Piedras Verdes 2010 Technical Report Acrobat X.2691621

Cobre del Mayo S.A. de C.V.
Technical Report
for the
PIEDRAS VERDES COPPER PROJECT
Alamos, Sonora, Mexico
February 12, 2010
Information effective as of December 31, 2009
By: Brian Kennedy, P.Eng.

Matt Gray, P.Geo.
John Nilsson, P.Eng.
FRONTERA COPPER CORPORATION
T AB L E O F C O N T E N T S
ITEM 1 • TITLE PAGE
ITEM 2 • TABLE OF CONTENTS
ITEM 3 • SUMMARY & CONCLUSIONS ............................................................................................... 3-1

3.1 Location & Access......................................................................................................................... 3-4
3.2 Ownership ..................................................................................................................................... 3-5
3.3 Mining Concessions ...................................................................................................................... 3-5
3.4 Surface Rights............................................................................................................................... 3-8
3.5 Water Rights ................................................................................................................................. 3-8
3.6 History ........................................................................................................................................... 3-8
3.7 Geology & Mineralization .............................................................................................................. 3-9
3.8 Exploration Activities ..................................................................................................................... 3-9
3.9 Mineral Resources ......................................................................................................................3-11
3.10 Mineral Reserves ........................................................................................................................3-11
3.11 Mining..........................................................................................................................................3-12
3.12 Processing ..................................................................................................................................3-13
3.13 Infrastructure ...............................................................................................................................3-14
3.14 Permitting ....................................................................................................................................3-15
3.15 Economic Analysis ......................................................................................................................3-15
ITEM 4 • INTRODUCTION & TERMS OF REFERENCE ....................................................................... 4-1
ITEM 5 • RELIANCE ON OTHERS ........................................................................................................ 5-1
ITEM 6 • PROPERTY DESCRIPTION & LOCATION ............................................................................ 6-1

6.1 Mineral Rights ............................................................................................................................... 6-1
6.1.1 Grupo Serrana Concessions ......................................................................................... 6-1
6.1.2 Cobre Del Mayo Concessions....................................................................................... 6-1
6.1.3 Private Concessions & Surface Rights.......................................................................... 6-4
6.1.4 Ejido Lands....................................................................................................................6-4
6.2 Water Rights ................................................................................................................................. 6-6
6.2.1 Project Water Rights...................................................................................................... 6-6
6.2.2 Subsurface Water Rights .............................................................................................. 6-6
6.3 Legal – Ejido Relocation Process ................................................................................................. 6-6
ITEM 7 • ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE &

PHYSIOGRAPHY ...................................................................................................................................... 7-1
7.1 Accessibility................................................................................................................................... 7-1
7.2 Climate .......................................................................................................................................... 7-1
7.3 Local Resources ........................................................................................................................... 7-4
7.3.1 Water ............................................................................................................................. 7-4
7.3.2 Construction Materials................................................................................................... 7-4
12 February 2010 Table of Contents 2-1

7.3.3 Mining Personnel...........................................................................................................7-4

7.4 Infrastructure ................................................................................................................................. 7-4
7.4.1 Roads & Highways ........................................................................................................ 7-4
7.4.2 Electric Power................................................................................................................ 7-4
7.4.3 Water Pipelines ............................................................................................................. 7-5
7.4.4 Sewage.......................................................................................................................... 7-5
7.5 Physiography ................................................................................................................................ 7-5
7.5.1 Terrain ........................................................................................................................... 7-5
7.5.2 Surface Water Hydrology .............................................................................................. 7-5
7.6 Geotechnical ................................................................................................................................. 7-6
ITEM 8 • HISTORY ................................................................................................................................. 8-1
ITEM 9 • GEOLOGICAL SETTING ........................................................................................................ 9-1

9.1 Regional Geology.......................................................................................................................... 9-1
9.2 Deposit Geology............................................................................................................................ 9-1
9.3 Lithology & Sequence of Intrusion ................................................................................................ 9-4
ITEM 10 • DEPOSIT TYPES................................................................................................................. 10-1
ITEM 11 • MINERALIZATION & ORE TYPES ..................................................................................... 11-1
ITEM 12 • EXPLORATION ................................................................................................................... 12-1

12.1 Piedras Verdes Exploration ........................................................................................................12-1
12.2 Cerro Chato Exploration..............................................................................................................12-1
12.3 Fortuna 8 Exploration..................................................................................................................12-4
ITEM 13 • DRILLING ............................................................................................................................ 13-1

13.1 Piedras Verdes Historical Drilling................................................................................................13-1
13.2 Cerro Chato.................................................................................................................................13-2
13.3 Piedras Verdes 2006-2007 Infill Drilling......................................................................................13-2
ITEM 14 • SAMPLING METHODS & APPROACH.............................................................................. 14-1

14.1 Sample Methods & Details..........................................................................................................14-1
14.1.1 Surface Samples .........................................................................................................14-1
14.1.2 Drill Samples ...............................................................................................................14-1
14.2 Drilling, Sampling, or Recovery Factors......................................................................................14-1
14.3 Sample Quality............................................................................................................................14-1
14.4 List of Individual Samples ...........................................................................................................14-3
14.5 Cerro Chato Diamond Drill Program ...........................................................................................14-3
14.6 2006- 2007 Infill Drilling Program................................................................................................14-3
14.7 Blast Hole Sampling....................................................................................................................14-3

ITEM 15 • SAMPLE PREPARATION, ANALYSES & SECURITY ...................................................... 15-1

15.1 General Procedures – Preproduction .........................................................................................15-1
15.1.1 Sample Preparation Personnel ...................................................................................15-1
15.1.2 Details of Sample Preparation, Assaying & Analytical Procedures ............................15-1
15.2 Quality Control ............................................................................................................................15-4
15.3 General Procedures – Production Blast Holes ...........................................................................15-7
15.3.1 Check Assays, Production Blast Holes .......................................................................15-7
15.4 Comparison of Assays with Model Generated Values................................................................15-9
15.5 Metallurigical Sample Checks.....................................................................................................15-9
15.6 Comparison of Bottle Roll test with SAPCu Assays .................................................................15-10
15.7 Cerro Chato Diamond DRILL CORE Sample Preparation, Analysis & Security .....................15-10
ITEM 16 • DATA VERIFICATION......................................................................................................... 16-1

16.1 Quality Control & Data Verification Measures ............................................................................16-1
16.1.1 Geologic Data..............................................................................................................16-1
16.1.2 Mining Data .................................................................................................................16-1
16.1.3 Process Data ...............................................................................................................16-1
16.2 Sampling & Analytical Data Verified ...........................................................................................16-2
16.3 Cerro Chato Diamond Drilling Campaign Data Verification ........................................................16-2
16.4 Limitations of Verification ............................................................................................................16-2
16.5 Reasons for Failure to Verify ......................................................................................................16-2
ITEM 17 • ADJACENT PROPERTIES ................................................................................................. 17-1
ITEM 18 • MINERAL PROCESSING & METALLURGICAL TESTING ............................................... 18-1

18.1 CDM Column Test Program........................................................................................................18-2
18.2 Testwork Correlation ...................................................................................................................18-5
18.3 Production Projections ................................................................................................................18-7
18.4 On-Going Activities .....................................................................................................................18-9
ITEM 19 • MINERAL RESOURCE & MINERAL RESERVE ESTIMATE............................................. 19-1

19.1 Database for Deposit Model .......................................................................................................19-2
19.1.1 Drill Hole Data .............................................................................................................19-2
19.1.2 Specific Gravity Determination ....................................................................................19-4
19.1.3 Geomechanical Database ...........................................................................................19-4
19.1.4 Geologic & Ore Domain Data......................................................................................19-4
19.1.5 Topographic Data ........................................................................................................19-8
19.2 Block Model.................................................................................................................................19-8
19.2.1 Dimensions & Variables ..............................................................................................19-8
19.2.2 Geologic Models........................................................................................................19-10
19.2.3 Land Status Model.....................................................................................................19-10
19.3 Geostatistical Analysis ..............................................................................................................19-10
19.3.1 Assay Statistics .........................................................................................................19-10
19.3.2 Composite Statistics ..................................................................................................19-14
19.3.3 Variography ...............................................................................................................19-16
19.4 Grade Interpolation ...................................................................................................................19-20

19.5 Specific Gravity .........................................................................................................................19-22

19.6 Acid Consumption .....................................................................................................................19-22
19.7 Resource Classification.............................................................................................................19-23
19.8 Mineral Resource ......................................................................................................................19-24
19.9 Model Validation........................................................................................................................19-28
19.10 Model Reconciliation .................................................................................................................19-30
19.11 Comparison of 2008 & 1997 Models.........................................................................................19-35
ITEM 20 • OTHER RELEVANT DATA & INFORMATION ................................................................... 20-1
ITEM 21 • MINING ................................................................................................................................ 21-1

21.1 Summary.....................................................................................................................................21-1
21.2 Operating Parameters.................................................................................................................21-2
21.3 Pit Optimization ...........................................................................................................................21-2
21.3.1 Resource Model ..........................................................................................................21-2
21.3.2 Wall Slopes..................................................................................................................21-2
21.3.3 Metallurgical Recovery ................................................................................................21-4
21.3.4 Ore Types....................................................................................................................21-4
21.3.5 Economic Parameters .................................................................................................21-5
21.3.6 Operating Costs...........................................................................................................21-5
21.3.7 Sustaining Capital........................................................................................................21-6
21.3.8 Block Model Net Value ................................................................................................21-6
21.3.9 Pit Limit Analysis .........................................................................................................21-7
21.4 Pit Design..................................................................................................................................21-10
21.4.1 General......................................................................................................................21-10
21.4.2 Pit Phases .................................................................................................................21-10
21.5 Production Schedule .................................................................................................................21-21
21.5.1 General......................................................................................................................21-21
21.5.2 Pit Sequencing ..........................................................................................................21-22
21.5.3 Mining Rate ...............................................................................................................21-25
21.5.4 Copper Production.....................................................................................................21-27
21.6 Plan of Operations ....................................................................................................................21-28
21.6.1 General......................................................................................................................21-28
21.6.2 Heap Leach Pad........................................................................................................21-28
21.6.3 Waste Dumps ............................................................................................................21-30
21.6.4 Unit Operations..........................................................................................................21-30
21.6.5 Production Schedule & Leaching Model ...................................................................21-35
ITEM 22 • PROCESSING ..................................................................................................................... 22-1

22.1 Introduction .................................................................................................................................22-1
22.2 Existing Plant & Process Description..........................................................................................22-1
22.2.1 Heap Leaching ............................................................................................................22-1
22.2.2 Solvent Extraction & Electrowinning............................................................................22-5
22.3 Heap Leach Performance ...........................................................................................................22-7
22.4 Process Improvements ...............................................................................................................22-9
22.4.1 Reduction of Copper Inventory....................................................................................22-9
22.4.2 Solution Management Plan .......................................................................................22-10

ITEM 23 • INFRASTRUCTURE ............................................................................................................ 23-1

23.1 Summary.....................................................................................................................................23-1
23.2 Utilities.........................................................................................................................................23-1
23.2.1 Power ..........................................................................................................................23-1
23.2.2 Water ...........................................................................................................................23-1
23.2.3 Sewage........................................................................................................................23-1
23.2.4 Telecommunications....................................................................................................23-1
23.3 Ancillaries....................................................................................................................................23-2
23.3.1 Roads ..........................................................................................................................23-2
23.3.2 Offices & Shops...........................................................................................................23-2
ITEM 24 • ENVIRONMENTAL & PERMITTING................................................................................... 24-1

24.1 Policy, Legal & Administrative Framework..................................................................................24-1
24.1.1 Environmental Impact Manifest (MIA) .........................................................................24-2
24.1.2 Land Use Change Application (CUS)..........................................................................24-2
24.1.3 Risk Study ...................................................................................................................24-2
24.1.4 Water Permitting..........................................................................................................24-3
24.1.5 Construction Permit .....................................................................................................24-3
24.1.6 Explosives Handling ....................................................................................................24-4
24.1.7 Cultural Resources ......................................................................................................24-4
24.2 Baseline Data..............................................................................................................................24-4
24.2.1 Climate ........................................................................................................................24-4
24.2.2 Air Quality ....................................................................................................................24-5
24.2.3 Soils.............................................................................................................................24-5
24.2.4 Surface Hydrology .......................................................................................................24-5
24.2.5 Groundwater Hydrology ..............................................................................................24-5
24.2.6 Vegetation & Wildlife ...................................................................................................24-6
24.2.7 Socio-economic Evaluation .........................................................................................24-7
24.2.8 Cultural Resources ......................................................................................................24-7
24.3 Environmental Impacts................................................................................................................24-8
24.3.1 Vegetation & Wildlife ...................................................................................................24-8
24.3.2 Air Quality ....................................................................................................................24-8
24.3.3 Acid Rock Drainage (ARD)..........................................................................................24-9
24.3.4 Surface Water..............................................................................................................24-9
24.3.5 Ground Water ............................................................................................................24-10
24.3.6 Pit Lake......................................................................................................................24-11
24.3.7 Waste Generation......................................................................................................24-11
24.4 Reclamation Plan ......................................................................................................................24-11
24.4.1 Recovery ...................................................................................................................24-14
24.4.2 Native Plant Salvage .................................................................................................24-14
24.4.3 Recontouring Waste Rock & Piles ............................................................................24-14
24.4.4 Cover Placement at Waste Rock Piles......................................................................24-14
24.4.5 Revegetation at Waste Rock Piles ............................................................................24-15
24.4.6 Pit Area Reclamation.................................................................................................24-15
24.4.7 Powder Magazine Reclamation.................................................................................24-16
24.4.8 Leach Pad Reclamation ............................................................................................24-16
24.4.9 Process Ponds Reclamation .....................................................................................24-17
24.4.10 Processing & Administration Areas Reclamation......................................................24-17
24.4.11 Dismantling of Facilities & Equipment .......................................................................24-17
24.4.12 Reclamation Cost Estimate .......................................................................................24-17

24.4.13 Environmental Monitoring Plan .................................................................................24-18

24.5 Summary & Conclusions...........................................................................................................24-18
ITEM 25 • RESULTS OF OPERATIONS .............................................................................................25-1
ITEM 26 • ECONOMIC ANALYSIS ...................................................................................................... 26-1

26.1 Summary.....................................................................................................................................26-1
26.2 Assumptions................................................................................................................................26-5
26.2.1 Economic Start Date & Sunk Costs.............................................................................26-5
26.2.2 Exchange Rate ............................................................................................................26-5
26.2.3 Date of Estimate ..........................................................................................................26-5
26.2.4 Escalation ....................................................................................................................26-5
26.2.5 Production ...................................................................................................................26-5
26.2.6 Copper Price................................................................................................................26-6
26.2.7 Diesel & Sulfuric Acid Prices .......................................................................................26-6
26.2.8 Copper Cathode Sales ................................................................................................26-6
26.3 Metal Production & Costs............................................................................................................26-6
26.4 Capital Costs...............................................................................................................................26-7
26.4.1 Capital Costs to 31 December 2009 ...........................................................................26-7
26.4.2 Capital Costs from 2010-2024.....................................................................................26-7
26.4.3 Working Capital ...........................................................................................................26-9
26.4.4 Reclamation Expense ...............................................................................................26-10
26.5 Operating Costs ........................................................................................................................26-10
26.5.1 Basis..........................................................................................................................26-10
26.5.2 Mining ........................................................................................................................26-10
26.5.3 Processing.................................................................................................................26-10
26.5.4 General & Administrative...........................................................................................26-10
26.5.5 Royalties....................................................................................................................26-10
26.5.6 Copper-In-Process Inventory Adjustment .................................................................26-11
26.6 Income Taxes............................................................................................................................26-11
26.6.1 Tax Depreciation .......................................................................................................26-11
26.6.2 Corporate Tax Rates .................................................................................................26-11
26.6.3 Government Fees & Taxes .......................................................................................26-11
26.6.4 Repatriation Issues....................................................................................................26-11
ITEM 27 • INTERPRETATION & CONCLUSIONS .............................................................................. 27-1

27.1 General .......................................................................................................................................27-1
27.2 Interpretation & Conclusions.......................................................................................................27-1
27.3 Recommendations ......................................................................................................................27-3
ITEM 28 • REFERENCES..................................................................................................................... 28-1
ITEM 29 • DATE & SIGNATURE PAGE .............................................................................................. 29-1

LIST OF TABLES
3.1 Mining Concessions Controlled by CDM ...................................................................................... 3-7
3.2 Measured & Indicated Resources...............................................................................................3-11
3.3 Proven & Probable Reserves......................................................................................................3-11
3.4 Piedras Verdes Mineable Reserves............................................................................................3-12
3.5 Projected Copper Recovery by Ore Type ...................................................................................3-14
3.6 Key Permits.................................................................................................................................3-15
3.7 Assumptions for Piedras Verdes Mine Economic Analysis ........................................................3-16
3.8 Piedras Verdes Mine Free Cash Flow and NPV.........................................................................3-17
3.9 Piedras Verdes Mine NPV Sensitivity Analysis ..........................................................................3-17
3.9 Life-of-Mine Production Schedule...............................................................................................3-18
4.1 Report Units & Abbreviations........................................................................................................ 4-2
6.1 Mining Concessions Controlled by CDM ...................................................................................... 6-2
12.1 Cerro Chato Drill Hole Intercepts Summary Table .....................................................................12-3
12.2 Fortuna 8 Drill Intersections Summary........................................................................................12-5
15.1 Sample Selection ........................................................................................................................15-8
18.1 Piedras Verde Ore Types............................................................................................................18-2
18.2 CDM Column Test Results..........................................................................................................18-3
18.3 Projected Copper Recovery by Ore Type ...................................................................................18-7
18.4 Projected Net Acid Consumption by Ore Type ...........................................................................18-8
19.1 Ore Types Used in Resource Model...........................................................................................19-5
19.2 Lithology (Rock Type) Codes Used in Resource Model .............................................................19-6
19.3 Block Model Limits & Dimensions..............................................................................................19-8
19.4 Data Fields in Block Model .........................................................................................................19-9
19.5 Piedras Verdes Model Land Status Codes ...............................................................................19-10
19.6 Statistics of Assay Items at 0.0 Cutoff ......................................................................................19-11
19.7 Summary Statistics for TCu at 0.0 Cutoff for Different Ore Types............................................19-14
19.8 Summary Statistics for SAPCu at 0.0 Cutoff for Different Ore Types.......................................19-15
19.9 Variogram Parameters for TCu & SAPCu in Different Ore Types ............................................19-20
19.10 Summary of the Interpolation Parameters Used.......................................................................19-21
19.11 Assay Capping Cutoff Grades for Cu Items by Ore Type Domain ...........................................19-21
19.12 Piedras Verdes Density Matrix..................................................................................................19-22
19.13 Net Acid Consumption Statistics by Ore Type ..........................................................................19-23
19.14 Resource Classification Criteria Used ......................................................................................19-24
19.15 Summary of Measured Mineral Resources at Incremental Cutoffs ..........................................19-25
19.16 Summary of Indicated Mineral Resources at Incremental Cutoffs ...........................................19-25
19.17 Summary of Measured & Indicated mineral resources at incremental cutoffs .........................19-27
19.18 Summary of Inferred Mineral Resources at Incremental Cutoffs..............................................19-27
19.19 Summary of Measured & Indicated Mineral Resources by Ore Type, at 0.20% TCu Cutoff....19-27
19.20 TCu Results from Blastholes for all the Blocks of Ore Types 2-9.............................................19-32
19.21 TCu Results from PD-1999, PD-Matt & Mintec-Matt Models....................................................19-33
19.22 Percent Differences of PD-1999, PD-Matt & Mintec-Matt Models from Blastholes for TCu.....19-33
19.23 SAPCu Results from Blastholes for all the Blocks of Ore Types 2-9........................................19-33
19.24 SAPCu Results from PD-1999, PD-Matt & Mintec-Matt Models...............................................19-34
19.25 Percent Differences of PD-1999, PD-Matt & Mintec-Matt Models from Blastholes for SAPCu 19-34
19.26 Comparison of 1997 & August 2008 Measured & Indicated In-Situ Metal Endowments (NOT
Resource Estimates), Pre-Mining Topography, Piedras Verdes Deposit.................................19-35
19.27 Comparison Contained Total & SAP Copper, August 2008 & 1997 Measured & Indicated
In-Situ Metal Endowments (NOT Resource Estimates), Pre-Mining Topography, Piedras
Verdes Deposit..........................................................................................................................19-36
19.28 Comparison of Measured & Indicated In-Situ Metal Endowments by Ore Type, August 2008
& 1997 Estimates, Pre-Mining Topography, Piedras Verdes Deposit ......................................19-36

21.1 Pit Optimization Slope Design Sectors .......................................................................................21-2

21.2 Pit Slope Design Sectors ............................................................................................................21-3
21.3 Metallurgical Ore Types ..............................................................................................................21-4
21.4 Process Recovery .......................................................................................................................21-4
21.5 Acid Consumption .......................................................................................................................21-5
21.6 Economic Parameters.................................................................................................................21-5
21.7 Operating Cost Basis ..................................................................................................................21-6
21.8 Sustaining Capital Cost...............................................................................................................21-6
21.9 Block Value Calculation Items ....................................................................................................21-7
21.10 Pit Optimization Results ..............................................................................................................21-8
21.11 Pit Design Criteria .....................................................................................................................21-10
21.12 Pit Design Material Distribution.................................................................................................21-12
21.13 Ore Reserve Summary .............................................................................................................21-13
21.14 Annual Mine Production Schedule............................................................................................21-24
21.15 Blasthole Drill Production ..........................................................................................................21-31
21.16 Loading Productivity..................................................................................................................21-34
24.1 Key Environmental Permits.........................................................................................................24-1
24.2 El Tepustete Creeks Stream Flow ..............................................................................................24-5
24.3 Mitigation Plan Main Criteria & Considerations Assumed for Reclamation Strategy of the
Piedras Verdes Mine.................................................................................................................24-12
24.4 PLS and Raffinate Pond Capacities and Areas ........................................................................24-17
24.5 Summary of Reclamation costs for Piedras Verdes Mine ........................................................24-18
26.1 Assumptions for Piedras Verdes Mine Economic Analysis ........................................................26-2
26.2 Piedras Verdes Mine Free Cash Flow & NPV ($M)....................................................................26-2
26.3 Piedras Verdes Mine Profit & Loss Statement ($M) ...................................................................26-4
26.4 Piedras Verdes Mine Remaining Life-of-Project Reported Cash Cost .......................................26-7
26.5 Capital Expenditures Summary ($M) ..........................................................................................26-8
LIST OF FIGURES
3-1 Piedras Verdes Project Regional Location Map ........................................................................... 3-4
3-2 Mining Concessions ...................................................................................................................... 3-6
3-3 Drill Hole Location Map ...............................................................................................................3-10
3-4 Piedras Verdes Mine NPV vs. Changes in Copper Price ...........................................................3-16
6-1 Piedras Verdes Deposit Mining Concessions............................................................................... 6-3
7-1 Piedras Verdes Project Regional Location Map ........................................................................... 7-2
7-2 Site Plan ........................................................................................................................................ 7-3
9-1 Simplified Geology Map ................................................................................................................ 9-2
9-2 North-South Geological Section (698,000 East)........................................................................... 9-3
11-1 North-South Ore Types Section (698,000 East) .........................................................................11-2
11-2 North-South Ore Types Section (696,400 East) .........................................................................11-3
11-3 Mid-Bench Ore Type Plan – 97.50 m Elevation Level ................................................................11-4
11-4 Mid-Bench Ore Type Plan – 157.50 m Elevation Level ..............................................................11-5
12-1 Cerro Chato Drill Hole Location Map ..........................................................................................12-2
14-1 Metallurgical Sample Drill Hole Location Map ............................................................................14-2
15-1 Check Assay Comparison (All Check Assays) ...........................................................................15-5
15-2 Comparison Check Assay Values TCu>0.09% ..........................................................................15-6
18-1 PV-07 Copper Extraction Results ...............................................................................................18-5
18-2 PV-07 Net Acid Consumption Results ........................................................................................18-5
18-3 PV-07 Curve Fitting Results........................................................................................................18-6

18-4 Extrapolated Copper Recovery Curves by Ore Type .................................................................18-8

19-1 3-D View of the Topography of the Deposit Area & the Drill Holes ............................................19-2
19-2 Plan View of the Topography Contours of the Deposit Area & the Drill Hole Locations ............19-3
19-3 Average Drill Hole Spacing by Bench .........................................................................................19-3
19-4 Histogram Plot of Drill Hole Length...........................................................................................19-11
19-5 Histogram Plot of All TCu Assays .............................................................................................19-12
19-6 Histogram Plot of All SAPCu Assays ........................................................................................19-12
19-7 Cumulative Probability Plot in Log Scale of All TCu Assays.....................................................19-13
19-8 Scatterplot of TCu vs. SAPCu Assays ......................................................................................19-13
19-9 Histogram Plot for All Composites, TCu ...................................................................................19-14
19-10 Cumulative Probability Plot in Log Scale for All Composites, TCu...........................................19-15
19-11 Cumulative Probability Plot in Log Scale for All Composites, SAPCu......................................19-16
19-12 Spherical 3-D Model Fit for TCu Variograms (Domain 3) .........................................................19-17
19-13 Horizontal Variogram Contours for TCu (Domain 3).................................................................19-18
19-14 3-D Variogram Ellipsoids Sliced at Principal Orthogonal Planes, Horizontal, W-E Vertical &
S-N Vertical (Domain 3) ............................................................................................................19-18
19-15 Global Median Indicator Variogram for TCu .............................................................................19-19
19-16 Grade-Tonnage Curves for TCu from IDW, Kriging & Polygonal Methods ..............................19-28
19-17 TCu Block Grades from Kriging Method, NS Section 698,500E ..............................................19-29
19-18 TCu Block Grades from Kriging Method, NS Section 698,600E ..............................................19-29
19-19 TCu Block Grades from Kriging Method, Bench 157.5 m.........................................................19-29
19-20 Summary of the Total In-Situ Mineral Endowment at Incremental Cutoffs...............................19-30
19-21 Grade-Tonnage Curves for TCu from Kriging in Different Models ...........................................19-31
19-22 Grade-Tonnage Curves for SAPCu from Kriging in Different Models ......................................19-32
21-1 Slope Design Sectors..................................................................................................................21-3
21-2 Unsmoothed Pit Limits Bench Plan 90........................................................................................21-7
21-3 Unsmoothed Pit Limits Section 6300 North ................................................................................21-8
21-4 Unsmoothed Pit Resource Quantity............................................................................................21-9
21-5 Unsmoothed Pit Copper Grade...................................................................................................21-9
21-6 Stripper Pit Limits Bench Plan 105 ...........................................................................................21-11
21-7 Stripper Pit Limits Section 6300 North ......................................................................................21-11
21-8 Pit Design General Arrangement Perspective View .................................................................21-12
21-9 Phase 3 Material Distribution by Bench ....................................................................................21-13
21-11 Phase 5 and 6 Material Distribution by Bench..........................................................................21-14
21-15 Phase 3 Plan.............................................................................................................................21-17
21-16 Phase 4 Plan.............................................................................................................................21-18
21-17 Phase 5 & 6 Plan ......................................................................................................................21-19
21-18 Phase 7 Plan.............................................................................................................................21-20
21-19 Phase 8 Plan.............................................................................................................................21-20
21-20 Phase 9 Plan.............................................................................................................................21-21
21-21 Pit Sequence – Periods.............................................................................................................21-22
21-22 Pit Sequence – Schedule of Active Benches by Phase............................................................21-22
21-23 Pit Sequence Phase Solids.......................................................................................................21-23
21-24 Material Movement by Period ...................................................................................................21-25
21-25 Material Movement by Year ......................................................................................................21-25
21-26 Run-of-Mine Grades by Period .................................................................................................21-26
21-27 Run-of-Mine Grades Annual Total and SAP Copper ................................................................21-26
21-28 Mine Plan Cumulative Copper Life of Mine...............................................................................21-27
21-29 Copper Production ....................................................................................................................21-27

21-30 Heap Leach Pads As-built End of 2008 ....................................................................................21-28

21-31 Conceptual Design of Heap Leach Pads ..................................................................................21-29
21-32 Heap Leach Pad Cell Subdivision and Liner Construction Sequence......................................21-29
21-33 Waste Dump General Arrangement..........................................................................................21-30
21-34 Split Engineering Digital Image Scanning.................................................................................21-31
21-35 O&K RH200 Front Shovel .........................................................................................................21-32
21-36 Caterpillar 994 Wheel Loader ...................................................................................................21-32
21-37 Komatsu PC2000 Excavator.....................................................................................................21-33
21-38 Caterpillar 5110 Excavator........................................................................................................21-33
21-39 Caterpillar 789 Haulage Trucks ................................................................................................21-34
21-40 Rubber-Tire Dozer ....................................................................................................................21-35
21-41 Water Trucks and Grader..........................................................................................................21-35
21-42 Ore Type Distribution ................................................................................................................21-37
21-43 Copper Extraction .....................................................................................................................21-37
22-1 Solvent Extraction Flowsheet......................................................................................................22-2
22-2 Electrowinning Flowsheet ...........................................................................................................22-3
22-3 Historical Copper Production since December 2008 ..................................................................22-7
22-4 Historical PLS Grades.................................................................................................................22-8
22-5 Conceptual Leach Pad Layout..................................................................................................22-10
25-1 CDM Average Daily Cathode Harvest per Month .......................................................................25-1
26-1 Piedras Verdes Mine NPV Sensitivity Analysis to Operating and Capital Costs ........................26-3
26-2 Piedras Verdes Mine NPV Sensitivity Analysis to Copper Price ................................................26-3
26-3 Piedras Verdes Mine NPV Sensitivity Analysis to Copper Production .......................................26-4
LIST OF APPENDICES
A Certificates of Qualified Persons

ITEM 3 • SUMMARY & CON CLUSION S
This report, dated 12 February 2010, is being filed by Frontera Copper Corporation (FCC) as a
reporting issuer in a Canadian jurisdiction. As such, it is bound to comply with National Instrumental
NI 43-101, Standards of Disclosure for Mineral Projects. It is an update of the previous technical
reports and contains revised estimates of capital and operating costs, as well as long-term copper
prices. Additionally, this report reflects a new life-of-mine production schedule developed by FCC
and its consultants.
An Amended Technical Report, dated December 2005, was filed in January 2006. Since that time,
the Piedras Verdes mine was constructed and began producing cathode copper in October 2006,
and has since completed its first calendar year of continuous operation. A Technical Report dated
March 2008 was filed 27 March 2008 and is hereby incorporated by reference.
The Piedras Verdes mine-for-leach copper mine consists of 28 mineral concessions and is located
21 km north-northwest of the town of Alamos in the state of Sonora, Mexico, in the foothills of the
Sierra Madre Occidental Mountains. The site varies in elevation from 150 to 300 meters above sea
level (masl). The area has excellent infrastructure in the form of power, water, airfield, roads and
access to a deep-water port. The project is 100% owned and controlled by Cobre del Mayo S.A. de
C.V. (CDM), a Mexican registered company, which in turn is 100% beneficially owned by FCC.
The project utilizes open-pit mining, heap leaching of copper oxides and chalcocite mineralization at
run-of-mine (ROM) size, solvent extraction (SX), and electrowinning (EW). Annual copper production
capacity is 70 million pounds (Mlbs) of “LME Grade A” copper cathode. All technology is well proven
and is in common use internationally.
The current pit designs and mine plan were developed to leach 125.1 million tonnes (Mt) of ore at an
average TCu grade of 0.40% copper over a nine-year period. The total material within the final pit
design is 534 Mt, resulting in an overall strip ratio of 3.27:1. The run-of-mine ore tonnage placed on
the leach pad varies by year based upon ore grade and metallurgical ore type. The rate of ore
placement on the heap varies from 10.9 to 17.2 Mt per year.
Between 2009 and 2024, when copper extraction is forecast to be completed, a total of 726.2 Mlbs of
copper will be produced and sold. The capital requirements over that period are estimated at $134.6 M.
The estimated average “reported” cash cost for the life-of-mine is $1.41/lb of cathode copper produced,
including royalties. At a copper price of $2.50 for 2009, $3.30 for 2010, $3.20 for 2011, $2.35 for 2012
and $2.00/lb onward, the mine returns a net present value (based on a discount rate of 12.5%) of
$147.9 M.1
1
This report is not a valuation of Cobre del Mayo S.A. de C.V., it does not take into account its debt and other obligations. Discount
rates used for NPV were selected taking into account the current cost of financing of Cobre del Mayo S.A. de C.V. of LIBOR +
10.75% + warrants.
12 February 2010 Summary & Conclusions 3-1

It is assumed that the price of energy will increase at an annual rate of 6%. The rest of the input
commodity prices were held constant for the life of mine.
The estimate of recoverable copper has been calculated at 61.7% of total contained copper, based
on material yet to be mined. This estimate is based on the TCu grade, the SAPCu grade, a recovery
curve that varies depending on the ore type, and an estimate of how much residual copper will be
left in the pad at the end of the property life.
During the year ended 31 December 2006, the Piedras Verdes operations produced 9.2 Mlbs of
“LME Grade A” quality copper cathode and sold 8.5 Mlbs of copper cathode at an average cash cost
per pound of $1.32.
For the year ended 31 December 2007, the Piedras Verdes operations produced 53.7 Mlbs of “LME
Grade A” quality copper cathode and sold 54.1 Mlbs of copper cathode. The lower than planned
production levels in 2007 are primarily the result of the continuing strike that commenced in July
2007 at CDM’s major supplier of sulfuric acid, which limited the operation to receiving only 75% to
80% of its normal acid requirements during the second half of 2007.
For the year ending 2008, the Piedras Verdes operations produced 41.6 Mlbs of “LME Grade A”
quality copper cathode and sold 41.8 Mlbs of LME “Grade A” copper cathode.
The Company recorded two writedowns of copper in process inventory due to a reassessment of the
copper recovery being experienced in the operations. In January 2009, the ultimate recovery
estimate of the existing heap material was lowered to 52.5% for the ores mined prior to the end of
Q2 2008. Consequently, the estimated recoverable copper leach pad inventory balance was
adjusted downward by 27.7 Mlbs as at Q4 2008.
Subsequently, FCC management has developed a new operating plan for Piedras Verdes and this
contemplates leaching the existing leach pad material until Q4 2013, at which time this material will
be covered with an overliner to avoid losses of copper from the additional ore to be placed on top of
this material. Based on management review of the actual recoveries from the leach pads and a
review by an independent expert, the recoverable copper estimate for the existing leach material
was reduced to 24 Mlbs at the end of September 2009. Based on the new operating plan in which
this material will be covered with a liner in 2013, a writedown of 34 Mlbs of copper-in-process
inventory was taken at Q3 2009.
Based on the leach out curve for this material, from 2013 to the end of mine life this material could
theoretically produce an additional 7 to 10 Mlbs. Attempting to produce this copper inventory was
deemed to be uneconomic due to concomitant production delays from solution hold-up and the risk
of copper losses due to reprecipitation in this material stemming from the practice of multilift leaching
on top of this material. It is not possible to determine definitively the reasons for not achieving target
production, but the authors believe that the impact of poor permeability and decrepitation of some
host rock minerals was not properly identified in the testwork carried out to date.
Extensive metallurgical testwork was carried out over ten years on samples that were taken and
chosen to materially represent the various ore types, and the metallurgical response of the various

ore types. The historical Phelps Dodge testwork was largely done on crushed material recovered by
diamond drilling. The authors are concerned that this material may not accurately address the
physical characteristics of the ore, as excessive fines and decrepitation are evident in the existing
heaps.
The overall recovery of TCu has been re-estimated to be 61.7% for material yet to be mined, using a
detailed mass balance model based on this testwork and additional testwork carried out by CDM in
2007-2009. Based on the actual leach results experienced in 2008-2009, the authors remain
concerned that this estimate may not be based on fully representative sampling and consequent
testwork.
The primary types of copper mineralization are chalcocite and oxide mineralization. The host rock
types vary from competent porphyry and quartzite types to highly oxidized and/ or extensively
altered materials with low hardness and minimal strength apparently capable of producing large
quantities of fines. The former are suitable for run-of-mine heap leach operations, while the latter can
be quite problematic.
The ultimate average copper recovery estimate in this technical report will not be confirmed until the
leaching operations are complete.
Annual copper production is estimated at 70 Mlbs of “LME Grade A” quality copper cathode for
10 years with decreasing amounts of copper being recovered for an additional five years as the
heaps are leached to final completion. The estimated average reported cash cost of production in
Q1 2010 US dollars for the life of the mine is $1.41/lb including royalties at a copper price of $2.50/lb
for 2009, $3.30/lb for 2010, $3.20/lb for 2011, $2.35/lb for 2012 and $2.00/lb onward.
The economic analysis carried out by FCC is based upon capital and operating costs estimated
and/or reviewed by FCC to continue operating the open-pit mine, process plant and associated
infrastructure. Based upon these estimates, the project provides an NPV (12.5%) of $147.9 M at the
above copper prices.
A comprehensive reclamation plan has been prepared to return the project’s operational footprint as
close as possible to the type of land it was prior to mining activities. This plan includes sloping and
capping all heap leach pads and waste stockpiles, dismantling and removing all buildings, seeding
all areas, and other measures.
Risks to the project include unfavourable changes in copper prices, the cost and availability of
supplies necessary to sustain the operation; the actual leach recoveries achievable may be lower
than estimated. The performance of the leach pads in 2008 provides significant evidence that
previous testwork and drilling have underestimated the impact of fine altered and decrepitating
materials.
Exploration diamond drilling in the Cerro Chato area, located approximately 1.9 km west of the
existing open pit mine, has identified up to 15 to 20 Mt of oxide mineralization, although additional in-
fill drilling is required to classify this material as mineral resources. In addition, there is the potential

to add resources with additional drilling near the pit periphery of the main deposit for (1) further
reserve definition; and (2) better definition of the ultimate resource geometry, particularly in the east.
3.1 LOCATION & ACCESS

The Piedras Verdes Mine is located 21 km by dirt road north-northwest of the town of Alamos in the
state of Sonora, Mexico. The town of Alamos (population 9,000) is approximately 370 km to the
southeast of the Sonora state capital, Hermosillo, and is connected to the city of Navojoa by 50 km
of paved road (see Figure 3-1). A 14 km dirt road connects the mine to the Mocuzarit Dam road. A
14 km 115 kV powerline connects the mine to the national power grid. The mainline north-south
railway passes through Navojoa, as does the Pan-American Highway, which begins at the Mexican-
American border in Nogales, Sonora. The deep-water port of Guaymas on the Gulf of California is
250 km from Alamos. Charter flights may be arranged to the paved airstrip at Alamos.
Figure 3-1: Piedras Verdes Project Regional Location Map

3.2 OWNERSHIP
Frontera Copper Corporation (FCC), a Canadian corporation, owns and controls the Piedras Verdes
Project through its 100% beneficial interest in Cobre del Mayo, S.A. de C.V. (CDM), a Mexican
registered company. FCC initially purchased Phelps Dodge Corporation’s (PDC) 70% interest in
CDM in March 2002. PDC acquired its 70% interest in the property from AZCO Mining, Inc. (AZCO)
in 1996. On 10 April 2003, FCC also acquired AZCO’s remaining 30% interest and now owns 100%
of the project.
On December 3, 2008, Invecture Group, S.A. de C.V. (“Invecture”), a Mexican registered company,
announced an offer to acquire all of the outstanding common shares and stock options of The
Company. The offer was made through Invecture’s owned subsidiary 0839073 B.C. Ltd. On
February 15, 2009, the Company’s board of directors unanimously recommended that shareholders
tender their shares to the Invecture offer.
After acquiring control, Invecture purchased additional common shares under its extended offer,
bringing its total to over 90%. Invecture thereafter completed (4 May 2009) a compulsory acquisition
of the remaining shares and is currently the 100% shareholder of the Company. During the second
quarter, the company’s jurisdiction of incorporation was moved (redomiciled) from that of the Canada
Business Corporations Act (federal Canadian law) to the provincial jurisdiction of British Columbia
(the British Columbia Business Corporations Act).
3.3 MINING CONCESSIONS

CDM owns or controls 28 titled mining concessions that cover the entirety of the proven and
probable reserves of the Piedras Verdes Mine. In October 2009, CDM’s Mexican Counsel, Lic.
Eduardo Robles, undertook a title search and confirmed that all concessions are in good standing
and that no litigation is pending with respect to any concessions.
The concessions are shown in Figure 3-2 and listed in Table 3.1.

Figure 3-2: Mining Concessions

Table 3.1: Mining Concessions Controlled by CDM

Surface Expiration
(2)
File Number Title Type Date of Title Area Date
(1, 4)
Concessions Titled to Grupo Serrana SA de CV under Option to Cobre del Mayo SA de CV
HAYDEE 4/1.3/1243 210483 Exploitation 10/8/1999 47.84 10/7/2049
FORTUNA 321.1-4/511 194867 Exploitation 7/30/1992 16.00 7/29/2042
PIEDRAS VERDES UNO 4/1.3/940 196299 Exploitation 7/16/1993 166.40 7/15/2043
PIEDRAS VERDES DOS FRACC. I 4-1.3/1357 210774 Exploitation 11/26/1999 345.03 11/25/2049
PIEDRAS VERDES DOS FRACC. II 4-1.3/1356 210775 Exploitation 11/26/1999 10.09 11/25/2049
(4)
Concessions Titled to Cobre del Mayo SA de CV
FORTUNA 26 4/1.3/1355 210156 Exploitation 9/10/1999 70.00 9/9/2049
CHATO 4-1.3/2011 218868 Exploitation 1/23/2003 3.88 1/22/2053
MESA 4-1.3/2013 218289 Exploitation 10/17/2002 66.16 10/16/2052
EL HUECO 4-1.3/1918 212206 Exploitation 9/22/2000 8.27 9/21/2050
PIEDRAS VERDES TRES 4-1.3/2012 218649 Exploitation 12/2/2002 1010.65 12/2/2052
(3)
PIEDRAS VERDES FRACCION 1 4-1.3/1415 206216 Exploitation 11/19/1997 314.30 11/18/2047
(3)
(3)
(3)
(3)
(3)
SANTA ROSA 4-1.3/1529 209104 Exploitation 2/26/1999 181.15 2/25/2049
(3)
SANTA CRUZ 4-1.3/1804 213746 Exploitation 6/12/2001 266.26 6/11/2051
(3)
SANTA CRUZ DOS 4-1.3/1917 212084 Exploitation 8/31/2000 139.13 8/30/2050
(3)
EL TABELO FRACC. I 4-1.3/1530 209105 Exploitation 2/26/1999 41.30 2/25/2049
(3)
EL TABELO FRACC. II 4-1.3/1530 209106 Exploitation 2/26/1999 74.87 2/25/2049
LOBO 4-1.3/1875 198039 Exploration 9/30/1993 18.81 9/29/2043
MARIA ELENA 82/25875 213163 Exploration 3/30/2001 249.60 3/29/2051
LUCIA FRACC. II 77/7050 222512 Exploitation 7/20/2004 0.18 7/19/2054
LUCIA FRACC. III DIV. 4-2.4/2264 225107 Exploitation 7/20/2005 405.33 7/19/2055
LUCIA FRACC. IV DIV. 4-2.4/2264 225108 Exploitation 7/20/2005 522.68 7/19/2055
FORTUNA 15 FRACC 1 082/29859 226214 Exploration 11/16/2005 120.00 11/15/2055
LA FORTUNA 8 82/21437 213877 Exploration 7/5/2001 36.59 7/6/2051
Notes: 1. Grupo Serrana concessions carry a royalty of 3% of sales less certain costs, including cost of freight and other
marketing costs as described in Appendix 3.1 of the Piedras Verdes Prefeasibility Study (1 January 1999). 2. Mining law
reform enacted in 2006 simplified the concession regime, and all new concessions are “mining concessions,” which are valid
for a 50-year period and are renewable. Upon enactment of the mining law reform, all previously issued “exploration” and
“exploitation” concessions automatically converted to “mining concessions,” with the effective date of title the same as that of
the previously titled “exploration” or “exploitation” concession. Mexican Mining Law no longer recognizes distinctions
between "exploration" and "exploitation" concessions. 3. Concessions acquired from Alamos Minerals are subject to a 2%
royalty once production from such concessions exceeds 30 Mlbs of copper as described in Appendix 2.1 of the Piedras
Verdes Prefeasibility Study (1 January 1999). None of the known ore resources are located on the concessions acquired
from Alamos Minerals. 4. Each of PDC and AZCO has retained a royalty of $0.02/lb on all receipts for copper prices above
$1.20/lb. Total royalty payments are capped at $9.5 M to PDC and $3.25 M to AZCO.

