior Technical Reports and from work completed by independent consultants on behalf, and under the direction, of Rio Alto and Tahoe, and by work completed by Rio Alto and Tahoe personnel under the guidance of the authors. Information included herein derived from this work is cited in the text of this Report, with references listed in Section 27.0. The authors have made all reasonable effort to establish the completeness and authenticity of the information provided in this Report.

 

Prior Technical Reports filed on the Shahuindo project include:

 

·      Resources Estimation, Shahuindo Project, Peru (Saucier and Poulin, 2004)

 

·      Resources Estimation, Shahuindo Project, Peru (Saucier and Buchanan, 2005)

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

·                  Shahuindo Gold Project, Cajabamba Province, Peru, NI 43-101 Technical Report on Preliminary Assessment (Wright et al., 2010a)

 

·                  Shahuindo Gold Project, Cajabamba Province, Peru, NI 43-101 Technical Report on Preliminary Assessment (Wright et al., 2010b)

 

·      Technical Report on the Shahuindo Project, Cajabamba, Peru (Tietz and Kappes, 2011)

 

·      Updated Technical Report on the Shahuindo Project, Cajabamba, Peru (Tietz and Defilippi, 2012)

 

·      Technical Report on the Shahuindo Heap Leach Project (Defilippi, et. al., 2012)

 

2.3          Qualified Persons and Site Visits

 

Mr. Tim Williams, Tahoe’s Vice President Operations and Peru Country Manager, Mr. Charles V. Muerhoff, Tahoe’s Vice President Technical Services and Mr. Carl E. Defilippi of Kappes, Cassiday & Associates prepared this Technical Report. Each is a Qualified Person (QP) by NI 43-101 definitions.

 

Dates of site visits and specific sections of the Report that the Qualified Persons are responsible for are listed in Table 2.3-1.

 

Table 2.3-1           Qualified Persons - Site Visits and Report Responsibilities

 

QP Author

 

Company

 

Designation

 

Site Visit

 

Section Responsibility

 

Tim Willams

 

Tahoe Resources Inc.

 

FAusIMM

 

Multiple Site Visits 2014 & 2015

 

Sections 4, 15, 16, 18, 20 and corresponding items in Sections 1, 25, 26

 

Charles V. Muerhoff

 

Tahoe Resources Inc.

 

SME Registered Member

 

May 19-20, 2015 November 13-14, 2015

 

Sections 2, 3, 5 through 12, 14, 19, 21 through 24 and corresponding items in Sections 1, 25, 26

 

Carl E. Defilippi

 

Kappes, Cassiday & Associates

 

SME Registered Member

 

May 4-7, 2010 April 6-8, 2010  September 2-3, 2015

 

Sections 13, 17 and corresponding items in Sections 1, 25, 26

 

 

2.4          Effective Dates

 

The effective date of this Technical Report is 01 January 2016. The effective date of the Shahuindo Mineral Resource estimate is the 15 April 2015. The effective date of the Shahuindo Mineral Reserve Estimate is 01 November 2015.

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

2.5          Units of Measurements

 

Unless otherwise specified, all monetary dollars expressed in this Report are in United States dollars ($). Metal grades are expressed in grams per metric tonne (g/t) and metal content is expressed in troy ounces. All units of measure, unless otherwise specified, are metric.

 

2.6          Abbreviations and Acronyms

 

A list of abbreviations and acronyms commonly used in this report is provided in Table 2.6-1.

 

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Shahuindo Mine, Peru
NI 43-101 Technical Report

 

Table 2.6-1           List of Abbreviations

 

Abbr.

 

Description

 

Abbr.

 

Description

 

$

 

United States of America dollars

 

m

 

meters

 

μ

 

microns

 

m2

 

square meters

 

ADR

 

adsorption-desorption-refining

 

m3

 

cubic meters

 

Ag

 

silver

 

MCE

 

maximum considered earthquake

 

ARD

 

acid rock drainage

 

MEM

 

Ministry of Energy and Mines

 

Au

 

gold

 

mm

 

millimeters

 

AuEq

 

gold-equivalent

 

MMR

 

Minimum Mining Royalty

 

bcm

 

bank cubic meters

 

Moz

 

million troy ounces

 

CAPEX

 

capital expenditure

 

MPa

 

million Pascal

 

CIM

 

Canadian Institute of Mining, Metallurgy and Petroleum

 

Mt

 

millions of dry metric tonnes

 

CIRA

 

Certificate for the Inexistence of Archaeological Remains

 

Mt/y

 

million tonnes per year

 

CN

 

cyanide

 

MW

 

megawatt

 

dmt

 

dry metric tonne

 

NAG

 

non acid generating

 

DSHA

 

deterministic seismic hazard assessment

 

NI 43-101

 

Canadian National Instrument 43-101

 

EIA

 

Estudio de Impacto Ambiental (environmental impact study)

 

NPV

 

net present value

 

GEU

 

Geo Environmental Unit

 

NSR

 

net smelter return

 

g/t

 

grams per metric tonne

 

oz

 

troy ounce

 

in

 

inches

 

PAG

 

potentially acid generating

 

ha

 

hectare

 

PGA

 

peak ground acceleration

 

HDPE

 

high-density polyethylene

 

PLS

 

pregnant leach solution

 

hp

 

horsepower

 

ppm

 

parts per million

 

IBC

 

International Building Code

 

PSAD

 

Peru Central Zone

 

IGV

 

impuesto general a las ventas

 

PSHA

 

probabilistic seismic hazard assessment

 

IP

 

induced polarization

 

QA/QC

 

quality assurance and quality control

 

IRR

 

internal rate of return

 

QP

 

Qualified Person

 

k

 

thousand

 

RC

 

reverse circulation

 

Koz

 

thousands of troy ounces

 

RMR

 

rock mass rating

 

kPA

 

kilopascal

 

ROM

 

run-of-mine

 

kt

 

thousand tonnes

 

SENACE

 

National Environmental Certification Service

 

ktpd

 

thousand tonnes per day

 

SERNANP

 

National Service of Natural Protected Areas of the State

 

kV

 

kilovolt

 

SMT

 

Special Mining Tax