LOCATION

The Andacollo Gold Project is located in Districto Minero Andacollo (Andacollo Mining District), Minas Department, Neuquén Province, Argentina, 56 km northwest of Chos Malal and 456 km northwest of the provincial capital Neuquén via paved roads. The principal access to the district is via paved Provincial Route 43 that connects the town of Andacollo with Chos Malal, the second largest town in Neuquén.

From Chos Malal, National Route 40 connects to Las Lajas where the paved road splits, leading west to the Chilean border at Pino Hachado via Route 243 or southeast to the city of Neuquén via Route 22. There is a paved airstrip at Chos Malal and commercial air service to Neuquén.

PROPERTY

The state company Corporación Minera de Neuquén S.E.P. (CORMINE) owns the Andacollo Gold Project property, which consists of 34 Vein concessions and 26 Disseminated concessions, totalling 29,575.4 hectares, together with additional “Damasias” mining rights and surface easements for infrastructure.

These concessions were acquired by CORMINE in 1998 by expropriation from private owners. In September 2016, the Provincial Government of Neuquén awarded rights for exploration and exploitation of the property to Trident Southern Explorations for 25 years in usufruct.

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HISTORY

Discovery

Corydon P. Halls, a US citizen, reportedly initiated the first exploitation of placer gold deposits along Milla Michicó creek in the late 19th century. In 1860, the Vivanco family arrived from Chile, discovered the Julia and Sofia veins and initiated the first mining works. In 1892, the Quiroga family brought mills and, in a lapse of eleven years, produced 200 kilograms of gold with 30 workers. In 1903, the Salas family from Chile created a partnership with the Quiroga family and jointly they built a process plant at Milla Michicó during 1905. By 1906, the Neuquén Proprietary Gold Mines at Cerro de la Julia (currently Cerro Minas) had sixteen mines in production but by 1909 the higher-grade veins were exhausted and production declined until production basically ended between 1920 and 1925. In 1933, the Erika vein was discovered, which operated until 1947. Total production during this early period is not well documented.

Exploration and Production

Between 1993 and 1995, Placer Dome, unsuccessfully carried out exploration, including 6 RC and 2 diamond core holes totaling 1,542m, looking for the disseminated gold mineralization in an area south of Andacollo, La Primavera, where significant placer workings exist. From 1996 through to 1998, Cameco Argentina continued exploration in the area including 2,890 m of additional drilling. In 1998, the Andacollo mineral deposits were expropriated by Corporación Minera del Neuquén, Sociedad del Estado Provincial (CORMINE SEP) the mining agency of the provincial government. CORMINE then granted a 20-year usufruct contract to Minera Andacollo Gold SA (MAGSA), which initiated an exploration program within the central part of the district around Cerro Minas. In 2001, MAGSA received approval by the Neuquén government to begin mining activity and initiated production in 2003, mainly from the Buena Vista, San Pedro Sur, Sofía-Julia and Erika mines.

Ore was processed in a 320-tons/day flotation plant with an additional line for gravity concentration. During the 11 years from 2004 through 2014, MAGSA produced 129,620 ounces of gold, mainly from the Buena Vista, Sofía and Erika mines. During this period, MAGSA also conducted 3 drilling campaigns (15,562 meters) south of Andacollo in the Primavera sector following up on the initial Cameco and Placer Dome work. MAGSA ceased production in late 2014 and CORMINE subsequently terminated the contract in May, 2015, due to non-compliance.

As of 2016, remnant resources, as indicated in the technical report “SUMMARY REPORT ON THE CERRO MINAS SECTOR, ANDACOLLO GOLD PROJECT” (click to link) consisted of 47k AuEq Ozs M+I resources and 58.5k AuEq Ozs Inferred resources for the seven principal veins in the Cerro Minas sector of the district.

Trident Acquisition and Exploration

In September 2016, the Provincial Government of Neuquén awarded the Andacollo Gold Project to Trident Southern Explorations, a subsidiary of the Trident Group, for 25 years in usufruct. In order to restart production and de-risk the project, Trident initiated an in-fill and step-out drill program to validate the reported resources, duplicate the contained gold equivalent ounces and develop a sustainable mine plan. The 2017-2018 drilling campaign, totalling 16,448 m in 83 core holes, focused on five targets – Sofía-Julia, Buena Vista, San Pedro Sur, San Pedro Norte (Karina) and Veta Azul located at Campo de Vetas. RPMGlobal is currently updating the resources and FF GeoMechanics is developing a LOM plan to reinitiate production in the 3rd quarter 2018.