3.4 SURFACE RIGHTS

Surface rights to the Piedras Verdes Mine (1,687.11 hectares) were controlled by four Ejidos
(Piedras Verdes, Mocuzarit, El Tabelo and Osobampo) and five individual landowners. On 30 March
2007, an agreement was signed to purchase 1,596.11 hectares (Ha) from three of the four Ejidos
(Piedras Verdes, Mocuzarit and El Tabelo). The land that was occupied by the Ejido Piedras Verdes
was the most critical, as it covers the extent of the known mineralization. In addition, the SX/EW
plant and associated facilities are located on this land.
In 2006, an agreement of transfer of right-of-way for the 115 kV powerline to the Federal Power
Supply Company (CFE) was executed. This agreement includes the lands of the Osobampo,
Mocuzarit, Piedras Verdes and El Tabelo ejidos, as well as some small properties that are privately
owned.
In 2005, CDM entered into a lease agreement with the Palomares family to construct wells 22, 23
and 24 on their land. In December 2007, CDM completed a negotiation with the Palomares family to
purchase the ranch. Transfer of title was completed in 2008.
In 2009, CDM completed the acquisition from the Bojorquez family and acquired the title for adjacent
land to the west of the leach pads to construct for construction of additional leach pad area. Rights
were also acquired to the Fortuna 8 lands adjacent to the PV pit.
3.5 WATER RIGHTS

CDM has estimated that copper mining and processing operations at Piedras Verdes will require 454
m3 of fresh water per hour (2,000 gallons per minute) or 4 Mm3 per year.
The well field operated by CDM consists of 13 wells, two of which have been assigned to two
communities, and 11 to the operation. These 11 wells are capable of exceeding the 4.0 Mm3/a
requirement. CDM currently holds concession titles for 16 wells, with a combined industrial water
right totaling 8.1 Mm3/a. Excess volumes authorized to CDM may be applied to developing new wells
within the same aquifer in the San Bernardo Basin.
3.6 HISTORY
Prior to FCC’s purchase of PDC’s interest in CDM, sufficient work had been carried out by PDC and
AZCO to determine the measured and indicated resources. This work included 27,000 m of RC
drilling, approximately 46,000 meters of diamond drilling, a 15,000 tonne test blast and bulk sample,
and an extensive program of hydrometallurgical testing of drill and surface samples.
The original Ejido Piedras Verdes village was situated within the footprint of the planned mining
area. Following agreement with the Ejido Piedras Verdes, a new townsite complete with power and
water supplies, roads, sewer system, schools, clinic and recreational facilities has been constructed
at a new site 6 km south of the original village. The new townsite has been occupied by the Ejido,
and the old village has been demolished in conjunction with mining operations.

3.7 GEOLOGY & MINERALIZATION

Piedras Verdes is an elongate porphyry copper deposit that is 4 km long in an east-west direction
and 500 m wide in a north-south direction. Mineralization is predominantly within Triassic-Jurassic
metasedimentary units and various intrusives phases of a Laramide granodiorite porphyry. Primary
copper mineralization in the porphyry is in the form of chalcopyrite. Where intersected in boreholes,
it averages 0.15% to 0.20% Cu. Oxidation and leaching of the 0.15% to 0.20% primary
mineralization has resulted in the formation of zones of supergene enrichment in the form of
chalcocite and oxides that comprise the present leachable copper resource with an average grade of
0.36 % copper at a cutoff of 0.10% Cu.
These supergene processes operated episodically from the time of uplift and erosion of the deposit
until the present. The bulk of enrichment probably occurred in the mid-Tertiary during a 10 to
15 million year period. Major east-west to east-northeast fault zones controlled emplacement of the
deposit. Younger northwest-striking fault zones cut across the deposit and have had repeated
movements. The latest displacements on some of the faults occurred subsequent to supergene
enrichment. The surface expression of the deposit is demarcated by a leached and oxidized cap with
a characteristic reddish-brown color caused by iron oxides.
Proven and probable ore consists of copper oxides (principally chrysocolla and neotocite/tenorite),
limonitic copper mineralization (LCM), copper oxides with native copper and cuprite, chalcocite, and
mixed oxide-chalcocite. The deposit is currently defined by AZCO’s 242 RC drill holes (27,000 m)
and 205 diamond drill holes (DDH) (45,782.7 m) completed in 1996-1997 by PDC. Locations of drill
holes used for the block model are shown on Figure 3-3.
The most recent resource model (Nov 2008) is constrained by 242 reverse circulation drill holes with
a total length of 27,619 m and by 236 diamond drill holes with a total length of 50,458 m.
3.8 EXPLORATION ACTIVITIES

During 2006 and 2007, CDM conducted a diamond drilling exploration program at the Cerro Chato
target located 1,900 meters west of the Phase 1 Piedras Verdes pit and 400 m north of the mine
access road. A total of 3,419 m of diamond drilling was completed in 27 drill holes. Drill hole density
is insufficient to allow for estimation of a mineral resource according to CSA NI 43-101 definitions;
however, modeling of mineralized zones on 50 m spaced cross-sections indicates that 15 to 20 Mt of
oxide mineralization at grades of >0.25% TCu would be a reasonable goal for an infill resource
definition drilling program at Cerro Chato.
CDM completed an infill drilling program consisting of 23 drill holes and a total of 3,420 m in the
main ore body during 2006 and 2007 to confirm budgeted mining plans for 2008-2010. This
information has been incorporated into the block model.

Figure 3-3: Drill Hole Location Map

3.9 MINERAL RESOURCES

The mineral resources are summarized in Tables 3.2. The mineral resources meet the criteria
established in the 2000 Classification of Mineral Resources and Mineral Reserves of the Canadian
Institute of Mining, Metallurgy and Petroleum, and are in accordance with the standards set out in
National Instrument NI 43-101.
Table 3.2: Measured & Indicated Resources

Cutoff Tonnage (000s) KTCu KSCu
≥0.000 332,424.1 0.287 0.164
≥0.050 330,243.0 0.289 0.164
≥0.100 317,782.3 0.297 0.168
≥0.150 258,636.9 0.337 0.193
≥0.200 197,082.1 0.389 0.224
≥0.300 107,645.1 0.514 0.294
≥0.400 60,123.7 0.653 0.366
≥0.500 40,322.3 0.756 0.415
3.10 MINERAL RESERVES

The open-pit mineable reserves are summarized in Table 3.3. The reserves meet the criteria
established in the 2000 Classification of Mineral Resources and Mineral Reserves of the Canadian
Institute of Mining, Metallurgy and Petroleum, and have been reported in accordance with the
standards set out in National Instrument (NI 43-101).
The reserves have been estimated based upon resources in a 3-D computer block model developed
utilizing Minesight® software. The final pit design and determination of proven and probable
reserves were based on a Lerchs-Grossman pit limit defined using a copper price of $1.90/lb.
Table 3.3: Proven & Probable Reserves

Category Ore (kt) Total Cu Grade % Acid Soluble Cu Grade%
Proven 102,140 0.38 0.25
Probable 22,955 0.47 0.29
Proven & Probable 125,095 0.40 0.26

Table 3.4 shows the projected reserves for the Piedras Verdes mine by pit development phase.
Table 3.4: Piedras Verdes Mineable Reserves

Ore Waste Total Strip
Phase tonnes KTCu KSCu tonnes tonnes Ratio
Phase 3 19,439,000 0.39 0.26 36,090,000 55,529,000 1.86
Phase 4 51,556,000 0.40 0.27 130,529,000 182,085,000 2.53
Phase 5 & 6 26,186,000 0.53 0.32 184,461,000 210,647,000 7.04
Phase 7 4,196,000 0.31 0.24 8,772,000 12,968,000 2.09
Phase 8 22,198,000 0.28 0.18 46,967,000 69,165,000 2.12
Phase 9 1,521,000 0.38 0.26 2,551,000 4,072,000 1.68
Total 125,096,000 0.40 0.26 409,370,000 534,466,000 3.27
The ore reserve reduction relative to 2008 year-end reporting is largely the result of reductions in
metallurgical recovery assumptions, increased acid consumption rate expectations, and increased
operating cost assumptions for the purposes of pit limit definition. The combined oxide- limonite
cuprite-mixed reserve declined from approximately 85 Mt to approximately 34 Mt. The chalcocite
reserve decreased only marginally from approximately 95 Mt to 91 Mt. The current reserves at
125 Mt are thus substantially more heavily weighted to chalcocite mineralization.
Copper recovery expectations for limonite, oxide and native copper have been reduced significantly
based upon a review of the testwork results and operating experience. Leaching duration was
reduced from 10 cycles to 4 over the life of mine. Acid factors were replaced with estimates of acid
consumption based upon ore type, which also impacted similar ore types as recovery reductions.
Increased operating costs were applied to potential ore blocks to reflect sustaining capital
requirements for heap leach pad construction.
3.11 MINING
A final pit design and a mine plan have been developed to place 125,095 kt of ore at an average
TCu grade of 0.40% Cu on the heap leach pad over a nine-year period. The total tonnage within the
final pit design is 534 Mt for an overall waste to ore ratio of 3.27:1. The run-of-mine ore tonnage
placed on the leach pad varies by year based on the grade of the ore and the ore types. The annual
ore tonnage mined varies between 12,100 kt/a and 16,000 kt/a.
Mining is currently conducted by CDM with a fleet of used mining equipment acquired primarily from
the previous mining contractor. The fleet includes two hydraulic shovels, drills, wheel loaders,
excavators and off-road haulage trucks. Support equipment includes graders, dozers and water
trucks. The mining rate is forecasted to peak at 200 kt/day and averages 160 kt/day over the life of
mine.

3.12 PROCESSING
Over a period of eight years, between 1999 and 2007, CDM conducted a program of
hydrometallurgical testing on drill and surface samples covering the entire deposit. Earlier, AZCO
also performed exploration and testing. These tests showed the ore to be amenable to extraction of
copper by heap leaching. This testwork was carried out on samples that were taken and chosen to
materially represent the various ore types, and, more importantly, the metallurgical response of the
proven and probable reserves.
As commonly identified in copper deposits, there are significant differences in the ultimate extraction,
rate of extraction, and acid consumption from one ore type to another. The March 2008 Technical
Report summarized this testing by AZCO, PDC, and Metcon that were used to support a production
decision for Piedras Verdes. Operating results have not vindicated the extraction and acid
consumption forecasts based on the previous testing.
The historical testwork was largely done on crushed material recovered by diamond drilling. A review
of the available core indicates that poor core recovery was experienced in the highly altered areas of
the deposit. The authors are concerned that this material may not accurately address the physical
characteristics of the ore, as excessive fines and decrepitation are evident in the existing heaps.
The primary types of copper mineralization are chalcocite and oxide mineralization. The host rook
quantities of fines. The former are suitable for run-of-mine heap leach operations while the later can
The process design for Piedras Verdes was based on a nominal production rate of 70 Mlbs per year
(31,750 t/y) of LME grade A cathode copper, using conventional sulfuric acid/ferric sulfate heap
leaching at run-of-mine (ROM) size. Purchased sulfuric acid is added to raffinate solutions, while the
ferric solution is internally generated as part of the leaching process. Leaching is followed by
conventional SX/EW copper recovery incorporating a two-stage series extraction circuit with a single
stage of stripping.
Based on previous recommendations, CDM had installed large diameter columns at the PV
operation. The purpose of these columns was to test the Piedras Verde ore types at as close to run-
of-mine as possible. Since 2006, CDM has performed large diameter column tests on all ore types of
the Piedras Verde deposit, with the exception of the Cuprite ore type, which accounts for a very
small percentage of the minable ore and appears from previous testwork to perform similar to
limonitic oxide. Sample preparation for all of the CDM tests focused on delivering a sample for the
large diameter column tests that closely resembled the screen size distribution of the typical ROM
feed coming from the Piedras Verde mining operations. All but one of the historical column tests
performed by AZCO, PDC, and Metcon used crushing to prepare the samples prior to testing.
The large-scale column tests performed by CDM at the ROM particle size distribution are believed to
be the most representative testwork available for estimating copper recovery and acid consumption

of Piedras Verde ores. Accordingly, these tests have been used to extrapolate and project copper
recovery and acid consumption for the mine plan and future heap leach operations at Piedras Verde.
Using revised extrapolation techniques, the projected ultimate copper recovery by ore type, based
on the SAP copper grade, for the materials contained in the future mine plan are as shown in
Table 3.5.
Table 3.5: Projected Copper Recovery by Ore Type
Ore Type Projected SAP Copper Recovery
303 54.3
304 81.7
305 54.3
306 104.9
307 (40) 106.4
307 (50) 98.0
307 (70) 99.2
Using these projections, the overall total copper recovery for the future mine plan material has been
re-estimated using a detailed mass balance model to be 61.7%. Based on the actual leach results
experienced in 2008-2009, the authors remain concerned that this estimate may not be based on
fully representative sampling.
The ultimate average copper recovery established in this technical report will not be confirmed until
the leaching operations are complete.
The estimated capital cost for the heap leach and for SX/EW operations is $48.0 M from 2009 to
2024. Process operating costs are expected to average $0.56/lb of cathode copper over the life of
the mine. The acid supply contract currently in place is valid until 31 December 2011, and for this
technical report, an assumption was made that similar terms to the existing contract will be possible
for 2012 and beyond. It is assumed that energy prices will increase at an annual rate of 6%.
3.13 INFRASTRUCTURE
Infrastructure includes an access road, 115 kV powerline and substation, water wells, freshwater
pipeline, support buildings and plant yard utilities. Buildings, including a maintenance shop,
combined administrative offices and warehouse, a laboratory and a guardhouse have been
constructed. Sewage treatment and disposal facilities are provided. Stormwater diversions have
been constructed.
Water is pumped from an aquifer located approximately 6 km southeast of the mine site. Eleven
wells supply the current water requirements, with well pumps interconnecting to a booster tank and
16" high-density polyethylene freshwater pipeline.

3.14 PERMITTING
CDM has obtained all of the necessary permits to operate the Piedras Verdes facility. Federal laws
primarily regulate mining in Mexico; however, there are several permit programs subject to state and
local jurisdiction. The key permits obtained are shown in Table 3.6.
Secretary of Environment and Natural Resources (SEMARNAT) is the chief agency regulating
environmental matters in Mexico. The National Water Commission (CNA) has authority over all
matters concerning water rights and activities that affect ground and surface water supplies,
including activities in the floodplains.
Table 3.6: Key Permits

Required Permit Agency
Environmental impact manifest1 SEMARNAT-State branch offices
Land use change study1 SEMARNAT-DGGFS2- Mexico City offices and state branch offices
Risk analysis study1 SEMARNAT (Mexico City office)
Construction permit1 Alamos municipality
Explosive handling and storage permits SEDENA3 (Need approval from state and municipal authorities)
Archaeological release letter1 INAH4 (State offices)
Water use concession title CNA5 (Regional branch office)
Water discharge permit CNA (Regional branch office)
Unique license SEMARNAT-State offices
Accident prevention plan SEMARNAT-State branch offices
Notes: 1. Mandatory to start construction activities. 2. DGGFS (General Department of Permitting for Forestry and Soils).
3. SEDENA (National Secretary of Defense). 4. INAH (National Institute of Anthropology and History). 5. CNA (National
Water Commission).
3.15 ECONOMIC ANALYSIS

The economic analysis details the net present value (NPV) estimate for the Piedras Verdes mine
from 2009 to 2024. Annual cash flow projections were estimated for years 2009 to 2024 (the
remaining life of the project, based on currently identified proven and probable reserves) based on
estimates of copper production, revenue, production costs, taxes, capital expenditures and working
capital. The bases for each of these estimates, as well as other parameters, are described in detail
in Item 26. The economic analysis has been prepared in constant Q1 2010 United States dollars.
Reported cash costs over the period 2010 to 2024 are forecast to average $1.41/lb of copper
cathode produced. Costs reflect the mining plan discussed in Item 21, which include accelerating
delivery of recoverable pounds to the leach pad early in the mine life as a means to generate
adequate amounts of copper production from slower leaching material. The model assumes that
acid consumption will be higher during the early years of the mine life because of this front-loading
and because of mining ores characterized to be higher consumers of acid relative to ores that will be
mined later in the mine life from deeper locations of the deposit.

A copper price forecast of $2.50/lb in 2009, $3.30/lb in 2010, $3.20/lb in 2011, $2.35/lb in 2012 and
$2.00/lb from 2013 to 2024 is used for estimating revenue over the remaining life of the project.
Similarly, key cost input variables such as diesel fuel and sulfuric acid are expressed in constant Q1
2010 dollars. Energy prices are assumed to increase 6% annually.
Figure 3-4 presents the sensitivity of the Piedras Verdes mine NPV to changes in copper price.
Figure 3-4: Piedras Verdes Mine NPV vs. Changes in Copper Price
Sensitivity to Cu Price
$400
$350
$300
$250
NPV (US$M)
$200
$150
$100
$50
$0
-$50
-30% -15% 0% 15% 30%
Changes from base level
NPV (10%) NPV (12.5%) NPV (15%)
The economic analysis is based on owner-operated mining from 2009 onwards. Table 3.7 outlines
the primary assumptions and key results of the economic analysis.
Table 3.7: Assumptions for Piedras Verdes Mine Economic Analysis
Economic Start Date 1 January 2009

Copper Price (per pound)
2009 ................................................................................................................................................. $2.50
2010 ................................................................................................................................................. $3.30
2011 ................................................................................................................................................. $3.20
2012 ................................................................................................................................................. $2.35
2013 to 2024 .................................................................................................................................... $2.00
Capital Costs from 2009 to 2024 (000s)
Capital Expenditures ........................................................................................................................... $134,600
Average Reported Cash Cost (per pound of copper sold)

Mining........................................................................................................................................................ $0.59
Processing ................................................................................................................................................ $0.56
General and Administration....................................................................................................................... $0.19
Royalties ................................................................................................................................................... $0.08
Total Operating Cost............................................................................................................................... $1.41

Table 3.8 presents the total cash flows and their corresponding net present value (NPV) (at 12.5%
discount rate) of the Piedras Verdes mine based on the assumptions presented above and
described in Item 26.
Table 3.8 presents the total cash flow and its corresponding net present value (NPV) (at 12.5%
discount rate) of the Piedras Verdes mine based on the assumptions presented above and
described in item 26.
Table 3.8: Piedras Verdes Mine Free Cash Flow and NPV
Total Cash Flow (2009 – 2024) ......................................................................................................... $347.6 M

NPV (12.5%) ....................................................................................................................................... $147.9 M
A sensitivity analysis of the Piedras Verdes mine NPV to copper price, copper production, sustaining
capital expenditures, and mine operating and processing costs is presented in Table 3.8.
Table 3.9: Piedras Verdes Mine NPV Sensitivity Analysis

NPV
10.0% 12.5% 15.0%
Base Case 1 $173.3 $147.9 $126.8
Sensitivities:
Operating Costs
-20% $250.1 $215.3 $186.4
-10% $212.5 $182.3 $157.2
0% $173.3 $147.9 $126.8
10% $134.0 $113.4 $96.4
20% $92.1 $76.9 $64.3
Capital Costs
-20% $176.5 $150.7 $129.3
-10% $174.9 $149.3 $128.1
0% $173.3 $147.9 $126.8
10% $171.6 $146.5 $125.6
20% $170.0 $145.1 $124.4
Cu Price
-40% ($26.3) ($29.6) ($32.0)
-20% $78.3 $63.8 $51.7
0% $173.3 $147.9 $126.8
20% $265.6 $229.5 $199.5
40% $357.9 $311.3 $272.5
Cu Production
-20% ($36.8) ($37.2) ($37.2)
-10% $86.2 $71.6 $59.5
0% $173.3 $147.9 $126.8
10% $285.9 $244.1 $209.9
20% $337.2 $297.4 $263.5
Note: 1. Base case copper price per pound: $2.50 in 2009, $3.30 in 2010,
$3.20 in 2011, $2.35 in 2012, and $2.00 in 2013 onwards.

Table 3.9 presents a summary of the life-of-mine production schedule.
Table 3.10: Life-of-Mine Production Schedule

2019 - Life of
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2024 Mine Total
Ore Mined (kt) 1,939 13,935 13,246 13,056 14,683 14,516 12,947 12,553 17,227 10,967 10,967 125,068
Waste Mined (kt) 11,400 58,115 59,754 59,744 44,467 40,083 41,803 42,047 37,373 14,555 14,555 409,341
Total Mined (kt) 13,339 72,050 73,000 72,800 59,150 54,599 54,750 54,600 54,600 25,522 25,522 534,409
Waste-to-Ore Stripping Ratio 5.9 4.2 4.5 4.6 3.0 2.8 3.2 3.3 2.2 1.3 1.3 3.27
Cathode Production (k lbs) 17,440 48,188 65,703 67,847 78,237 79,456 79,303 76,643 71,524 70,565 141,864 726,204
Cash Cost ($/lb) $2.03 $2.11 $1.59 $1.53 $1.26 $1.25 $1.26 $1.31 $1.49 $1.10 $1.59 $1.41
Cu Price ($/lb) $2.77 $3.30 $3.20 $2.35 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.23

ITEM 4 • INTRODUCTION & TERMS OF REFERENCE
Frontera Copper Corporation (FCC) through its 100% owned subsidiary, Cobre del Mayo S.A. de
C.V. (CDM), a Mexican registered company, operates the Piedras Verde Mine, in Sonora State,
Mexico. This report, dated 12 February 2010, is being filed by FCC as a reporting issuer in a
Canadian jurisdiction. As such, it is bound to comply with National Instrumental 43-101, Standards of
Disclosure for Mineral Projects.
This report is an update of the Technical Report completed in March 2008. It contains updated
economic information based on changes in estimated long-term commodity prices and supply costs,
as well as updates to long-term capital estimates. Where appropriate, portions of this report were
repeated from the March 2008, and previous Technical Reports. In addition, where appropriate,
updates to the property’s facility description have been provided. Additionally, this report reflects a
new life-of-mine production schedule and ore reserve calculation.
An Amended Technical Report, dated December 2005, was filed in January 2006, and since that
time, the construction of the Piedras Verdes mine was completed and placed in operation. The
property began producing cathode copper in October 2006, and continued operations in 2007 and
2008. The March 2008 Technical Report was an update of the previous technical reports and
contained revised estimates of capital and operating costs, as well as long-term copper prices.
Additionally, the March 2008 report reflected a new life-of-mine production schedule, stemming from
the January 2008 ore reserve calculation that was disclosed in a news release on January 15, 2008.
Due to the world economic downturn and the significant fall in copper price in 2008, CDM ceased
mining operations at Piedras Verde on November 11, 2008. With 43.9 Mt of ore placed on the leach
pads at that time, CDM continued leaching operations to recover copper contained in the leach
pads.
On May 4, 2009, Invecture Group S.A. de C.V, a privately owned company, purchased 100% of FCC
shares and subsequently delisted FCC from public trading. The new management of FCC and CDM
have re-started mining and are bringing the operation back into production.
This Technical Report has been prepared in compliance with NI 43-101.
All previous technical reports and this report generally use the SI (metric) system of units.
Exceptions are the common use of “pounds” and “inches” for copper and piping sizes, respectively.
These exceptions should not cause any confusion, as all engineering calculations are conducted
using the SI system. The term “tonne” rather than “ton” is used throughout the report to denote a
metric ton.
All listed costs are reported in Q1 2010 US dollars. Units used and their abbreviations are listed in
Table 4.1.
12 February 2010 Introduction & Terms of Reference 4-1

Table 4.1: Report Units & Abbreviations

tonnes per day t/d
Liters per second L/s
Meters m
Square meters m2
Cubic meters m3
Cubic meters per hour m3/h
Specific gravity s.g.
Density t/m3
Tonnage factor or specific volume m3/t
Volts V
Amperes A
Current density A/m2
Watts W
Kilometer km
Kilo (1000) k
Mega (1,000,000) or million M
Acid soluble copper assay ASCu
Total copper assay TCu
Short assay procedure copper assay SAPCu
Grams/liter g/L
Parts per million ppm
Kilotonnes kt
Two consultants, Brian Kennedy, P.Eng. and John Nilsson, P.Eng., are the primary reviewers for all
information contained in this report and are the qualified persons for the report’s content under
NI 43-101 regulations. Since April 2009, Mr. Kennedy, a metallurgical engineer, has visited the
property for a variety of specific and general purposes. Mr. Nilsson is a mining engineer and
prepared the updated mine design and mine planning, has also visited the property, with a particular
focus on mine operations and related aspects, between April and October 2009.
Dr. Mathew Gray of Resource Geosciences S.A was responsible for the geological sections of this
report, having carried out similar work on all of the previous technical reports. Dr. Gray has visited
the site numerous times and is intimately familiar with all aspects of the project.
Dr. Abdulllah Arik of Mintec provided the geostatistical analysis and support for the model update
and the new resource and reserve estimate.
12 February 2010 Introduction & Terms of Reference 4-2

ITEM 5 • RELIANCE ON OTHERS
In preparing this Technical Report (12 February 2010), the authors relied on others for certain
information as listed below:
• Environmental and Permitting: Patricia Aguayo, Environmental Consultant.

• Land and Mining Concessions: Lic. Eduardo Robles, CDM’s Mexican Counsel.
12 February 2010 Disclaimer 5-1

ITEM 6 • PROPERTY DESC RIPTION & LOCATION
6.1 MINERAL RIGHTS

Mineral rights to the Piedras Verdes deposit are controlled by 29 mining concessions (see
Table 6.1). Of these, CDM owns or controls 28, including all concessions covering the resource
defined in this Technical Report. The claim not controlled by CDM is privately held and does not
affect project resources or infrastructure. All claim license fees and taxes for property owned or
under the control of CDM have been fully paid and are up to date.
6.1.1 Grupo Serrana Concessions
The majority of the defined deposit is covered by five claims totaling 585.36 Ha belonging to Grupo
Serrana (previously known as Minera Serrana): (1) Haydee; (2) Fortuna; (3) Piedras Verdes Uno;
(4) Piedras Verdes Dos Fraction 1; and (5) Piedras Verdes Dos Fraction 2. These claims are under
long-term mining lease agreement to CDM (see Table 6.1).
The terms and conditions under which CDM is entitled to explore, develop, and exploit the five
concessions owned by Grupo Serrana are outlined in detail in the legal document in Appendix 3.1 of
the Piedras Verdes Prefeasibility Study (January, 1999).
6.1.2 Cobre Del Mayo Concessions
CDM directly owns 23 titled concessions totaling 3,617.89 Ha (see Figure 6-1 and Table 6.1). The
Chato, Mesa, El Hueco, and Piedras Verdes Tres concessions were staked by agents of AZCO and
ceded to CDM. CDM acquired the Fortuna 26 and Lobo concessions from private owners in 1996
and completed the purchase of the Santa Rosa, Santa Cruz, Santa Cruz Dos, El Tabelo Fractions 1
and 2, and Piedras Verdes Fractions 1 through 5 concessions from Alamos Minerals (AM) in
December 1997. CDM purchased the Fortuna 8 concession in 2009.
The concessions purchased from AM are subject to an underlying royalty agreement obligating AM
to pay 2% royalty to the original owners (Bienvenidos Syndicate) once production from the
concessions exceeds 30 Mlbs of copper. This obligation passed to CDM with purchase of the
concessions. None of the known ore resources are located on the concessions acquired from AM. In
addition, Minera Phelps Dodge Mexico ceded the Lucia Fractions 2 through 4 concessions to CDM
because they lie within CDM’s area of influence. These concessions surround the resource area, but
do not host any known mineral resource. Both PDC and AZCO have retained a royalty of US$0.02/lb
on all receipts for copper prices above US$1.20/lb as per the terms described in Appendix 2.2 of the
Piedras Verdes Prefeasibility Study (1 January 1999). In September 2005, CDM was the successful
participant in a lottery held to assign the Fortuna 15 Fraccion 1 and 2 concession.
12 February 2010 Property Description & Location 6-1

Table 6.1: Mining Concessions Controlled by CDM

Surface Expiration
(2)
File Number Title Type Date of Title Area Date
(1, 4)
Concessions Titled to Grupo Serrana SA de CV under Option to Cobre del Mayo SA de CV
HAYDEE 4/1.3/1243 210483 Exploitation 10/8/1999 47.84 10/7/2049
FORTUNA 321.1-4/511 194867 Exploitation 7/30/1992 16.00 7/29/2042
PIEDRAS VERDES UNO 4/1.3/940 196299 Exploitation 7/16/1993 166.40 7/15/2043
PIEDRAS VERDES DOS FRACC. I 4-1.3/1357 210774 Exploitation 11/26/1999 345.03 11/25/2049
PIEDRAS VERDES DOS FRACC. II 4-1.3/1356 210775 Exploitation 11/26/1999 10.09 11/25/2049
(4)
Concessions Titled to Cobre del Mayo SA de CV
FORTUNA 26 4/1.3/1355 210156 Exploitation 9/10/1999 70.00 9/9/2049
CHATO 4-1.3/2011 218868 Exploitation 1/23/2003 3.88 1/22/2053
MESA 4-1.3/2013 218289 Exploitation 10/17/2002 66.16 10/16/2052
EL HUECO 4-1.3/1918 212206 Exploitation 9/22/2000 8.27 9/21/2050
PIEDRAS VERDES TRES 4-1.3/2012 218649 Exploitation 12/2/2002 1010.65 12/2/2052
(3)
(3)
(3)
(3)
(3)
(3)
SANTA ROSA 4-1.3/1529 209104 Exploitation 2/26/1999 181.15 2/25/2049
(3)
SANTA CRUZ 4-1.3/1804 213746 Exploitation 6/12/2001 266.26 6/11/2051
(3)
SANTA CRUZ DOS 4-1.3/1917 212084 Exploitation 8/31/2000 139.13 8/30/2050
(3)
EL TABELO FRACC. I 4-1.3/1530 209105 Exploitation 2/26/1999 41.30 2/25/2049
(3)
EL TABELO FRACC. II 4-1.3/1530 209106 Exploitation 2/26/1999 74.87 2/25/2049
LOBO 4-1.3/1875 198039 Exploration 9/30/1993 18.81 9/29/2043
MARIA ELENA 82/25875 213163 Exploration 3/30/2001 249.60 3/29/2051
LUCIA FRACC. II 77/7050 222512 Exploitation 7/20/2004 0.18 7/19/2054
LUCIA FRACC. III DIV. 4-2.4/2264 225107 Exploitation 7/20/2005 405.33 7/19/2055
LUCIA FRACC. IV DIV. 4-2.4/2264 225108 Exploitation 7/20/2005 522.68 7/19/2055
LA FORTUNA 8 82/21437 213877 Exploration 7/5/2001 36.59 7/6/2051
Notes: 1. Grupo Serrana concessions carry a royalty of 3% of sales less certain costs, including cost of freight and other
costs as described in Appendix 3.1 of the Piedras Verdes Prefeasibility Study, 1 January 1999. 2. Mining law reform in
enacted in 2006 simplified the concession regime, and all new concessions are “mining concessions” which are valid for a 50-year
period and are renewable. Upon enactment of the mining law reform, all previously issued “exploration” and “exploitation”
concessions automatically converted to “mining concessions” with the effective date of title the same as that of the previously titled
“exploration” or “exploitation” concession. Mexican Mining Law no longer recognizes distinctions between "exploration" and
"exploitation" concessions. 3. Concessions acquired from Alamos Minerals are subject to a 2% royalty once production from
such concessions exceeds 30 Mlbs of copper as described in Appendix 2.1 of the Piedras Verdes Prefeasibility Study
(January 1999). None of the known ore resources are located on the concessions acquired from Alamos Minerals. 4. Each
of PDC and AZCO has retained a royalty of $0.02/lb on all receipts for copper prices above $1.20/lb. Total royalty payments
are capped at $9.5 M to PDC and $3.25 M to AZCO.

Figure 6-1: Piedras Verdes Deposit Mining Concessions

In October 2009, CDM’s Mexican Counsel, Lic. Eduardo Robles undertook a title search and
confirmed that all 28 titled concessions, which cover the entirety of the proven and probable
reserves of the Piedras Verdes Project, are in good standing and that no litigation is pending with
respect to any concessions. At this time, records on file at the Mexican Bureau of Mines were
reviewed verifying that all concessions under the control of CDM are fully valid and are in good legal
standing. All documents proving compliance with respect to tax filings, assessment reports, and
claim surveys are available for inspection in the offices of Resource Geosciences de Mexico S.A. de
C.V., in Hermosillo, Sonora, Mexico.
To CDM’s knowledge, none of the properties that it owns or controls are subject to any
environmental liabilities. All claims have been surveyed by a certified and registered mineral lands
surveyor.
6.1.3 Private Concessions & Surface Rights
On the west end of the project area is the Fortuna 15 concession (Exp. 6932) owned by Ms. Bertha
Valdez. The concession is outside the identified mineralized zone and is not required to develop the
deposit. The Fortuna 15 concession is distinct from the concession of the same name staked by
Cobre Del Mayo.
Surface rights to the Piedras Verdes project (1,687.11 Ha) were controlled by four ejidos (Piedras
Verdes, Mocuzarit, El Tabelo and Osobampo) and five individual landowners. On 30 March 2007, an
agreement was signed to purchase 1,596.11 Ha from three of the four ejidos (Piedras Verdes,
Mocuzarit and El Tabelo). The land that was occupied by the Ejido Piedras Verdes was the most
critical, as it covers the extent of the known mineralization. In addition, the SX/EW plant and
associated facilities are located on this land.
On 26 June 2006, an agreement of transfer of right-of-way for the 115 kV powerline to the “Federal
Power Supply Company” (CFE) was executed. This agreement includes lands of the Osobampo,
Mocuzarit, Piedras Verdes and El Tabelo Ejidos, and some small properties that are privately
owned.
6.1.4 Ejido Lands
6.1.4.1 Ejido Piedras Verdes

The Piedras Verdes Ejido (EPV) originally owned the surface rights over the majority of the
mineralization outlined by drilling and mapping. In addition, EPV land was critical to infrastructure
siting. CDM had a 30-year lease agreement with this Ejido for 1,101.11 Ha, of which 844.96 Ha were
purchased by CDM on 30 March 2007, along with 119.90 Ha that were owned by six individual
owners.
CDM had sale/purchase and long-term lease agreements with the EPV for 21 parcels that do not
cover any of the mineral resource, but are necessary for optimum leach pad construction. In 2007,
CDM agreed to purchase 93.5 Ha of these parcels (“El Chiragual”) from the EPV. The Transfer of
Property Agreement was signed on 19 December 2007.

6.1.4.2 Ejido El Tabelo

On 1 October 2004, CDM and Ejido El Tabelo (Tabelo) entered into agreements granting CDM
surface rights to 370 Ha under the same terms granted to Ejido Piedras Verdes. These agreements
superseded and replaced all previous agreements between CDM and Tabelo. An agreement was
reached with the Tabelo on March 30, 2007 for CDM to purchase 335.6 Ha. Additionally, 58.89 Ha
were purchased from private landowners.
A 27-year occupation agreement was signed with Tabelo for 11 Ha covering those areas where the
pipeline that brings water from the wells to the mine is installed.
On 1 February 2008, 7.1 Ha were purchased from Tabelo. Clay that will be used for Phase 3 leach
pad construction will be obtained from this area.
6.1.4.3 Ejido Mocuzarit

In August 2004, CDM and Ejido Mocuzarit executed Temporary Occupation and Lease Agreements
granting CDM surface occupation rights for 216 Ha of land needed for mine infrastructure, including
access road and powerline rights-of-way.
In 2007, an agreement was reached between CDM and Ejido Mocuzarit for CDM to purchase
218.72 Ha. This agreement replaces the August 2004 Temporary Occupation and Lease
Agreements.
6.1.4.4 Ejido Osobampo

The Ejido Osobampo owns 98 Ha of land used for the access road to the mine and the right-of-way
for the 115 kV powerline. In August 2004, CDM entered into a rent Agreement with Ejido Osobampo
for the 98 Ha.
On 3 November 2005, a 30-year Temporary Occupation Agreement was executed with the
Osobampo Ejido (Sector 2) for an additional 98 Ha. In November 2009, 112.6 Ha were purchased
from Ejido Osobampo to acquire ownership of the previous road right-of-way land.
6.1.4.5 Leandro & Pablo Rochin A

CDM entered into a Lease Agreement (with purchase option) with the Rochín family for 100 Ha.
6.1.4.6 Luz Del Carmen Bours De Bojorquez

Mrs. Bours de Bojorquez owns the surface rights to the Agua Tapada Ranch, an 802 Ha parcel of
land immediately south of the Piedras Verdes deposit. Although this land does not cover any portion
of the deposit, and the mine design presented in this Technical Report does not include any
infrastructure on this land, approximately 70 to 200 Ha of the ranch would be desirable for optimum
leach pad development. An agreement was reached with Bojorquez in November 2009 and 120 Ha
of this land was purchased for use as additional leach pad area.

6.1.4.7 Rancho El Guamúchil

On 30 June 2005, CDM entered into a lease agreement with the Palomares family to construct wells
22, 23 and 24 on their land. In December 2007, CDM completed a negotiation with the Palomares
family to purchase the ranch. Transfer of title was completed in 2008.
6.1.4.8 Fortuna 8
In 2009, CDM purchased the right to the Fortuna 8 property (112.6 Ha) adjacent to the Piedras
Verdes pit.
6.2 WATER RIGHTS
6.2.1 Project Water Rights
CDM has estimated that copper mining and processing operations at Piedras Verdes will require
454 m3 of fresh water per hour (2,000 gallons per minute) or 4 Mm3 per year.
6.2.2 Subsurface Water Rights
The well field consists of 13 wells, two of which have been assigned to two communities and 11 to
the operation. These 11 wells are capable of exceeding the 4.0 Mm3/a (million cubic meters per
annum) requirement. CDM currently holds Concession Titles for 16 wells with a combined industrial
water right totaling 8.1 Mm3 per year. Excess volumes authorized to CDM may be applied to
developing new wells within the same aquifer in the San Bernardo Basin.
During 2010, three additional well developments are planned in the southeast end of the San
Bernardo Basin.
6.3 LEGAL – EJIDO RELOCATION PROCESS

As part of the negotiations with the ejidos, CDM committed to help the ejidos obtain the title deeds
for their land. The responsibility for the municipal services that the inhabitants have will be
transferred to the municipality of Alamos.
CDM committed to building a new road to provide ejido inhabitants with access to Mocuzarit Lake for
commercial fishing purposes. This road was built to replace an existing road that passed through the
mine area. CDM completed construction of the road in July 2006.

ITEM 7 • ACCESSIBILITY, C LIMATE, LOCAL R ESOURCES,

INFRASTRUCTURE & PHYSIOGRAPHY
7.1 ACCESSIBILITY
The Piedras Verdes project is located 21 km by dirt road north-northwest of the town of Alamos,
Sonora. Alamos is 370 km south of Hermosillo in the southernmost portion of the state of Sonora
(Figure 7-1). A major four-lane highway, the Pan-American (MEX #15), connects Nogales, Sonora
with the Sonora state capital, Hermosillo, 276 km to the south.
Access for mining operations bypasses the town of Alamos, connecting from the branch highway
between Alamos and Navojoa via the existing road to the Mocuzari Dam. The access road turns
east off the Mocuzari Dam road at a point 8.5 km north of the branch highway between Alamos and
Navojoa (see Figure 7-2 for a site plan).
The nearest rail service is in Navojoa. Guaymas has the closest deep-water port.
Alamos can be reached directly by air charter flights that land on a paved 1.2 km landing strip.
7.2 CLIMATE
For eight to nine months of the year, the climate is arid to semi-arid. Monthly meteorological data
consisting of temperature, precipitation, and evaporation from 1956 to 1996 were obtained from a
weather station at the Mocuzari dam site 10 km northwest of Piedras Verdes (see Piedras Verdes
Prefeasibility Study, 1 January 1999) and supplemented by a weather station installed at the project
site in 1996. Temperatures for nightly lows in December and January range between 5°C and 8°C.
Daily highs of 38°C and 42°C occur during May through August. The average annual temperature is
26°C to 28°C.
Monsoon rains occur from the end of June to the first part of October. Rains during these months
consist of intense, but relatively short, thunderstorms in the late afternoon and evening. Longer
torrential storms periodically occur in association with hurricanes in the Pacific Ocean and Gulf of
California. Average annual rainfall is 56.38 cm. From 1956 to 2007, the lowest annual rainfall,
29.63 cm, occurred in 1979 and the highest, 96.68 cm, was recorded in 1984. The annual average
evaporation rate is 242.06 cm. The highest monthly evaporation rates, 25 to 30 cm, occur from April
through June.
The town of Alamos (population 9,000) is in the foothills of the Sierra Madre at an elevation of
400 m. Elevation in the project area ranges from 150 to 300 m. Vegetation is a mix of desert cactus,
open grassland, and sub-tropical shrubs and trees.
12 February 2010 Accessibility, Climate, Local Resources, 7-1

Infrastructure & Physiography
Figure 7-1: Piedras Verdes Project Regional Location Map

Figure 7-2: Site Plan

7.3 LOCAL RESOURCES
7.3.1 Water
Surface water sources in the region include the Rio Mayo and Mocuzari Lake. The lake is 3 km north
of the mine. The town of Alamos obtains water from shallow wells (75 m average depth) that exploit
water from various volcaniclastic sedimentary units and the interface between bedrock and the
overlying alluvium. Water for the village of Piedras Verdes is supplied by a borehole.
CDM thoroughly investigated local sources and supplies of fresh water and discovered an aquifer
southeast of the community of El Tabelo, some six km southeast of the mine. Pump tests confirmed
the presence of at least 4 Mm3/a of water per annum that is available for operational needs.
Throughout the mine area, the elevation of the top of the water table is relatively consistent at 140 to
155 m.
7.3.2 Construction Materials
Local supplies of building materials such as sand and gravel are sufficient within a reasonable
distance from the mine.
7.3.3 Mining Personnel
The mine is located in a historic mining region, and workers with the technical skills necessary to
support a mining operation were found in local communities. Navojoa and Alamos are both within
commuting distance of the mine, and adequate transportation is available for employees. The site
does not provide accommodations for personnel.
7.4 INFRASTRUCTURE
The Alamos, Senora area has excellent infrastructure in the form of power, water, airfield, roads and
access to a deep-water port. See Item 20 for more information on local and regional infrastructure.
7.4.1 Roads & Highways
A 14 km access road connects the mine site to the secondary road that connects the Mocuzari Dam
to State Highway 162, the Alamos/Navojoa Highway.
7.4.2 Electric Power
A 14.8 km long, 115 kV powerline connects the CFE (Comisiόn Federal de Electricidad) grid to the
mine substation.
The power supply to the El Tabelo well field is fed from a 34.5 kV CFE transmission line. This same
transmission line also supplies power to the relocated Piedras Verdes townsite.

7.4.3 Water Pipelines
A pipeline was constructed to connect the well field to the mine and plant site. This is a network of
10 cm (4") and 14.7 cm (6") high-density polyethylene (HDPE) piping that connects the wells to a
central 39.2 cm (16") collection line. This line in turn connects the well field to a booster tank. From
the booster tank, water is pumped to a main 3,785 m3 capacity storage tank via a 16-inch HDPE
pipeline.
7.4.4 Sewage
Sanitary facilities are provided at the general office, laboratory and truckshop. The facilities are
equipped with standard septic tank/leach field waste disposal systems.
7.5 PHYSIOGRAPHY
The Piedras Verdes project site is located within the Pie de Sierra subdivision of the Sierra Madre
Occidental physiographic province in the municipality of Alamos, Sonora, México.
7.5.1 Terrain
The topography is favorable for mine development. The terrain is generally flat with low hills and
rocky outcrops. Elevation ranges from 150 to 300 m. There are no major geographical impediments.
7.5.2 Surface Water Hydrology
Three relatively large washes converge at the mine site and then flow northward to the Mocuzari
Reservoir. These streams were diverted from active areas to prevent flooding.
7.5.2.1 West Diversion

The westernmost wash drains 16.8 km2 of surface area. The ancestral Agua Tapada channel
previously entered the western portion of the planned pit area. The stream was diverted by a
combined diversion dike/channel arrangement that redirects the flow westward to an adjoining
stream channel.
7.5.2.2 Central Diversion

The central wash drains a surface area of 8.9 km2. The ancestral channel previously crossed the
western portion of the heap leach pad. This stream has been diverted by a diversion dike/channel
arrangement, such that the flow is redirected to the east and into the adjoining El Tepustete channel.
7.5.2.3 East Diversion

The eastern wash drains an area of 25.2 km2. The ancestral channel previously crossed the heap
leach pad from the southeast to the northwest. This stream has been diverted by a diversion

dike/channel arrangement such that the flow is now redirected eastward into an adjoining stream
(arroyo) channel.
7.5.2.4 Groundwater
Available information indicates local groundwater is relatively scarce. Shallow wells along surface
drainages supply water to some of the local inhabitants. The subsurface water map published by the
National Institute of Geographical Information shows a single hand-dug well in Piedras Verdes. The
depth to static water level is 3 m.
Exploration drilling in the immediate area of the ore body encountered subsurface water in minor
amounts.
Two prospective monitoring wells, TEP 1 and TEP 2, drilled south of the heap leach pad area have
static water levels within just a few meters from surface. These two wells produce 0.9 and 0.4 L/s,
respectively.
7.6 GEOTECHNICAL
URS Corporation (URS) and Call and Nicholas (CNI) both examined the geotechnical/seismic
aspects of the project. Their findings are fully developed in their reports found in Appendix J and
Appendix G, respectively, as referenced by the September 2004 Technical Report.
URS evaluated the geotechnical aspects of the plant site. The exercise included fieldwork,
laboratory work, soil characterization, engineering analysis and geotechnical and seismic
recommendations for the foundations of the plant. The URS evaluation revealed no unusual
conditions or risks. Golder Associates, Inc. has completed soil investigations during basic
engineering.
CNI performed a pit slope stability evaluation and a study of geotechnical aspects of the waste
dumps and heap leach pad. Their reports are found in Appendices G and H, as referenced by the
September 2004 Technical Report. CNI recommended final interramp slope angles of 44° to 48°,
and their geotechnical evaluation of the waste dumps and heap leach pad foundations revealed no
unusual risks or conditions.

ITEM 8 • HISTORY
In the late 1800s, small-scale mining in the Piedras Verdes area consisted of several shafts and
numerous prospect pits. The workings exploited enriched copper zones along structures. Chalcocite
and chrysocolla were the main ores mined. The first attempt at defining a larger resource was churn
drilling in 1909-1910 (Seeley Mudd group) and again in 1919-1921 (Lazarus and Co.). These
programs did not find grades of mineralization that were economic at that time.
Major companies looking for a large resource initiated exploration programs on the property in the
late 1960s and early 1970s. This renewed interest resulted from the discovery and definition of the
chalcocite resource at La Caridad near Nacozari in northern Sonora. In 1969-1970, Cominco drilled
57 rotary percussion holes (4,754 m) and eight diamond drill holes (907 m). Trion (Homestake), in
1975, drilled 19 rotary percussion holes (4,530 m).
Cominco drilled widely spaced holes throughout the limits of the currently defined deposit, identifying
a chalcocite zone in the central and eastern portions of the deposit, as it is currently known, and a
smaller zone of chalcocite with oxides in the western portion of the deposit. Cominco’s drill holes
averaged only 100 m depths. The total copper resource indicated by Cominco’s work was 15 to
20 Mt. This resource was based on ore types and grades compatible with sulfide flotation recovery
of copper.
Homestake explored the eastern part of the deposit area between 1973 and 1975. Like Cominco,
their drill holes were relatively shallow and only defined a limited resource in the central and eastern
portions of the deposit. At approximately the same time that Cominco and Homestake were in the
area, Noranda drilled nine diamond drill holes (1,841 m). The Noranda holes were drilled to the west
of the deposit and on the eastern fringe of the deposit.
In 1992, through its Mexican subsidiary CDM, AZCO entered into an agreement with Grupo Serrana,
the Mexican company that owns the mining concessions over most of the deposit, and began an
exploration program concentrating on the definition of a bulk-minable, heap-leachable copper
resource. In addition to expanding the resources defined previously in the western, central and
eastern portions of the deposit, AZCO demonstrated the continuity of mineralization in the village
region between these areas. Like earlier drilling, AZCO’s average depth of drilling was approximately
100 m in 242 RC holes. At a cutoff of 0.20% total copper (TCu), AZCO defined a leachable copper
resource of 140 Mt at an average grade of 0.41% TCu. AZCO did sufficient metallurgical work to
show that the deposit was amenable to treatment by heap leaching followed by solvent extraction
and electrowinning (SX/EW) technology.
At the same time as the AZCO work was in progress, the Bienvenidos Syndicate, a Canadian-based
group, controlled ground around the main deposit. This group optioned their property to Tenajon
Resources in 1993. Tenajon drilled 819 m in nine RC holes to the west of the deposit around Cerro
Chato. Bienvenidos also drilled 38 shallow airtrack holes on their claims. In 1995, Bienvenidos sold
their interests to another Canadian company, Alamos Minerals. These claims were subsequently
purchased from Alamos Minerals by Cobre del Mayo.
12 February 2010 History 8-1

Following a site visit and data review in 1995, PDC geologists recommended the property based on
considerable unexplored potential both laterally and at depth throughout the deposit. A review of drill
chips indicated that many of the AZCO drill holes did not completely penetrate the leached cap or
bottom in leachable copper mineralization. As part of the acquisition deal for the Sanchez deposit in
Safford, Arizona, PDC entered into a 70/30 joint venture with AZCO on the Piedras Verdes deposit.
In January 1996, PDC acquired 70% ownership of Cobre del Mayo, and CDM, under PDC control,
began exploration that continued through to the completion of the 1999 Prefeasibility Study. Prior to
and during that time, approximately $17 M was spent on exploration drilling, metallurgical testing and
engineering studies of the Piedras Verdes property. Drilling in the deposit area consisted of 211 core
holes (47,240 m), and 12 additional exploration holes (2,086 m) were drilled in prospective areas to
the west of the deposit.
The deposit was remapped at a scale of 1:2000, and regional mapping and reconnaissance
exploration was carried out on surrounding ground controlled by CDM. Geochemical sampling and
geophysical surveys were also conducted over the property (See PDC’s 1999 Prefeasibility Study).
A 15,000 tonne test blast was conducted, and extensive metallurgical testwork was done by CDM.
Previous reports and correspondence for Piedras Verdes are contained in the Piedras Verdes 1999
Prefeasibility Study by PDC. The 242 RC holes (27,000 m) drilled by AZCO, together with the 211
diamond drill holes (47,240 m) drilled by PDC, formed the basis for evaluating the leachable
reserves at Piedras Verdes. In addition to the aforementioned exploration activities, regional and
reconnaissance mapping was done on the surrounding concessions owned by CDM. Extensive
geochemical surveys were carried out over the deposit, including sampling of diamond drill core and
channel sampling along drill roads and in backhoe trenches. These studies demonstrated that
copper values are anomalous in the leached cap throughout the deposit (200 to 600 ppm). Where
there is copper-oxide mineralization at the surface, values exceed 1000 ppm. The only other
anomalous metal in the deposit is molybdenum.
An induced polarization (IP) survey was conducted over the deposit by BAR Geophysics Inc. in
December 1997. The results showed a moderate to high response across 5 km of the ore body
strike.
An airborne magnetic and radiometric survey was carried out over the Piedras Verdes area by World
Geoscience of Houston. The survey covered an area of 15 X 20 km. The magnetic survey showed
that the deposit occurs in a slight magnetic low along a diffuse east-west magnetic lineament. There
is a weak radiometric potassium anomaly over the deposit that presumably reflects the moderate to
strong sericite alteration seen in outcrops and drill cores. Details of these various geochemical and
geophysical surveys are available in the company files for review (see the Piedras Verdes 1999
Prefeasibility Study).
During 2001 and 2002, Frontera Copper Corporation (FCC), a privately owned Canadian company,
undertook a comprehensive review of all technical data on the Piedras Verdes property, including
the Piedras Verdes 1999 Prefeasibility Study. Based on this review, FCC concluded that the
optimum development strategy for the project had not been adopted. On 29 March 2002, FCC
acquired PDC’s 70% interest in CDM and undertook a revised study. This study incorporated new
metallurgical data gained from a large number of column leach tests that were not completed until
after the completion of the Piedras Verdes Prefeasibility Study in 1999, and involved the complete

redesign of the open-pit mine, process plant and associated infrastructure to design a project
capable of producing 70 Mlbs/a of copper cathode. Innovative, but proven, technology was adopted
to optimize the mining and metallurgical aspects of the project and to minimize capital and operating
costs. Innovative methods were also sought to reduce the infrastructure costs of the project. In
August 2002, FCC filed the completed study with the Canadian Securities Administrators as
“Feasibility Study for the Piedras Verdes Copper Project.” The Technical Report, which complied
with NI 43-101 Standards, confirmed the proposed development strategy and noted, “the Piedras
Verdes property was an excellent development opportunity.”
On 10 April 2003, FCC acquired the remaining 30% interest in CDM from AZCO. FCC owns directly
and indirectly 100% of CDM, which in turn owns 100% of the Piedras Verdes project.

ITEM 9 • GEOLOGICAL SETTING
9.1 REGIONAL GEOLOGY

Piedras Verdes is located in the southern portion of the Basin and Range province, midway between
the Gulf of California and the Sierra Madre Occidental. The north-south trending Sierra Madre
plateau is composed of relatively flat-lying silicic tuffs and flows of Tertiary age. In the area to the
west of the Sierra Madre and near Piedras Verdes, there is a large granodiorite batholith of
Cretaceous age. Overlying this large intrusion in the form of erosion remnants, xenoliths and roof
pendants are numerous outcrops of Triassic and Jurassic metasedimentary rocks. Intrusive into
these older rocks is the east-west trending Laramide-age Piedras Verdes intrusive porphyry
complex. This sequence of intrusions was clearly controlled by a major east-west trending mega
shear or fault structure.
The area is also famous for its numerous polymetallic (lead, zinc, copper, silver and gold) epithermal
veins. Some of these were mined for more than 200 years and provided the wealth on which the
town of Alamos was built.
9.2 DEPOSIT GEOLOGY

The Piedras Verdes granodiorite porphyry (Tgdp) is the intrusion responsible for virtually all the
copper mineralization in the area. It occurs as a large east-northeasterly trending, more or less
vertically dipping dike-like body (see Figure 9-1.). Deep diamond drilling has shown that the
granodiorite porphyry has vertical contacts in depth, but towards the surface the porphyry widens
and splits up into a number of dikes, apophyses, and stocks, rather like the fingers on a hand.
Intrusion of the porphyry into the older metasediments has resulted in them becoming extensively
mineralized and altered (see Figure 9-2). The granodiorite porphyry also intruded the granodiorite
batholith, but the older granodiorite does not appear to be receptive to mineralization.
The primary sulfide mineralization was predominantly pyrite and chalcopyrite with grades of 0.15 to
0.20% copper. Subsequent uplift, weathering, leaching and supergene enrichment produced zones
of copper mineralization sufficiently high-grade to represent economically important deposits
amenable to open-pit mining and heap leaching.
The granodiorite porphyry has been dated at 62.2 ±1.6 million years. This means that the
mineralizing event was Laramide in age, which is the geological period when most of the productive
porphyry copper deposits in North America were formed.
Deep drilling in the eastern portion of the deposit has shown that the mineralized granodiorite
porphyry (Tgdp) has been intruded by a younger stock of quartz feldspar porphyry (Tqfp). This
intrusion is known to contain small amounts of pyrite and chalcopyrite, but of no economic
importance (see Figure 9-2). In addition, a number of east-northeasterly trending late stage
granodiorite porphyry dikes (Tgdpx) intrude the mineralized porphyry (see Figure 9-1 and 9-2).
Neither of these younger intrusions contains significant primary mineralization.
12 February 2010 Geological Setting 9-1

Figure 9-1: Simplified Geology Map

Figure 9-2: North-South Geological Section (698,000 East)

The dike-like nature of the Piedras Verdes porphyry copper deposit (4,000 m long and approximately
500 m wide) strongly suggests that the intrusion took place along an east-northeasterly trending
mega shear or major fault.
The ore body is cut by numerous high-angle, northwest-trending normal and strike-slip faults that
have undergone a number of movements post formation of the enriched ore zones.
9.3 LITHOLOGY & SEQUENCE OF INTRUSION

A detailed description of the various lithologic units within the Piedras Verdes deposit is included in
the Amended Technical Report for the Piedras Verdes Copper project (December 2005).

ITEM 10 • DEPOSIT TYPES
The Piedras Verdes ore body is an elongate porphyry copper deposit 4 km long in an east-west
direction and approximately 500 m wide in a north-south direction. The mineralization is
predominantly associated with a Laramide granodiorite porphyry (62 million years old), which
intrudes Triassic-Jurassic metasedimentary units and has mineralized these rocks to a greater or
lesser extent around the margins of the intrusive. The primary sulfide mineralization in the porphyry
intrusive is pyrite and chalcopyrite and has a grade of 0.15% to 0.20% TCu. The primary
mineralization appears to be too low grade to be of economic interest. However, oxidation and
leaching of the primary mineralization has resulted in the formation of zones of supergene
enrichment in the form of chalcocite and oxides. These zones of enrichment represent the presently
known resource with an average grade of 0.36% TCu. The surface expression of the deposit is
demarcated by a leached and oxidized cap with a reddish-brown color caused by iron oxides. The
leached cap varies in thickness from 0 to 200 m and is normally devoid of economic mineralization.
12 February 2010 Deposit Types 10-1

ITEM 11 • MINERALIZATION & ORE TYPES
Oxidation of primary and secondary sulfides generated chalcocite, chrysocolla, neotocite/tenorite,

limonite copper mineralization, cuprite, native copper and minor amounts of malachite, brochantite,
libethenite, and azurite. Ore type designations are based on observed mineralogy during borehole
logging and total copper (TCu) and short assay procedure copper (SAPCu) assays. Two
representative mineralization cross-sections are shown by Figures 11-1 and 11-2.
Secondary copper mineralization at Piedras Verdes shows the effects of in-situ oxidation, as well as
leaching and supergene enrichment. More than one episode of leaching is indicated. Following early
episodes of oxidation and enrichment, there was considerable remobilization of copper, both
vertically and laterally, along faults. Across the Piedras Verdes deposit from west to east, there is a
change in the character of secondary copper mineralization. The changes were caused by a
combination of structure, alteration, and host rock chemistry. Seven visually differentiable ore types
were determined for the deposit model. Leachable ore types with their block model codes (noted in
parenthesis) consist of limonite copper mineralization (303), oxide mineralization (304), oxide
mineralization with native copper and/or cuprite (305), mixed oxide and chalcocite (306), and
chalcocite (307). In addition, unmineralized leached cap (302) and primary mineralization (309) were
included in the model. Changes in ore types across the length of the deposit are illustrated by two
level plans (see Figures 11-3 and 11-4).
Chalcocite enrichment developed in those areas of high pyritic quartz-sericite alteration. Copper-
oxide mineralization formed in the central potassic zone and in the late-stage dikes. On the east side
of the deposit, deep leaching and oxidation along penetrative structures, mainly in porphyry,
generated limonite copper mineralization (ore type 303), mixed with some copper oxides and
remnant chalcocite veins at depth. Limonite copper mineralization occurs as a minor component
elsewhere in the deposit, often mixed with oxide mineralization. It may reflect inefficient leaching due
to insufficient acid generation and/or changes in rock chemistry.
12 February 2010 Mineralization & Ore Types 11-1

Figure 11-1: North-South Ore Types Section (698,000 East)

Figure 11-2: North-South Ore Types Section (696,400 East)

Figure 11-3: Mid-Bench Ore Type Plan – 97.50 m Elevation Level

Figure 11-4: Mid-Bench Ore Type Plan – 157.50 m Elevation Level

ITEM 12 • EXPLOR ATION
12.1 PIEDRAS VERDES EXPLORATION

See the History section (Item 8) for information on pre-production exploration activities.
12.2 CERRO CHATO EXPLORATION

During 2006 and 2007, Cobre del Mayo conducted a diamond drilling exploration program at the
Cerro Chato target, located 1,900 m west of the Phase 1 Piedras Verdes pit and 400 m north of the
mine access road. The Cerro Chato target is contained within the Santa Rosa T-209104 and Fortuna
15 T 226214 concessions, 100% owned by Cobre del Mayo SA de CV. This drilling program was
subsequent to a channel sampling program described in the December 2005 Amended Technical
Report.
Schists and gneisses interpreted as metamorphosed sedimentary and volcanic strata underlie most
of the Cerro Chato area. The schists and gneisses are interpreted to be in sharp contact with a
regionally extensive, pre-mineral, diorite-quartz diorite intrusion that crops out on the lowermost
southern flank of Cerro Chato. The contact relationships between this diorite and the intrusions
exposed at Piedras Verdes were not observed. The schists and gneisses are crosscut by dioritic
dikes, feldspar porphyritic dikes, and by quartz feldspar porphyry dikes. These dikes seldom are
observed in outcrop, but were intersected in drill holes. They strike northeast-southwest and have
vertical or steep northwest dips. Structurally controlled zones of copper mineralization are exposed
on the flanks of Cerro Chato. Malachite, chrysocolla, and tenorite form fracture coatings on all rock
types and occur as impregnations along foliation planes in the schists and gneisses. Leaching and
oxidation levels at Cerro Chato are extremely shallow on the eastern flank and extremely deep on
the western flank. Primary sulfides occur at depths of 20 to 40 m below surface on the east flank of
Cerro Chato, whereas diamond drill hole data indicate oxidation and leaching to depths in excess of
300 m below surface under the central and western portions of Cerro Chato. The most widespread
and continuous zones of copper mineralization are hosted within gneissic and schistose rocks.
Surface mapping and sampling of these mineralized zones defined large areas of anomalous copper
concentrations, and these zones were the focus of the exploration drilling program.
A total of 3,419 m of diamond drilling was completed in 27 drill holes (Figure 12-1), but six of the drill
holes were prematurely terminated at shallow depths due to difficult drilling conditions. The 2006-
2007 exploration drilling program indicates that the mineralized zones exposed at surface have
tabular, near vertical morphologies. They are exposed or were intersected on the eastern, northern,
and western flanks of Cerro Chato. The mineralized zones are interpreted to be controlled by east-
west trending structural zones. Drill hole density is insufficient to allow for estimation of a mineral
resource according to CSA NI 43-101 definitions, however, modeling of mineralized zones on 50 m
spaced cross-sections indicates that 15 to 20 Mt of oxide mineralization at grades of >0.25% TCu
would be a reasonable goal for an infill resource definition drilling program at Cerro Chato. This
estimate of potential is conceptual in nature and it is uncertain if additional drilling will result in the
target being delineated as a mineral resource.
12 February 2010 Exploration 12-1

Figure 12-1: Cerro Chato Drill Hole Location Map
The west flank of Cerro Chato demonstrates the greatest continuity of mineralized zones and is the
highest priority target for further exploration. Mineralized intercepts of greater than 0.15% TCu are
summarized in Table 12.1.
Preliminary metallurgical test results indicate that some of the Cerro Chato mineralization has
metallurgical characteristics similar to the ores currently being mined at Piedras Verdes. Cerro Chato
material yields SAPCu / TCu ratios of 25% to 75%, with 34 drill hole intercepts yielding an average
SAPCu / TCu ratio of 51%. Column tests of crushed drill core indicate copper recoveries of as much
as 70% with acid consumption of 14 kg/t. More extensive testing is needed to adequately quantify
the copper recovery and acid consumption properties of Cerro Chato material.

Table 12.1: Cerro Chato Drill Hole Intercepts Summary Table

Ratio
From Interval Total SAP SAP/Tota
Drillhole (m) To (m) (m) Cu % Cu % l Cu Location Notes
no significant results, hole terminated at
PVD06-234 Chato West 32.5m due to ground conditions
PVD06-235 27.0 75.0 48.0 0.25 0.14 56% Chato West

end of hole at 122.3, in low grade
PVD06-235 111.0 122.3 11.3 0.23 0.13 57% Chato West mineralization
PVD06-236 15.0 33.0 18.0 0.28 0.21 75% Chato West

end of hole at 126.5, in low grade
PVD06-237 39.0 54.0 15.0 0.31 0.15 48% Chato West
PVD06-237 84.0 96.0 12.0 0.17 0.06 35% Chato West
PVD06-237 105.0 129.0 24.0 0.35 0.23 66% Chato West
PVD06-238 3.0 12.0 9.0 0.16 0.04 25% Chato West
PVD06-238 132.0 144.0 12.0 0.19 0.12 63% Chato West
PVD06-239 36.0 51.0 15.0 0.47 0.35 74% Chato West

111 to 114m, 3m with 18 gpt Au and >200
PVD06-239 84.0 114.0 30.0 0.17 0.05 29% Chato West gpt Ag
PVD06-240 15.0 57.0 42.0 0.37 0.15 41% Chato West
PVD06-240 69.0 90.0 21.0 0.16 0.13 81% Chato West

Includes 69 to 128.6m, 59.6m @ 0.45%
PVD06-241 42.0 128.6 86.6 0.37 0.17 46% Chato West Cu
PVD06-242 48.0 69.0 21.0 0.17 0.07 41% Chato West

End of hole at 39m, in low grade
PVD06-244 4.5 24.0 19.5 0.16 0.04 25% Chato West
PVD06-244 51.0 75.0 24.0 0.18 0.06 33% Chato West
PVD06-245 4.3 18.0 13.7 0.13 0.08 62% Chato West
PVD06-245 36.0 45.0 9.0 0.23 0.14 61% Chato West
PVD06-245 63.0 78.0 15.0 0.26 0.16 62% Chato West
PVD06-245 87.0 111.0 24.0 0.12 0.05 42% Chato West

Continued on following page…

Ratio
From Interval Total SAP SAP/Tota
Drillhole (m) To (m) (m) Cu % Cu % l Cu Location Notes
PVD06-246 Chato West No significant results.
PVD06-247 6.4 72.0 65.6 0.33 0.21 64% Chato West
PVD06-247 90.0 105.0 15.0 0.25 0.11 44% Chato West
PVD06-248 Chato West No significant results
PVD06-249 84.0 99.0 15.0 0.17 0.09 54% Chato West
PVD06-250 18.0 27.0 9.0 0.24 0.14 58% Chato West
PVD06-251 33.0 138.0 105.0 0.40 0.23 58% Chato West

Chato
PVD06-252 North No significant results
Chato
Chato
PVD06-262 48.0 54.0 6.0 0.77 0.52 68% Chato West
PVD06-264 3.0 9.0 6.0 0.30 0.10 33% Chato West
PVD06-265 99.0 108.0 9.0 0.72 0.53 74% Chato West
PVD07-267 6.0 21.0 15.0 0.12 0.03 25% Chato West
PVD07-267 33.0 57.0 24.0 0.17 0.05 29% Chato West
PVD07-267 123.0 141.0 18.0 0.33 0.20 61% Chato West
PVD07-267 312.0 333.0 21.0 0.24 0.18 75% Chato West Intercept at oxide-sulfide transition
12.3 FORTUNA 8 EXPLORATION

In 2009, CDM conducted wide-spaced exploration drilling in and adjacent to the Fortuna 8
concession at the southern limit of the resource area. Prior to 2009, the Fortuna 8 concession was
not controlled by CDM, and had thus not been extensively drill tested. A total of 1,742 m in 12 drill
holes was completed; 246 of 596 3 m intervals of the drill holes intersected copper mineralization in
excess of 0.10 % TCu. Mineralized intercepts are summarized in Table 12.2. These drill hole data
are not incorporated into the current resource model. Inclusion of these data is expected to
incrementally increase resources at the southern margin of the currently planned pit.

Table 12.2: Fortuna 8 Drill Intersections Summary

From To Width TCu SAPCu SAPCu/TCu
Drill Hole (m) (m) (m) (%) (%) (% Rec)
MDH09‐16 21 54 33 0.30 0.21 63
MDH09‐16 69 75 6 0.16 0.09 54
MDH09‐16 99 117 18 0.23 0.11 43
MDH09‐17 0 27 27 0.37 0.28 54
MDH09‐17 39 135 96 0.57 0.40 64
MDH09‐18 3 9 6 0.11 0.03 30
MDH09‐18 24 27 3 0.10 0.03 32
MDH09‐18 57 81 24 0.21 0.12 52
MDH09‐18 93 162 69 0.15 0.08 47
MDH09‐19 0 21 21 0.20 0.06 33
MDH09‐19 54 63 9 0.35 0.19 47
MDH09‐20 9 15 6 0.10 0.04 41
MDH09‐20 33 45 12 0.12 0.04 37
MDH09‐20 63 69 6 0.15 0.05 34
MDH09‐20 78 102 24 0.29 0.20 40
MDH09‐21 30 33 3 0.11 0.04 36
MDH09‐21 144 201 57 0.60 0.48 78
MDH09‐22 0 3 3 0.12 0.09 71
MDH09‐22 15 51 36 0.30 0.15 42
MDH09‐22 99 173.3 74.3 0.26 0.15 47
MDH09‐23 0 6 6 0.13 0.08 60
MDH09‐23 24 84 60 0.29 0.11 38
MDH09‐24 15 84 69 0.22 0.03 14
MDH09‐24 111 135 24 0.94 0.67 38
MDH09‐25 9 21 12 0.22 0.17 76
MDH09‐25 30 33 3 0.13 0.10 74
MDH09‐25 72 93 21 0.19 0.02 13
MDH09‐25 102 117 15 0.26 0.03 10
MDH09‐27 33 36 3 0.12 0.04 34
MDH09‐27 57 66 9 0.12 0.04 32
MDH09‐27 150 155.8 5.8 0.43 0.30 62

ITEM 13 • DRILLING
13.1 PIEDRAS VERDES HISTORICAL DRILLING

The Piedras Verdes deposit has been drilled on north-south section lines spaced 100 m apart. In the
central portion of the deposit, the drill spacing is 60 m (see Figure 3-3). The 2008 resource model is
constrained by 242 reverse circulation drill holes totaling 27,620 m and 236 diamond drill holes
totaling 50,458 m. All of the reverse circulation drilling was completed by CDM in the period 1992 to
1995 when AZCO was the owner and operator of CDM. Phelps Dodge Corporation became the
operator of CDM in 1996, and drilled 207 diamond drill holes totaling 45,783 m in 1996-1997. These
have been included in the resource model database. Other exploration drill holes outside of the
known resource were completed by Phelps Dodge, but do not form part of the resource database. In
2006 and 2007, CDM, under the direction of FCC, conducted an infill drilling campaign comprising
23 diamond drill holes totaling 3,385 m. At this time, FCC also added data to the resource model
database for six drill holes (1,457 m) that were drilled by Phelps Dodge in 1997. These confirmation
drill holes were completed after the resource model was constructed and were not part of the 1997
resource model database.
In 1999, Phelps Dodge conducted additional diamond drilling to obtain samples for metallurgical
testing. Ten drill holes, PVD99-224 through PVD99-233, were completed. These drill holes were
neither logged nor assayed. The entire core was utilized for column tests. These drill holes do not
form part of the resource model database.
Core from the 1996-1997 program was logged at the company’s facility, Rancho Esmeralda, in
Alamos. Model codes for lithology, ore mineralogy, ore type, alteration, structure, and pyrite content
were taken from the drill logs and input into the model database. To code the AZCO RVC holes, drill
chips from the holes were relogged by Phelps Dodge project geologists. Downhole orientation
surveys of RC holes were not conducted. Processing of drill core generated in the 2006 and 2007
campaigns, including core logging, photographing, and sampling, was conducted by geologists Matt
Gray, Rodolfo Sauceda and Carlos Huitron of Resource Geosciences de Mexico SA de CV. Logging
procedures respected the lithology and ore type codes originally developed by Phelps Dodge for the
project. Core was processed at the core logging facilities and warehouse at the Piedras Verdes
mine. Core was split with a diamond disk saw, with one-half sent for assay and the other half
preserved in the core library. Core was photographed prior to splitting. Core recoveries averaged
95%.
In 2002, IMC reviewed the intensity of drilling and concluded that sufficient drilling had been carried
out to determine measured and indicated resources. However, they recommended that an additional
15 to 27 drill holes be completed to upgrade inferred resources to measured and indicated resources
and to delineate additional resources in areas of good exploration potential. The 2006 and 2007 infill
drilling programs addressed these areas.
12 February 2010 Drilling 13-1

13.2 CERRO CHATO

During 2006 and 2007, CDM drilled 27 holes totaling 3,419 m in the Cerro Chato exploration area.
Drilling was conducted on north-south sections across a mineralized corridor controlled by east-west
trending structures, as described in Item 12 of this report. Drill hole density is insufficient to allow for
estimation of a mineral resource according to CSA NI 43-101 definitions, and these exploration holes
lie outside of the deposit block model.
13.3 PIEDRAS VERDES 2006-2007 INFILL DRILLING

In 2006 and 2007, Cobre del Mayo completed infill drilling designed to provide diamond drill data in
areas where the resource was constrained principally by reverse circulation drill data. The drill holes
specifically tested the block model in areas important to the three-year production plan. Drilling was
conducted by Layne de Mexico SA de CV, subsidiary of Layne Drilling Inc. A truck-mounted CS-
1000 drill rig and a skid-mounted Hagby drill rig and HQ and NQ thin wall tools were used. CDM
drilled 23 infill holes in the main deposit area totaling 3,420 m. Information from these holes was
used to update the block model in 2008 and define the ore schedule to be mined during 2008. Some
of these holes were in zones recommended for drilling by IMC in 2002, and all were within the final
pit limits. Data from the 23 diamond drill holes completed in 2006 and 2007, and data from six drill
holes completed by Phelps Dodge that post-date the 1999 resource estimate were used to update
the geological and resource model in November 2008, as discussed in Item 19 of this report.
12 February 2010 Drilling 13-2

ITEM 14 • SAMPLIN G METHODS & APPROACH
14.1 SAMPLE METHODS & DETAILS

During the period that AZCO and PDC explored the Piedras Verdes property, samples were taken
by two methods: surface sampling and drilling. Eight surface samples were taken, including one
large bulk sample from a 15,000 tonne test blast. A total of 465 drill holes were sampled on either
3.05 m or 3 m intervals, producing over 24,000 samples for assays, density determination, rock
quality designation (RQD) and metallurgical testing. Figure 3-3 shows the location of all drill holes,
while Figure 14-1 shows the location of surface samples and those drill holes used for metallurgical
testing. The total area covered by the sampling is approximately 6 km east-west by 2 km north-
south; however, the area modeled and used for resource estimation and mine planning is about
3 km east-west by 1 km north-south. Maximum depth of drilling is about 350 m.
14.1.1 Surface Samples
Except for the bulk sample produced by a 15,000 tonne test blast, the surface samples were used
for the initial column leach tests performed both by AZCO and by PDC. Samples were taken
manually from surface exposures shown in Figure 14-1. Project geological personnel delivered the
samples to Metcon Research, Inc. in Tucson. Test details and assay results are given under Item
22. Complete metallurgical reports are presented in the Piedras Verdes Prefeasibility Study (January
1999). The test blast sample was used to perform a large diameter column leach test at ROM size,
as well as several smaller diameter column tests. The sample location is shown in Figure 14-1. This
location corresponds to the starting place for mining the deposit as detailed under Item 21, Mining.
14.1.2 Drill Samples
Two types of drilling were employed at Piedras Verdes, RC drilling, which produces rock chips and
fines, and diamond drilling, which produces drill core. These are discussed in Item 13.
14.2 DRILLING, SAMPLING, OR RECOVERY FACTORS

No factors were identified that could materially affect the accuracy and reliability of the results of
sampling the Piedras Verdes deposit. With few exceptions, core recoveries were in excess of 90%.
14.3 SAMPLE QUALITY

In the opinion of the authors, the samples taken by AZCO and PDC for the Piedras Verdes project
are of high quality and are representative of the deposit. This statement applies to samples used for
the determination of grades, lithology, and densities, as well as metallurgical performance.
12 February 2010 Sampling Methods & Approach 14-1

Figure 14-1: Metallurgical Sample Drill Hole Location Map

14.4 LIST OF INDIVIDUAL SAMPLES

The geologic block model database contains 26,488 individual drill intervals, each with assays for
TCu, ASCu, SAPCu and acid consumption. These assays are available in digital form from which
print-outs can be made. Original drill logs and assay certificates are available for inspection in the
FCC office in Phoenix, AZ.
14.5 CERRO CHATO DIAMOND DRILL PROGRAM

During 2006 to 2007, diamond drilling was conducted in the Cerro Chato area. Standard diamond
drilling methods were used yielding high quality representative samples with core recoveries in
excess of 90%. Drill core was sampled on regular 3 m intervals. Samples submitted for analysis
were one-half splits obtained by cutting the core using diamond disk rotary saws. Half of the drill
core was sent for assay and the other half was stored in the core library.
14.6 2006- 2007 INFILL DRILLING PROGRAM

In 2006 and 2007, CDM drilled 23 infill holes in the main deposit area. Standard diamond drilling
methods were used yielding high quality representative samples with core recoveries in excess of
90%. Drill core was sampled on regular 3 m intervals. Samples submitted for analysis were one-half
splits obtained by cutting the core using diamond disk rotary saws. Half of the drill core was sent for
assay and the other half was stored in the core library.
14.7 BLAST HOLE SAMPLING

Cuttings resulting from production blast holes are all sampled using pipe sampling. This technique
involves driving a pipe into the pile of drill hole cuttings and retrieving the material from within the
pipe for further splitting and ultimately for analysis. Several pipe samples are taken from each
cuttings pile, and special care is taken to ensure the sample does not include any material from sub-
drilling zones.

ITEM 15 • SAMPLE PREPARATION , A NALYSES & SEC URITY
15.1 GENERAL PROCEDURES – PREPRODUCTION

For the RC drill samples, on-site sample preparation consisted of compositing the 3.05 m RC chips,
then mixing and splitting. The diamond cores were split in half by sawing. PDC project geologists
directed the sawing procedure to ensure that each half was representative. The RC splits or the one-
half cores were packaged and labeled, and then the samples were picked up by drivers from the
Hermosillo, Sonora office of Skyline Laboratories Inc. (Skyline). Skyline reduced the samples to
assay pulps at the Hermosillo office, and then shipped the assay pulps to Skyline in Tucson for
assaying. Samples for metallurgical testing (except the bulk sample from the test blast) were
transported to test facilities in Tucson, Morenci, or Safford, Arizona. The test blast sample was
transported by common carrier to Morenci, Arizona.
The samples were carefully protected against contamination and tampering. A system of careful
record-keeping was used throughout the exploration program.
15.1.1 Sample Preparation Personnel
Initial sample preparation was performed onsite by hourly paid project personnel, under the direction
of project geologists. Most of the metallurgical samples were composited onsite by project personnel
then transported by project geologists to the test facilities. In some cases, sample reject material
was shipped to the test facility, where test charge composites were prepared. Additional sample
preparation was done by employees of the test facilities used for those particular tests. In the case of
work by the Phelps Dodge Process Technology Center (PTC), these personnel were employed by
PDC.
15.1.2 Details of Sample Preparation, Assaying & Analytical Procedures
15.1.2.1 Sample Preparation

Drill samples were composited on 3 m intervals. After splitting or sawing as described above, the
assay samples were further reduced by crushing and riffle splitting to produce assay pulps of
approximately 200 g mass, at a particle size of minus 150 Tyler mesh.
Metallurgical samples were made up from the split core remaining after assay samples were taken
from course rejects or from surface samples. The samples were blended and crushed to the
required particle size for column testing, usually -25 mm. Sub-samples were taken by the test facility
for assays and screen analysis. A discussion of tests and references to original test reports is
provided elsewhere in this report.
12 February 2010 Sample Preparation, Analyses & Security 15-1

15.1.2.2 Test Blast Sampling Procedures

In 1999, PDC conducted a 15,000 tonne test blast to collect a bulk sample for run-of-mine (ROM)
large diameter column leach tests and to observe the rock fragmentation achieved. The rock
fragmented into a fine particle size distribution supporting ROM heap leach processing. The test
blast and bulk sampling procedures are fully described in a 1999 report by PDC (Appendix 6.6A,
referred to in the August 2002 Technical Report). Pertinent excerpts from that report are given
below:
“A location was selected by PDC to collect a bulk sample for metallurgical tests and conduct a
scaled production type blast test. The material desired for metallurgical testing was a copper
oxide; a location that would best simulate a typical production blast was also desired. The
location chosen was on the western edge of the deposit, at the base of Cerro Cinco. This
location provided an acceptable oxide sample (TCu of 0.60%) and the topography required to
simulate a mining blast. The rock type sampled was a meta-sediment, biotite gneiss.
A flat top and a near vertical face of approximately 10 m existed at this site. Limited additional
equipment work was required to prepare the area. The upper bench was leveled completely off
and increased in size. The face was increased to 10 m by removing material at the base. This
material was used to create a level bench at the foot of the blast site. The final size of the test
area was approximately 22 m wide x 26 m deep x 10 m high.
The blast holes were drilled to a depth of approximately 10 m. Rock chip samples from each
blast hole were collected and assayed by Act-Skyline labs of Tucson. The analysis included
TCu, ASCu, SAPCu and MLT. Grades for TCu ranged from 1.15% to 0.14%. The average
grades for the blast are TCu 0.53%, ASCu 0.48%, SAP 0.46% and MLT 0.45%.
Approximately 80 tons of material is required to load a 30 ft tall x 6 ft diameter leach column.

This includes material for the column, a sample for screen size analysis and material for
several 10 ft x 6 inch columns that are run in conjunction with any 6 ft diameter column. To
allow for possible future testing, more than the required 80 tons was collected. The collected
sample is mixed well before any material is removed. This allows for any number of tests that
need to be run at any time, to use the same material. For this test, approximately 600 tons of
sample was collected from the test blast.
The main requirement for the metallurgical sample was to replicate the average grade of the
deposit’s oxide ores. The grade values targeted for this sample were between 0.60 and 0.30
ASCu. To locate the sample, the assays from the blast holes were hand contoured. This was
done for TCu, ASCu and SAPCu. The location selected for the sample was the center 16
holes.
The sample was cut out of the pile using the following procedure. The loader removed the front
of the blast up to where the second row of holes started. It then worked in on each side and
removed material. When this was done the center of the sample area was all that remained.
The loader began working across the face, advancing evenly through the muck pile. This
material was put into a separate pile. At differing intervals, the new muck pile was mixed to
blend the sample into a homogenous sample. When the desired amount of muck had been

removed, the entire sample was again mixed for several hours. This was done by pushing the
material up the pile from all sides of the sample. The final step was to turn the pile over again
by pushing the entire pile into a new pile 30 feet from the original.
The sample was shipped to Morenci in four end-dump gondola trucks, 20 tons each, on
5 April 1999. The trucks were visually inspected for any residue material in the gondolas
before they were loaded. Three buckets from the pile was required to fill each of the trucks.
The sample was visually divided into quarters. Each bucket taken for the sample was taken
from a different quarter. When the four quarters had been taken, the sampling area was moved
45 degrees to collect material from the opposite portion of the pile. This procedure was
followed until all of the trucks were loaded. Once loaded the trailers were covered with a tarp to
keep any fines from being blown off of the sample.”
15.1.2.3 Assaying & Analytical Procedures

For determinations completed prior to operation, assaying was conducted by Skyline Laboratories or
the Phelps Dodge Process Technology Center. In the case of Cerro Chato exploration samples,
Skyline Laboratories also conducted the analysis. Currently, the analysis of blasthole samples is
completed on site, and check assays are periodically sent to Skyline Laboratories for control.
Assaying for TCu is done by a standard four-acid sample digestion followed by atomic absorption
(AA) spectrometry using standards and blanks for calibration.
Short assay procedure copper (SAPCu) uses an assay pulp sample contacted with a strong sulfuric
acid-ferric sulfate solution. The sample is shaken with the solution for 30 minutes at 75ºC and then
filtered. The filtrate is cooled, made up to a standard volume, and the copper determined by AA with
appropriate standards and blanks for calibration. The exact analytical procedure is given in
Appendix 6.10 (referred to in the August 2002 Technical Report). This procedure has been found by
PDC to reasonably approximate actual heap leach results when appropriate correction factors are
used. These factors are the result of comparing column leach tests with SAPCu results on the same
samples.
Acid consumption is also determined on assay pulp samples by contacting the material with 15 g/L
of sulfuric acid for one hour at ambient temperature. The amount of acid consumption is then
determined by titration of the remaining acid with normal NaOH solution.
Again, the results are adjusted by comparing acid consumption measured in column leach tests with
the analytical procedure. Results tend to be very conservative with respect to actual heap leach
operations. Either gross or net acid consumption can be calculated and reported. Gross
consumption is a measure of the total amount of acid consumed by a given mass of ore, while net is
the amount determined by deducting from the gross the stoichiometric amount of acid equivalent to
the amount of copper in the sample. This is the amount of acid that would be transferred from the
organic phase to the aqueous phase in a solvent extraction operation, representing acid available for
the next leach cycle in a heap leach SX/EW operation.

15.1.2.4 Assay & Test Facilities

Skyline Laboratories began operations in Denver in 1967. They opened the Tucson branch in
January 1973. Skyline is considered a highly reputable, reliable firm for sample preparation and
assaying. For the Piedras Verdes project, Skyline performed approximately 100,000 determinations
on about 25,000 samples. During the period 1992 through 1999, Skyline was managed by William
Lehmbech, Charles Thompson, and James Martin, all registered assayers in Arizona. All assay
certificates bear the seal and signature of one of these individuals.
Bondar-Clegg (BC), a laboratory used for check assays, was founded in 1962 and acquired in 1989
by Inchcape. The Vancouver laboratory became the Minerals Division head office in 1994. In the fall
of 1995, the company was acquired by Charter House, a UK corporation and the owners of Intertek
Testing Services (ITS). BC is recognized as a reputable laboratory for analyses and physical testing
serving the mining and exploration industry. The BC Vancouver office performed over 500 check
assays for the Piedras Verdes project. Their standard practice for geochemical assay reports is to
have the reports signed by one of the senior technical staff. This procedure was followed for Piedras
Verdes.
METCON Research, Inc. also located in Tucson, AZ, has been in business since about 1979. It was
purchased by KD Engineering, the present owners, in 1985. METCON is considered a highly
professional and reliable test facility. The test facility was managed by Mr. Eugenio Iasillo, a
metallurgical engineer (University of Arizona) and registered professional engineer in Arizona. Mr.
Joseph M. Keane. P.E. (AZ) was president of KD-METCON.
The PDC Process Technology Center was originally located at the Morenci mine in Arizona. The
center moved into new facilities located near Safford, AZ. PDC uses the center for virtually all
testwork involving heap leaching and SX/EW. The test lab was directed by Mr. E.A. Rood, who has
over 30 years experience in metallurgical testing.
Jerry T. Hanks, P.E., directed the testwork at METCON and at the PTC. At the time, Hanks was the
staff metallurgist for Phelps Dodge Exploration Corp.
15.2 QUALITY CONTROL

Several quality control procedures were employed during the Piedras Verdes investigation.
As an analytical check of the Skyline assays, a split of 3 m pulverized sample, at approximately

every 60 m in 207 drill holes, was sent to Bondar-Clegg. The Bondar-Clegg laboratory in Vancouver
assayed the check samples for TCu. A comparison plot of the Skyline versus the Bondar-Clegg
values for 571 check assays is given in Figure 15-1. The data do not include values of -0.01, which
is the code in the database for TCu values less than 0.01%. Only ten values are listed with this code.
Due to the systematic sampling procedure for the check assays, many samples having <0.10% TCu
were checked. To compare check assays for copper contents that approach ore grade, a
comparison plot of values that are 0.09% TCu or greater is presented in Figure 15-2.

Figure 15-1: Check Assay Comparison (All Check Assays)

Figure 15-2: Comparison Check Assay Values TCu>0.09%

Both comparisons demonstrate a good correlation between the two laboratories. For all check
assays, the mean %TCu for Skyline is 0.139 and for Bondar-Clegg, the mean value is 0.146. The
correlation coefficient between the two sets of values is 0.9951. For %TCu values ≥0.09, the mean
Skyline value is 0.276 and the mean Bondar-Clegg value is 0.289.
For this comparison, the correlation coefficient between the two sets of values is 0.9953. In either
comparison, the relative difference between the two average assays from the two laboratories is
5.0%.
The comparison plots exhibit a slight upward bias (slightly higher TCu values) for the Bondar-Clegg
assays. Due to the very slight difference in average assay values and the extremely good correlation
between the two sets of the data, a very high level of confidence can be stipulated for the analytical
results that are used in the resource estimation.
Resource Geosciences de Mexico was contracted to supervise drilling and QA/QC practices for the
2006 and 2007 drilling campaigns. RGM implemented a quality assurance and quality control
(QA/QC) program designed to verify the reliability of the data obtained and its suitability
incorporation the data into a resource model. All drill core, coarse sample rejects, and sample pulps
have been retained, thus permitting additional data verification in the future should results so
warrant.
M Gray reviewed the control data and found that results verify that the analytical results of the drilling
program are reliable. Key components of the QA/QC program were systematic insertion into the
sample stream of blank samples and standards. During the 2006 and 2007 drill programs, control
samples equivalent to 10.6% of the total number of drill core samples were inserted and analyzed.
15.3 GENERAL PROCEDURES – PRODUCTION BLAST HOLES

Samples taken from production blast holes are processed at an on-site laboratory, operated by
Cobre del Mayo, in facilities where special care is taken to protect against contamination. Personnel
performing the sample preparation are employees of Mayoson, the employment arm of CDM.
Each sample is split, dried, pulverized and further split into assay pulps weighing approximately
300 g. The analysis is performed using the same procedures described in Item 15.1.2.3.
Check assays are performed by Skyline Laboratories, a facility described in Item 15.1.2.4. A
description of the check assaying procedures is provided below.
15.3.1 Check Assays, Production Blast Holes
Currently, approximately 5% to 10% of the total number of blast hole samples (approximately 100
samples) have been sent to Skyline Laboratory for verification of assay determination.
For samples selected to be checked, the original sample pulps, weighing approximately 300 grams,
are split in half giving two pulp samples of 150 grams each and shipped to Skyline Laboratory in

Tucson, Arizona. The samples are selected on a monthly basis from all the ore samples sent by the
mine/geology departments.
The selection of samples for outside analyses is based on their TCu content. Samples are selected
to have 50% of these in the range of 0.20% to 0.29% TCu. Another 15% of the samples selected are
taken between the range of 0.10% to 0.19% TCu and another 15% between the range of 0.30% to
0.39% TCu. Finally, another 10% is taken between the range of 0% to 0.09% TCu and 10% from the
range 0.40% TCu or higher. The sample selection is shown in Table 15.1.
Table 15.1: Sample Selection

100% Samples
Percent 10% 15% 50% 15% 10%
%TCu 0-0.09 0.1-0.19 0.20-0.29 0.30-0.39 0.40 and up
Once selected, the samples are listed and numbered from 1 to 100 and identified by the original
designations provided by the geology department. Upon receiving the Skyline results, they are
compared to the CDM laboratory results and graphed (see Figures 15-3 and 15-4). The results are
considered to positively confirm acceptable results from the CDM Laboratory.

15.4 COMPARISON OF ASSAYS WITH MODEL GENERATED VALUES

Prior to production, as an additional check on the assay work, IMC compared the analytical
composite (15 m) values determined for TCu, ASCu, and SAPCu to the mathematically determined
composite values that were used in the resource model. The results were found to be in close
agreement.
15.5 METALLURIGICAL SAMPLE CHECKS

All preproduction metallurgical test head samples were assayed for TCu, ASCu, SAPCu, and acid
consumption. These data were compared to the calculated head obtained from solution and residue
assays. Good agreement was obtained for most tests. In addition, some of the samples were used
for several column tests permitting comparison of assay and metallurgical results from one test to
another. Details are contained in the respective metallurgical test reports referenced in Item 19.

15.6 COMPARISON OF BOTTLE ROLL TEST WITH SAPCu ASSAYS

AZCO did not perform ASCu or SAPCu assays on their RC drill samples, but did perform
approximately 2,200 bottle-roll tests on these samples. Later, PDC assayed the AZCO assay pulps
for ASCu and SAPCu. IMC made a statistical comparison of the two methods. Overall, the results do
not agree too well, but when the extreme low and high-grade samples are disregarded, the results
are quite close. Since the mid-grade material makes up most of the resource, this check is
considered to validate the SAPCu assays as an approximate predictor of metallurgical extraction.
IMC’s comparison can be found in Appendix 6.11 of the August 2002 Technical Report.
15.7 CERRO CHATO DIAMOND DRILL CORE SAMPLE PREPARATION,

ANALYSIS & SECURITY
Drill core from the 2006-2007 Cerro Chato diamond drilling campaign was sampled by Resource
Geosciences de Mexico (RGM), an independent provider of technical services. Drill core was
collected from the drill site by RGM employees and transported to a secure warehouse outside of
the mine property where geologists logged and marked the drill core for cutting by a diamond disk
saw. Access to drill core and samples was controlled by RGM. Sampling was conducted on regular
3 m intervals. Samples were delivered by RGM directly to Sonora Sample Preparation in Hermosillo,
Sonora where the sample was crushed to 75% minus 10 mesh. Crushed material was then
homogenized and a 250 g sample was taken and pulverized to 90% minus 150 mesh. The
pulverized sample (pulp) was packaged into Kraft envelopes and sent to Skyline Labs in Tucson
Arizona, for copper and multi-element assay. Skyline analyzed for TCu (three acid, AAS) and SAP
copper (H2SO4/FeSO4 digestion at 75° C, PDC procedure), and provided fire assay (AA) gold results
and a 35 element aqua regia digestion ICP scan.

ITEM 16 • DATA VERIFICATION
16.1 QUALITY CONTROL & DATA VERIFICATION MEASURES
16.1.1 Geologic Data
Regarding the drill hole sampling data, it is believed that the work done by AZCO and PDC is in
accordance with normal industry standards. A 2002 review by Mr. Herb Welhener, a Qualified
Person as defined by CSA National Instrument 43-101, of Independent Mining Consultants (IMC),
indicated that the AZCO RC holes and PDC core holes were in reasonably good agreement. A
sampling program was not conducted to validate the existing assay data.
Regarding the block model, Mr. Welhener did considerable checking against the drilling data. The
model conformed to normal industry standards. Mr. Welhener developed an independent model and
obtained results comparable to the block model.
Mining commenced in 2006, and the Piedras Verdes staff made comparisons between the mining
results and the block model.
16.1.2 Mining Data
The mining cost data is based on actual experience, including:
• Equipment productivities and required equipment shifts and number of units based on the
performance of the project to date.
• Diesel fuel costs are based on PEMEX prices FOB Piedras Verdes mine site. The cost used for
the analysis averages $0.50/L. IVA and other refundable taxes are not included in the cost.
• Electrical costs are based on current prices charged by CFE (Comisiόn Federal de Electricidad).
Unit costs are estimated at $0.127/kWh, increasing 6% annually.
• Explosives costs are based on current charges by the explosives provider in Hermosillo, Hanka.
• Equipment costs, tire costs and spare parts costs are based on current prices.
16.1.3 Process Data
Jerry T. Hanks, P.E., a Qualified Person as defined by CSA NI 43-101, was previously involved in
the Piedras Verdes project as Staff Metallurgist for Phelps Dodge Exploration Corporation (PDX). In
that capacity, he designed and supervised the test programs performed by METCON and by the
Phelps Dodge Process Technology Center (PTC) during the period 1996 through 1999.
Soon after PDC acquired its 70% interest in Piedras Verdes, Mr. Hanks performed a thorough
review of the AZCO testwork that had been done prior to the acquisition. The review consisted of
(1) Reading the reports by METCON and by Mr. Mike Sierakoski, Consulting Metallurgist for AZCO;
12 February 2010 Data Verification 16-1

(2) Meeting with Mr. Sierakoski for review and clarification of testwork; (3) Meeting with METCON
personnel to review data and results.
In 2002, CDM retained Mr. Hanks as an independent metallurgical engineer to review the process
data again. He reviewed all testwork by both AZCO and CDM, in particular the work completed after
the PDC 1999 Prefeasibility Study was completed. The review consisted of re-reading all reports and
having extensive discussions with Mr. E. A. Rood of the PTC to understand fully the results and the
analytical methods used by the project.
Mr. Hanks also hired and directed Acorga Metal Extraction Products, suppliers of reagents for SX
operations, to model the extraction and strip circuits and recommend the most economical design for
the project.
16.2 SAMPLING & ANALYTICAL DATA VERIFIED

In 2002, Mr. Hanks checked about 50 assay certificates against the block model database and found
no errors. He also reviewed the check assay data and the interpretation in the PDC 1999
Prefeasibility Study and discussed analytical methods with Mr. William Lehmbeck, of Skyline
Laboratories, to confirm that the methods used are those discussed in Item 12 of this report. (No
new assays have been added to the database that was used as the basis of this technical report.)
Mr. Hanks also hired and directed IMC to compare bottle roll test data with SAPCu analyses.
Differences were noted, particularly in the high- and low-grade values. The mid-range values agreed
fairly well, considering that the samples used were not identical splits, were obtained by different
drilling methods, and the bottle roll samples were stored as assay pulps for several years before the
SAPCu assays were performed. Any differences noted were within the tolerances of the study.
16.3 CERRO CHATO DIAMOND DRILLING CAMPAIGN DATA VERIFICATION

During the 2006-2007 Cerro Chato exploration diamond drilling campaign, Mr. Matt Gray, a Qualified
Person as defined by CSA NI 43-101, of Resource Geosciences de Mexico (RGM), an independent
technical services provider, was responsible for overseeing and implementing quality assurance and
quality control protocols appropriate for the exploration program. Key components of the QA/QC
program were systematic insertion into the sample stream of blank samples and standards and
comparison of primary lab assays to check assays performed by a second independent laboratory.
Review of the control data verified that the analytical results of the drilling program are reliable.
16.4 LIMITATIONS OF VERIFICATION

The geologic interpretations contained in the 1999 Piedras Verdes Prefeasibility Study were
accepted; however, the model and resource estimates were checked by IMC, as discussed above.
16.5 REASONS FOR FAILURE TO VERIFY

All material data were reviewed and verified to acceptable feasibility study level standards.
12 February 2010 Data Verification 16-2

ITEM 17 • ADJACENT PROPERTIES
There are no adjacent mineral properties of any significance, and, to the best of the authors’
knowledge, no public disclosures have been made by any owner in the immediate vicinity of Piedras
Verdes.
12 February 2010 Adjacent Properties 17-1

ITEM 18 • MINERAL PROCESSING & METALLUR GICAL TESTIN G
Over a period of eight years, between 1999 and 2007, CDM conducted a program of
hydrometallurgical testing on drill and surface samples covering the entire deposit. Earlier, AZCO
also performed exploration and testing. These tests showed the ore to be amenable to extraction of
copper by heap leaching. This testwork was carried out on samples that were taken and chosen to
materially represent the various ore types, and, more importantly, the metallurgical response of the
proven and probable reserves.
As commonly identified in copper deposits, there are significant differences in the ultimate extraction,
rate of extraction, and acid consumption from one ore type to another. The March 2008 Technical
Report summarized this testing by AZCO, PDC, and Metcon that were used to support a production
decision for Piedras Verdes. The metallurgical history summarized there encompassed 63 samples
and 104 tests. Operating results have not vindicated the extraction and acid consumption forecasts
based on the previous testing.
The historical testwork was largely done on crushed material recovered by diamond drilling. A review
of the available core indicates that poor core recovery was experienced. The authors are concerned
that this material may not accurately address the physical characteristics of the ore, as excessive
fines and decrepitation are evident in the existing heaps.
The primary types of copper mineralization are chalcocite and oxide mineralization. The host rock
quantities of fines. The former are suitable for run-of-mine heap leach operations while the latter can
(31,750 t/y) of LME grade A cathode copper, using conventional sulfuric acid/ferric sulfate heap
stage of stripping.
Due to complex geology, seven metallurgically distinct materials within the PV ore body have been
identified, as shown in Table 18.1 below.
Based on previous recommendations, CDM had installed large diameter columns at the PV
operation. The purpose of these columns was to test the Piedras Verde ore types at as close to run-
of-mine as possible. Since 2006, CDM has performed large diameter column tests on all ore types of
the Piedras Verde deposit, with the exception of the Cuprite ore type, which accounts for a very
small percentage of the minable ore and appears from previous testwork to perform similar to
Limonitic Oxide. Sample preparation for all of the CDM tests focused on delivering a sample for the
large diameter column tests that closely resembled the screen size distribution of the typical ROM
12 February 2010 Mineral Processing & Metallurgical Testing 18-1

feed coming from the Piedras Verde mining operations. All but one of the historical column tests
performed by AZCO, PDC, and Metcon used crushing to prepare the samples prior to testing.
Table 18.1: Piedras Verde Ore Types
Ore Type Description
303 Limonitic Oxide
304 Oxide
305 Cuprite
306 Mixed Oxide/Chalcocite
307 (40) Chalcocite (Porphyritic)
307 (50) Chalcocite (Quartz Diorite)
307 (70) Chalcocite (Metasedimentary)
The large-scale column tests performed by CDM at the ROM particle size distribution are believed to
be the most representative testwork available for estimating copper recovery and acid consumption
of Piedras Verde ores. Accordingly, these tests have been used to extrapolate and project copper
recovery and acid consumption for the mine plan and future heap leach operations at Piedras Verde.
18.1 CDM COLUMN TEST PROGRAM

Testing at larger scale has continued, to evaluate the upcoming heap feed as it is exposed, and to
better understand the relationship between column and commercial performance. In particular, the
focus is on chalcocite-containing material, ore type 307, as it is expected to assume a much greater
importance in future operations.
Column tests are run at site in columns of 0.53 m diameter and 5.0 m high. Ore is not usually
crushed in order to simulate the ROM leaching operation. Leach solution is raffinate from the
commercial plant, modified if required to meet the test objectives. The irrigation rate is programmed,
including rest cycles, according to the “Lixiviant Request Rate” system, which seeks to match the
irrigation to the amount of copper being leached, maintaining a relatively constant copper
concentration in the PLS.
Table 18.2 lists the tests that have been run, or are currently planned, for the columns at site. The
PV-13 series has not yet yielded any reportable results. The PV-10 and PV-12 series have not been
closed by means of balancing with residue assays, so the numbers reported are based on head
assays and solution accounting only.

Table 18.2: CDM Column Test Results

CuT CuSAP / Net Acid :
Duration SAP Extraction Net Acid
Designation Rock Type Rock Type Description Assay CuT Cu
(Days) (%) (kg/tonne)
(%) (%) (kg/kg)
PV-01 CLM-1 Mixed 68 0.497 65.6 115.4 8.24 2.14
PV-01 CLM-2 Mixed 65 0.497 65.6 115.0 8.43 2.22
PV-01 CLM-3 Mixed 90 0.497 65.6 118.6 7.83 2.04
PV-01 CLM-4 Mixed 90 0.497 65.6 121.0 8.23 2.08
PV-01 CLM-5 Mixed 90 0.497 65.6 115.3 7.01 1.87
PV-01 CLM-6 Mixed 90 0.497 65.6 118.2 9.41 2.54
PV-01 CLM-7 Mixed 90 0.497 65.6 118.4 5.87 1.49
PV-01 CLM-8 Mixed 90 0.497 65.6 118.3 2.93 0.76
PV-01 CLO-9 Oxides 65 0.505 96.2 99.5 12.81 NA
PV-01 CLO-10 Oxides 65 0.505 96.2 101.4 10.96 NA
PV-01 CLO-11 Oxides 65 0.505 96.2 95.2 10.62 NA
PV-01 CLO-12 Oxides 65 0.505 96.2 96.5 11.13 NA
PV-01 CLO-13 Oxides 111 0.505 96.2 92.7 8.95 NA
PV-01 CLO-14 Oxides 76 0.505 96.2 87.3 13.61 NA
PV-01 CLO-15 Oxides 65 0.505 96.2 94.1 6.95 NA
PV-01 CLO-16 Oxides 65 0.505 96.2 91.9 3.8 NA
PV-07 C-1 Chalcocite Metasediment (70) 110 0.127 78.7 115.6 6.8 5.9
PV-07 O-5 Limonitic 110 0.197 43.1 82.2 20.43 29.23
PV-07 O-6 Limonitic 110 0.197 43.1 70.2 16.56 27.72
PV-09 C-1 Oxides 88 0.382 79.1 74.9 12.31 5.44
PV-09 C-2 Oxides 88 0.32 81.9 79.4 9.02 4.34
PV-09 C-3 Oxides 88 0.32 81.9 77.2 9.43 4.66
PV-09 C-4 Oxides 88 0.271 82.7 85.6 8.9 4.65

PV-09 C-5 Oxides 88 0.271 82.7 85.0 8.88 4.67

PV-09 C-6 Oxides 88 0.425 83.8 73.7 9.12 3.47
PV-10 C-1 Chalcocite (307) Quartz diorite (50) 150 0.342 40.9 78.8 3.83 3.48
PV-12 C-1 Chalcocite (307) Quartz feldspar porphyry (40) 100 0.344 58.4 82.7 3.53 2.12
PV-13 C-1/2 Chalcocite (307) (40 + 70)
PV-13 C-3/4/5/6/7/8 Chalcocite (307) Metasediment (70)
PV-13 C-
Chalcocite (307) Quartz feldspar porphyry (40)
9/10/11/12/13/14

18.2 TESTWORK CORRELATION

The principal objective of these tests is to generate data (metallurgical recovery and net acid
consumption relationships) for each of the various ore types to use as input to the resource and
production forecasting models. Testwork results are generated to produce copper recovery and net
acid consumption curves for the test duration. Examples of these curves are shown in Figures 18-1
and 18-2 for results from PV-07, chalcocite series.
Figure 18-1: PV-07 Copper Extraction Results

Pruebas en columna 0.5 m diam., 5 m altura
Extracción de cobre versus tiempo
100.0
90.0
80.0
70.0
Extracción (%)
60.0
50.0
40.0
30.0
20.0
10.0
0.0
0 10 20 30 40 50 60 70 80 90 100 110 120
Tiempo de lixiviación (días)
C-1 Curado 10 Kg. C-2 Curado 5 Kg. C-3 Sin Curado
Figure 18-2: PV-07 Net Acid Consumption Results

Pruebas en columna 0.5 m diam., 5 m altura
Consumo neto de Acido Sulfúrico versus tiempo
10.0
8.0
Consumo (kg/ton)
6.0
4.0
2.0
0.0
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 110 115 120
Tiempo de lixiviación (días)
C-1 Curado 10 Kg. C-2 Curado 5 Kg. C-3 Sin Curado

Because of the relative short duration of the column tests, which run up to 150 days, versus the
duration of time under leach in the operational heaps, which is estimated to be 480 days of effective
leaching, the testwork recovery profiles are extrapolated from the testwork in order to estimate
ultimate 480 day leach recoveries. In order to perform these extrapolations, the raw testwork results
were correlated using the Metsim form of equation, which is a mathematical modeling of copper
extraction curves using two linked first order rare equations. The curve fitting equation is expressed
as follows:
E = A1 * (1-(1-R1) T) + A2 * (1-(1-R2) T)
Where:
E = Extraction expressed as a fraction

A1 = weight fraction of fast dissolving copper
R1 = rate of reaction of fast dissolving copper
A2 = weight fraction of slow dissolving copper
R2 = rate of reaction of slow dissolving copper
T = leach time in days
The curve fitting routine in the Metsim heap leach module uses the raw testwork data to calculate
mass fractions (A1 and A2) and reaction rates (R1 and R2) based on a least squares fitting algorithm.
An example of the leach curves and the quality of curve fit obtained using the Metsim correlation is
shown in Figure 18-3, for results from PV-07.
Figure 18-3: PV-07 Curve Fitting Results

After an initial period of high consumption, acid consumption continues at a relatively constant rate in
these tests. The acid consumption was estimated by fitting a straight line to the constant rate portion
of the curve and calculating the consumption after 4 cycles.
18.3 PRODUCTION PROJECTIONS

In order to predict operational heap leach recoveries based on column testwork, scale-up factors are
required to account for operational inefficiencies that are not experienced in the column test
environment. For example, stacking inefficiencies, size segregation, grade variations, wetting
inefficiencies (side slopes and haul roads), reagent availability, etc. To account for this, factors are
applied to testwork recoveries such that the ultimate recovery is reduced. For the CdM testwork
curves, a factor of 90% was used to scale up testwork recoveries to field recoveries. In addition, field
surveys by various professionals has shown that the leach time to reach a recovery in a field
leaching condition will take up to 2 times the time as required in column testwork.
Using these extrapolation techniques, the projected ultimate copper recovery by ore type, based on
the SAP copper grade, for the materials contained in the future mine plan are as shown in
Table 18.3.
Table 18.3: Projected Copper Recovery by Ore Type
Ore Type Projected SAP Copper Recovery
303 54.3
304 81.7
305 54.3
306 104.9
307 (40) 106.4
307 (50) 98.0
307 (70) 99.2
The projected recovery curves, based on the SAP copper grade, for the materials contained in the
future mine plan are shown in Figure 18-4.
Using these projections, the overall total copper recovery for the future mine plan material has been
re-estimated using a detailed mass balance model to be 61.7%. Based on the actual leach results
experienced in 2008-2009, the authors remain concerned that this estimate may not be based on
fully representative sampling.
The ultimate average copper recovery estimate in this technical report will not be confirmed until the
leaching operations are complete.

Figure 18-4: Extrapolated Copper Recovery Curves by Ore Type
100.0
80.0
Limonitic Oxide and Cuprite
Copper Recovery (%Cu SAP)
Oxide
Mixed Oxide/Chalcocite
60.0
Chalcocite (Porphyritic)
Chalcocite (Dioritic)
40.0 Chalcocite
(Metasedimentary)
20.0
0.0
0 50 100 150 200 250 300 350 400 450 500
Time (days)
To predict ultimate net gangue acid consumptions, the straight line correlations were projected to the
extent of the effective leaching time, or 480 days, for each ore type contained in the future mine
plan. However, operational experience has shown that acid consumption is not subject to
inefficiencies or time delays.
Using these extrapolation techniques, the projected ultimate net acid consumption by ore type, for
the materials contained in the future mine plan, are as shown in Table 18.4.
Table 18.4: Projected Net Acid Consumption by Ore Type
Ore Type Projected Net Acid Consumption (kg/tonne)
303 74.8
304 32.4
305 74.8
306 23.4
307 (40) 11.8
307 (50) 11.3
307 (70) 10.0

18.4 ON-GOING ACTIVITIES

On-going activities to improve and refine the copper recovery projections include:
• Analysis of all drill hole intervals within the pit limits for sequential copper assay
• PV-13 (and future PV column series) column testwork of chalcocitic materials in the exposed
faces of the mine
• Drilling of metallurgical core in the future areas of the pit to verify metallurgical performance

ITEM 19 • MINERAL RESOUR CE & MIN ERAL RESERVE ESTIMATE
Only mineral resource estimates will be discussed in this section of the report. Mineral reserve
estimates are addressed under Item 21 of this report.
The Piedras Verdes mine was capitalized based on a resource model that was created by PDC in
1997 and incorporated into the 1999 Phelps Dodge Pre-Feasibility Report. The resource model was
independently reviewed by Independent Mining Consultants (IMC) of Tucson, Arizona, and deemed
to be suitable for use in the initial 2002 mining study, which was updated for the 2005 Feasibility
Study. At the same time, IMC identified areas where infill drilling was required for reserve definition
and to better define the final pit geometry.
During 2006 and 2007, Cobre del Mayo SA de CV conducted diamond drilling infill programs at the
Piedras Verdes mine. Data from these drill campaigns and from drill holes completed in 1997 after
the PDC resource model was constructed were used to update the deposit resource model. As a
result of adding the 1997, 2006, and 2007 infill drill holes, compared to the 1997 resource model
database, the 2008 database includes an additional 4,877 m of diamond drill data in 29 drill holes.
In 2008, an updated ore domain model was created for the deposit and subsequently used to create
a new block model and resource estimate for the Piedras Verdes deposit. The revised ore domain
model and the new drill hole database were created by Resource Geosciences de Mexico SA de CV
(RGM) in May 2008. In June 2008, IMC integrated the new drill hole data into the historic project
database and updated it to include ore type codings based on the new ore domain model. The
updated ore type model and database, including all drill hole assay, survey, and geologic
information, were transferred in CSV format from IMC to Mintec, Inc., in Tucson, Arizona. Mintec did
not check the assay data information for consistency. The data was assumed to be verified by FCC
for accuracy. Mintec received from IMC the geologic model in the form of block codes. Mintec also
received the interpreted outlines (polygons) of the ore type codes from IMC in MineSight® format on
horizontal views. These ore type polygons were completed by Matthew D Gray of Resource
Geosciences de Mexico SA de CV. Additional corrections on polygons by Gray were incorporated to
the model by Mintec. In July 2008, Abdullah Arik and Lefteris Papanikolaou of Mintec completed
geostatistical review of the data, determined new grade estimation parameters, and interpolated
copper grades, acid consumption, and specific gravity into the block model. Mintec issued the final
resource estimate report in November 2008 (Mintec 2008).
The work done by Mintec includes:
• Collection of all available drilling and geologic information

• Development of a 3-D model of the ore types
• Geostatistical analysis of the data and review of legacy PDC variograms
• Development of a 3-D block model
• Resource estimation and classification
12 February 2010 Mineral Resource & Mineral Reserve Estimate 19-1

• Model reconciliation with blasthole data

• Conclusions
• Recommendations.
19.1 DATABASE FOR DEPOSIT MODEL
19.1.1 Drill Hole Data
The 2008 resource model is constrained by 242 RC drill holes totaling 27,620 m and 236 diamond
drill holes totaling 50,458 m. All of the RC drilling was completed by CDM in the period 1992 to 1995
when AZCO was the owner and operator of CDM. PDC became the operator of CDM in 1996 and in
the period 1996-1997 drilled 207 diamond drill holes totaling 45,783 m that are included in the
resource model database. Other exploration drill holes, outside of the known resource, were
completed by PDC but do not form part of the resource database. In 2006 and 2007, CDM, under
the direction of FCC, conducted an infill drilling campaign comprising 23 diamond drill holes totaling
3,385 m. At this time, FCC also added the data for six drill holes totaling 1,457 m that were drilled by
PDC in 1997. These were confirmation drill holes completed after the resource model was
constructed and were not part of the 1997 resource model database.
Figure 19-1 shows a 3-D view of the topography of the deposit and the drill holes. Figure 19-2 shows
a plan view of the topography contours of the deposit and the drill hole locations. Figure 19-3 shows
the average drill hole spacing by bench.
Figure 19-1: 3-D View of the Topography of the Deposit Area & the Drill Holes

Figure 19-2: Plan View of the Topography Contours of the Deposit Area & the Drill Hole Locations
Figure 19-3: Average Drill Hole Spacing by Bench

In 1996 and 1997, PDC created the original model database on site using MedSystem. PDC
geologists logged all diamond core and RC drill holes, established the model codes, and coded all
drill holes from the drill logs. Assays were loaded when received in either digital or printed form from
Skyline Labs. Drill hole coordinates, elevations, and deviations were all input to the database. The
digital project database that was originally developed in the MedSystem program was converted to
MineSight. Data from the 1997, 2006 and 2007 infill drill programs was captured by RGM in Excel
tables respecting the historic structure and format of the project database. To maintain consistency
of data, the 2006 and 2007 drill programs utilized the same protocols as the 1996 and 1997 drill
campaigns with respect to sample intervals, logging codes, and analytical procedures.
19.1.2 Specific Gravity Determination
Specific gravity determinations throughout the deposit were obtained from pieces of core taken
every 15 m in all drill holes. A representative piece was chosen for the measurement, with
anomalous densities of restricted sulfide veins or fault material avoided. The specimen was taken
from the core box, weighed in air and in water on a digital electronic scale (note: pieces were not
wax coated before measurement). If any anomalous values were detected, another specimen from
the same interval was chosen and the measurement was repeated.
19.1.3 Geomechanical Database
Geomechanical data consist of rock quality designation (RQD) measured for all core. Procedures for
RQD determination were taken from the Call & Nicholas guide. All the RQD data were entered into
the MEDS database. An initial attempt has been made to contour RQD data plotted on level plans.
Call & Nicholas reviewed the RQD data and made a site inspection as part of their study to
determine pit-slope angles and to determine average size of run-of-mine material (See Prefeasibility
Study 1999). Based on an analysis of RQD composite data at the 150 m elevation level for three drill
holes, Call & Nicholas determined that 79% to 89% of the size fragments would be less than 6".
For future mechanical work, 6” samples of whole core were taken every 30 m in each drill hole and
stored on site.
19.1.4 Geologic & Ore Domain Data
Creation of a new resource model was commissioned in 2007 with the goal of improving the
accuracy of the model and to allow for refinement of the three-year production plan. As a result of
drilling completed subsequent to construction of the 1997 resource model, an additional 4,877 m of
diamond drill data in 29 drill holes and a total of 1,599 additional drill core assays were generated, as
discussed in Item 13 of this report.
The ore type domains used in the 1997 model were also used in the 2008 model. They were defined
by PDC as summarized in Table 19.1.

Table 19.1: Ore Types Used in Resource Model

Ore Type Code Description
0 Unmineralized units
1 Copper-bearing alluvium
2 Leached capping (TCu < 0.10%)
3 Oxide copper, refractory, ASCu < 50%, may be due to presence of copper in powdery
limonites
4 Oxide copper, chrysocolla, brochantite, copper limonites, neotocite/tenorite, etc. with ASCu
values > 50%
5 Oxide copper, with native copper and/or cuprite/chalcotrichite along with other copper oxides;
SAPCu values usually greater than ASCu values
6 Mixed oxide w/ chalcocite
7 Chalcocite
8 Mixed chalcocite and hypogene (cpy.)
9 Hypogene
A significant amount of mixed chalcocite and hypogene mineralization, which would correspond to
ore type 8, is present at Piedras Verdes; however, PDC eliminated it from their 1997 resource model
after determining that ore type 8 was metallurgically identical to ore type 7 (chalcocite) and that the
SAP analyses would determine if chalcocite is present in meaningful quantities. Mixed material was
classified as chalcocite dominant (ore type 7) or hypogene dominant (ore type 9) based on TCu and
SAPCu recovery. If greater than 50% of the total copper reported to the SAPCu assay, and TCu was
greater than 0.2%, the material was considered to be chalcocite mineralization. The same protocol
has been respected in the 2008 model and ore type 8 is not used, thus ore type 7 includes material
that may include significant amounts of primary pyrite, chalcopyrite and molybdenite, intermixed with
secondary chalcocite, the latter yielding the ferric soluble copper reported by the SAP assay.
For the 2008 model, the first determinant of ore type domain coding is geology and mineralogy
logged in core, however, for domains 2, 3, and 4, assay data was used to confirm or adjust domain
codings. In hand specimen, domain 2 (leached cap) may be visually identical to domain 3 (refractory
oxide or limonitic copper) and low-grade domain 4 (oxide dominated by tenorite, malachite,
chrysocolla), thus by definition, oxidized material without significant quantities of megascopically
visible tenorite, malachite, or chrysocolla is coded as:
• domain 2 if TCu < 0.10 %

• domain 3 if TCu > 0.10% and if SAP assays are less than 50%
• domain 4 if TCu > 0.10% and SAP assays are greater than 50%.
A review of the 1997 model revealed that it includes many drill hole intercepts coded as ore type 4
that had chemical characteristics inconsistent with the defined mineralogy. Because ore type 4 is

dominated by chrysocolla, brochantite, tenorite, malachite, and other easily leached copper
minerals, ore type 4 should exhibit high ASCu and SAPCu recoveries. Intervals coded as ore type 4
that yielded less than 50% ASCu or SAPCu recoveries were highlighted on drill hole cross-sections
and re-interpreted. If an ore type 4 intercept of low ASCu and SAPCu recovery was the reasonable
projection of a zone of ore type 3 (refractory oxide or “limonitic copper”), the ore type 3 polygon
interpreted on section was modified to include the ore type 4 coded intercept. The original ore type
code in the drill hole database was not altered, but the ore type polygons interpreted on sections
respected the revised interpretations of ore type 3 and 4 codings.
Lithologic units (rock types) used in the model are summarized in Table 19.2.
Table 19.2: Lithology (Rock Type) Codes Used in Resource Model

Lithologic Unit (Rock Type) Model Code
Biotite Granodiorite to Quartz Diorite 41
Quartz Feldspar Porphyry Dikes 42
Various Phases of Biotite Granodiorite Porphyry 43
Intrusion Breccia 47
Diorite or Quartz Diorite 50
Biotite to Biotite-Hornblende Granodiorite (batholith) 60
Intrusion Breccia associated with Batholith 63
Undifferentiated Metasedimentary Units 72
Gneissic Units 73
The starting point for the 2008 model was the 1997 PDC geologic model built on 100 m spaced,
west-looking cross-sections. Updated drill hole sections were superimposed on the geology sections
and the ore type boundaries were re-interpreted by M. Gray of RGM on the basis of geological
contacts, faults, logged ore type codes, and TCu and SAPCu assay data. The PDC sectional model
was modified only where new data or interpretations required changes to the sectional ore type
polygons. The new sectional interpretations of ore type boundaries were digitized and imported into
modeling software that was used to project the sectional ore type polygons onto 15 m spaced mid-
bench elevation plan views. Drill hole density was sufficient to allow for accurate modeling of ore
type boundaries on plan view using the plan view projections of:
• the geologically constrained, sectional ore type polygons

• faults
• logged drill hole ore type codes
• Cu assay data.

The first interpretations of ore type polygons on plan view were digitized and then projected back
onto cross-sections. Discrepancies between the plan views and sectional views were noted and
corrected by adjusting the sectional and plan view ore type polygons. When the model was internally
consistent between plan and sectional interpretations, and all ore type polygons were judged to be
geologically reasonable, the final ore type polygons on the mid-bench elevation plan views were
digitized.
The final ore type model was built on mid-bench plan views spaced 15 m apart over the vertical
interval 292.5 m elevation (285 bench) to -292.5 m elevation (-300 bench) for a total of 40 plan view
interpretations. The digitized plan view polygons of ore type boundaries were provided to
Independent Mining Consultants (IMC) of Tucson, Arizona, who converted them into 20 x 20 x 15 m
blocks with ore type codes. The 1997 lithology model was not updated during the 2008 exercise,
thus the 2008 lithology codes for the blocks are the same as those used in the 1997 model.
After the ore type solids model was created, the drill holes were projected through the solids
(“dipped into the solids model”) and each drill hole assay was then coded to the ore type solid in
which it was contained, and this ore type code was included in an additional column (MDVOR)
added to the database. An interval that passed through two ore type solids was coded to the ore
type that corresponded to the greater intercept length. During the first iteration of the model it was
noted that in some cases, ore type codes and TCu and SAPCu assays were incongruent, because
waste zones (ore type 2) reported high-grade copper and primary mineralization (ore type 9)
reported high SAP copper.
The model was reviewed and these incorrect codings were found to be caused by:
• edge effects in the solids model where a ore type solid boundary was a few meters out of place
due to digitizing error, thus the ore type solid included a drill hole that did not belong
• errors in the ore type solids interpretation that were found and corrected directly in MineSight by
modifying in-screen plan views of ore polygons (M. Gray of RGM and Lefteris Papanikolaou of
Mintec).
Gray then updated the most important changes to the ore type codes. The database was expanded
to include the column “modrvore2” which contains the updated ore type code. The table also
includes the column “modrvore” which shows the incorrect code. The re-coding was completed after
geostatistical studies of the data had been completed and a total of 139 drill hole assays had their
ore type code modified. This was judged to be insignificant to the geostatistics so the variography
was not re-evaluated; however, the composites by ore type were re-calculated.
At the end of the process, the database was simplified and only two ore type columns were left in the
database, the original ¨ore type¨ column and the ¨MDVOR¨ column, which contains the edited and
corrected ore type code.

19.1.5 Topographic Data
The resource model used a 1 m contour interval topographic base generated for CDM by Aero
Geometric Ltd. of Vancouver, British Columbia, in January 2009. Standard photogrammetric
methods were used. The topographic map is tied to a local grid that is slightly transposed from the
UTM NA27 grid.
In 2005, survey checks of drill holes and monuments prior to initiation of construction indicated a
consistent approximate 5 m east-west and 2 m north-south difference to that reported by previous
surveys. This difference was first noted when the Direccion General de Minas (Department of Mines)
conducted a survey check of mining concession monuments in 2004 and the discrepancy was
traced to the national geodetic control point PC 4003 used for the survey control by PDC in 1997.
The published and officially recognized coordinates for this control point differed from those obtained
by CDM and DGM surveyors using precision survey equipment. In 2005, after field review with the
EPCM contractor, M3 Engineering, it was decided to continue construction surveying with no change
in control point coordinates, but for pit surveying, a translation of approximately 5.14 meters (East
4.835, North -1.746, Elevation 0.192) was made. By making this translation and adopting a local
coordinate system, all the drill-holes, block modeling, topography base, and M3 construction
drawings remained unchanged, but the mine grid is slightly transposed from the UTM NAD27 grid.
19.2 BLOCK MODEL
19.2.1 Dimensions & Variables
A 3-D block model of the deposit was built with 20 x 20 x 15 m-size blocks for mineral resource
calculations. The block model covered an area of 6.0 km by 3.0 km on plan, and 0.85 km vertically.
Table 19.3 gives the model coordinate limits and dimensions.
Table 19.3: Block Model Limits & Dimensions

Block Size No. of
Minimum Maximum
(m) Blocks
East 694,500 700,500 20 300
North 4,500 7,500 20 150
Elevation -330 525 15 57
Over 30 items or variables were initialized in the resource model file to store the interpolated grades
for Cu and other items of interest from different interpolation methods, lithology codes, topography
and any other pertinent information. Table 19.4 lists items used in the 3-D block model file.

Table 19.4: Data Fields in Block Model
# Label Min Max Prec. Description

1 TOPO 0 100 1 Topography% (Jul 2008)
2 KTCU 0 10 0.01 Total Cu% from Ordinary Kriging
3 ITCU 0 10 0.01 Total Cu% from IDW interpolation
4 PTCU 0 10 0.01 Total Cu% from polygonal method
5 ATCU 0 10 0.01 n/a
6 KNCU 0 10 0.01 Non-soluble Cu% OK
7 INCU 0 10 0.01 Non-soluble Cu% IDW
8 PNCU 0 10 0.01 Non-soluble Cu% Polyg
9 KSCU 0 10 0.01 Sap Cu% from Ordinary Kriging
10 ISCU 0 10 0.01 Sap Cu% from IDW
11 PSCU 0 10 0.01 Sap Cu% from Polyg
12 SPREC 0 100 1 Sap Recovery%
13 %REC 0 100 1 n/a
14 ACID 0 500 1 Acid consumption, kg/t
15 VALUE 0 80 0.01 n/a
16 DIST 0 500 1 Distance to the closest composite
17 #COMP 0 29 1 Number of composites
18 LAND 0 13 1 Land Status
19 ORTYP 0 13 1 Ore type code
20 LITH 0 100 1 Lithology
21 ALTR 0 13 1 n/a
22 STRUC 0 13 1 n/a
23 RQD 0 100 0.01 Rock Quality Designation
24 ZONE 0 13 1 n/a
25 SZONE 0 13 1 n/a
26 MZONE 0 13 1 n/a
27 SG 0 5 0.0001 Specific gravity
28 CLASS 0 5 1 Resource Classification – PD-1999 (1,2,3)
29 PDTCU 0 10 0.01 Total Cu% from PD-Matt model
30 PDSCU 0 10 0.01 Sap Cu% from PD-Matt model
31 PXTCU 0 10 0.01 Total Cu% from PD-1999 model
32 PXSCU 0 10 0.01 Sap Cu% from PD-1999 model
33 VTOPO 0 100 0.01 Topo (original - May 2002) 0-1
34 HARD 0 100 0.01 Hardness
35 AZLIM 0 2 1 n/a
36 ORELT 0 1000 1 n/a
37 TOPOX 0 1 0.01 Topography (Dec 2007)
38 KVAR 0 20 0.001 Kriging Variance
39 NDH 0 100 1 No. of dhs
40 MII 0 10 1 n/a
41 CLAS2 0 5 1 Resource Classification – Mintec (1,2,3)
42 MINED 0 2 1 n/a
43 BHTCU 0 10 0.01 Total Cu% from BHS
44 BHSCU 0 10 0.01 Sap Cu% from BHS
45 ADIST 0 500 1 Average distance
46 ODIST 0 500 1 n/a
47 PASS 0 10 1 Interpolation pass no, (1 or 2)
48 DISTG 0 500 1 Nearest Distance (using all ore types)
49 ADSTG 0 500 1 Average Distance (using all ore types)
50 NCMPG 0 100 1 No. of comps (using all ore types)
51 KVARG 0 2 0.001 Kriging Variance (using all ore types)
52 NDHG 0 100 1 No. of dhs (using all ore types)

19.2.2 Geologic Models
Two geologic parameters are carried for each block in the model: lithology (rock type) and ore type.
Detailed descriptions of lithologic and ore type units and corresponding codes used in the database
and model are given in the 1999 Prefeasibility Study. For the lithologic models, certain units were
lumped together as discussed in the 1999 Prefeasibility Study. Ore types refer to geologic domains
that affect leaching characteristics, and are based on acid-soluble and ferric-soluble recovery data
and logged mineralogy, as defined in Item 11.
19.2.3 Land Status Model
Boundaries of the major claim groups were digitized and used to code land status in the block
model. These, in turn, enable tabulation of geologic resources by claim group and allow differing
royalties, as discussed in Item 6.1, to be applied during mine design. A summary of the claim group
codes is given in Table 19.5.
Table 19.5: Piedras Verdes Model Land Status Codes

Code Claim Group Name
1 Cobre del Mayo
2 Bienvenidos/CDM
3,4 Fractions
5 Serrana
6* Fortuna 8*
7 Maria Elena
8** Fortuna 15 - #4099**
9 Fortuna 15 - #6032
* Note that Fortuna 8 claim was subsequently purchased by CDM. ** Note that the mineral rights covered by Fortuna 15
#4099 were subsequently acquired by CDM by re-staking the cancelled Fortuna 15 #4099 concession.
19.3 GEOSTATISTICAL ANALYSIS

The geostatistical analysis of the Piedras Verdes deposit included the statistical analysis of assays
and composite grade items, the correlation analysis of the assays, spatial continuity analysis of the
mineralization using variograms, and the determination of interpolation parameters for deposit
modeling.
19.3.1 Assay Statistics
The current Piedras Verdes deposit database contains 490 drill holes of various lengths including 10
holes outside the project model limits. The average depth of the holes is about 164 m. There are 25
shorter holes with less than 50 m while the longest hole is 599 m; however, the majority of the holes
range between 100 and 200 m (47%). Figure 19-4 displays the histogram of the drill hole depths.

Figure 19-4: Histogram Plot of Drill Hole Length
The total drilling in the current database is 80,188 m including the unassayed intervals. Most
intervals were assayed for total copper (TCu) and sap copper (SAPCu). The total length of TCu
assayed intervals is 78,874.0 m with 26,488 assays intervals. The majority of the assay intervals are
3 m in length.
Statistical analyses of assay data were performed mainly for TCu and SAPCu. General statistics
including number of samples, total length, mean value, standard deviation, maximum value, and
coefficient of variation, were calculated for reference. Table 19.6 gives the summary statistics of
assays for each of these items in the database at zero cutoff grade, including non-soluble copper
(NCu) and net acid consumption in kg/tonne (ACIDN). The statistics are based on the assay length
weighting.
Table 19.6: Statistics of Assay Items at 0.0 Cutoff

Number Meters Minimum Maximum Mean Std. Dev. C.V.
TCu 26,488 78,873.4 0.000 10.700 0.168 0.348 2.073
SAPCu 26,150 77,960.6 0.000 9.200 0.090 0.232 2.578
NCu 24,472 72,996.4 0.000 6.970 0.074 0.141 1.910
ACIDN 23,646 71,182.7 0.000 149.00 22.80 16.40 0.700
Notes: C.V. = Coefficient of variation = Std. Dev. / Mean. NCu = Non-soluble copper in %. ACIDN = net acid consumption
in kg/tonne.
Figures 19-5 and 19-6 and show the histograms for TCu and SAPCu assays, respectively. Both TCu
and SAPCu have skewed distributions with some outlier high grades. Figure 19-7 shows the
probability plot in logarithmic scale of all TCu assays.

TCu and SAPCu assay grades exhibit some varying correlations depending on the ore zone. The
coefficient of correlation between TCu and SAPCu obtained from the least square linear regression
is around 0.95 using all the data. Figure 19-8 shows the scatter plots of TCu versus SAPCu. The
correlations between them within specific ore type domains were also calculated resulting in high
correlation as well.
Figure 19-5: Histogram Plot of All TCu Assays
Figure 19-6: Histogram Plot of All SAPCu Assays

Figure 19-7: Cumulative Probability Plot in Log Scale of All TCu Assays
Figure 19-8: Scatterplot of TCu vs. SAPCu Assays

19.3.2 Composite Statistics
The drill hole assays were composited by 15 m fixed lengths within ore type domains. There are
6,134 valid composites in the database (including the ones outside the model limits without any ore
type codes). There 6,003 composites in the database that have assigned ore type codes.
Figure 19-9 gives the summary statistics and histograms of the 15 m composites for TCu for all ore
types. Tables 19.7 and 19.8 summarize the statistics of bench composites within ore types for TCu
and SAPCu, respectively.
Figure 19-9: Histogram Plot for All Composites, TCu
Table 19.7: Summary Statistics for TCu at 0.0 Cutoff for Different Ore Types
Ore type Number Minimum Maximum Mean Variance C. V.
0 186 0.005 0.222 0.022 0.001 1.412
2 1,557 0.000 0.446 0.042 0.001 0.789
3 833 0.005 2.192 0.204 0.038 0.963
4 763 0.005 4.584 0.335 0.115 1.010
5 181 0.005 1.476 0.315 0.063 0.794
6 274 0.005 3.885 0.328 0.124 1.075
7 788 0.005 3.424 0.354 0.142 1.067
9 1,421 0.005 0.726 0.077 0.006 1.010
Total 6,003 0.000 4.584 0.171 0.064 1.485
All 6,134 0.000 4.584 0.168 0.063 1.497
Note: Category “All” includes the composites outside the model limits with no ore type assigned.

Table 19.8: Summary Statistics for SAPCu at 0.0 Cutoff for Different Ore Types
Ore type Number Minimum Maximum Mean Variance C. V.
0 184 0.005 0.110 0.011 0.0002 1.378
2 1,552 0.000 0.290 0.017 0.0003 0.965
3 832 0.005 1.710 0.079 0.0148 1.539
4 754 0.005 3.488 0.218 0.0702 1.219
5 179 0.005 1.230 0.183 0.0277 0.908
6 270 0.005 1.950 0.192 0.0435 1.089
7 782 0.000 1.946 0.229 0.0574 1.048
9 1,419 0.005 0.238 0.023 0.0005 1.025
Total 5,972 0.000 3.488 0.092 0.0290 1.854
All 6,103 0.000 3.488 0.090 0.0285 1.869
Note: Category “All” includes the composites outside the model limits with no ore type assigned.
The cumulative probability plots were used to examine the composite grades at the tail of the
distribution curve that might behave differently than the rest of the grades. The probability plots were
generated for Total and SAPCu for all composites and within each geology domain for checking.
Figures 19-10 and 19-11 show the cumulative probability plots in logarithmic scale for TCu and
SAPCu respectively. Appendix A includes additional statistical summaries for reference.
Figure 19-10: Cumulative Probability Plot in Log Scale for All Composites, TCu

Figure 19-11: Cumulative Probability Plot in Log Scale for All Composites, SAPCu
19.3.3 Variography
Variogram analysis for TCu and SAPCu items was done using the bench composites and based on
the different ore types domains listed below:
• 0 – Unmineralized
• 2 – Leached Capping
• 3 – Limonitic Copper
• 4,5,6 – Oxide, Cuprite, Native Cu
• 7 – Chalcocite
• 9 – Primary.
The type of variogram used for the analysis was correlogram. The sill of the variogram from a
correlogram is normally equal to one (1.0). This makes it easier to compare the variogram models
from different geologic units and for different items.
Directional variograms were calculated within different geologic domains as defined by the ore codes
above. Variograms were calculated from 0o to 330o at 30o increments in horizontal directions, and at
0o, 30o, 60o and 90o dip angles. Since the variogram in any given direction is the same as the
variogram in the opposite direction, these angles cover all directions needed to check the continuity
of the mineralization in the deposit.
The directional variograms essentially exhibit the continuity of the mineralization for different
directions in a mathematical form. Using the “auto-fit” option in Mintec’s 3-D variogram modeler,

mathematical models were fit to the directional variograms calculated. The selected 3-D model is the
“best” fit that minimizes the error between the theoretical model and the experimental curves for all
directions considered. The parameters of the variogram model are a necessary input in kriging, but
they are also helpful for defining the search distances used in the interpolation of the block grades.
Figure 19-12 shows the final spherical model fit to the directional variograms for TCu calculated
within ore type 3 (limonitic copper). Figure 19-13 shows the variogram contours generated based on
these directional variograms on the horizontal plane. Figure 19-14 shows the 3-D variogram
ellipsoids in the same domain sliced at principal orthogonal planes: horizontal, W-E vertical, and N-S
vertical.
Figure 19-12: Spherical 3-D Model Fit for TCu Variograms (Domain 3)

Figure 19-13: Horizontal Variogram Contours for TCu (Domain 3)
Figure 19-14: 3-D Variogram Ellipsoids Sliced at Principal Orthogonal Planes,

Horizontal, W-E Vertical & S-N Vertical (Domain 3)
Note: The ½ width of each box is scaled to the maximum range, which is 216.72.

Besides the grade variograms, a global median indicator variogram for TCu within all zones was
computed to help determine the distance ranges used in the resource estimation and classification.
Using a 0.1% copper grade, the 15 m composites were tagged 0 if they were below the cutoff, and 1
if above. Figure 19-15 shows the global variogram of these indicators at 0.1% Cu cut-off and the
theoretical nested spherical model fit.
Figure 19-15: Global Median Indicator Variogram for TCu
Table 19.19 summarizes the variogram model parameters determined for TCu and SAPCu in
different domains.

Table 19.9: Variogram Parameters for TCu & SAPCu in Different Ore Types
Major
Axis
Total Range Minor Axis Vert. Axis Rotation
Ore Type Nugget Sill (m) Range (m) Range (m) Angles
Total Copper
0 – Unmineralized 0.44 1.00 145 145 160 0, 0, 0
2 – Leached Capping 0.15 1.00 91 38 7 65, -4, -5
3 – Limonitic Copper 0.10 1.00 217 102 33 84, -23, 43
4,5,6 – Oxide, Cuprite, 0.40* 1.00 400 124 46 266, 13, 18
Native Cu
7 – Chalcocite 0.40 1.00 252 75 40 34, -15, -19
9 – Primary 0.15 1.00 737 430 185 249, -14, 73
SAP Copper
0 – Unmineralized 0.58 1.00 130 130 110 0, 0, 0
2 – Leached Capping 0.20 1.00 94 33 11 95, 3, 1
3 – Limonitic Copper 0.15 1.00 196 72 39 257, 28, -28
4,5,6 – Oxide, Cuprite, 0.40 1.00 309 121 53 72, -8, 28
Native Cu
7 – Chalcocite 0.30 1.00 100 64 20 54, 26, -55
9 – Primary 0.20 1.00 82 73 31 185, -57, 63
Note: The nugget effect for TCu variogram in ore types 4, 5, and 6 was lowered to 0.1 based on the reconciliation results in
benches 90 m and above.
19.4 GRADE INTERPOLATION

The interpolation plan and the search distances for ordinary kriging were based on the geostatistical
analysis and variogram parameters. According to this plan, the TCu and SAPCu items were
interpolated within the ore type domains in the model. Both items were also interpolated using the
inverse distance cubed weighting (IDW) method for comparison. The reason for using a power of 3
in the inverse distance weighting was that the previous work done by PDC had used the same
power.
Besides the ordinary kriging and the inverse distance weighting method, the Total and SAPCu
grades were interpolated using the polygonal method for comparison and checking of the global
bias. Kriging results for TCu were stored into KTCu item in the model. The IDW and polygonal
method results were stored into ITCu and PTCu items, respectively. The composites whose lengths
are less than 5 m were not included in the interpolation. Composite to block ore type code matching
was applied so that the blocks were interpolated using the composites that have the same ore type.
Kriging and IDW interpolations were done in two passes. The first pass consisted of a maximum
isotropic 3-D search distance of 200 m applied horizontally and 22.5 m vertically. The second pass
was done using an ellipsoid search within the search box. The major axis of the ellipsoid search was
set to 200 m. Other axes of the ellipsoid were proportionally adjusted based on the variogram ranges
determined for each ore type. The results of the second pass overwrote the first pass. A minimum of

1 and a maximum of 12 composites, with 3 composites from the same hole, were used for the
interpolation with ore type code matching between the blocks and the composites. The interpolation
pass number was stored into the blocks to be for resource classification.
Table 19.10 gives a summary of the interpolation parameters used for the second pass.
Table 19.10: Summary of the Interpolation Parameters Used

Interpolation Parameters for all items - second pass
Maximum 3-D Distance – major axis of ellipsoid (m) 200
Vertical Search (m) 22.5
Ellipsoid Search (varied by ORTYP) Yes
Minimum Composites 1
Maximum Composites 12
Maximum Composites Per Hole 3
Quadrant Search Yes
Maximum Composites Per Quadrant 3
Minimum Composite Length (m) 5
Geology Matching (ORTYP codes) Yes
High-Grade Capping Applied to Assays Yes
High-grade capping cutoffs were applied to the TCu and SAPCu assays. The assay values were
capped at specified cutoff values per ore type, and then the capped values were composited before
using for the interpolation of the block grades. The cutoffs were based on the assay statistics within
each ore type and drill hole grade distribution. Matthew D. Gray of Resource Geosciences de
Mexico SA de CV provided the cut off analysis. There were only a few outliers in each domain. Table
19.11 gives a list of the TCu and SAPCu outlier cutoffs used within each ore type domain.
Table 19.11: Assay Capping Cutoff Grades for Cu Items by Ore Type Domain
Ore Type TCu SAPCu
0 No cap No cap
2 No cap No cap
3 3.50 1.98
4 4.30 3.20
5 No cap No cap
6 No cap No cap
7 No cap No cap
9 No cap No cap
Non-soluble copper (NSCu) was calculated from the TCu and SAPCu grades using:
NSCu = TCu - SAPCu

Sap Recovery (SPREC) was also calculated from the TCu and SAPCu grades using:
SPREC = (SAPCu / TCu)*100
NSCu was calculated for all interpolation items (Kriging, IDW and Polygonal) whereas SPREC was
based on only the Kriging results.
19.5 SPECIFIC GRAVITY

Specific gravity values in the block model are used to convert 3-D block volumes to tonnages. To
determine specific gravity values, PDC statistically analyzed the assay database by ore type and by
rock type. For any given rock type, unmineralized (0) and primary (9) ore types have the highest
densities, leached capping (2) and limonitic copper (3) have the lowest densities, and ore types 4
through 8 have intermediate densities. Based on these groupings, a specific gravity matrix (in t/m3)
was developed (Table 19.12).
For rock types that are unmineralized to weakly mineralized, specific gravity does not vary by ore
type. Intrusion breccia (rock type code 47) has similar specific gravity characteristics to main phases
of the porphyry body. Densities from the matrix were assigned to corresponding blocks in the model
to establish tonnages.
Table 19.12: Piedras Verdes Density Matrix

Rock Types
40/41 42 43-46 47 50-54 60 63 70-72 73
Ore Types
0, 9 2.58 2.64 2.63 2.74 2.61 2.52 2.59 2.69

2, 3 2.35 2.40 2.58 2.41 2.50
4-8 2.47 2.44 2.48 2.72 2.51 2.52
Specific gravity (SG) in the 2008 model was provided to Mintec by Independent Mining Consultants
based on a combination of ore type and lithology using the specific gravity matrix presented as Table
19.5.1.
19.6 ACID CONSUMPTION

Analytical net acid consumption values received from Skyline/Act Labs are in lbs/short ton, and are
stored as such in the MEDS database. Skyline used a PDC analytical method developed by Ed
Rood for this work.
Using these values, net acid consumption was interpolated by PDC into the model using IDP
interpolation with a power of 3. Statistics and cumulative frequency plots generated from the
composite file indicate cleaner distributions by ore type than by rock type (Table 19.13). This is
contrary to the norm observed in other porphyry-copper models, but at Piedras Verdes it reflects a
strong correlation between copper mineralogy and acid consumption.

Table 19.13: Net Acid Consumption Statistics by Ore Type

Mean Analytical Net Acid Adjusted Mean Net Acid
Number of Consumption Consumption
Ore Type Samples (lbs/ton) (kg/tonne) (lbs/ton) (kg/tonne)
0 188 86 43 - -
2 1362 32 16 27 13
3 549 35 17 29 12
4 642 50 25 22 11
5 132 64 32 42 21
6 165 58 29 24 12
7 540 27 13 11 6
9 1164 66 33 - -
Ore types 2 through 6 show a generally increasing trend in acid consumption, whereas ore types 0,
7, and 9 have unique distributions. For this reason, acid consumption values for ore types 0, 7, and 9
were interpolated in separate runs. The other ore-type limits were treated as soft boundaries, using
composites from adjacent zones within the search radius. For example, ore type 2 was interpolated
using acid consumption values from ore types 2 and 3; 3 was interpolated using composites from 2,
3, and 4; etc.
19.7 RESOURCE CLASSIFICATION

The classification of the resources was based on the geostatistical analysis of Cu grades in the
deposit. The following parameters that are stored in the block model were considered to classify the
resources into measured, indicated and inferred:
DIST Distance to the nearest drill hole from the center of the block
NDH Number of drill holes used in the interpolation of a block
KVAR Kriging estimation variance
According to the classification scheme, a block was considered measured resource (CLASS=1) if
the distance to the nearest drill hole from the center of the block was less than or equal to 30 m,
there were at least two drill holes used for the grade interpolation, and the kriging estimation
variance was less than 0.9. The kriging variance requirement was added to make sure that the
composites around the measured blocks were well distributed. If the number of drill holes or the
kriging variance requirement was not satisfied within this distance range (0 to 30 m), then the block
was placed into indicated category (CLASS=2).
Similarly, a block was considered indicated resource if the distance to the nearest drill hole from the
block was 31 to 70 m, there were at least two drill holes used for the grade interpolation, and the
kriging estimation variance was less than 0.90. If the number of composites or the kriging variance
requirement was not satisfied within this distance range, then the block was placed into inferred
category (CLASS=3).

Finally, a block was considered inferred resource if the distance to the nearest drill hole from the
block was greater than 70 m. The blocks that did not meet the indicated category requirements were
also considered inferred. Table 19.14 shows the resource classification rules.
Table 19.14: Resource Classification Criteria Used

1 2 3
Measured Resources Indicated Resources Inferred Resources
DIST = < 30 m DIST = 31-70 m DIST > 70 m
and and or
NDH > = 2 NDH > = 2 Other blocks that cannot be
and and classified as indicated
KRGVR < 0.90 KRGVR < 0.90

Also,
DIST = < 30 m
but
NDH < 2
or
KRGVR > = 0.90
Only the blocks within the interpreted mineral zone outlines were interpolated and assigned a
resource classification code. In addition, the measured and indicated categories were limited to
blocks interpolated using the second pass.
The distances used in the resource classification were deduced from the global median indicator
variogram determined for TCu at 0.1% cutoff grade. The 70 m distance used in the indicated
classification was deduced from the range of the first structure of the indicator variogram. The 30 m
distance used for the measured resource category was derived based on the range of the same
variogram corresponding approximately to 50% of the first structure sill.
19.8 MINERAL RESOURCE

All mineral resources are reported within $3 Cu economic pit based on Lerchs-Grossman (LG)
algorithm. This pit was generated by Mr. John Nilsson, an independent consultant for this project,
using only the blocks with Measured or Indicated categories. The $3 is approximately the average of
the prices per pound of copper for the last three years.
Mintec received the pit shell from Mr. Nilsson as polygons on benches clipped to the end of 2008
topography. These outlines by bench were triangulated to generate a surface. The pit surface was
then merged with the end of 2008 topography to make the surface cover the entire project area. The
blocks that are within 50% or more inside the pit shell were assigned a code of 1 in PIT30 item in the
3-D block model to help summarize the mineral resources within this economic pit. The mineral
resources reported herein are compatible with Canadian NI 43-101 guidelines.

Table 19.15 summarizes the measured resources for TCu and SAPCu from the kriging method at
incremental cutoffs for ore type 3 through 9. Similarly, Table 19.16 summarizes the indicated
resources, Table 19.17 summarizes the combined measured and indicated resources, and
Table 19.18 summarized the inferred resources. Table 19.19 summarizes measured and indicated
resources by ore type at a 0.20% TCu cutoff.
Table 19.15: Summary of Measured Mineral Resources at Incremental Cutoffs
≥0.000 139,311.5 0.292 0.170
≥0.050 138,151.3 0.294 0.171
≥0.100 132,822.4 0.303 0.176
≥0.150 110,388.8 0.340 0.199
≥0.200 85,165.4 0.390 0.231
≥0.300 47,302.6 0.510 0.301
≥0.400 26,743.6 0.641 0.375
≥0.500 18,205.3 0.736 0.425
Table 19.16: Summary of Indicated Mineral Resources at Incremental Cutoffs
≥0.000 193,112.6 0.284 0.159
≥0.050 192,091.7 0.285 0.159
≥0.100 184,959.9 0.293 0.162
≥0.150 148,248.1 0.335 0.187
≥0.200 111,916.7 0.389 0.220
≥0.300 60,342.5 0.518 0.289
≥0.400 33,380.1 0.662 0.359
≥0.500 22,116.9 0.773 0.407
Notes: Ore types (3-7) are included only. Cutoff grades and tonnages are based on KTCu (Total Cu from Kriging). KSCu is
SAPCu from Kriging. Variable density was applied. End of 2008 topography is used (TOPO). Resources are reported within
$3 Cu LG economic pit. 3-D model used is pied15.dat.


Table 19.17: Summary of Measured & Indicated mineral resources at incremental cutoffs
≥0.000 332,424.1 0.287 0.164
≥0.050 330,243.0 0.289 0.164
≥0.100 317,782.3 0.297 0.168
≥0.150 258,636.9 0.337 0.193
≥0.200 197,082.1 0.389 0.224
≥0.300 107,645.1 0.514 0.294
≥0.400 60,123.7 0.653 0.366
≥0.500 40,322.3 0.756 0.415
Table 19.18: Summary of Inferred Mineral Resources at Incremental Cutoffs

≥0.000 24,458.0 0.291 0.148
≥0.050 24,310.9 0.292 0.148
≥0.100 22,928.8 0.305 0.151
≥0.150 14,530.6 0.412 0.198
≥0.200 10,704.2 0.500 0.241
≥0.300 5,858.3 0.718 0.341
≥0.400 4,218.1 0.867 0.405
≥0.500 3,364.8 0.972 0.449
Notes: Ore types (3-7) are included only. Cutoff grades and tonnages are based on KTCu (Total Cu from Kriging). KSCu is
SAPCu from Kriging. Variable density was applied. End of 2008 topography is used (TOPO). Resources are reported within
$3 Cu LG economic pit. 3-D model used is pied15.dat.
Table 19.19: Summary of Measured & Indicated Mineral Resources by Ore Type, at 0.20% TCu Cutoff
Ore Types Tonnage (000s) KTCu KSCu
3 35,250.1 0.284 0.119
4 40,390.7 0.389 0.221
5 11,281.8 0.451 0.246
6 14,153.1 0.328 0.175
7 96,006.4 0.430 0.270
Total 197,082.1 0.389 0.224

19.9 MODEL VALIDATION

The copper grade items were interpolated using Ordinary Kriging and the IDW methods for
comparison. Polygonal grade was also calculated. In the case of the polygonal method, the nearest
15 m composite intercept was used to assign the block grade with the ore type domain code
matching.
The grade-tonnage curves from the IDW and kriging methods are comparable but the kriging results
are relatively smoother than IDW. The polygonal method, on the other hand, gives fairly higher
grade distribution with less tonnage, as expected. The differences in results from these
interpolations are found within acceptable limits. Figure 19-16 shows the grade-tonnage curves for
TCu from kriging, IDW, and polygonal methods.
Figure 19-16: Grade-Tonnage Curves for TCu from IDW, Kriging & Polygonal Methods
Polygonal
IDW
Kriging
Sections and plan maps of the grades from the block model were generated to check the
interpolation results. Matthew D. Gray of Resource Geosciences de Mexico SA de CV did extensive
review and checking of the sections to make sure the drill hole and block model ore types and
grades match as expected. He reported any discrepancies he found in the database. The model
grades were reinterpolated after each correction until the results were satisfactory.
Figure 19-17 is a sample E-W vertical section showing TCu block grades from Kriging method and
drill holes on 698,500E looking west. Similarly, Figure 19-18 is a sample E-W vertical section also
showing TCu block grades and drill holes for section 698,600E, looking west. Figure 19-19 is a
sample bench plot at 157.5 m mid-bench elevation showing TCu block grades with the drill hole
intercepts.

Figure 19-17: TCu Block Grades from Kriging Method, NS Section 698,500E
Figure 19-18: TCu Block Grades from Kriging Method, NS Section 698,600E
Figure 19-19: TCu Block Grades from Kriging Method, Bench 157.5 m

Table 19.20 summarizes the total geological in-situ mineral endowment at incremental TCu cutoffs
from kriging, IDW, and polygonal methods. Also reported in the same table at the same cutoffs are
SAPCu grade from the same methods. Ore types 2-9 were used in this table for blocks below the
current topography. The cutoff grades and tonnages are based on KTCu (total copper from Kriging).
Table 19-20: Summary of the Total In-Situ Mineral Endowment at Incremental Cutoffs
TCu Cutoff Tonnage (000s) KTCu ITCu PTCu KSCu ISCu PSCu
≥0.00 2,810,297.0 0.096 0.096 0.096 0.041 0.040 0.041
≥0.05 1,705,621.0 0.142 0.141 0.141 0.058 0.058 0.058
≥0.10 830,435.2 0.222 0.220 0.220 0.094 0.094 0.095
≥0.15 500,171.2 0.291 0.288 0.289 0.131 0.131 0.133
≥0.20 335,477.7 0.351 0.345 0.348 0.166 0.168 0.171
≥0.30 146,446.2 0.499 0.483 0.495 0.258 0.264 0.273
≥0.40 76,162.3 0.649 0.624 0.649 0.340 0.353 0.371
≥0.50 49,588.1 0.760 0.729 0.765 0.397 0.415 0.440
Notes: Ore types (2-9) are included. Cutoff grades and tonnages are based on KTCu (Total Cu from Kriging). ITCu and
PTCu are TCu from IDW and Polygonal methods, respectively. KSCu is SAPCu from Kriging. ISCu and PSCu are SAPCu
from IDW and Polygonal methods, respectively. Variable density was applied. Current topography is used (TOPO). 3-D model
used is pied15.dat.
19.10 MODEL RECONCILIATION

In order to validate the results obtained from the interpolation method, the grade of blocks in the
mined-out areas in the model were calculated using the blasthole data. The resources from different
interpolations using the exploration data were then compared against the results from the blastholes.
There were 34,653 blastholes available for validation with TCu and SAPCu values.
Based on the request of FCC, the reconciliation study was extended to three different models for
comparison.
1. PD-1999 Model
2. PD-Matt Model
3. Mintec-Matt Model.
PD-1999 Model was based on the original interpolation and variogram parameters used by then
PDC. This model was built in 1997 and used in the 1999 Prefeasibility study.
PD-Matt Model was based on the original interpolation and variogram parameters used by PDC, but
using up-to-date drill hole data and the current ore type domains as interpreted by M. Gray of
Resource Geosciences de Mexico SA de CV.
Mintec-Matt Model was based on the interpolation and variogram parameters determined by Mintec
in this study and using up-to-date drill hole data and the current ore type domains as interpreted by
M. Gray.

The exploration block model (pied15.dat) included additional items to store the results from the
reconciliation study. The blasthole grades were calculated by kriging the values of blasthole data
using a search radius of 30 m from the center of the block. A minimum of two and a maximum of
eight blastholes were used, with the nearest blasthole to be present within 15 m distance to ensure
the blocks with no blastholes are not interpolated. Total and SAPCu values from blastholes were
interpolated and stored in the model into BHTCu and BHSCu items, respectively.
Total and SAPCu values from PD-1999 Model were exported and stored into PXTCu and PXSCu
items in the same model.
Total and SAPCu values from PD-Matt Model were exported and stored into PDTCu and PDSCu
items in the model.
Total and SAPCu values from Mintec-Matt Model were exported and stored into KTCu and KSCu
items in the model.
The comparison was done for TCu and SAPCu using the blocks that have interpolated value for
blastholes and for each of the models studied. This is to make sure the same volume and tonnage
are used for the comparison to avoid bias. Figure 19-21 shows the grade-tonnage curves for TCu
from different models. Similarly, Figure 19-22 shows the grade-tonnage curves for SAPCu from the
same models.
Figure 19-21: Grade-Tonnage Curves for TCu from Kriging in Different Models
Mintec-Mattt
Model
PD-Matt
Model
PD-1999
Model

Figure 19-22: Grade-Tonnage Curves for SAPCu from Kriging in Different Models
Mintec-Mattt
Model
PD-Matt
Model
PD-1999
Model
Table 19.20 shows the results for blastholes for all the blocks of ore types 2-9. Table 19.21 shows
the TCu reconciliation results for PD-1999, PD-Matt and Mintec-Matt Models for comparison for all
the blocks of ore types 2-9 and the reconciliation of each model to production data, expressed as
percent difference, is summarized in Table 19.22. Similar results for SAPCu can be found in
Tables 19.23, 19.24, and 19.25.
Table 19.20: TCu Results from Blastholes for all the Blocks of Ore Types 2-9
Cutoff BHS
TCu Tonnage Mean Metal
≥0.000 76,422.3 0.201 15,360.9
≥0.050 59,589.0 0.253 15,076.0
≥0.100 49,279.1 0.291 14,340.2
≥0.150 39,735.6 0.332 13,192.2
≥0.200 30,080.0 0.384 11,550.7
≥0.250 22,805.2 0.437 9,965.9
≥0.300 17,259.2 0.491 8,474.3
≥0.400 10,387.8 0.591 6,139.2
≥0.500 6,171.6 0.694 4,283.1

Table 19.21: TCu Results from PD-1999, PD-Matt & Mintec-Matt Models
Cutoff PD-1999 PD-Matt Mintec-Matt

TCu Tonnage Mean Metal Tonnage Mean Metal Tonnage Mean Metal
≥0.000 76,422.3 0.223 17,042.2 76,422.3 0.219 16,736.5 76,422.3 0.200 15,284.5
≥0.050 53,965.5 0.305 16,459.5 54,569.8 0.296 16,152.7 53,913.8 0.274 14,772.4
≥0.100 45,249.9 0.352 15,928.0 44,674.8 0.348 15,546.8 43,973.9 0.321 14,115.6
≥0.150 42,436.6 0.367 15,574.2 41,051.1 0.368 15,106.8 37,917.0 0.353 13,384.7
≥0.200 36,438.7 0.399 14,539.0 35,433.7 0.399 14,138.0 30,922.8 0.394 12,183.6
≥0.250 30,575.7 0.434 13,269.9 29,949.4 0.432 12,938.1 24,671.0 0.439 10,830.6
≥0.300 25,174.1 0.469 11,806.7 24,778.8 0.466 11,546.9 19,977.2 0.479 9,569.1
≥0.400 16,301.2 0.538 8,770.0 15,454.3 0.542 8,376.2 12,377.3 0.562 6,956.0
≥0.500 9,018.8 0.615 5,546.6 8,634.2 0.619 5,344.6 7,782.7 0.634 4,934.2
Table 19.22: Percent Differences of PD-1999, PD-Matt & Mintec-Matt Models from Blastholes for TCu

≥0.000 0.0 10.9 10.9 0.0 9.0 9.0 0.0 -0.5 -0.5
≥0.050 -9.4 20.6 9.2 -8.4 17.0 7.1 -9.5 8.3 -2.0
≥0.100 -8.2 21.0 11.1 -9.3 19.6 8.4 -10.8 10.3 -1.6
≥0.150 6.8 10.5 18.1 3.3 10.8 14.5 -4.6 6.3 1.5
≥0.200 21.1 3.9 25.9 17.8 3.9 22.4 2.8 2.6 5.5
≥0.250 34.1 -0.7 33.2 31.3 -1.1 29.8 8.2 0.5 8.7
≥0.300 45.9 -4.5 39.3 43.6 -5.1 36.3 15.7 -2.4 12.9
≥0.400 56.9 -9.0 42.9 48.8 -8.3 36.4 19.2 -4.9 13.3
≥0.500 46.1 -11.4 29.5 39.9 -10.8 24.8 26.1 -8.6 15.2
Table 19.23: SAPCu Results from Blastholes for all the Blocks of Ore Types 2-9
Cutoff BHS
TCu Tonnage Mean Metal
≥0.000 76,422.3 0.137 10,469.9
≥0.050 59,589.0 0.173 10,308.9
≥0.100 49,279.1 0.202 9,954.4
≥0.150 39,735.6 0.234 9,298.1
≥0.200 30,080.0 0.277 8,332.2
≥0.250 22,805.2 0.321 7,320.5
≥0.300 17,259.2 0.365 6,299.6
≥0.400 10,387.8 0.446 4,633.0
≥0.500 6,171.6 0.531 3,277.1

Table 19.24: SAPCu Results from PD-1999, PD-Matt & Mintec-Matt Models

≥0.000 76,422.3 0.145 11,081.2 76,422.3 0.135 10,317.0 76,362.4 0.133 10,156.2
≥0.050 53,965.5 0.200 10,793.1 54,569.8 0.184 10,040.8 53,853.9 0.184 9,909.1
≥0.100 45,249.9 0.234 10,588.5 44,674.8 0.219 9,783.8 43,914.0 0.218 9,573.3
≥0.150 42,436.6 0.246 10,439.4 41,051.1 0.233 9,564.9 37,857.1 0.238 9,010.0
≥0.200 36,438.7 0.272 9,911.3 35,433.7 0.256 9,071.0 30,878.0 0.264 8,151.8
≥0.250 30,575.7 0.300 9,172.7 29,949.4 0.281 8,415.8 24,626.1 0.292 7,190.8
≥0.300 25,174.1 0.329 8,282.3 24,778.8 0.307 7,607.1 19,932.4 0.314 6,258.8
≥0.400 16,301.2 0.387 6,308.6 15,454.3 0.367 5,671.7 12,332.4 0.369 4,550.7
≥0.500 9,018.8 0.456 4,112.6 8,634.2 0.437 3,773.1 7,752.9 0.416 3,225.2
Table 19.25: Percent Differences of PD-1999, PD-Matt & Mintec-Matt Models from Blastholes for SAPCu

≥0.000 0.0 5.8 5.8 0.0 -1.5 -1.5 -0.1 -2.9 -3.0
≥0.050 -9.4 15.6 4.7 -8.4 6.4 -2.6 -9.6 6.4 -3.9
≥0.100 -8.2 15.8 6.4 -9.3 8.4 -1.7 -10.9 7.9 -3.8
≥0.150 6.8 5.1 12.3 3.3 -0.4 2.9 -4.7 1.7 -3.1
≥0.200 21.1 -1.8 19.0 17.8 -7.6 8.9 2.7 -4.7 -2.2
≥0.250 34.1 -6.5 25.3 31.3 -12.5 15.0 8.0 -9.0 -1.8
≥0.300 45.9 -9.9 31.5 43.6 -15.9 20.8 15.5 -14.0 -0.6
≥0.400 56.9 -13.2 36.2 48.8 -17.7 22.4 18.7 -17.3 -1.8
≥0.500 46.1 -14.1 25.5 39.9 -17.7 15.1 25.6 -21.7 -1.6
Note: Cutoff grades and tonnages are based on KTCu (Total Cu from kriging).
As observed from the reconciliation results, the resources obtained from the blastholes and
exploration model at zero cutoff for TCu and SAPCu show the same tonnage and a slight difference
in grade as expected. At 0.2% TCu cutoff, the Mintec-Matt Exploration model tonnage and grade
estimates are within 5% of the blasthole model values at the same cutoff.
It should be noted from these tables that the results from different models get progressively better,
as one would expect. PD-Matt model is slightly better than PD-1999 model, and Mintec-Matt model
is much better than PD-Matt model.

19.11 COMPARISON OF 2008 & 1997 MODELS

The 2008 resource model is constrained by additional data, and the methodology used in creation of
the 2008 resource estimate differs from that used in 1997 in two significant ways:
1. The geology/ore type model used to constrain the 2008 resource estimate differs from the 1997
model in that volumetrically significant zones of oxide material with low SAP recoveries that had
been classified as ore type 304 in the 1997 model were modeled as ore type 303 in the 2008
model
2. The 1997 model grouped together domains 4, 5, 6, and 7 for grade interpolation, whereas the
2008 model interpolates grades for ore type 7 independently.
In order to quantify the effects of new data and modeling parameters on the resource estimate, the
2008 Measured and Indicated interpolated blocks were tabulated to original pre-mining topography,
thus allowing comparison to the 1997 resource model, as summarized in Table 19.26.
Note: This tabulation represents the estimated in-situ metal endowment prior to initiation of mining
and does not represent a mineral resource and is not compatible for CSA NI 43-101 reporting
because the blocks do not lie within an optimized pit shell, do not respect current topography, and
have not been demonstrated to have a reasonable prospects for being mineable. This tabulation
serves only to demonstrate the effects on estimation caused by modifications to the ore domain
model and the inclusion of additional drill hole data.
Table 19.26: Comparison of 1997 & August 2008 Measured & Indicated In-Situ Metal Endowments (NOT
Resource Estimates), Pre-Mining Topography, Piedras Verdes Deposit
1997 Model 2008 Model
Cutoff
Grade,%
TCu ktonnes TCu, % SAPCu, % ktonnes TCu, % SAPCu, %
0.10 571,000 0.252 0.127 616,142 0.250 0.123
0.15 427,000 0.299 0.158 430,024 0.307 0.158
0.20 296,000 0.354 0.204 302,537 0.365 0.194
0.30 146,000 0.477 0.300 148,950 0.496 0.275
0.40 87,000 0.575 0.367 80,599 0.631 0.351
0.50 52,000 0.663 0.419 52,781 0.731 0.401
The 2008 in-situ metal endowment resource differs from the 1997 estimate in that at all cutoff
grades, the 2008 estimate yields greater contained total copper, but contains slightly less contained
SAP copper at cutoff grades above 0.20% TCu (Table 19.27).

Table 19.27: Comparison Contained Total & SAP Copper, August 2008 & 1997 Measured & Indicated In-
Situ Metal Endowments (NOT Resource Estimates), Pre-Mining Topography, Piedras
Verdes Deposit
Delta %, Delta %,
Cutoff 2008-1997 2008-1997
Grade,% Contained Contained Contained Contained Contained Contained
TCu TCu, lbs SAP Cu, lbs TCu, lbs SAP Cu, lbs TCu SAP Cu
0.10 3,167,569 1,604,728 3,395,868 1,670,767 7.2 4.1
0.15 2,817,479 1,488,987 2,910,455 1,497,889 3.3 0.6
0.20 2,309,319 1,330,256 2,434,453 1,293,929 5.4 -2.7
0.30 1,535,724 964,292 1,628,738 903,030 6.1 -6.4
0.40 1,102,961 704,590 1,121,218 623,688 1.7 -11.5
0.50 760,146 480,382 850,597 466,607 11.9 -2.9
The ore type model contains three distinct oxide ore types; ore types 3 and 5, both of which exhibit
semi-refractory leaching characteristics; and ore type 304, a readily leachable material. Because of
differences in the manner in which oxide ores were modeled, the relative proportions of oxide ore
types are markedly different between the 1997 and 2008 resource estimates. In the 1997 model,
60% of the oxide ores corresponded to the readily leachable ore type 4, in contrast, in the 2008
model, only 47% of the oxide material is ore type 4. Compared to the 1997 model, the 2008 model,
at a 0.20% TCu cutoff, contains approximately 17 Mt less of ore type 4 (oxide) and 23 Mt more of
ore type 3 (limonitic Cu or refractory oxide material), as shown in Table 19.28.
The tonnage and grade of chalcocite ore in the 2008 model are nearly identical to those of the 1999
model, as shown in Table 19.28.
Table 19.28: Comparison of Measured & Indicated In-Situ Metal Endowments by Ore Type, August 2008
& 1997 Estimates, Pre-Mining Topography, Piedras Verdes Deposit
Oretype Description Ktonnes TCu % SAP Cu % Ktonnes TCu % SAP Cu %
2 Leached cap 0 0 0 45 0.23 0.11

Limonitic Cu/refractory
3 oxide 36,000 0.25 0.08 58,971 0.30 0.12
4 Oxide 81,000 0.38 0.25 63,980 0.40 0.23

Oxide w/ native Cu,
5 cuprite 17,000 0.41 0.25 14,125 0.43 0.23
6 Mixed oxide-Chalcocite 24,000 0.30 0.19 22,526 0.35 0.20
7 Chalcocite 104,000 0.41 0.26 104,074 0.42 0.26
9 Primary 34,000 0.24 0.04 38,817 0.25 0.04

ITEM 20 • OTHER R ELEVANT DATA & INFORMA TION
To the best of the authors’ knowledge, all relevant data and information have been discussed
elsewhere in this report.
12 February 2010 Other Relevant Data & Information 20-1

ITEM 21 • MINING
21.1 SUMMARY
An updated life of mine plan for the Piedras Verde Project was developed in September 2009 with
consideration of the following key elements:
• Resource model developed by Mintec Inc. (Mintec) of Tucson Arizona in August 2008 in
conjunction with Independent Mining Consultants (IMC) of Tucson Arizona and Resource
Geosciences de Mexico, S.A. de CV.
• Historical wall slope design recommendations provided by Call & Nicolas Inc.
• Economic parameters including operating costs and metal price provided by FCC
• Revised metallurgical recovery and acid consumption criteria provided by FCC
• Current topographic surface updated to December 2008
• Pit limit analyses using Minesight software with a Lerchs-Grossman algorithm
• Pit phase designs to fit as-built surface conditions
• Production schedule to balance mining fleet capacity, heap leach pad operating conditions and
the anticipated SX-EW capacity.
The current pit designs and mine plan were developed to leach 125.1 Mt of ore at an average TCu
grade of 0.40% copper over a nine-year period. The total material within the final pit design is
534.4 Mt resulting in an overall strip ratio of 3.27:1. The run-of-mine ore tonnage placed on the leach
pad varies by year based upon ore grade and metallurgical ore type. The rate of ore placement on
the heap varies from 10.9 to 17.2 Mt per year. The overall mining rate averages 200,000 t/d during
the first two years of the schedule and then drops to 152,000 t/d until the end of Year 8 when
stripping requirements are reduced as mining in the pit bottoms are completed.
The final pit design is based upon a Lerchs-Grossman pit optimization geometry using a copper
price of US$1.90/lb. Measured and indicated resources have been used to define pit limits and the
production schedule. Within the pit design limits there is an additional inferred resource of 4.1 Mt
with an average grade of 0.46% TCu.
Mining at the Piedras Verde project re-commenced on a limited basis in Q4 2009 and is expected to
reach full capacity in late 2010. The mine will operate using two RH 200 O&K hydraulic shovels, one
Komatsu PC 2000 excavator, two Cat 994 wheel loaders, 14 Cat 789 haulage trucks and 10 Cat 777
haulage trucks with a fleet of support equipment. Mine operations will be managed by the staff of
FCC.
21.2 OPERATING PARAMETERS
The current mine plan was based upon a maximum daily mining rate of 200,000 tonnes and a
recoverable copper placement target of 70 Mlbs per year. Actual forecasts for plated copper cathode
are impacted by inventory build-up and leach cycle initiation delay, as well as cell sequencing. The
mine will operate on two 12-hour shifts, 365 days per year.
Metallurgical design parameters have a significant impact on operating costs and recovery forecasts
for the purposes of mine planning. Seven distinct ore types have been defined, each with
characteristic recovery and acid consumption relationships with respect to time. Based upon column
testwork, run-of-mine ore will be subjected to four 120-day leach cycles that have been modeled to
estimate copper recovery for a total of 480 days of run-of-mine leaching.
21.3 PIT OPTIMIZATION
21.3.1 Resource Model
The resource model used for pit optimization was developed in August 2008 by Mintec in
conjunction with IMC and Resource Geosciences de Mexico. This resource model is described in
detail in Item 19.
Measured and indicated resources were used for the purposes of mine planning. Inferred resources
were not incorporated in the mine plan.
21.3.2 Wall Slopes
Wall slopes used for Lerchs-Grossman pit optimization were set by azimuth as shown in Table 21.1.
Table 21.1: Pit Optimization Slope Design Sectors

Sector Slope Azimuth
West Wall 50° 230° to 300°
North and East Walls 44° 300 to 115°
South Wall 41° 115 to 230 °
Final pit slopes were designed using the slope codes for each block. The bench face angles were
assumed to be 70°. All final designs were generated using double benching and the recommended
inter-ramp slope. In the case of zones where double benching is still in question, the inter-ramp
slope was set at a reduced value as if single benching were carried out in actual operating practice.
Hence, the slope code to inter-ramp angles were matched as shown in Table 21.2. Design sector
location limits are shown in Figure 21-1 superimposed on an unsmoothed pit limit for reference.
Table 21.2: Pit Slope Design Sectors
Sector Single Inter-Ramp Slope Double Inter-Ramp Slope Bench Face Design Recommended
1 44 46 70 Double Single
2 44 50 70 Double Double
Figure 21-1: Slope Design Sectors

21.3.3 Metallurgical Recovery
21.3.4 Ore Types
Resources were divided into seven “ore types” for the purposes of assigning long-term recovery and
acid consumption. Hypogene ore was not considered for mine planning purpose. The chalcocite ore
was further subdivided into porphyry, quartz diorite and metasedimentary units. These ore types are
summarized in Table 21.3.
Table 21.3: Metallurgical Ore Types

Description Host Rock
Limonitic Oxide
Oxide
Cuprite
Mixed Oxide/Chalcocite
Chalcocite Porphyry (40s Lithology)
Chalcocite Quartz Diorite (50s Lithology)
Chalcocite Metasedimentary (70s Lithology)
Final short assay procedure (SAP) copper recovery for four 120-day leach cycles was estimated for
each ore type as shown in Table 21.4.
Table 21.4: Process Recovery

Four-Cycle Final Production
Ore Type September 2009
(Mintec Recovery
Terminology) Description Host Rock % SAPCu
303 Limonitic Oxide 54.3
304 Oxide 81.7
305 Cuprite 54.3
306 Mixed Oxide/Chalcocite 104.9
307 Chalcocite Porphyry (40s Lithology) 106.4
307 Chalcocite Quartz Diorite (50s Lithology) 98.0
307 Chalcocite Metasedimentary (70s Lithology) 99.2
The four leach cycle acid consumption estimates used for operating cost estimation during pit
Table 21.5: Acid Consumption
Four-Cycle
Ore Type Acid Consumption
(Mintec September 2009
Terminology) Description Host Rock (kg/tonne)
303 Limonitic Oxide 74.8
304 Oxide 32.4
305 Cuprite 74.8
306 Mixed Oxide/Chalcocite 23.4
307 Chalcocite Porphyry (40s Lithology) 11.8
307 Chalcocite Quartz Diorite (50s Lithology) 11.3
307 Chalcocite Metasedimentary (70s Lithology) 10.0
21.3.5 Economic Parameters
The base case copper price for the development plan was US$1.90/lb of copper. Sales charges and
royalties used for pit optimization are summarized in Table 21.6.
Table 21.6: Economic Parameters

Item Unit Use for 2009 Plan
Sales Charge $/lb Sold $0.015
Serrana Royalty % of Net Sales 3.0%
PD-AZCO Royalty $/lb Sold $0.010
Cutoff Grade $/t Net Value $0.01
Copper Price $/lb Recoverable Cu $1.900
Sales & Revenue Charges $/lb Recoverable Cu $0.082
Revenue $/lb Recoverable Cu $1.818
21.3.6 Operating Costs
Operating costs were estimated for owner operated mining and process facilities. Key on-site
operating costs are summarized in Table 21.7.
Table 21.7: Operating Cost Basis
Item Unit Use for 2009 Plan
Waste Mining $/t $1.02
General Administration $/t $0.38
Processing $/t $0.84
Mining Cost $/t $1.06
Sustaining Capital $/t $0.36
Subtotal $/t $2.64
Acid Cost $/kg $0.06
21.3.7 Sustaining Capital
A preliminary estimate was made for sustaining capital requirements based upon an earlier pit
design concept. A unit cost allowance for sustaining capital was then calculated and used in the pit
optimization as shown in Table 21.8.
Table 21.8: Sustaining Capital Cost

Item Units Capital
Construct Additional Wells $ x 1000 $2,161
Main Substation Switch $ x 1000 $200
Light vehicles $ x 1000 $1,440
Boiler Replacement $ x 1000 $150
Communications Project $ x 1000 $410
Organic Recovery Filter $ x 1000 $250
Leach Pad Construction $ x 1000 $46,400
Total $ x 1000 $51,011
Approximate Reserve t x 1000 140,000
21.3.8 Block Model Net Value
Block model net values were calculated using a range of metal price assumptions ranging from
US$1.00/lb through US$2.40/lb in increments of US$0.10/lb. Typical net value calculation
parameters are shown in Table 21.9.
Additional parameters used from the block model included SAP copper grade, final recovery of SAP
copper and acid consumption. Additional adjustments were made to account for resource block
partials below topographic surface and specific gravity at the block model total value level.
Table 21.9: Block Value Calculation Items
Item Units Value
Copper Price $/lb $1.90
Sales & Revenue Charges $/lb $0.08
Revenue $/lb $1.82
General Administration $/t $0.38
Processing $/t $0.84
Mining Cost $/t $1.06
Subtotal $/t $2.64
Acid Cost $/kg $0.06
21.3.9 Pit Limit Analysis
Pit limits for the 15 nested pits were generated using a Lerchs-Grossman algorithm that seeks to
maximize gross operating surplus at each price level increment. Pit limits are shown in section and
plan in Figures 21-2 and 21-3, respectively.
There are several notable inflection points on the unsmoothed pit resource graph at $1.50/lb and
$1.90/lb copper that reflect release of significant amounts of incremental ore at depth held back by
high stripping at the previous increment.
Figure 21-2: Unsmoothed Pit Limits Bench Plan 90

Figure 21-3: Unsmoothed Pit Limits Section 6300 North
The in-pit measured and indicated resource for each price level is shown in Table 21.10.
Table 21.10: Pit Optimization Results

Run of Run of Waste ROM ROM
Copper Mine Mine Total Waste KTCu KSCu ACIDG ACIDC TOREC SPREC
$/lb bcm tonnes tonnes S/R % % kg/t kg/t % %
1.00 20,742,000 51,541,742 121,488,542 2.360 0.503 0.347 13.69 13.45 74.87 100.03
1.10 23,268,000 57,834,662 130,499,942 2.260 0.488 0.336 14.01 13.71 74.40 99.83
1.20 26,958,000 67,025,342 142,880,223 2.130 0.462 0.318 14.49 13.82 74.15 99.71
1.30 30,588,000 76,083,363 150,527,283 1.980 0.442 0.303 14.60 14.17 73.44 99.31
1.40 32,304,000 80,355,663 154,816,804 1.930 0.435 0.298 14.83 14.51 73.04 99.14
1.50 39,276,000 97,603,923 227,962,987 2.340 0.433 0.289 15.11 15.02 72.33 99.07
1.60 42,708,000 106,180,444 245,321,708 2.310 0.423 0.281 15.37 15.30 71.69 98.78
1.70 47,184,000 117,244,084 287,148,131 2.450 0.420 0.275 15.79 15.83 70.75 98.67
1.80 49,698,000 123,505,684 293,293,571 2.370 0.412 0.270 16.05 16.20 70.13 98.34
1.90 53,514,000 132,983,344 318,657,252 2.400 0.406 0.263 16.54 16.53 69.32 98.41
2.00 60,744,000 150,875,524 391,554,616 2.600 0.396 0.257 16.83 17.25 68.54 97.65
2.10 64,332,000 159,765,485 408,830,357 2.560 0.391 0.252 17.18 17.84 67.73 97.21
2.20 68,388,000 169,756,565 446,253,439 2.630 0.385 0.247 17.17 17.88 67.35 97.23
2.30 72,318,000 179,481,005 466,898,840 2.600 0.377 0.241 17.33 18.24 66.63 96.97
The unsmoothed pit resource quantity and unsmoothed pit copper grade are shown in Figures 21-4
and 21-5, respectively.
Figure 21-4: Unsmoothed Pit Resource Quantity
Pit Optimization Results
600,000,000
500,000,000
400,000,000
tonnes
300,000,000
200,000,000
100,000,000
‐
1.00 1.10 1.20 1.30 1.40 1.50 1.60 1.70 1.80 1.90 2.00 2.10 2.20 2.30 2.40
Copper Price $/lb
ORE WASTE
Figure 21-5: Unsmoothed Pit Copper Grade
Pit Optimization Results
0.600
0.500
Ore Grade Copper %
0.400
0.300
0.200
0.100
0.000
1.00 1.10 1.20 1.30 1.40 1.50 1.60 1.70 1.80 1.90 2.00 2.10 2.20 2.30 2.40
Copper Price $/lb
KTCU KSCU
21.4 PIT DESIGN
21.4.1 General
The mine has been designed for large-scale truck and shovel operations. Multiple phases are
required to release ore in a timely manner and to smooth out stripping requirements on an annual
basis. In most phases, access to the pits is available to the south for ore transportation and north to
the waste dumps.
The overall dimensions of the ultimate pit are approximately 3,200 m in the east-west direction,
1,200 m in the north-south direction and 420 m depth. Haulage road allowances are 30 m at 10%
grade. Additional design criteria are shown in Table 21.11.
Table 21.11: Pit Design Criteria

Item Units Dimensions
Haul Road Width meters 30
Haul Road Grade % 10
Bench Height meters 15
Berm Interval meters 30
Inter-berm Face Angle degrees 70
Inter-ramp Slope degrees variable by sector
Berm Width meters variable by sector
Minimum Mining Width meters 60
21.4.2 Pit Phases
21.4.2.1 Overview
In general, the unsmoothed Lerchs-Grossman pit limit for US$1.90/lb copper has been used as a
basis for developing the ultimate pit limit for six pit expansion phases. The previous terminology for
the various expansion phases was retained to minimize confusion with respect to mining areas. The
phases are shown in plan and section in Figures 21-6 and 21-7.
Figure 21-6: Stripper Pit Limits Bench Plan 105
Figure 21-7: Stripper Pit Limits Section 6300 North

The mineable reserves are summarized in Table 21.12 by pit phase. The total minable ore reserve is
125 Mt at a grade of 0.40% total copper. Ore distribution is shown in Figure 21-8.
Table 21.12: Pit Design Material Distribution

Ore Waste Total Strip
Phase tonnes KTCu KSCu tonnes tonnes Ratio
Phase 3 19,439,000 0.39 0.26 36,090,000 55,529,000 1.86
Phase 4 51,556,000 0.40 0.27 130,529,000 182,085,000 2.53
Phase 5 & 6 26,186,000 0.53 0.32 184,461,000 210,647,000 7.04
Phase 7 4,196,000 0.31 0.24 8,772,000 12,968,000 2.09
Phase 8 22,198,000 0.28 0.18 46,967,000 69,165,000 2.12
Phase 9 1,521,000 0.38 0.26 2,551,000 4,072,000 1.68
Total 125,096,000 0.40 0.26 409,370,000 534,466,000 3.27
Figure 21-8: Pit Design General Arrangement Perspective View
Ore reserves are further summarized by classification in Table 21.13.

Table 21.13: Ore Reserve Summary
Ore (bcm) Ore (tonnes) TCU (%) KSU (%)
Proven 41,057,000 102,140,000 0.38 0.25
Probable 9,296,000 22,955,000 0.47 0.29
Total 50,354,000 125,095,000 0.40 0.26
Inferred 1,654,000 4,076,000 0.46 0.29
The ore reserve reduction relative to 2008 year-end reporting is largely the result of reductions in
metallurgical recovery assumptions, increased acid consumption rate expectations and increased
operating cost assumptions for the purposes of pit limit definition. The combined oxide- limonite
cuprite-mixed reserve declined from approximately 85 million tonnes to approximately 34 million
tonnes. The chalcocite reserve decreased only marginally from approximately 95 million tonnes to
91 million tonnes. The current reserves at 125 Mt are thus substantially more heavily weighted to
chalcocite mineralization.
Copper recovery expectations for limonite, oxide and native copper have been reduced significantly
based upon review of testwork results and operating experience. Leaching duration was reduced
from 10 cycles to 4 cycles over the life of mine. Acid factors were replaced with estimates of acid
consumption based upon ore type also affecting similar ore types as recovery reductions. Increased
operating costs were applied to potential ore blocks to reflect sustaining capital requirements for
heap leach pad construction.
The reserve distributions by pit phase and bench elevation are shown in Figures 21-9 to 21-14.
Figure 21-9: Phase 3 Material Distribution by Bench
‐ 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000
285
255
225
195
165
135
Bench Elevation
105
75
45
15
‐15
‐45
‐75
‐105
‐135
‐ 5,000,000 10,000,000 15,000,000 20,000,000
285
255
225
195
165
135
Bench Elevation
105
75
45
15
‐15
‐45
‐75
‐105
‐135
Ore Waste
Figure 21-11: Phase 5 and 6 Material Distribution by Bench

‐ 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000
285
255
225
195
165
135
Bench Elevation
105
75
45
15
‐15
‐45
‐75
‐105
‐135
Ore Waste
‐ 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000
285
255
225
195
165
135
Bench Elevation
105
75
45
15
‐15
‐45
‐75
‐105
‐135
Ore Waste

‐ 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000
285
255
225
195
165
135
Bench Elevation
105
75
45
15
‐15
‐45
‐75
‐105
‐135
Ore Waste
‐ 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000
285
255
225
195
165
135
Bench Elevation
105
75
45
15
‐15
‐45
‐75
‐105
‐135
Ore Waste
21.4.2.2 Phase 3
The Phase 3 pit design (Figure 21-15) has been designed to fit into the existing development with
waste dump access to the north and heap leach pad access to the south. Wide berms have been
incorporated at the 150 m elevation on the southwest and southeast sides to allow for haulage roads
and drainage diversions.
The pit bottom is at 0 m elevation. The main haulage roads are on the east side of the pit to the 90 m
elevation. Below 90 m, the access will be moved to the west side linking to the ramp from the old
Phase 8 starter pit. This improves ore recover on the east side at depth.
Minor modifications may be warranted in the nose area on the north side where additional waste
may be left behind if blasthole drilling shows the area to be in fact barren.
Total reserves in the Phase 3 pit are 19.4 Mt with an average grade of 0.39% TCu. The majority of
the material in this pit is “chalcocite ore.” Strip ratio is 1.86:1.
Figure 21-15: Phase 3 Plan
21.4.2.3 Phase 4
The Phase 4 pit (Figure 21-16) expands the mine to the east bringing down the east wall of Phase 3.
A relatively narrow pushback on the northwest side of the pit was made to recover some of the ore
below the Phase 3 pit.
The pit bottom is at -45 m elevation. Access to the heap leach pad will be from the southeast or
southwest below 105 m elevation. Waste dump access initially will be off contour and then from
195 m elevation on the north side. The main ramp switches back at 105 m and spirals down
counterclockwise to the bottom of the pit.
Minor modifications may be warranted to access the pit bottom from the west if spillage from Phase
5 and 6 expansion becomes an operational safety or logistics issue.
the material in this pit is “chalcocite ore.” Strip ratio is 2.53:1.
21.4.2.4 Phase 5 & 6

The Phase 5 and 6 expansion to the south and west of Phase 4 combines the area previously mined
as Phase 5 and Phase 6, because in the previous schedules these pits were mined simultaneously
and were completed at nearly the same time (see Figure 21-17).
The pit limit on the southwest was pulled in from the US$1.90/lb copper Lerchs-Grossman limit
intentionally to reduce some of the stripping.
Access to the pit bottom at -105 m is by a ramp commencing on the east side at 190 m elevation
and switching back twice at 135 m elevation and 0 m elevation. Temporary access will be possible at
several points on ramps from Phase 4.
There will be operational issues with respect to spillage into active areas of Phase 4 while this pit is
being mined, and alternate mining areas will be required such as Phases 7 and 8 to ensure an
uninterrupted ore supply to the heap.
Total reserves in the Phase 5 and 6 pit are 26.2 Mt with an average grade of 0.53 % TCu. The
Figure 21-17: Phase 5 & 6 Plan
21.4.2.5 Phase 7
The Phase 7 pit (Figure 21-18) is an expansion of the existing Phase 1 pit at the west end of the
deposit. It is relatively small, but requires pushing back a significant height of wall in the northwest
area. The potential resources in the area to the southwest were not included, as the expansion was
too narrow to include in the mine plan.
Development of the pit on the upper levels will be off contour. A ramp will be sunk on the northeast
side from 135 m elevation and another on the north side from 150 m elevation. The pit bottom is at
30 m elevation.
Total reserves in the Phase 7 pit are 4.2 Mt with an average grade of 0.31% TCu. The majority of the
material in this pit is “oxide ore” with some “mixed ore.” Strip ratio is 2.09:1.
21.4.2.6 Phase 8
The Phase 8 pit (Figure 21-19) connects to the Phase 3 pit and deepens the area under Phase 8A.
Access to the pit bottom will be by ramp, commencing in the southeast corner and progressing in a
clockwise direction to a switchback at bench 45 then to a double pit bottom at 0 m elevation.

21.4.2.7 Phase 9
Phase 9 (Figure 21-20) is a small satellite pit located southwest of the Phase 7 pit. This pit is 45 m
deep on the northeast side and approximately 290 m across at the widest point.
Total reserves in the Phase 9 pit are 1.52 Mt with an average grade of 0.38% TCu. All of the material
in this pit is “oxide ore.” Strip ratio is 1.68:1.
21.5 PRODUCTION SCHEDULE
21.5.1 General
The production schedule was prepared using the bench reserves for seven metallurgical ore types
and six pit phases. The general approach to scheduling was as follows:
• Use an effective zero profit cutoff grade on the net operating surplus item in the profit matrix.
• Set up the schedule for monthly periods for the first year and quarterly periods for subsequent
years. Summarize detailed schedule on an annual basis.
• Mine the benches to achieve the daily target of material movement while monitoring anticipated
recoverable copper. Target copper was set at 70 Mlbs per year with a 5% increase allowance for
the initial estimate of in-process inventory.
• Link the production schedule to a leach stacking model with four cycles of copper leaching to
report forecast annual copper production.
21.5.2 Pit Sequencing
The pit sequencing with respect to schedule periods is shown in Figure 21-21. The first 12 periods
are months; the remaining periods are quarters (of a year). For the first year, two pits will be mined.
For the remainder of the mine life, life three pits will be active in any given year (Figure 21-22). This
occurs as pre-stripping is required in most phases and oxide/mixed ore is blended with chalcocite
ores.
Figure 21-21: Pit Sequence – Periods

Period
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
1
2
3
4
5
6
7
8
9
Phase 3 X X X X X X X X X X X X X X X X X X X
Phase 4 X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
Phase 5 & 6 X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
Phase 7 X X X X X X
Phase 8 X X X X X X X X X X X X X X X X X
Phase 9 X X
Figure 21-22: Pit Sequence – Schedule of Active Benches by Phase

Period
11
14
24
27
30
33
40
10
12
13
15
16
17
18
19
20
21
22
23
25
26
28
29
31
32
34
35
36
37
38
39
41
42
43
44
45
BENCH
1
2
3
4
5
6
7
8
9
285 4
270 4 4 4
255 4 5
240 4 4 5 7
225 3 4 4 4 5 5 7
210 3 4 4 4 5 7
195 3 4 4 4 5 5 5 7
180 3 4 4 5 5 7
165 3 4 4 4 5 5 7 8
150 3 3 4 4 4 5 5 5 8 8
135 3 3 4 4 4 5 5 8 8 8 8
120 3 3 3 4 4 4 4 5 5 8 8 8 8
105 3 3 3 4 4 4 4 5 8 8 8 8
90 3 3 3 3 7 4 4 4 5 5 8 8
75 3 3 3 3 4 4 5 5 5 8 8
60 3 3 3 4 4 5 5 8 8 8
45 3 3 3 4 5 5 8
30 3 3 4 5 5 5 8 8
15 3 4 5 8 8
0 3 4 4 5 5 5 8
-15 4 4 5 5
-30 4 4 4 5 5
-45 4 4 4 5 5
-60 5 5
-75 5
-90 5
-105 5
-120 5
-135
The pit sequencing was set as follows: Phase 3, Phase 4, Phase 5/6, Phase 7, Phase 8, Phase 9.
PIEDRAS VERDES COPPER PROJE
FRONTERA COPPER CORPORAT
Figure 21-23: Pit Sequence Phase Solids
2 February 2010 Mining 2

Table 21.14: Annual Mine Production Schedule

Time Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Total
Limonite tonnes 352,865 6,464 7,936 12,721 51,675 50,805 2,742 1,758 165,168 652,133
KTCU % 0.704 0.620 0.620 0.418 0.561 0.600 0.409 0.409 0.566 0.640
KSCU % 0.462 0.460 0.460 0.360 0.397 0.390 0.408 0.408 0.375 0.427
Oxide tonnes 187,604 1,512,534 1,048,587 3,692,344 2,991,434 1,923,979 1,829,531 3,508,057 2,001,571 18,695,640
KTCU % 0.431 0.630 0.397 0.315 0.345 0.471 0.476 0.583 0.372 0.439
KSCU % 0.261 0.435 0.249 0.230 0.232 0.310 0.293 0.309 0.251 0.280
Native Cuprite tonnes 137,605 282,893 743,075 113,669 47,107 45,165 218,580 270,515 40 1,858,648
KTCU % 0.751 0.880 0.828 0.677 0.630 0.473 0.973 1.441 0.500 0.914
KSCU % 0.549 0.483 0.503 0.457 0.480 0.350 0.558 0.765 0.360 0.541
Mixed Oxide/Chalcoc tonnes 960,245 732,271 153,257 29,820 32,697 347,445 556,372 5,793,579 4,080,952 12,686,639
KTCU % 0.362 0.322 0.171 0.303 0.189 0.358 0.632 0.280 0.266 0.301
KSCU % 0.218 0.165 0.129 0.193 0.121 0.203 0.320 0.162 0.153 0.171
Chalcocite 40 tonnes 1,549,011 2,424,330 3,933,837 5,119,021 4,934,948 6,166,743 6,390,294 3,352,387 4,084,621 37,955,193
KTCU % 0.421 0.417 0.440 0.436 0.445 0.439 0.488 0.307 0.591 0.450
KSCU % 0.291 0.284 0.293 0.302 0.274 0.281 0.304 0.244 0.328 0.290
Chalcocite 50 tonnes - - - - - - 136,788 95,919 49,799 282,506
KTCU % 0.000 0.000 0.000 0.000 0.000 0.000 0.585 0.443 0.713 0.559
KSCU % 0.000 0.000 0.000 0.000 0.000 0.000 0.421 0.274 0.260 0.343
Chalcocite 70 tonnes 9,070,652 8,739,794 7,127,595 5,176,159 6,748,514 4,780,068 2,979,225 3,008,551 5,332,644 52,963,204
KTCU % 0.344 0.333 0.375 0.295 0.328 0.433 0.487 0.293 0.379 0.356
KSCU % 0.241 0.216 0.245 0.209 0.224 0.279 0.306 0.237 0.240 0.239
Total Combined tonnes 12,257,981 13,698,285 13,014,288 14,143,733 14,806,375 13,314,206 12,113,532 16,030,767 15,714,796 125,093,963
KTCU % 0.371 0.391 0.420 0.354 0.372 0.440 0.502 0.375 0.407 0.402
KSCU % 0.256 0.255 0.273 0.250 0.243 0.283 0.309 0.236 0.243 0.259
Waste tonnes 55,385,642 59,101,715 59,985,711 49,456,266 39,792,185 41,285,793 42,636,467 38,569,232 23,157,096 409,370,107
Total tonnes 67,643,623 72,800,001 72,999,999 63,599,999 54,598,559 54,599,999 54,749,999 54,599,999 38,871,892 534,464,070
Cumulative Combined tonnes 12,257,981 25,956,267 38,970,554 53,114,287 67,920,662 81,234,867 93,348,400 109,379,167 125,093,963
Stacking Rate tonnes/day 33,492 37,530 35,656 38,750 40,565 36,477 33,188 43,920 43,054 -
Overall Mining Rate tonnes/day 184,819 199,452 200,000 174,247 149,585 149,589 150,000 149,589 106,498 -
12 February 2010 Mining 21-24

21.5.3 Mining Rate
The mining rate was gradually increased from 125, 000 t/d to 200,000 t/d over the first five months.
The 200,000 t/d rate was maintained until Period 23 when major stripping effort in Phase 5 and 6
has been completed. The material movement by type is shown in Figures 21-24 and 21-25 by
scheduling period and annual summary.
Figure 21-24: Material Movement by Period

Mine Material Movement
20,000,000
18,000,000
16,000,000
14,000,000
12,000,000
tonnes
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
‐
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
55
57
59
61
63
65
67
1
3
5
7
9
Period
Limonite Oxide Native Cuprite Mixed Oxide/Chalcocite Chalcocite 40 Chalcocite 50 Chalcocite 70 Waste
Figure 21-25: Material Movement by Year

Mine Material Movement
80,000,000
70,000,000
60,000,000
50,000,000
tonnes
40,000,000
30,000,000
20,000,000
10,000,000
‐
Year 10
Year 9
Year 6
Year 7
Year 8
Year 3
Year 4
Year 5
Year 1
Year 2
Period
Limonite Oxide Native Cuprite Mixed Oxide/Chalcocite Chalcocite 40 Chalcocite 50 Chalcocite 70 Waste

Forecast run-of-mine head grades are shown in Figure 21-26 for each ore type by scheduled period.
Figure 21-26: Run-of-Mine Grades by Period
The run-of-mine head grades are shown in Figure 21-27 for total and SAP copper on an annual
summary basis.
Figure 21-27: Run-of-Mine Grades Annual Total and SAP Copper

Mine Head Grades
0.600
0.500
0.400
SAP Copper %
0.300
0.200
0.100
0.000
Year 1
Year 2
Year 10
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Period
KTCU KSCU

21.5.4 Copper Production
The mine plan scheduled cumulative copper production targets and estimated recoverable copper
production are shown in Figures 21-28 and 21-29 along with the leach model prediction for copper
extraction and electrowinning. The cumulative electrowinning capacity is shown for the rated
capacity of 70 Mlbs per year. Actual capacity is 14% higher, and this higher threshold is what limits
the maximum copper production in the model.
Figure 21-28: Mine Plan Cumulative Copper Life of Mine

800,000,000
700,000,000
600,000,000
500,000,000
Copper lbs
400,000,000
300,000,000
200,000,000
100,000,000
‐
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
55
57
59
61
63
65
67
1
3
5
7
9
Period
Placed Recoverable Copper Mine Plan Extracted Copper EW Capacity Cumulative Plated Copper
Figure 21-29: Copper Production pp

160,000,000
140,000,000
120,000,000
100,000,000
Copper lbs
80,000,000
60,000,000
40,000,000
20,000,000
‐
10
11
12
13
14
15
16
1
Period
Placed Recoverable Copper Mine Plan Extracted Copper EW Capacity Cumulative Plated Copper

21.6 PLAN OF OPERATIONS
21.6.1 General
The plan of operations has been developed to deliver run-of-mine ore to the heap leach pad while
mining at a maximum rate of 200,000 t/d. The CdM will be responsible for mine operations, including
grade control and sequencing of heap leach pad material placement.
21.6.2 Heap Leach Pad
The current as-built configuration of the heap leach pad is shown in Figure 21-30. Pad 1 has been
filled to the 215 m elevation, Pad 2 has been filled to the 205 m elevation and Pad 3 has been
partially filled to the 200 m elevation and liner construction is ongoing.
Golder Associates has provided designs for expanded leach pads for future operations. A
conceptual version of the leach pad layout for completion of Pad 1 to Pad 3 and the addition of
Pad 4 and Pad 5 is shown in Figure 21-31. These conceptual limits with haulage road access were
developed for the leaching model. Solids of the design areas were generated and further subdivided
into cells and sliced for volume calculation, sequencing and eventual scheduling.
The heap leach pads will be constructed in 5 m lifts during operations. Final slopes will be built to 2:1
by stepping in on each subsequent lift. Reclaimed heaps will be bulldozed.
Figure 21-30: Heap Leach Pads As-built End of 2008

Figure 21-31: Conceptual Design of Heap Leach Pads
The liner construction sequence is shown in Figure 21-32. Approximately 1.6 Mm2 of new liner
construction will be required to cover all the areas shown for Pad 3, Pad 4 and Pad 5 completion.
Liner construction is currently in progress at a planned construction rate of 120,000 m2/month
Figure 21-32: Heap Leach Pad Cell Subdivision and Liner Construction Sequence

The total capacity of the heap leach pad area to the 230 m elevation is 148 Mt assuming a
conversion factor of 1.9 t/m3. The total ore scheduled in the mine plan is 125 Mt. There is therefore
additional capacity within the current design footprint to allow for inferred resources and changes in
ore volume due to cutoff grade changes related to higher copper prices.
21.6.3 Waste Dumps
Waste dumps will be located north and east of the open pit as shown in Figure 21-33. Approximately
135 Mm3 can be located north of the pit to the 255 m elevation. Another 68 Mm3 can be placed in the
east dump to the 260 m elevation. The Phase 7 pit can be backfilled with an additional 15 Mm3.
Figure 21-33: Waste Dump General Arrangement
21.6.4 Unit Operations
21.6.4.1 Drilling
Production drilling will be done with two diesel-powered rotary drills. Drill patterns will vary as
material characteristics change. The objective will be to optimize fragmentation for leaching
recovery. Fragmentation will be monitored closely to ensure minimal oversize is produced.
For the purposes of production estimation, the parameters shown in Table 21.15 have been
assumed. A third drill may be required when operations become spread out between three open pit
phases.

Table 21.15: Blasthole Drill Production

Blast Pattern Unit Value
Burden meters 9.00
Spacing meters 9.00
Bench Height meters 15.00
Subdrill meters 1.50
Hole Depth meters 16.50
Volume m3 1,215
3
Density t/m 2.45
Mass tonnes 2,977
Drill Time min/hole 20.00
Efficiency 75%
Production t/h 6,698
2008 Annual Average m/h 50.00
min/hole 19.80
21.6.4.2 Blasting
Drilling and blasting will take place on a 15 m bench. Rotary drills will be used to drill 250 mm holes
on a variable pattern in the order of 9 m x 9 m to 10 m x 10 m. The patterns are adjusted for rock
hardness and ore/waste expectations.
Explosives to be used will be primarily based on ammonium nitrate and fuel oil (ANFO). Stemming
will be crushed rock. Fragmentation will be closely monitored using digital photographs. Review
meetings will be held regularly between the explosives suppliers, contractors and mine supervision.
The fragmentation target will be 80% passing 6". An example of the fragmentation is shown in
Figure 21-34.
Figure 21-34: Split Engineering Digital Image Scanning

21.6.4.3 Loading
Loading will be done with a variety of equipment including two RH200 26 m3 hydraulic shovels, two
Caterpillar 994 wheel loaders, a Komatsu PC2000 excavator and two Caterpillar 5110 excavators.
Photos of this equipment are shown in Figures 21-35 through 21-38.
Figure 21-35: O&K RH200 Front Shovel
Figure 21-36: Caterpillar 994 Wheel Loader

Figure 21-37: Komatsu PC2000 Excavator
Figure 21-38: Caterpillar 5110 Excavator
The entire fleet will be required to produce 200,000 t/d based upon historical productivity figures.
In general, RH200 shovels and Caterpillar 994 loaders will be matched with Caterpillar 789 haulage
trucks. Historically, the shovels averaged 2,600 t/h and the wheel loaders averaged 1,400 t/h. The
smaller Caterpillar 777 haulage trucks will be loaded with Caterpillar 992 wheel loaders and
excavators such as the Caterpillar 5110 and Komatsu PC 2000. The 5110 excavators have 31,000
operating hours and are nearing the end of their useful life.

Minor improvements in productivity have been assumed for Owner-operated mining, and hourly
production rates have been adjusted accordingly, as shown in Table 21.16.
Table 21.16: Loading Productivity

Unit t/h m3 t/h/m3
RH200 2,750 26.0 106
RH200 2,750 26.0 106
994 1,550 19.0 82
994 1,550 19.0 82
PC2000 1,000 12.0 83
5110 900 12.0 75
5110 900 12.0 75
11,400
Availability 85.0%
hours/day 24.0
t/day 232,560
The operating cost model requires some adjustment of material split to ensure that utilization does
not exceed mechanically available operating time.
21.6.4.4 Hauling
The haulage fleet will consist of 14 Caterpillar 789 end dump units (see Figure 21-39) and 10
Caterpillar 777 end dump units. Haulage fleet productivity for 789 units range from 530 t/h to 330 t/h.
Figure 21-39: Caterpillar 789 Haulage Trucks

21.6.4.5 Roads & Dumps

Support equipment will consist of two Cat 834 rubber-tire dozers, two Cat D10 track dozers, one Cat
D11 track dozer, two Cat 16G graders and two water trucks (refer to Figures 21-40 and 21-41).
Figure 21-40: Rubber-Tire Dozer
Figure 21-41: Water Trucks and Grader
21.6.5 Production Schedule & Leaching Model
The mine production schedule has been described in general terms in Item 21.5. A complex
integrated mine / process model was developed to provide a link between the mine plan and the
heap leach pad operation. The logic used in the model was as follows:

21.6.5.1 Geometallurgical
• Identify seven classifications of ore for reporting.
21.6.5.2 Mining
• Develop designs for pit phases.

• Report in-pit reserves for pit phases by bench for each ore type.
• Sequence and schedule detailed reserves.
21.6.5.3 Process
• Establish leaching recovery curves for each ore type.

• Establish acid consumption curves for each ore type.
21.6.5.4 Leach Pad Operation
• Develop overall heap leach pad design.

• Subdivide overall heap leach pad design into cells for long-term monitoring (note that in daily
operations, these cells may be further subdivided).
• Generate solids models for each of cells for slicing on 5 m intervals.
• Summarize cell volumes and address locations.
• Sequence liner construction and cell filling sequence.
• Fill the cells with material from the detailed mine plan by period and material type carrying
detailed volume and grade information for each of the seven ore types (macro driven).
• Establish starting and ending points for the four 120-day leach cycles based upon the stacking
sequence.
• Calculate copper recovery and acid consumption for each ore type during the period for each of
the four leach cycles (macro driven).
• Estimate area under leach, PLS flows, evaporation losses, active and passive copper inventory
levels, bypassed copper, plated copper and raffinate grades (macro driven).
This model has been used to provide some long-range insight into expected copper production
levels based upon the current mine plan. Short-range mine planning is based upon a separate short
range block model incorporating current metal prices, blasthole information for copper grades and
acid consumption levels. Scheduling is also done at a more detailed level incorporating monthly
digging plans using clearly defined polygons for digging limits and volumetrics.
Selected images from the long-range model are shown in Figures 21-42 and 21-43 to provide some
insight into ore type by period and copper extraction.

Figure 21-42: Ore Type Distribution
Ore Type
6,000,000
5,000,000
4,000,000
tonnes
3,000,000
2,000,000
1,000,000
‐
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67
Period
Limonite Oxide Native Cuprite Mixed Oxide/Chalcocite Chalcocite 40 Chalcocite 50 Chalcocite 70
Figure 21-43: Copper Extraction

25,000,000
Extracted Copper
20,000,000
15,000,000
Copper lbs
10,000,000
5,000,000
‐
1 3 5 7 9 1113 15 1719 2123 25 2729 3133 3537 39 4143 4547 49 5153 5557 59 6163 6567
Period
CYCLE ONE ‐ Copper Extraction ‐ Recovery Curve CYCLE TWO ‐ Copper Extraction ‐ Recovery Curve

CYCLE THREE ‐ Copper Extraction ‐ Recovery Curve CYCLE FOUR ‐ Copper Extraction ‐ Recovery Curve

ITEM 22 • PROCESSING
22.1 INTRODUCTION
(31,750 t/y) of LME grade A cathode copper using conventional sulfuric acid/ferric sulfate heap
stage of stripping.
22.2 EXISTING PLANT & PROCESS DESCRIPTION

The ROM ore is leached in heaps, and the dissolved copper is recovered in the form of “LME Grade
A” quality copper cathodes by the SX/EW process. All technology currently used for this facility is
well proven at numerous worldwide operations. The heap leach pads are located southeast of the
open pit, with the SX/EW facilities west of the heaps, approximately 200 m south of the west end of
the main pit. The process flow diagram for leaching and solvent extraction is shown in Figure 22-1;
the electrowinning area is shown in Figure 22-2. Complete design drawings are in Appendix C of the
September 2004 Technical Report.
22.2.1 Heap Leaching
The warm, relatively dry climate at Piedras Verdes lends itself to a heap leach operation. The
process consists of leaching the run-of-mine ores with sulfuric acid solutions. As the solution passes
through the heap, it dissolves copper from the oxide and chalcocite ores. Iron-containing minerals
such as pyrite also oxidize and dissolve to form ferric sulfate solution, which is the active leaching
agent for chalcocite ores. The copper-rich solution is termed “pregnant leach solution” (PLS).
Heap leach pads 1 and 2 have been constructed. Pads 3.1 and 3.2 have been constructed with
Pads 3.3 / 3.4 / 3.5 currently in progress. All pads have been constructed on lined areas to prevent
solution loss to the environment. The run-of-mine ore was initially end-dumped from haul trucks in
10 m lifts. In February 2007, however, this was changed to 5 m lifts. Ore tonnage will vary from year
to year to provide sufficient leachable copper to produce the nominal 70 Mlbs/a SX/EW design rate.
12 February 2010 Processing 22-1

Figure 22-1: Solvent Extraction Flowsheet

Figure 22-2: Electrowinning Flowsheet

22.2.1.1 Heap Construction

The entire leach pad is being lined using a composite liner system consisting of a prepared base
material, synthetic liner, and layer of suitably sized material to both protect the liner from damage
during ore placement and promote rapid drainage of the PLS. The sub-grade was prepared by
clearing and grubbing, then grading was performed to ensure proper drainage and eliminate any
internal slopes steeper than 3:1 (horizontal to vertical).
A 300 mm bedding layer of compacted low-permeability soil was placed on top of the graded
surface. Where required, the bedding layer was amended with native clayey soil to achieve a
saturated hydraulic conductivity of 10 to 6 cm/s. The bedding layer was graded, moisture-
conditioned, and compacted in a single lift to 90% maximum dry density (ASTM-1557) at a moisture
content several percentage points dry of optimum. The low-permeability soil was compacted to the
nominal 300 mm thickness. The compacted surface was smoothed and promptly covered with the
synthetic liner to minimize desiccation and cracking.
The synthetic liner is a smooth 60 mil linear low-density polyethylene (LLDPE) membrane liner with
heat-welded seams. A 0.6 m over-liner constructed of crushed and screened rock was placed atop
the synthetic liner. The over-liner consists of 50 mm minus material that has been quarried, crushed
and screened on site.
The PLS collection system is a network of HDPE pipes that collect the PLS and deliver it to the PLS
ponds. These collection pipes have been placed above the geomembrane liner in shallow collection
trenches, which generally follow the natural drainages along original ground contours. ROM ore
material is placed upon the protective over-liner in 5 m lifts by mine haul trucks using conventional
end-dump methods. Once placed, the leaching surface is ripped in three passes, in three different
directions, using a D11N dozer to remove any compaction by the haul trucks and promote even
solution distribution and percolation.
The final stage of heap construction is the assembly of the raffinate distribution system on the top
surface of the heap. Larger arterial lines carry leach solution from the main distribution system to a
set of smaller pipes that feed drip emitters and/or sprays that are used to irrigate the heaps. The
emitters reduce evaporation losses, while the sprays are better suited to leaching side slopes (which
form a large part of the heap surface in the early months of operation).
22.2.1.2 Heap Leach Operation

Ore was placed on the heaps in 10 m lifts for the first 10 months until February 2007, after which ore
was placed in 5 m lifts. Tonnage rates will vary from year to year to provide sufficient leachable
copper to produce the nominal 70 Mlbs/a SX/EW design rate.
After placement, the ore is leveled and ripped prior to leaching and ripped again before overbuilding
each lift. Ripping disturbs the upper portion of the heap to improve solution flow through the ore.

Water and acid are added to the SX plant raffinate to maintain a steady system volume and to
produce a target pH of 1.7 to 1.8 in the PLS feed to SX. Raffinate application will be for
approximately 120 days per cycle, with a total effective leaching time of 4 cycles or 480 days.
During the leach cycle, raffinate plus makeup water is pumped to the distribution system on the top
surface of the heap. Raffinate contains about 0.03 g/L copper. The PLS exiting the heap contains a
nominal concentration of 1.0 to 1.9 g/L copper. The PLS flows by gravity to the PLS collection pond,
is pumped to the solvent extraction plant feed pond, and flows by gravity to the SX plant. The
difference between the raffinate application rate and the PLS flow rate is the amount of solution that
is retained in the residual heap moisture plus evaporation. Flow details are shown on the flowsheet
in Figure 22-1.
At the end of the leach cycle, the distribution system piping is dismantled and removed. The heap is
again ripped and allowed to rest. The rest cycle is necessary for the chalcocite ore, but is not
required for the oxide ore. The purpose of the rest is to allow oxygen to circulate through the heap.
The oxygen, combined with natural bacterial action, oxidizes iron in solution from ferrous to ferric
and converts the copper sulfide mineral to a more soluble sulfate, freeing the copper for collection in
the next leach phase.
After the rest phase, a next lift of ore is placed over the first. This over-dumping produces a fresh
layer for leaching as described above. At the same time, the previously leached lifts contribute
additional residual copper.
22.2.2 Solvent Extraction & Electrowinning
The SX/EW facilities have been designed to extract and plate 70 Mlbs/year of cathode copper from
the PLS based on a PLS copper content varying from 1.6 to 3.1 g/L. If the PLS copper content
varies, the SX plant has flexibility to efficiently process flows up to 2,500 m3/h, 35% above maximum
design capacity (1,850 m3/h). To accommodate an even lower PLS copper content, the SX plant has
been designed to accommodate an additional settler and conversion to a series-parallel flow
configuration.
22.2.2.1 Solvent Extraction

Solvent extraction, also known as liquid ion exchange, is a two-step process: (1) extraction, and
(2) stripping. In extraction, the PLS is mixed in agitated tanks with an immiscible organic reagent
consisting of a specialized extractant diluted with a commercial grade solvent. This results in a
transfer of copper from the PLS to the organic phase, and the phases are then allowed to separate.
Extraction is done in two stages with countercurrent flow of the organic and aqueous phases. The
copper in the PLS is preferentially exchanged for acid (hydrogen ion) in the organic extractant
reagent, increasing the copper in the organic phase from 2.4 to 5.3 g/L, while the acid in the organic
phase decreases by an equivalent (stoichiometric) amount. The extractant reagent is very selective
toward copper in preference to iron and other cations, meaning that very little iron advances from
extraction to stripping.

In the stripping stage, the process is reversed because of the high acid strength of 160 to 180 g/L. In
the stripping mixer settler, copper in the organic phase transfers to another aqueous phase, the
electrolyte, while acid from the electrolyte transfers to the organic phase. This acid is generated as
part of the anode reaction in the EW cells. The stripped organic returns to the extraction circuit to
extract more copper, while the rich electrolyte advances to the EW circuit.
The configuration of the mixer settlers and the SX flow scheme is shown in Figure 22-1. This
arrangement, with two stages of extraction and one of stripping, is the most common arrangement in
the copper industry, with the exception that the mixer settler tanks are of the reverse flow/Bateman
type. The material balance for leaching and SX is shown in Figure 22-1.
22.2.2.2 Electrowinning
In the electrowinning operation, copper is plated from the electrolyte solution onto stainless steel
plates. The electrolytic cell uses lead alloy anodes with stainless steel blanks as the starter
cathodes. When the desired thickness of copper has plated, the cathodes are harvested from the
electrolytic cells and the copper is mechanically stripped from the blank. The pure copper cathodes
are the final product, which are weighed, sampled, bundled and shipped for sale.
The flow scheme for the electrowinning process is shown in Figure 22-2. The associated EW area
material balance is also shown in Figure 22-2.
The electrowinning tank house contains 92 cells, each with 67 anodes and 66 stainless steel starter
blanks. Cathodes will be harvested every seven days, 22 at a time from each cell, and stripped
mechanically. Tankhouse design and equipment selection are based on the following criteria:
• Overall plant available operating time of 98%
• Operating current density of 285 A/m² at 90% current efficiency
• Design current density 344 A/m² at 90% current efficiency
• Rich electrolyte: 50 g/L Cu, 160 g/L acid, 120 ppm Co
• Lean electrolyte: 35 g/L Cu, 180 g/L acid
• Feed to EW cells: 38 g/L Cu, 177 g/l acid.
Because of the electrochemical reaction at the anode, oxygen evolves from the EW cells, creating
mists or aerosols of cell electrolyte and oxygen gas bubbles. To control mist concentrations
immediately over the cells, polypropylene balls and a foaming agent (FC-1100 or equivalent) are
used. Cobalt sulfate is added to the electrolyte to passivate the anodes. Guar is used to improve the
deposition of copper on the cathodes. All of these additives are widely used in the industry and
readily available.

22.3 HEAP LEACH PERFORMANCE

At the end of December 2008, the inventory of recoverable copper within the leach material was
estimated by previous Frontera management at 72.0 Mlbs. Since December 2008, application of
leach solution to existing pads 1, 2A, 2B, and 3.1/3.2 has continued, with copper recovery by
SX/EW. Accordingly, the pads have assumed more of a batch leaching characteristic, allowing some
conclusions to be drawn with regard to the ultimate recovery that may be expected.
Since December 2008, operations staff has continued to track the declining production as the ore
continues to be leached with no further placement of new material. This production trend, which
follows a logarithmic function, is shown in Figure 22-3.
Figure 22-3: Historical Copper Production since December 2008
PLS grades appear to be stabilizing with increased acid addition to the raffinate in order to reduce
PLS pH below 1.8. Historical PLS grades are shown in Figure 22-4.

Figure 22-4: Historical PLS Grades
EVOLUCION DE LA CONCENTRACION DE COBRE (PLS, g/l) EN LA ALIMENTACION A LA PLANTA SX
1.00
0.90
0.80
0.70
g/l
0.60
0.50
0.40
0.30
0.20
Agosto
Agosto
Abril
Mayo
Noviembre
Septiembre
Octubre
Diciembre
Enero
Febrero
Junio
Julio
Promedio de la Semana
11
12
13
14
15
16
17
Marzo
Anterior
Septiembre 11 al 17
The production decline is well modeled by the chosen logarithmic function. A calculation has been
constructed accounting for the change in inventory on a monthly basis using the logarithmic function
for the production trend. It is estimated that after leaching the existing heaps until the end of 2013,
the daily production from this ore is forecast to be less than economic, considering the opportunity
cost of the leach pads, the inventory cost of PLS holdup in the pads, and the operating costs of heap
irrigation and SX/EW copper recovery. At that time, the cumulative copper production over the 39
months from end September 2009 will be 38.0 Mlbs, leaving 34.0 Mlbs as unrecoverable.
In early 2014 the material on leach pads 1 and 2a will be covered with an overliner to provide
additional leach pad area for ongoing production demands and to avoid losses of copper from the
additional ore to be placed on top of this material.
Based on this review of the actual recoveries from the leach pads and a review by an independent
expert, the recoverable copper estimate for the existing leach material was reduced to 24 Mlbs at the
end of September 2009. Based on the new operating plan in which this material will be covered, a
writedown of 34 Mlbs of copper in process inventory was taken at Q3 2009.
Based on the above leach-out curve for this material, this material could theoretically produce an
additional 7 to 10 Mlbs from 2012 until the end of mine life. Attempting to produce this copper
inventory was deemed uneconomic, however, due to concomitant production delays from solution
hold-up and the risk of copper losses due to reprecipitation in this material stemming from the
practice of multilift leaching on top of this material. It is not possible to determine the exact reasons
for not achieving target production, but the authors believe that the impact of poor permeability and

decrepitation of some host rock minerals was not properly identified in the testwork carried out to
date.
The leaching performance of these existing heaps has not been as forecast in the previous
Technical Reports. While the previous reports have suggested that this failure was due to a lack of
acidification, it appears more likely that the other geological/mechanical/metallurgical factors were
the primary contributors to the leach production problems. It is not possible to estimate with any
certainty the impact of under-acidification in 2007 and 2008, but the lack of copper recovery in 2009,
with much higher acid application suggests that this was not significant.
Some of the potential factors that could contribute to the poor historical leaching performance are as
follows:
• High fine content on some material, which reduces aeration and bacterial activity.
• Oversize of some highly mineralized material, which reduces contact with solution.
• Presence of montmorillonite clay, which reduces rate of flow through a pad.
• Decrepitation of oxide and limonitic ores leading to poor percolation of leach solutions (highly
decrepitated or high clay content ores are expected to have blinded off portions of the existing
pads, eliminating materials beneath from solution irrigation).
• Lack of adequate acid application during pad building.
• Lack of identification of certain mineralization (native Cu, cuprite or limonitic copper) that does
not leach as well as other minerals.
• Poor classification of ores, which allowed limonitic material to be identified as oxide ore and
placed on the pads with higher expected recoveries.
22.4 PROCESS IMPROVEMENTS
22.4.1 Reduction of Copper Inventory
The existing leach pads are relatively high and available evidence indicates that it is necessary to
place the new chalcocite and other ore on new leach pad to reduce the cost of copper inventory and
the losses that appear to be a result of stacking on this existing material, which exhibits poor
percolation and channeling. It is planned to increase the amount of leach pad available at a rate
sufficient to allow single lift leaching during the next two years to facilitate long operation without
over-stacking of previously placed ore.
Golder Associates has provided designs for expanded leach pads for future operations. A
conceptual leach pad layout for increased areas in pads 3 and 4, as well as the addition of a new
pad 5, is shown in Figure 22-5 below.

Figure 22-5: Conceptual Leach Pad Layout
22.4.2 Solution Management Plan
With the increased amount of leach pad area, the new mine plan and stacking model is predicting a
required leach solution application rate of up to 3,300 m3/h of raffinate onto the new ore that will be
placed on the future heap leach pads. During re-initiation of mining and stacking/leaching
operations, the strategy will be to maximize copper production through optimization of the raffinate
application and PLS delivery to the tankhouse.
Current irrigation rates to the existing leach pads are as follows:

Pad 1 – 900-1,000 m3/h
Pad 2A – 500-600 m3/h
Pad 2B/3.1 – 1,000-1,100 m3/h
Total flow – 2,500-2,600 m3/h
The existing heap leach pads will continue to be irrigated with raffinate, with the intermediate leach
solution from these pads reporting to ponds 1 and/or 2. The intermediate leach solution will then be
used as leachate for the new ore placed on the new pad area on pads 3 /4 / 5. PLS from the new ore
will report to solvent extraction and electrowinning (SX/EW). It is expected that this solution stacking

will recover the residual copper from the existing ore on pads 1 / 2A / 2B / 3.1 / 3.2, and also recover
the planned copper production from the new ore.
As the existing design of the series SX system is 1,850 m3/h (at a 1:1 organic to aqueous solution
ratio), this will require the re-configuration of the SX system from a two-stage series extraction to two
single-stage parallel extractors to allow processing of the full volume reporting to SX/EW. The
maximum capacity of the SX/EW plant in this parallel configuration will be 3,600 m3/h. Detailed
engineering of the required piping modifications at the SX plant are currently underway by
independent consultant M3 Engineering, located in Phoenix, AZ, and are expected to be completed
by January 2010.
Accordingly, raffinate application to the existing pads can be increased up to 4,000 m3/h (allowing for
evaporation). Intermediate leach solution (ILS) from pads 1 / 2A / 2B / 3.1 (at approximately
3,800 m3/h) will be pumped to the new pad area solution application piping. ILS will require re-
acidification and it is proposed to use the existing acid cure system to re-acidify the ILS solution prior
to application onto the new pad areas. Since the mine plan has primarily chalcocite materials being
delivered to the heap leach for at least the first 2 years after mining re-start (chalcocite does not
require acid cure prior to leaching), the acid cure system can be dedicated to re-acidification of the
ILS solution.
Pad 3.1 and 3.2 will remain connected to pad 2B for solution drainage. However, future pad 3 areas
will be separated from pad 2B and drain to a new pond for PLS collection and pumping to the
SX/EW plant. This new pond will be located to receive solutions from future pad 3 areas, as well as
future pad 5 areas.
These solution management system modifications will require a change to the pumping systems
currently in operation. A study was executed by M3 Engineering in 2007 on a proposed revised
pumping system similar to that required for the new plan of operations. M3 is currently re-assessing
this work and developing recommended pumping system modifications based on the revised flow
requirements described above. New pumps and piping will be required to augment the existing
pumping systems in order to reach the required production projections. The pumping system
modifications are expected to be completed by Q1 2010. As the new mine plan and leaching plan
ramps up to maximum flows, the installation of the new pumps and piping systems will be integrated
into the leaching and solution management operations when required to meet the flow requirements.

ITEM 23 • INFRASTRUCTURE
23.1 SUMMARY
This section of the Technical Report covers the project infrastructure under the main categories of
utilities and ancillaries, and buildings. “Utilities and ancillaries” include electric power, water,
wastewater treatment, solid waste disposal, reagent, acid, fuel storage, and roads. “Buildings”
include shops, administrative offices, warehouse, laboratory, guardhouse, explosives magazine, and
the relocation of the Piedras Verdes village.
23.2 UTILITIES
23.2.1 Power
The electric power requirement for the Piedras Verdes project is 16 MW total connected load. The
demand load averages 12 MW. Electric power is being purchased from the government through the
Comision Federal de Electricidad (CFE), which administers electrical power in Mexico.
23.2.2 Water
Water is supplied from 11 production wells located approximately 6 km southeast from the mine site.
The wells pump from a depth of 120 to 300 m to a gravity collection tank. Water collected in the
gravity tank flows by gravity to the booster tank and pump station. This booster station pumps the
water 6 km through an HDPE pipeline to an elevated storage tank near the processing plant. The
capacity of the tank is 2,650 m3, with about one-third of the volume of the storage tank held in
reserve for fire protection.
23.2.3 Sewage
All occupied buildings are equipped with sanitary facilities and septic tank/leach field systems.
23.2.4 Telecommunications
The site is equipped with a microwave system for voice and data transmission, as well as internet
access. Cellular telephone coverage is also available at the mine site.
12 February 2010 Infrastructure 23-1

23.3 ANCILLARIES
23.3.1 Roads
23.3.1.1 Access Road

A 14 km, 7 m wide, dirt-surfaced, access road connects the mine to the Mocuzarit Dam road 8.5 km
north of State Highway 162, the branch highway between Alamos and Navojoa.
23.3.1.2 Plant & Mine Roads

A network of haul roads and facility access roads connect the various operational areas.
23.3.2 Offices & Shops
23.3.2.1 Administration Building

Approximately half of the warehouse building is being used for administration offices.
23.3.2.2 Truck & Maintenance Shop

A truck and maintenance shop, with four heavy equipment bays (two equipped with steel rails in the
floor to accommodate tracked equipment) and four bays for light vehicles and offices has been
constructed and is in use. The shop can accommodate a Caterpillar Model 793 haul truck, or one of
equivalent size.
Other features of the shop include electrical, machine and welding shop areas, office areas for
maintenance and/or mine operations personnel, a tool room, two 35 tonne overhead cranes, roll-up
doors, and electrical and equipment rooms. The shop had been previously used at the Phelps
Dodge Ajo mine.
23.3.2.3 Truck Wash Facility

A truck wash facility has been constructed and is in use. It has a set of four monitors and four hose
stations, two for pressurized water sprays and two for steam. Collected water is being used for dust
control in the pit. Used oil that is collected from the facility is removed from the property by a third
party, and dirt mixed with oil is sent off site to a confinement area. Uncontaminated dirt is placed on
the waste rock pile.
23.3.2.4 Fuel/Lube Station

A fuel/lube facility with 360 m³ diesel fuel capacity provides sufficient fuel for haul trucks for seven
days of operation. The lube oil facility is located next to the truckshop. This facility includes storage
for gear oil, anti-freeze, engine oils, hydraulic/transmission fluids, and synthetic oil. Two waste oil
tanks are used to store used oil prior to recycling by a local jobber.

23.3.2.5 Warehouse
The warehouse building has 1,114 m² of indoor space. Half the space is being used for
administration offices; the other half (560 m2) is being used for indoor warehouse storage. The
building is equipped with a ground level entrance and an elevated loading dock and two roll-up
doors.
23.3.2.6 Laboratory
The lab analyzes plant and mine samples. It has a sample preparation room, wet lab, atomic
absorption analyzer room, a plasma analytical machine, office and utility space. All rooms are
equipped with ventilation hoods and fans to remove noxious agents.
The lab also has a separate small block structure for acid storage.
23.3.2.7 Guard Building

A guardhouse is located at the plant west entrance along with a truck scale to weigh-in supplies and
weigh-out copper cathodes. The truck scale is located adjacent to the access road just outside the
guardhouse where the guards can monitor and operate the scale.
23.3.2.8 Acid Receiving & Storage

Two 950 tonne tanks are provided to store sulfuric acid. The capacity is sufficient for two to three
days depending on the ore type being placed on the heaps at the time. The tanks are located west
of the solvent extraction plant for gravity unloading and distribution of acid to the process. A
550 tonne tank is located at the acid mixing facility, where acid is mixed into raffinate for curing
purposes.
23.3.2.9 Stormwater Diversion Dikes & Channels

Three natural stormwater drainages previously crossed the current mining and processing area. A
stormwater diversion dike and channel system was constructed to intercept stormwater flow from the
three natural drainages and divert them to the east and west of the mining and processing areas.
23.3.2.10 Townsite Relocation

The original village of Piedras Verdes was located within the planned mine area. CDM has relocated
the Piedras Verdes community to a new town site (12,000 m2) 6 km south of the original location.
23.3.2.11 Miscellaneous
An office/control room for the solvent extraction and electrowinning operations was built on the
second floor of the electrowinning tankhouse building. The office/control room is equipped with all
process control equipment and communications facilities used to monitor and control processing
operations.

A small trailer office was installed for the leaching supervisors and a lunchroom for the leaching crew
near the heap leach pad
Ten groundwater monitoring wells have been installed at key locations up- and downgradient of the
operations. Of the ten wells, eight are in operation. Two were abandoned due to leach pad
construction and are being replaced in March 2008.

ITEM 24 • ENVIRON MENTAL & PERMITTIN G
24.1 POLICY, LEGAL & ADMINISTRATIVE FRAMEWORK

As with any mining venture, a large number of permits were required in order to bring the Piedras
Verdes project into production. For the most part, federal laws regulate mining in Mexico, but some
aspects are subject to state or local approval. The Secretary of Environment and Natural Resources
(SEMARNAT) is the chief environmental regulating agency in Mexico. The National Water
Commission (CNA) has authority over issues concerning water rights and activities that affect
ground and surface water, including diversion of floodwaters.
The key permits for the various mining stages, as well as the government agency responsible for
issuing the permits, are shown in Table 24.1. The permit applications were all prepared and
submitted in strict accordance with applicable regulations.
Table 24.1: Key Environmental Permits

REQUIRED PERMIT MINING STAGE AGENCY
1
Environmental Impact Manifest Construction / Operation / Abandonment SEMARNAT - State branch offices
Land use change study 1
Construction / Operation SEMARNAT - DGGFS2- Mexico City
offices and State branch offices.
Risk analysis study1 Construction / Operation SEMARNAT (Mexico City office)
1
Construction permit Construction Alamos municipality
Explosive handling and storage Construction / Operation SEDENA3 (Need approval from state
permits and municipal authorities)
Archaeological release letter1 Construction INAH4 (State offices)
Water use concession title Construction / Operation CNA5 (Regional branch office)
Water discharge permit Operation CNA (Regional branch office)
Unique license Operation SEMARNAT - State offices
Accident prevention plan Operation SEMARNAT - State branch offices
Notes: 1. Required prior to beginning construction activities. 2. DGGFS (General Department of Permitting for Forestry and
Soils). 3. SEDENA (National Secretary of Defense). 4. INAH (National Institute of Anthropology and History).
5. CNA (National Water Commission).
Three SEMARNAT permits were required prior to beginning construction: the Environmental Impact
Manifest, the Land Use Change, and the Risk Study permits. A construction permit from the
municipality of Alamos and an archeological release letter from National Institute of Anthropology
and History (INAH) were also required before beginning construction, as was an explosives permit
from the National Secretary of Defense. CDM obtained all of these essential permits prior to
beginning construction.
The following is a description of the key environmental programs for the Piedras Verdes project.
12 February 2010 Environmental & Permitting 24-1

24.1.1 Environmental Impact Manifest (MIA)
The MIA is required for all new projects. It involves an environmental impact evaluation to establish
the project site baseline conditions for plant and animal life, soil, water and air quality. The study also
identifies potential impacts of mine operations on the environment together with recommended
mitigation measures.
The MIA for the mine and plant was approved on 1 June 2005. The MIA for the access road and
powerline was approved on 8 September 2005. MIA approval was required to obtain some of the
other required permits.
A change to the MIA was submitted to SEMARNAT on 5 November 2009 for modifications to the
previously approved mine arrangement works. The modifications consist of an expansion of the pit,
extraction of granodiorite to use as a pad overliner, construction of an adjusted phase 5 of the
lixiviation pad and construction of two additional ponds. These new mining works will affect an area
of 147.5 Ha additional to the ones already permitted for the Piedras Verdes mine, from which
118.75 Ha are on land with natural vegetation and will require a land use change permit.
The approval for the above modifications is expected by the end of January 2010.
24.1.2 Land Use Change Application (CUS)
All land in Mexico has a designated use, and prior to construction, the project site was designated as
for mining use, a change from the previous agricultural use designation. The CUS was the formal
instrument for changing the designation to allow mining to commence.
The CUS program stems from the Forestry Law and its regulations. It requires an evaluation of the
existing conditions of the land including a plant and wildlife study, an evaluation of the current and
proposed use of the land and impacts on natural resources, and an evaluation of the reclamation
and revegetation plans. The establishment of agreements with all affected surface landowners is
also required. See Item 6 for more information on the status of land agreements.
The CUS for the mine and plant was approved on 20 September 2005. The CUS for the access road
and powerline was approved in 14 September 2005.
A new CUS application was filed before SEMARNAT on 6 November 2009 for 118.75 Ha of land
with natural vegetation to be affected by the modification of the mine arrangement works. The
approval of the new CUS application is expected by the end of January 2010.
24.1.3 Risk Study
This study is required in accordance with Federal Law and the First and Second Lists of Risky
Activities officially published by the federal environmental agency. The law covers facilities that
handle reportable quantities of hazardous materials, as well as metallurgical activities involving
leaching. In the “AR,” all environmental risks are identified and evaluated in order to establish the
methods that will be used to prevent, respond to, and control environmental emergencies.

The “AR” was approved on 1 June 2005.
24.1.4 Water Permitting
The National Water Law and its regulations control all water use in Mexico, and the CNA is the
responsible agency. Applications are submitted to this agency indicating the annual water needs for
the mine operation and the source of water to be used. The CNA grants water concessions
according to the availability in the source area.
The water source for the Piedras Verdes project is a well field southeast of the community of El
Tabelo, about 6 km southeast of the mine site. Item 6.2 provides a more detailed description of the
water supply system.
Obtaining water rights is a two-stage process. In the first stage, CDM obtained permission from CNA
to construct and equip wells for specified quantities of annual water extraction. In the second stage,
after successful construction and pump testing of the approved wells, an individual Concession Title
(Concesion de Titulo) was obtained for each well; the Concession Title specifies the permitted
annual water extraction and water use for each well. The extraction volumes assigned to each
Concession Title are a function of hydrologic parameters, thus they are not necessarily the same as
the volumes initially approved in the well construction permits. In this manner, CDM obtained
permission to construct 10.6 Mm3 per year of well capacity, resulting in CDM obtaining Concession
Titles for 16 wells with a combined industrial use water right totaling 8.1 Mm3 per year. The
estimated maximum water requirement for the mine and plant is 4.0 Mm3 per annum. Excess
volumes authorized to CDM may be applied to the development of new wells within the same
aquifer.
The CNA must also approve any activities in floodplains. This includes the diversion of floodwaters
around the Piedras Verdes mining and processing facilities.
Water-related matters are handled by the CNA in Sonora. The official response time for a water use
application is 90 days. Any water discharge system, such as septic tanks, must be registered with
this agency as well.
24.1.5 Construction Permit
The construction permit is related to a municipal endorsement to develop the mining project within
the municipal land jurisdiction. This procedure is important to avoid any future conflict with the use of
the land and derives from the Human Settlement Law and the Municipal Urban Development Plans
for each municipality.
The Alamos Municipality granted a construction permit in January 2005 that was conditional upon
receipt of federal environmental permits. These federal permits were obtained in September 2005,
thus validating CDM’s municipal permit.

24.1.6 Explosives Handling
The Explosives and Firearms Law is the legal instrument regulating the use, storage and
manufacture of explosives. National Secretary of Defense (SEDENA) is the oversight agency for any
explosives handling activity.
Issuance of the explosives permit also requires the endorsement of the Sonora State government
and the Alamos municipality.
On 19 October 2005, SEDENA granted CDM a permit to purchase and use explosives at the mine
site. Subsequently, CDM obtained an amendment to the permit that allowed the use of an explosive
storage facility constructed at the mine site.
24.1.7 Cultural Resources
The National Institute of Anthropology and History (INAH) oversees archaeological evaluations and
provides clearance for the project once studies and any required mitigation activities are complete.
INAH completed field studies at the project site in February 2005 and issued an archaeological
release letter to CDM on 1 March 2005.
24.2 BASELINE DATA
24.2.1 Climate
The climate of the project area is considered warm and dry. Monthly meteorological data, consisting
of temperature, precipitation, and evaporation from 1956 to 1996, were obtained from a weather
station at the Mocuzarit dam site 10 km northwest of Piedras Verdes (Appendix 2.3 of the 1999
Piedras Verdes Prefeasibility Study). These data were supplemented by a weather station installed
at the project site in 1996. Nightly low temperatures in December and January range between 5°C
and 8°C. Daily highs of 38°C to 42°C occur during May through August. The average annual
temperature is 26°C to 28°C.
Afternoon and evening thunderstorms occur frequently from the end of June to the first part of
October. Less frequent, but longer duration, rain storms occur during the winter months, and
occasionally, there are torrential downpours associated with hurricanes in the Pacific Ocean and
Gulf of California. The average annual rainfall is 56.38 cm. From 1956 to 1996, the lowest annual
rainfall, 29.63 cm, occurred in 1979 and the highest, 96.68 cm, was recorded in 1984. The annual
average evaporation rate is 242 cm. The highest monthly evaporation rates, 25 to 30 cm, occur from
April through June.
The town of Alamos (population 9,000) is in the foothills of the Sierra Madre Occidental Mountains at
an elevation of 400 m. The process plant area elevations range from 150 to 300 m. Vegetation is a
mix of desert cactus, open grassland, and sub-tropical shrubs and trees.

24.2.2 Air Quality
No air quality sampling has been performed. With only a modest amount of agricultural activity in the
area and no major sources of pollution nearby, it is reasonable to assume that the quality is good.
Members of the study team familiar with the area agree that air quality appears to be unaffected by
human activities or other sources of contamination. Air quality was checked three times for
chemicals (electrowinning plant) in 2007. All three results were within the standards established by
NOM 10 of Secretaría del Trabajo y Previsión Social (STPS).
24.2.3 Soils
As part of a geotechnical site evaluation, URS carried out various investigations including excavating
trenches (Appendix J, referred to by the September 2004 Technical Report). From the
investigations, URS determined that in higher areas, the subsurface of the plant site area consists of
stiff, low plasticity silty clay, approximately 1.5 m thick, underlain by granodiorite. The lower areas
are covered by silty sand and gravel or fine to medium sand. Golder Associates Inc. completed
additional studies during basic engineering.
The soil zone lies within Subregion 9 of Martínez and Fernández (1983). Ordinarily this zone is
characterized by a low level of soil erosion of 2 to 3 tonnes/Ha/a. However, the immediate area
appears to suffer moderate to extreme erosion as evident from the numerous rills and gullies
observed during fieldwork.
24.2.4 Surface Hydrology
All water streams in the immediate area are ephemeral, carrying water only in response to rain
events. The main streams are La Higuerita, Agua Tapada and El Tepustete creeks. Streamflow
characteristics are shown in Table 24.2.
Table 24.2: El Tepustete Creeks Stream Flow

Creek Watershed Area (km²) 24-hour, 100-year Peak Flow at Mine Area (m³/s)
Agua Tapada 16.3 270
La Higuerita 8.6 250
El Tepustete 21.5 290
All three streams discharge to the Mocuzarit Reservoir approximately 3 km north of the mine site.
24.2.5 Groundwater Hydrology
No formal studies of the groundwater hydrology have been performed to date, but modeling is
planned for the next phase of the Piedras Verdes project. CDM collected water level data from
exploration drill holes (Appendix V referred to by the September 2004 Technical Report). These
holes suggest that static water levels range from 170 to 190 m above mean sea level. Data are not

sufficient to establish a gradient in the water table, but it is reasonable to assume that flow reflects
surface flow, from south to north.
Similarly, no water quality data exists, but there is no reason to expect the quality to be other than
good. Shallow wells, characterized as “tolerable,” provide water to local residents. Any groundwater
produced during mining will be used in the process plant or to water the haul roads, thus reducing
the demand on the well field.
Underground water quality has been measured every two months since the baseline studies and
periodically during the mine operation. Eight wells are being monitored, and the results of all analysis
comply with the MIA.
24.2.6 Vegetation & Wildlife
24.2.6.1 Vegetation
At Piedras Verdes, the predominant vegetation is characterized as low deciduous forest, though
riparian areas exist along the El Tepustete. Quantitative flora sampling was done within an
approximate area of 900 Ha. The sampling grid consisted of 350 squares of 50 m X 50 m
representing 10% of the total surface to be disturbed by the operations.
Among the most abundant flora species identified at the area are: elephant tree (Bursera odorata),
huinolo (Acacia cochliacantha), palo piojo (Caesalpimia palmeri), vara prieta (Senna pallida), chicura
(Franseria ambrosioides) and nopal (Opuntia wilcoxi). Main herbaceous species reported were
zacate pelillo (Triodia pulchella), la malva (Malvastrum biscuspidatus) and la damiana (Turnea
ulmifolia).
Two protected flora species are present at the project site in significant number: guayacan
(guaiacum coulteri), categorized as “specially protected” and amapa (tabebuia palmeri), categorized
as “threatened,” according to NOM-059-SEMARNAT-2001.
Besides nopal, some other cacti were identified such as pitaya, or dragonfruit cactus (echinocereus
pulcellus), echo, elephant cactus, or Mexican giant cactus (pachycereus pecten-aboriginum), and
cholla (opuntia thurberi).
24.2.6.2 Wildlife
In the Piedras Verdes area there is a large variety of fauna species characteristics of two
biogeographic kingdoms: the neoartic and neotropical. Both day and night field surveys were done
within an approximate area of 900 Ha where the mine was to be developed. The sampling effort
consisted of 21 vehicle transects (800 m x 50 m) and 5 walking transects (500 m x 25 m) covering a
total surface of 180 Ha.
The most abundant fauna group found at the area is the small mammals such as the squirrels, hares
and rabbits, followed by birds (such as crows). Other mammals found were: coyote (canis latrans),

gray fox (uroyon cinereoargenteus), white tail deer (odocoileus virginianus), catamount (felis rufus),
ghost-faced bat (mormoops megalophylla), and javelina, or collared pecarry (tayassu tajacu).
Birds include: sparrow (campylorhyncus brunneicapillus), magpie (calocitta formosa), roadrunner

(geococcyx californianus), hairy woodpecker (picoides villosus), yellow bellied sapsucker
(sphyrapicus varius), and orange-fronted parakeet (aratinga canicularis), among others.
The reptiles present are: desert tortoise (gopherus agassizii), rattlesnake (crotalus basiliscus), boa
constrictor (constrictor boa), and gila monster (heloderma suspectum), among others.
Appendix L, referred to by the September 2004 Technical Report, contains a list of 37 protected
species of fauna for the project region: 9 mammals, 9 birds, 10 reptiles, 4 amphibians and 5 fish.
Only four of these were identified during the field observations, namely: desert tortoise (gopherus
agassizii), rattlesnake (crotalus basiliscus), Mexican long-tongued bat (choeronycteris mexicana)
and green parakeet (aratinga holochora).
24.2.7 Socio-economic Evaluation
The main productive activities of Piedras Verde’s Ejido are raising cattle, small-scale agriculture,
forest products and fishing. All of these activities have been considerably affected due to the drought
conditions prevailing in the region in recent years.
The town of El Tabelo, located 3 km to the East of the mine site, has 54 houses and a population of
238 persons, 67 of whom are economically active. Located south of the mine site is another very
small community called Tepustete, which consists of only 3 houses and 14 persons. Electricity is
available at Nuevo Piedras Verdes and El Tabelo. The main sources of drinking water are one fully
equipped well provided to Nuevo Piedras Verdes by CDM, including a purification water system, and
a fully equipped well provided to El Tabelo by CDM.
Currently, 66 qualified personnel from ejido communities are employed by the Piedras Verdes mine.
24.2.8 Cultural Resources
In compliance with the Mexican Federal Law of Monuments and Archaeological, Historic and Artistic
Sites, CDM requested the National Institute of Anthropology and History (INAH) do an
archaeological reconnaissance at the Piedras Verdes project site. The area covered by the INAH
survey comprises 1,200 Ha within the Ejidos Piedras Verdes and Tabelo in the municipality of
Alamos, Sonora, Mexico. The survey was completed in spring 2004.
In the reconnaissance, INAH discovered four pre-Hispanic sites of archaeological interest. One of
them is a pre-Hispanic scatter of lithic artifacts that may be a prehistoric workshop. Additional
fieldwork was required to register and document the findings. The fieldwork was completed in
February 2005. On 1 March 2005 INAH released the areas, allowing construction and mining to
begin.

24.3 ENVIRONMENTAL IMPACTS
24.3.1 Vegetation & Wildlife
The project area is not within or adjacent to any protected area for natural resources. The nearest
protected area is the Sierra de Alamos-Arroyo Cuchujaqui, 10.6 km south of the Piedras Verdes site.
24.3.1.1 Vegetation
The project will disturb about 7.6 km² (764.7 Ha). CDM instituted salvage operations for the two
identified special status species of flora and other species with ecological value or local interest.
CDM also established a plant bank from where these species are being reintroduced as part of the
reclamation revegetation.
As reclamation proceeds and revegetation takes hold, habitat will be restored and native plant
species will reinvade or be reestablished deliberately. Net effects of the project on vegetation in the
long term are not expected to be significant.
At this time, plant relocation is complete in all mine and construction areas.
24.3.1.2 Wildlife
Field surveys revealed some protected wildlife species such as desert tortoise (Gopherus agassizii),
rattlesnake (Crotalus basiliscus), Mexican long-tongued bat (Choeronycteris mexicana), green
parakeet (Aratinga holochora), among others. Prior to land clearing, breed sites and nests were
moved to outside the disturbance area.
Non-sensitive species that were identified such as squirrels, rabbits, deer and javelina are all mobile.
These animals relocated voluntarily.
As reclamation proceeds and revegetation takes hold, wildlife habitat will be reestablished. Net
effects of the project on wildlife in the long-term are not expected to be significant.
24.3.2 Air Quality
Fugitive dust emissions can potentially cause localized air quality effects. Throughout construction
and operations, water trucks are being used to suppress dust on haul roads and unpaved primary
access roads.
Sulfuric acid is generated in the electrowinning process. Acid mist is controlled by heat retention
beads and balls and surfactants, all of which retard the release of the mist from the electrolyte or
contain the mist above the cell.
Volatile organic compounds (VOCs) can originate from the solvent extraction area and other
sources. These are minimized through engineering design (roof covers) and use of a diluent with a
low vapor pressure.

These control methods are successfully employed at similar facilities elsewhere. The measures are
sufficient to prevent harmful effects on health or welfare.
24.3.3 Acid Rock Drainage (ARD)
Appendix U, referred to by the September 2004 Technical Report, contains results of acid/base
accounting (ABA) testing performed on 41 representative core samples of ore and waste material
types. With few exceptions, the samples exhibit a potential for acid generation.
Following the ABA tests, twelve composite samples representing the various ore and waste types
were created from the 41 core samples and were submitted for kinetic tests with humidity cells.
These tests are used to evaluate the long-term weathering characteristics of mine waste materials
disposed under sub aerial conditions. Data thus far obtained indicate that ore types 307 (Chalcocite)
and 306 (mixed chalcocite and oxide) are the most aggressive ARD producers; however, only a
minor amount of this material is scheduled for placement on waste dumps. Of material being sent to
the waste dumps, kinetic tests indicate that types 302 (leached cap) and metasediment-hosted 309
(hypogene) have the highest potential to cause ARD; however, the kinetic tests show that the acid
solutions derived from materials 302 (leached cap) and 309 (hypogene) are barren of deleterious
elements, thus it does not appear that leaching and transport of toxins is likely (see Appendix S,
referred to by the September 2004 Technical Report).
Although the kinetic tests indicate that ARD is likely for certain material types, these tests generally
yield leachates with metal concentrations higher than those actually produced in the field. Humidity
cell tests are designed to create a rigorous dry air/moist air/water cycle, achieve complete wetting,
and are conducted on reduced size fractions that result in a relatively high specific surface area. In
field conditions, the Piedras Verdes waste dumps will not attain these idealized conditions, thus the
severity of acidic drainage will be less than that indicated by the kinetic test results. Continuous
monitoring of waste dump effluent will be required during operations to determine the amount, if any,
of ARD produced and its severity. The exact nature and scope of mitigation methods required to
prevent ARD cannot be known until realistic determinations of ARD production are obtained during
mine operations.
ABA testing of soils and bedrock in the waste dump area indicate that both soils and granodiorite
bedrock have a positive net neutralizing potential, thus may serve to mitigate at least in part any
ARD that may be generated by the waste dumps that escape collection and treatment. The soil and
bedrock samples have not been subject to kinetic testing. The leach pad liner system, downstream
collection dams on the waste dumps, lined process solution ponds and pipeline trenches will all
serve to mitigate and minimize any potential impacts from acid generation.
24.3.4 Surface Water
The operation will not discharge process or other impacted water. All process waters will be
contained within the process facilities either in holding ponds with double geomembrane liners or
within lined and secure leaching facilities.

The processing plant is designed so that spills or leaks of process chemicals will collect in the
raffinate pond and will not reach surface waters.
Stormwater diversions have been constructed to reroute existing creeks around the operations area.
The streams ultimately flow to the Mocuzarit Reservoir, their current destination, and there is
therefore no net effect on the local surface hydrologic balance. Any stormwater that cannot be
intercepted will be contained within the process water system. Stormwater runoff from the heap
leaching will collect within the PLS collection system.
A perimeter berm/canal around the waste dumps will direct storm water runoff to a series of
collection basins/sumps to be constructed in the existing drainages below the dump toe. The
collected runoff will be pumped back to the process area as makeup water.
The perimeter berm/canal will also collect the surface flow component of any seepage that may exit
the dump as a result of percolation of precipitation through the dump. These systems will be installed
during waste stockpile placement by CDM as part of normal operations.
24.3.5 Ground Water
The ultimate pit depth will reach well below the indicated water table. Data are insufficient to
estimate the rate of infiltration of ground water into the pit. Based on the limited amount of water
encountered during the exploration drilling, it is reasonable to assume that inflow volumes will be
small. Nevertheless, because of the ultimate pit depth, pumping of collected water from the pit will
induce a strong gradient toward the pit from the surrounding area. Therefore, the pit is expected to
act as a groundwater sink.
Contamination from the leaching system is unlikely because the leach pad liner system will prevent
release of any contamination that might otherwise reach groundwater from those sources. Since the
pit will be downgradient from the process facilities, it will capture any contamination that might occur.
The amount of seepage of percolated precipitation through the dump to ground water is not known,
but is not expected to be significant. The relatively arid climate is favorable in this regard. For the
most part, precipitation will infiltrate the dump during a precipitation event and will quickly evaporate
afterward. Should the precipitation percolate through the dump, it will either exit as a surface flow, or
it will infiltrate the ground under the dump. The surface component will be managed as described in
Item 24.3.4 above.
The amount of precipitation that might ultimately find its way into the subsurface beneath the dumps
is unknown, but believed to be relatively minor. In general, such flows are quickly neutralized by the
native soils and do not result in significant contamination to groundwater.
Two monitoring wells have been installed between the rock waste areas and the Mocuzari
Reservoir, and since their installation, no contamination of ground water has been detected. After
closure, the dump surfaces will be covered with a store-and-release layer, consisting of capping
material and top soil, designed to prevent infiltration thereafter.

It should also be noted that the lowest elevation of the final pit bottom would be over 200 m below
the current implied water table. It is reasonable to assume that, by lowering the local water table by
several hundred meters, pit inflow will create a local groundwater sink. This phenomenon should
provide a second line of groundwater protection by collecting any contamination that might escape
either the leach pad liner system or the mine waste dump collection sump system.
24.3.6 Pit Lake
Formation of a pit lake is a function of the rate of inflow of groundwater, the amount of precipitation,
and the evaporation rate.
Appendix W, referred to by the September 2004 Technical Report, provides a pit lake study report,
which concludes that the pit will reach a steady state elevation and will not overflow to local surface
waters.
24.3.7 Waste Generation
Testing has determined that the ore and waste material are not considered hazardous. Both were
tested with the toxicity characteristic leaching procedure (TCLP) and the synthetic precipitation
leaching procedure (SPLP). Mercury was added as an analyte in both procedures to satisfy Mexican
norms. No sample exceeded the minimum regulatory limits for these tests.
The electrowinning tankhouse generates two related waste streams containing lead. Lead alloy
anodes corrode and must periodically be replaced. As anodes corrode, lead flakes spall off the
anode and fall to the bottom of the electrowinning cell. Lead waste is periodically removed during
routine cleaning. All of the cleanout debris from the cells and spent anodes are stored in containers
and periodically shipped back to the anode manufacturer for recycling.
Clean, used oil is stored in a tank within the bermed fuel storage area. A company from Los Mochis
(authorized by SEMARNAT) retrieves the oil for recycling or other beneficial use.
Oily waste material that cannot be recycled is removed by the same company who sends it to a
confinement in Minas, Nuevo León, Mexico.
Solid waste is handled through a contract with the City of Alamos for disposal in their municipal
landfill.
24.4 RECLAMATION PLAN

The reclamation plan identifies measures to be taken to remedy disturbance and the potential effects
to the environment from the proposed mining activities. The mitigation measures shown in
Table 24.3 are proposed given both the current and foreseeable regulatory environment in Mexico. A
detailed reclamation strategy was developed as a part of the 2007 annual ARO (Asset Retirement
Obligation) calculation.

Table 24.3: Mitigation Plan Main Criteria & Considerations Assumed for Reclamation Strategy of the
Piedras Verdes Mine
Environmental
Area Media Issue to Mitigate Aspect Mitigation Measure
All Vegetation Disturbance Reforestation From 43 to 318 plants/hectare will be
criteria planted, depending on the area to be
reforested.
All Wildlife Disruption of Wildlife voluntary migration, replacement of
habitat habitat through reclamation and
revegetation
All Soils Loss Restoration through reclamation and
revegetation
Heap Water Quality Surface runoff PLS collection system
Leach
Heap Water Quality Subsurface Liner system
Leach seepage
Heap Water Quality Surface Runoff Grade of leach Slope to 2H:1V. The pad has been formed
Leach Pad pad slopes at the with this grade angle as of the operations
completion of stage; however, the bank will have to be
operations smoothed during the abandonment stage.
Heap Water Quality Surface Runoff Grade of upper 2-5%
Leach Pad leach pad area
Heap Water Quality Sub-surface Design of cover Bottom layer: 0.8 m of soil or non-acid
Leach Pad seepage to minimize generating material.
infiltration into the Upper layer: 0.35 m of fertile soil.
spent mineral.
Heap Water Quality Sub-surface Neutralization of
The results of the preliminary column
Leach Pad seepage the leach pad backwash assay are not favorable (effluent
pH: 2.5; water applied: 2.8 m3/ton). This
option is not contemplated in the
restoration plan.
Heap Water Quality Sub-surface Management of It is assumed that once the water of the
Leach Pad seepage sediments/sludge ponds has evaporated or has been
in processing discharged, the remaining sludge will be
ponds covered by folding and welding
the plastic membrane within the ponds.
Heap Water Quality Sub-surface Filling of leach It is considered that all the ponds will
Leach Pad seepage ponds eventually be filled with soil, waste rock, or
any other non-toxic material.
Mine Pit stability The grades and drainage control works in
the pit will be performed during the
operations stage. These items are not
contemplated in the restoration costs.
Mine Air Quality Fugitive Dust Water application
Mine Water Quality Pit Lake Overflow Unlikely
Mine Water Quality Surface Runoff Grades of waste Slope to 2H:1V. The waste rock pile has
Waste rock pile slopes been formed with this grade angle as of the
Rock Piles operations stage; however, the bank will
have to be smoothed during the
abandonment stage.

Environmental
Area Media Issue to Mitigate Aspect Mitigation Measure
Mine Water Quality Surface Runoff Grade of upper Slope to 2% to 5%, towards pit
Waste waste rock pile
Rock Piles area
Mine Water Quality Surface Runoff Criteria for Maximum 100-year/24-hour rainfall (162
Waste designing the mm)
Rock Piles canal and
collection sumps
in waste rock pile
Mine Water Quality Surface Runoff Area of the waste 90 Ha
Waste rock pile draining
Rock Piles into the canal and
collection sump
Mine Water Quality Surface Runoff Area of the waste 186 Ha
Waste rock pile draining
Rock Piles into the pit
Mine Water Quality Surface Runoff Design of cover Bottom layer: 0.8 m of soil or non-acid
Waste to minimize generating material.
Rock Piles infiltration into the Upper layer: 0.35 m of fertile soil.
acid generating
waste rock.
Mine Vegetation Disturbance Criteria for the In the waste rock piles and the leach pad, a
Waste establishment of layer of approximately 35 cm. of plant soil,
Rock Piles vegetation cover recovered from the mine, will be applied.
A mix of native plant seeds (203 kg/Ha on
average) will be sown throughout the entire
affected area.
Mine Water Quality Surface seepage Perimeter control berms and collection
Waste ponds
Rock Piles
Mine Water Quality Subsurface Pit sink
Waste seepage
Rock Piles
Process Air quality VOC, acid mist Minimization through controls
plant emissions
Process Waste Spent lead Recycle lead anode wastes
Plant anodes and cell
debris
Process Surface water Spills Collect in raffinate pond
Plant
Process Site Site infrastructure Dismantling of The processing areas, including the
Plant, Infrastructure processing and SX/EW plant and tank area, the
Admin. administration maintenance workshop, and all remaining
Areas areas facilities will be dismantled and removed
from the property.
Process Site Site Infrastructure Demolition of All concrete slabs and walls will be
Plant, Infrastructure concrete slabs demolished and properly disposed of.
Admin. and walls
Areas
Service Waste Used oil Recycle used oil
Areas

The main objectives of the reclamation strategy are:
• Prepare the land for long-term productive use and/or establishment of wildlife habitat.
• Leave stable and safe areas.
• Prevent erosion through vegetation coverage and drainage works.
• Prevent any present and future environment pollution.
The main activities to achieve the above reclamation objectives are briefly described below. The
execution of some of the activities may start during the mine construction and operation stages.
24.4.1 Recovery
Whenever possible, native topsoil has been and will continue to be sequestered at a convenient on-
site location so that it can be used to establish a soil system on newly reclaimed sites during mine
reclamation.
24.4.2 Native Plant Salvage
Whenever possible, native plants, especially sensitive species, have been and will continue to be
recovered from areas of disturbance so they can be transplanted for storage and eventual return to
the mine site or be donated to other beneficial uses.
24.4.3 Recontouring Waste Rock & Piles
A 2.0:1 (H: V) grade will be utilized for the waste rock pile slopes, in order to achieve sufficient
drainage of rainwater without causing severe erosion. Grades between 2% and 5 % will be used on
the top of the waste rock pile to allow for sufficient runoff to the pit area.
A 2.0:1 (H: V) grade will be utilized for the leach pad’s slope, in order to achieve sufficient drainage
of rainwater without causing severe erosion. Grades between 2% and 5%, which promote proper
runoff without creating puddles on the pad’s surface, will be used on the top of the pad.
The ore placement plan on the pad forms a general 2:1 slope angle; therefore, it will only be
necessary to soften the banks and berms in order to achieve a continuous 2:1 slope.
24.4.4 Cover Placement at Waste Rock Piles
Once the mine leach and waste rock piles have been recontoured to a 2:1 slope, a native soil cover
will be placed over the entire surface.
Due to the acid-generating potential of most of the non-ore rock, a two-layered cover will be utilized:
a lower soil or non-acid generating material layer, at least 80 cm thick, and an upper layer of plant
soil, at least 35 cm thick. The cover will be placed on the entire area, which is estimated to be

276.8 Ha. The preliminary cover is intended to operate as a rainwater storage-evaporation (release)
area, which will decrease the flow of rainwater into the acid-generating material.
The material used to form the 80 cm thick lower layer will comply with adequate texture and
hydraulic conductivity characteristics. Certain waste rock samples evaluated were not appropriate for
the construction of this layer, unless they are homogenized and mixed with finer grain material (clay)
that do not generate acid.
The upper layer of the aforementioned cover will be 35 cm thick and will consist of plant soil that is
available at the mine site. The surface area of the dump to be covered is 276.8 Ha (flat areas and
slopes) and the main purpose of this layer will be to support the growth of vegetation.
24.4.5 Revegetation at Waste Rock Piles
A seed mix of native species that complies with certain characteristics, such as being non-palatable
for cattle and having a shallow root system, will be utilized for revegetation (175.5 kg/ha). The area
on which these seeds are to be sown is 276.8 Ha.
In order to spread seeds randomly throughout the entire area, seeds will be scattered either
manually or with a sprinkler system mounted on a tractor. If necessary, the results of scattering
seeds can be improved by raking the surface to provide better contact between the seeds and the
soil.
In addition, approximately 67 cacti per hectare will be planted on the entire 276.8 hectare area, and
74 nursery plants/Ha will be planted on the 2 Ha of adjacent land on the northern waste rock pile
area.
Plant transplantation and planting activities will coincide with the season of highest humidity in the
soil, typically one or two weeks before the rainy season.
24.4.6 Pit Area Reclamation
The following activities for the pit are not considered in the reclamation activities, since they are
contemplated within the mine’s operation phase:
• Elimination of unstable slopes

• Works to control surface runoffs
• Softening of grades in the pit’s peripheral area.
The following activities for the pit will be completed at a future date to further solidify the reclamation
strategy:
• Modeling of geohydrological-geochemical system

• Pit water quality monitoring
• Pit water acidity control.

The activities included in the restoration cost estimate for the final pit, are as follows:
• Construction of an approximate 2 m high x 3 km long safety berm around the pit.

• Installation of a four-wire, approximately 4.3 km long safety fence around the pit in areas where a
safety berm cannot be constructed.
• Scarification of approximately 18 Ha of cleared spans of land around the pit to prepare the area
for sowing seeds and planting.
• Planting of approximately 203 kg/Ha of a native seed mix on the area of the waste rock pile.
• Planting of 475 individuals per hectare of native seed plant species on the area of the perimeter
of the pit where berms (3 km) will be developed, as well as on the safety strip surrounding the pit
of approximately 25 m (18 Ha).
• Installation of 50 safety signs for the pit area.
24.4.7 Powder Magazine Reclamation
The reclamation of the powder magazine area will consist of the removal of all stored material
(explosives and accessories) through the authorized supplier, followed by the cleaning and removal
of any waste. Buildings will be dismantled and demolished, after which the land will be scarified to
plant native species.
24.4.8 Leach Pad Reclamation
In order to determine the characteristics and the quality of the leach pad effluent during the
abandonment phase and to evaluate if the effluent may be neutralized by irrigating water, the
Piedras Verdes Metallurgical Department conducted a preliminary column assay test consisting of a
one-ton sample of ore subject to leaching in the leach pad. The material in the column was subject
to irrigation with natural water, simulating the final rinsing conditions at the operational scale. After
adding 2.3 m3 of water per ton of material, the effluent’s pH remained close to 2.5, which is not at a
level that complies with the water discharge norm (NOM-001-SEMARNAT-1996). Additional assay
testwork to evaluate other conditions and parameters that could favor the chemical stabilization of
the materials in the pads will be conducted in the future. Due to the results of this assay test and the
information available to date, neutralizing the leach pad has not been contemplated in the restoration
strategy. Therefore, a system to cover the leach pad to prevent rainwater infiltration into acid
material is planned.
Therefore, during the abandonment stage, a soil cover similar to that of the waste rock pile will be
constructed. This will consist of a lower 80 cm thick bottom layer of non-acid generating material and
an upper 35 cm thick layer of plant soil. The area on which this cover is intended to be placed is
200 Ha.
A layer of fertile soil of at least 35 cm thickness will be placed on the pad’s surface.
Approximately 5 Ha of land adjacent to the pad’s periphery will be scarified, and seeds will be sewn
and native plants planted.

Native species seeds (203 kg/ha) will be sewn on the pad’s entire surface area (200 ha).
From 74 to 121.8 plants per hectare produced in the nursery and 9.56 cacti per hectare (cuttings or
branches collected from the area of the mine) will be planted on the entire surface area of the pad
(200 ha) and 5 Ha on the pad’s peripheral area.
24.4.9 Process Ponds Reclamation
Once all of the fluid has been removed from the processing ponds, the sludge remaining therein will
be covered with a plastic membrane, which will be properly folded and sealed or welded in the
bottom of the pond to prevent water from infiltrating and to prevent plant roots from growing in the
sludge. Thereafter, the pond will be filled with soil, barren rock, or non-toxic dump material, and the
ground will be prepared for sowing and planting on the surface soil of each of the former ponds.
Table 24.4 lists the capacity and area of each pond:
Table 24.4: PLS and Raffinate Pond Capacities and Areas

Volume (m3) Area (ha)
Pond Phase 1 74,700 2.85
Pond Phase 2 69,862 1.88
Feed Pond 5,051 0.6
Raffinate Pond 8,463 0.56
24.4.10 Processing & Administration Areas Reclamation
All waste materials and waste remnants will be removed, and all equipment and machinery,
installations and facilities will be cleaned. Tanks previously containing chemicals or hydrocarbons
will be removed, and the sludge or sediments that have accumulated in the bottom of the tanks will
be sent to their final disposal site.
This activity will be followed with dismantling and removal of the equipment, pipelines, electrical
systems, soffits, walls, structures, etc.
24.4.11 Dismantling of Facilities & Equipment
Office and plant facilities will be sold for salvage at the close of operations. Remaining buildings will
be demolished, sold or donated to the community for beneficial use.
Once the dismantling process has been completed, floors, walls or concrete walls will be demolished
and the ground will be prepared for sowing and reforesting.
24.4.12 Reclamation Cost Estimate
The cost estimate for the reclamation activities is summarized in Table 24.5.

Table 24.5: Summary of Reclamation costs for Piedras Verdes Mine

Restoration Cost Cost
Mine Area Surface (ha) ($000) ($/hectare)
1. Waste rock pile 276.87 $11,971 $43,237
2. Pit 248.6 $212 $853
3. Powder magazine 0.413 $8 $19,370
4. Leaching pad 199.5 $5,608 $28,110
5. Process pond phase 1 2.8 $121 $43,214
6. Process pond phase 2 1.88 $139 $73,936
7. Process and administration area 21.75 $4,598 $211,402
8. Diversion Channels 12.88 $25 $1,941
9. Water supply system $50
10. Electric substation $50
Subtotal 764.693 $22,782
5% Indirect Costs $1,139
15% Contingency $3,417
Total Cost for Reclamation ($000) $27,338
24.4.13 Environmental Monitoring Plan
During construction and operations, project environmental personnel have monitored and tracked
the salvage of plants and topsoil.
During reclamation, project environmental personnel will monitor the placement of cover and the
revegetation procedures to assure they are performed according to specifications.
The PLS, plant feed and raffinate ponds have double geomembrane liners with leak detection
systems. Throughout the operations phase, these leak detection systems will be monitored
continuously from the SX/EW control room.
The only other major monitoring will be of ground water. By the end of the mine life, approximately
10 monitoring wells will be required. At least two will be completed upgradient (to the south) of the
operations, and a total of eight or more will be required within and downstream of the plant area.
Frequency of sample collection and analyses will be selected by plant personnel. Currently eight
monitoring wells have been constructed and are continually being monitored.
24.5 SUMMARY & CONCLUSIONS

CDM has adopted an environmental plan that meets national and international standards to protect
surface water, groundwater and air. The plan also addresses the socio-economic considerations of
the immediate and surrounding communities.

ITEM 25 • RESULTS OF OPERATIONS
Production commenced in October 2006 at the Piedras Verdes mine. Harvest of the first copper
cathodes marked the completion of the development phase of the project. With the start-up, focus
was placed on maximizing the operating efficiencies of the plant and reaching the plant’s full annual
production capacity of cathode copper.
Due to the significant decrease in copper prices in 2008 and the weaker global economic outlook, it
was decided to suspend mining activities at Piedras Verdes in November 2008, while continuing
leaching operations.
During 2008, the Piedras Verdes operations produced 41.6 Mlbs of “LME Grade A” quality copper
cathode. Average cash costs for 2008 were $2.21/lb and primarily reflected the lower production
levels and the higher costs for acid. Since a portion of the operation’s costs do not fluctuate with
production volumes, the lower production also contributed to the higher unit costs.
Since December 2008, the application of leach solution to existing pads has continued, with copper
recovery by SX/EW. For the nine months ended 30 September 2009, the Piedras Verdes operations
produced 14.4 Mlbs of “LME Grade A” quality copper cathode at an average cash cost per pound of
$1.70.
Primarily due to the escalation of copper prices, the Company resumed mining activities at the end
of September 2009. Due to the build-out of the leach pads, the ores mined at the beginning of the
mining re-start will not be immediately under leach. Additionally, once leaching of the new ores has
begun due to the time required for the acid circulation; copper cathode production will not increase
until the latter part of Q4 2009.
Figure 25-1 shows average daily cathode production for each month since October 2006 when
production began at the Piedras Verdes operation.
Figure 25-1: CDM Average Daily Cathode Harvest per Month

90
80
70
Tonnes per day
60
50
40
30
20
10
0
Oct-06
Oct-07
Oct-08
Oct-09
Dec-06
Feb-07
Jun-07
Aug-07
Dec-07
Feb-08
Jun-08
Aug-08
Dec-08
Feb-09
Jun-09
Aug-09
Apr-07
Apr-08
Apr-09
Month
12 February 2010 Results of Operations 25-1

ITEM 26 • ECONOMIC ANALYSIS
26.1 SUMMARY
The economic analysis presented in this section details the net present value (NPV) estimate for the
Piedras Verdes mine. Annual cash flow projections were estimated for 2009 to 2024 (the remaining
life of the project, based on currently identified proven and probable reserves) based on estimates of
copper production, revenue, production costs, taxes, capital expenditures and working capital. The
basis of the estimate for each of these as well as other parameters is described in detail in this item.
Annual copper cathode production at the Piedras Verdes mine is expected to be 48.2 Mlbs in 2010
and approximately 70 Mlbs per year from 2011 to 2018, at which time mining and the placement of
ore on the leach pads ends. From 2020 until the end of the project life in 2024, production is forecast
to decline annually as the residual copper continues to leach from the pads and be processed into
cathode. Cash costs over the period 2010 to 2024 are forecast to average $1.41/lb of copper
cathode produced. Costs reflect the mining plan discussed in Item 21, which include accelerating
delivery of recoverable pounds to the leach pad early in the mine life as a means to generate
adequate amounts of copper production from slower leaching material.
The economic analysis has been prepared in constant Q1 2010 United States dollars. A copper
price forecast of $2.50/lb for 2009, $3.30/lb for 2010, $3.20/lb for 2011, $2.35/lb for 2012 and
$2.00/lb from 2013 forward, which is an average of the forecasts produced by several investment
banks, is used to estimate revenue over the remaining life of the project. Similarly, key cost input
variables such as diesel fuel and sulfuric acid are expressed in constant Q1 2010 dollars. The
existing contract for acid supply expires at the end of 2011, and an assumption was made that long-
term prices would be established for 2012 to 2024. It is assumed that energy costs will increase 6%
annually.
Table 26.1 outlines the primary assumptions of the economic analysis, which are described in further
detail below. Table 26.2 presents the cash flow and net present value (NPV) (at a 10%, 12.5%, and
15% discount rate) of the Piedras Verdes mine.
A sensitivity analysis of the Piedras Verdes mine NPV to operating costs and capital costs is
presented in Figure 26-1.
Figure 26-2 presents the sensitivity of the Piedras Verdes mine NPV to changes in copper price.
Figure 26-3 presents the sensitivity of the Piedras Verdes mine NPV to changes in copper
production.
12 February 2010 Economic Analysis 26-1

Table 26.1: Assumptions for Piedras Verdes Mine Economic Analysis
Economic Start Date 1 January 2009

Copper Price (per pound)
2009 ................................................................................................................................................. $2.50
2010 ................................................................................................................................................. $3.30
2011 ................................................................................................................................................. $3.20
2012 ................................................................................................................................................. $2.35
2013 to 2024 .................................................................................................................................... $2.00
Capital Costs from 2009 to 2024 (000s)

Capital Expenditures ........................................................................................................................... $134,600
Average Reported Cash Cost (per pound of copper sold)

Mining........................................................................................................................................................ $0.59
Processing ................................................................................................................................................ $0.56
General and Administration....................................................................................................................... $0.19
Royalties ................................................................................................................................................... $0.08
Total Operating Cost............................................................................................................................... $1.41
Table 26.2: Piedras Verdes Mine Free Cash Flow & NPV ($M)
2019 -
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2024
Net Income ($4.1) $36.5 $56.4 $24.2 $27.7 $30.3 $31.2 $28.2 $17.7 $37.5 $36.9
Changes in Non Cash Items $8.1 $15.5 $22.9 $19.1 $16.0 $13.9 $11.9 $10.2 $8.8 $7.7 $37.0
Changes in Working Capital $8.1 ($17.1) ($2.5) ($4.0) $6.3 $2.9 ($0.4) ($3.1) ($6.3) $10.2 $50.5
Cash Flow From Operations $12.1 $34.9 $76.7 $39.3 $49.9 $47.1 $42.6 $35.3 $20.2 $55.4 $124.4
Cash From Investing Activities ($38.5) ($52.3) ($7.1) ($2.1) ($2.0) ($4.0) ($2.0) ($1.9) ($1.9) ($1.9) ($23.2)
CASH FLOW
CF ($26.4) ($17.4) $69.6 $37.3 $47.9 $43.1 $40.7 $33.3 $18.3 $53.5 $101.2
Cummulative CF ($26.4) ($43.8) $25.8 $63.1 $111.0 $154.1 $194.8 $228.1 $246.4 $300.0 $347.6
NPV: @ 10.0% $173.3

@ 12.5% $147.9
@ 15.0% $126.8

Figure 26-1: Piedras Verdes Mine NPV Sensitivity Analysis to Operating and Capital Costs
Sensitivity to Operating and Capital Costs
$300
$250
NPV (US$M)
$200
$150
$100
$50
$0
-20% -10% 0% 10% 20%
Change from base level
NPV (10%) Opex NPV (10%) Capex NPV (12.5%) Opex
NPV (12.5%) Capex NPV (15%) Opex NPV (15%) Capex
Figure 26-2: Piedras Verdes Mine NPV Sensitivity Analysis to Copper Price
Sensitivity to Cu Price
$400
$350
$300
$250
NPV (US$M)
$200
$150
$100
$50
$0
-$50
-30% -15% 0% 15% 30%
NPV (10%) NPV (12.5%) NPV (15%)

Figure 26-3: Piedras Verdes Mine NPV Sensitivity Analysis to Copper Production
Sensitivity to Cu Production
$350
$300
$250
NPV (US$M)
$200
$150
$100
$50
$0
-20% -10% 0% 10% 20%
-$50
NPV (10%) NPV (12.5%) NPV (15%)
Table 26.3 outlines the detailed profit-and-loss statement of the Piedras Verdes mine economic
analysis.
Table 26.3: Piedras Verdes Mine Profit & Loss Statement ($M)
2019 -
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2024
Copper Cathode Production (M lbs) 17.4 48.2 65.7 67.8 78.2 79.5 79.3 76.6 71.5 70.6 71.3
Copper Price ($/lb) $2.50 $3.30 $3.20 $2.35 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00
Gross Sales $43.9 $158.2 $210.2 $159.4 $156.4 $158.9 $158.6 $153.2 $143.0 $141.1 $144.0
- Gerald Metals Commission ($0.563) ($1.5) ($2.1) ($2.2) ($2.5) ($2.5) ($2.5) ($2.5) ($2.3) ($2.3) ($2.3)
Net Sales $43.35 $156.7 $208.1 $157.3 $153.9 $156.3 $156.1 $150.8 $140.7 $138.9 $141.7
- Mining Costs ($10.7) ($51.8) ($52.9) ($53.3) ($45.1) ($45.7) ($47.3) ($47.8) ($48.6) ($23.3) $0.0
- Processing Costs ($16.1) ($30.9) ($31.9) ($31.9) ($34.8) ($35.6) ($34.8) ($35.5) ($41.3) ($37.3) ($82.9)
- G&A Expenses ($10.5) ($12.4) ($12.3) ($12.3) ($12.4) ($12.3) ($12.9) ($12.5) ($12.6) ($13.0) ($22.5)
- Royalties ($1.2) ($6.4) ($7.6) ($6.1) ($6.2) ($5.5) ($4.7) ($4.5) ($4.2) ($4.2) ($4.3)
- Total Operating Costs ($38.5) ($101.6) ($104.7) ($103.6) ($98.4) ($99.1) ($99.7) ($100.3) ($106.7) ($77.6) ($109.6)
Cash Cost per Pound Sold ($2.03) ($2.11) ($1.59) ($1.53) ($1.26) ($1.25) ($1.26) ($1.31) ($1.49) ($1.10) ($1.59)
EBITDA $4.9 $55.1 $103.4 $53.7 $55.5 $57.2 $56.4 $50.4 $34.0 $61.2 $32.0
- Total Depreciation & Amortization ($5.0) ($15.5) ($22.8) ($19.0) ($16.0) ($13.9) ($11.8) ($10.2) ($8.8) ($7.7) ($29.8)
Earnings Before Tax ($4.1) $39.6 $80.5 $34.6 $39.5 $43.3 $44.6 $40.3 $25.3 $53.5 $2.3
Taxable Income $0.0 $10.5 $80.5 $34.6 $39.5 $43.3 $44.6 $40.3 $25.3 $53.5 $9.7
- Total Tax Payable $0.0 ($3.1) ($24.2) ($10.4) ($11.9) ($13.0) ($13.4) ($12.1) ($7.6) ($16.1) ($2.9)
Effective Tax Rate 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%
Net Income (Loss) ($4.1) $36.5 $56.4 $24.2 $27.7 $30.3 $31.2 $28.2 $17.7 $37.5 ($0.6)

26.2 ASSUMPTIONS
The assumptions used to prepare the Piedras Verdes mine economic analysis are described in the
subsections below.
26.2.1 Economic Start Date & Sunk Costs
The beginning date for the economic analysis is 1 January 2009. All expenditures prior to this date
are sunk costs. As of 3Q 2009, CDM had an estimate of $25 M of tax operating loss carry-forwards
remaining to defer pre-tax earnings.
26.2.2 Exchange Rate
All values are expressed in United States dollars unless otherwise noted. An exchange rate of 13.50
Mexican pesos to $1.00 was used for conversion. Although the Piedras Verdes mine economic
analysis may be subject to exchange rate risk, no attempt to account for this risk has been made,
primarily due to the inability to accurately forecast future exchange rates.
26.2.3 Date of Estimate
Estimates are in Q1 2010 United States dollars for all future labor, equipment, materials, contract
labor, and services provided to or used by the Piedras Verdes operations.
26.2.4 Escalation
The economic analysis has been prepared on a constant dollar basis without any provision for
escalation due to inflation of copper prices, operating costs or capital costs.
26.2.5 Production
The economic analysis assumes average annual copper cathode production of 70 Mlbs from 2010 to
2018.
Copper cathode production in 2010 is forecast to total 48.2 Mlbs; CDM expects full, annualized
production of 65.7 Mlbs to be achieved in 2011. The contract with CDM’s major sulfuric acid supplier
expires 31 December 2011.
The economic analysis assumes annual copper cathode production declines beginning in 2019 until
the end of the project life in 2024. Mining and the placement of ore on the leach pads will conclude in
2018, and as a result, beginning in 2019, declining amounts of copper will be leached from the
remaining recoverable copper contained in the ore on the leach pads.

26.2.6 Copper Price
A copper price forecast of $2.50/lb is assumed for 2009, $3.30/lb for 2010, $3.20/lb for 2011,
$2.35/lb for 2012 and $2.00/lb for 2013 onwards. This price was determined by a consensus
forecast of several investment banks for estimating future prices for the mineral.
The forecast assumes the current terms of CDM’s copper off-take agreement with Gerald Metals Inc.
(see Item 26.2.8, Copper Cathode Sales), with an adjustment for marketing charges.
26.2.7 Diesel & Sulfuric Acid Prices
The diesel fuel price used for the operating cost estimate was forecast by CDM to be $1.03/L over
the remaining life of the project. The forecast is in constant Q1 2010 United States dollars.
The sulfuric acid price used for the operating cost estimate was forecast by CDM to average $59/t
over the life of mine, reflecting the forecast long-term contract price. The existing contract for acid
supply expires at the end of 2011, and an assumption was made that long-term prices similar to
those currently in existence would be established for 2012 to 2024. The forecast is in constant Q1
2010 United States dollars.
26.2.8 Copper Cathode Sales
Under the terms of an agreement dated 23 June 2006 with Gerald Metals Inc., Gerald Metals has
agreed to purchase 100% of CDM’s electrowon copper cathode produced through to
31 December 2010. CDM will sell its copper cathode Free Carrier mine site to Gerald Metals. The
price CDM receives for its copper cathode sales is based on the average COMEX price for the
month following the month of shipment (“M+1 pricing”), minus an adjustment to account for a
premium over the COMEX price, and freight, insurance, and financing costs incurred by Gerald
Metals. For the purpose of the economic analysis, this arrangement is assumed to remain in place
over the life of the project.
26.3 METAL PRODUCTION & COSTS

During the remaining 10 years of mining at the Piedras Verdes mine (2009 to 2018), 125.1 Mt of ore
is forecast to be mined and processed together with 409.3 Mt of waste. The average grade of the
ore is forecast to be 0.40% TCu.
Copper cathode production in 2010 is estimated to be 48.2 Mlbs, as described previously. From
2010 through 2018, production will remains constant at approximately 70 Mlbs per year. Thereafter,
production will drops as discussed in 26.2.5. Total payable copper cathode production between 2009
and 2024 is estimated to be 726.2 Mlbs of Cu.
The average reported cash cost per pound of copper sold over the remaining life of the project (2009
to 2024) is $1.41, as shown in Table 26.4.

Table 26.4: Piedras Verdes Mine Remaining Life-of-Project Reported Cash Cost
(per pound of copper sold)
Mining $ 0.59
Processing $ 0.56
General and Administration $ 0.19
Royalties $ 0.08
Total Reported Cash Cost $ 1.41
The cash cost of $1.41/lb of copper sold is termed by CDM as the ‘Reported Cash Cost’. It is the
cash operating cost reported by CDM and represents the costs of production attributable to the
copper cathode produced in a period.
Our economic analysis does not consider the copper-in-process inventory adjustment, which would
make cash cost differ by the amount of costs that were incurred in a period, but which are not
attributable to the copper production in that period.
26.4 CAPITAL COSTS
26.4.1 Capital Costs to 31 December 2009
The Piedras Verdes project economic analysis considers the remaining tax values of the estimated
capital expenditures made through 31 December 2009. These assets are depreciated in the
economic analysis according to guidelines issued by the Mexican Internal Revenue Service, as
described further in Item 26.6.1, Tax Depreciation.
26.4.2 Capital Costs from 2010-2024
The economic analysis considers $54.0 M of capital costs in 2009 and $43.6 M of capital costs
during 2010. Capital needed to extend the leach pad area is provided within this amount. An
estimated $37 M of capital costs will be required over the remaining life of the project and will be
funded by cash flow from operations. It is assumed that none of the major SX/EW plant and
equipment will have to be replaced during the life of the project. The costs for replacement of wear
parts for the process equipment are included in the annual operating costs.
Table 26.5 shows the amounts of capital estimated over the remaining life of the project as
incorporated into the economic analysis.

Table 26.5: Capital Expenditures Summary ($M)

2019 -
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2024
Capex Leach Pad Construction $9.9 $30.5 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Capex for Processing Activities $0.8 $6.8 $3.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Capex for Mine Activities $40.3 $4.7 $2.0 $0.0 $0.0 $2.0 $0.0 $0.0 $0.0 $0.0 $0.0
Capex for Finance $0.0 $1.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Aquisition of Adjacent Properties $2.9 $0.5 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Sustaining Capex $0.0 $0.0 $2.5 $2.5 $2.5 $2.5 $2.5 $2.5 $2.5 $2.5 $12.5
Total Capex for Leach Pad

$54.0 $43.6 $7.5 $2.5 $2.5 $4.5 $2.5 $2.5 $2.5 $2.5 $10.0
Construction & Operations
Cummulative Capex $54.0 $97.6 $105.1 $107.6 $110.1 $114.6 $117.1 $119.6 $122.1 $124.6 $134.6

26.4.3 Working Capital
The economic analysis incorporates annual changes in working capital over the remaining life of the
project commencing 1 January 2010. Working capital consists of accounts receivable, inventories,
other accounts receivable, accounts payable and other current liabilities.
All working capital is expected to be recaptured at the end of the project life.
26.4.3.1 Accounts Receivable

For the purpose of the economic analysis and forecasting annual changes in accounts receivable,
the accounts receivable at year-end are considered in terms of days of net sales in that year. As of
3Q 2009, the accounts receivable represented approximately 1.0 days of 2009 net sales. CDM
expects accounts receivable to remain at that level for the remaining life of the project. Thereafter,
annual changes in accounts receivable are forecast to fluctuate with annual changes in net sales,
but have a negligible impact on annual changes in working capital.
The low level of actual and forecast accounts receivable arises primarily because of CDM’s copper
cathode sales agreement with Gerald Metals whereby CDM sells its copper cathode Free Carrier at
the Piedras Verdes mine site to Gerald Metals and is paid two days following shipment. This
arrangement is assumed to remain in place over the remaining life of the project.
26.4.3.2 Accounts Payable

For the purpose of the economic analysis and to forecast annual changes in accounts payable, the
accounts payable at a year-end are considered in terms of days of cost of sales in that year. As of
3Q 2009, accounts payable represented approximately 30 days of 2009 cost of sales. CDM expects
accounts payable to decrease to 23 days of cost of sales in 2010 and remain at that level for the
remaining life of the project. As a result, the increase in accounts payable in 2010 from 2009 is
expected to reduce working capital requirements by $1.4 M in 2010. Thereafter, annual changes in
accounts payable are forecast to fluctuate with annual changes in cost of sales, but have a minor
impact on annual changes in working capital.
26.4.3.3 Inventory
Copper-heap-in-process Inventory levels at each year end are calculated from the inventory
value and pounds left at the end of the previous year, plus the pounds and costs of ore and waste
mining and production in the year, minus the standard cost of production of the production in the
year allocated to the pounds of copper production. The cost of waste stripping being the largest
component of the accumulated inventory cost. All of the process costs and G&A for the period are
assigned to the standard cost of production and hence the costs of sales of the pound sold during
the period.
At 31 December 2009, copper inventory is estimated at 31 Mlbs. Annual changes in the value of
copper-in-process inventory are the greatest contributor to annual changes in working capital.

26.4.4 Reclamation Expense
An expense of $27.3 M is forecast to reclaim and rehabilitate the Piedras Verdes mine area. The
reclamation expenditures are expected to be incurred over five years, beginning in 2020 and ending
in 2024. In accordance with annual asset retirement obligation calculations, third-party equipment
operating cost estimates were used to develop this forecast.
26.5 OPERATING COSTS
26.5.1 Basis
The average cash operating cost over the life of the mine is estimated to be $1.41/lb of copper
cathode. Included in the cash operating cost are mining operations, processing operations, general
and administrative costs, and royalty payments to Grupo Serrana, PDC and AZCO Mining.
26.5.2 Mining
The mining production schedule is shown in Table 21.14. Mining costs were estimated using this
schedule and equipment productivity and base cost information provided by the mine-site
engineering staff. The resultant operating cost for the mine is $0.59/lb copper.
26.5.3 Processing
CDM estimated the remaining life of project process operating cost at $0.56/lb of copper produced.
Electric power and sulfuric acid are the major components of process operating costs. The power
price is estimated at $0.127/kWh for 2010 with annual increases of 6% during the life of mine, with
an average annual consumption of 103,570 MWh during the main production years. The acid price is
forecast to average $59/t with an average consumption rate of 16.7 kg/t of ore.
26.5.4 General & Administrative
General and administrative costs are projected to average $0.19/lb of copper over the remaining life
of the project. General and administrative costs include mine and processing labor costs, technical
area expenses, safety and ecology, finance, human resources, operations, laboratory, and general
administration costs to support the operations.
26.5.5 Royalties
26.5.5.1 Phelps Dodge & AZCO Mining Royalties

Royalties of $0.02/lb of copper produced and sold are payable to PDC and AZCO when the copper
price is $1.20/lb or greater. The total amount payable to PDC and AZCO, including royalties and
payments for the acquisition of their respective interests in the Piedras Verdes project, is capped at
$16 M and $5 M, respectively.

26.5.5.2 Grupo Serrana Royalty

Royalties of 3% of revenues less marketing, transportation and selling costs are payable to Grupo
Serrana. Prior to production, CDM made advance royalty payments to Grupo Serrana, and CDM is
permitted to credit these against the 3% net revenue royalty. CDM is now paying the full 3% net
revenue royalty.
26.5.6 Copper-In-Process Inventory Adjustment
The model does not consider the calculation of copper-in-process inventory adjustments.
26.6 INCOME TAXES
26.6.1 Tax Depreciation
Mexican tax authorities allow for the use of either normal or accelerated depreciation rates with
respect to capital assets. CDM has elected or intends to use normal depreciation rates to depreciate
all capital assets, as they were found to provide superior returns for the project. Applicable tax
depreciation rates are determined by CDM based on guidelines issued by the Mexican Internal
Revenue Service.
26.6.2 Corporate Tax Rates
The corporate tax rate for mining companies in Mexico is 30%.
On 1 October 2007, the Mexican Government enacted tax changes in the Tax Reform Act, which
came into effect on 1 January 2008. The Tax Reform Act created a new tax called the "flat tax rate"
or "IETU.” The IETU is calculated as an “alternative” tax, and the greater of the IETU or the regular
income tax becomes the taxpayer’s liability. Generally, all business revenue is subject to the new
IETU income tax system, and there are limited deductions allowed to compute the tax base,
excluding compensation (although a direct tax credit is allowed for most of the compensation
expense). The IETU statutory rate is 17% for 2009 and 17.5% for 2010 and thereafter.
26.6.3 Government Fees & Taxes
The government of Mexico imposes a 16% value added tax (VAT) on all commercial transactions.
CDM, as an exporter, qualifies for refund of essentially all VAT paid. The refund procedure takes
approximately one to two months from the date of payment. In addition, capital goods that are
imported as part of an investment project are exempt from VAT. Therefore, VAT is not included in
the analysis. CDM is not charged import duties as it has secured a permit to import mining plant and
equipment under the Temporary Import Program for Exporters (IMMEX).
26.6.4 Repatriation Issues
Pursuant to Mexico’s Income Tax Law, taxes are not withheld on repatriated dividends, as long as
they are paid from after-tax retained earnings.

ITEM 27 • INTERPR ETATION & CONC LUSIONS
27.1 GENERAL
FCC completed the construction of the Piedras Verdes Mine in October 2006 and began production
of copper. The project failed to meet its production targets in 2008 and was shut down in November
2008. While the previous report has suggested that this failure was due to a lack of acidification, it
appears more likely that the presence of fines, poor percolation and decrepitation of the ore were the
primary contributors to the leach production problems. It is not possible to estimate with any certainty
the impact of under-acidification in 2007 and 2008, but the lack of copper recovery in 2009 with
much higher acid application suggests that this was not significant.
This report updates the December 2008 Technical Report with current estimates of supply costs,
commodity prices and operating performance, and incorporates a new life-of-mine production plan
resulting from a new ore reserve estimation.
27.2 INTERPRETATION & CONCLUSIONS

This section summarizes the authors' interpretation of the current study data analyzed, the
voluminous data obtained from preceding studies, and the cost estimating used to prepare the
economic analysis in this report. The following major conclusions are drawn:
1. Based on intensive exploration work carried out between 1992 and 1999, including detailed
geological mapping, drilling (78,077 m in 478 drill holes), geochemical and geophysical surveys,
it is concluded that a reasonably adequate understanding of the geology, mineralogy and
resources of the deposit has been developed. The CDM model is based on adequate drilling to
determine measured and indicated resources. A complete assay database has been compiled
with considerable attention to detail. The resource estimate is considered appropriate for mine
planning purposes.
2. The oxide leaching performance has not been as forecast in the previous Technical Report
(2008). The reasons for this remain unclear, but appear to be primarily the result of the presence
of clays and fine material in the ore placed and due to the substantial decrepitation exhibited by
this ore. This is amply demonstrated by the copper production curve demonstrated by the
existing heap leach material since the cessation of mining and stacking operations between
November 2008 and November 2009. A cumulative writedown of 61.7 Mlbs of copper-in-process
inventory has been taken by CDM.
3. The revised open-pit design and mining schedule provides for the extraction of 125.1 Mt
(measured and indicated) at a grade of 0.40% TCu over a 10-year period. The overall waste-to-
ore ratio is 3.27:1. CDM and its consultants have developed a multi-phase mining schedule,
leach-ore delivery schedule, and heap leach production model that predict grades delivered to
the heap, leach recovery by ore type, and detailed production forecast along with acid
12 February 2010 Interpretation & Conclusions 27-1

consumption requirements. This level of detail and modeling is considered adequate for detailed
scheduling for mine production.
4. Additional potential resources adjacent to, peripheral to, and below the planned open pit have
the potential to increase the minable reserves. These potential resources may be brought into
the reserve in the future if copper price, operating costs and economics warrant. This includes
the Cerro Chato area, which is located approximately 1.9 km to the west of the present open pit
and was subject to 27 diamond drill holes. This program was successful in identifying
approximately 15 to 20 Mt of oxide mineralization. The drill hole density, however, is insufficient
to allow for estimation of a mineral resource, and additional infill drilling will be required in order
to delineate NI 43-101 compliant resources. Since this zone is located further from the leach pad
area than material in the main deposit, it is not likely the material will be mined until towards the
end of the mine life; therefore, definition drilling has been deferred and will be carried out in the
future when appropriate.
5. Extensive metallurgical testwork has been carried out on ten years of samples. This work is
believed to materially represent the various ore types, as well as the metallurgical response of
the proven and probable reserves. The overall recovery of TCu is estimated to be 61.7% based
on this testwork. The remaining reserve is about 75% chalcocite ores and oxide mineralization.
Both ore types are common for run-of-mine heap leach operations. The recovery of SAPCu on
oxides has been less than the 98% of SAP previously estimated. Current testwork indicates the
chalcocite recoveries should equal or exceed SAP recoveries. The lower operational recoveries
achieved in 2008 and 2009 indicate that the use of SAP may be overstating recoveries due to
the poor physical characteristics of the various host rocks.
6. The project utilizes open-pit mining, heap leaching of copper oxides and chalcocite
mineralization, at run-of-mine size, solvent extraction and electrowinning. Annual copper
production is estimated at 70 Mlbs of “LME Grade A” quality copper cathode for 10 years, with
decreasing amounts of copper being recovered for an additional four years as the heaps are
leached to final completion. The estimated average cash cost of production in January 2010 for
the life of the mine is $1.41/lb including royalties.
7. The economic analysis carried out by FCC is based upon capital and operating costs (as
estimated and/or reviewed by FCC) to continue operating the open-pit mine, process plant and
associated infrastructure. Based upon these estimates, the project NPV @ 12.5% is estimated to
be $147.9 M at a copper price of $2.50/lb in 2009, $3.30/lb in 2010, $3.20/lb in 2011, $2.35/lb in
2012 and $2.00/lb for 2013 onward.
8. This Technical Report (12 February 2010) was prepared by the authors to reflect updated long-
term estimates of commodity process and material costs; to incorporate a new estimate of ore
reserves and reflect new life-of-mine plans associated with those reserves; and to reflect
knowledge gained on the project following 17 months of operations.
9. Major risks to the project include unfavorable changes in copper prices, continuing problems with
the percolation and leach rates for the ROM leach, and the cost and availability of acid
necessary to sustain the operation and the cost of labor.

27.3 RECOMMENDATIONS
The following recommendations are offered to attempt to improve the leach recovery response of the
various ore types:
1. Implement an improved system of control of leach feed, examining particle size distribution,
hardness, resistance to decrepitation, and permeability to adjust the leach treatment of different
copper mineral and host rock combinations. This includes improved planning of drill patterns,
blasting practice, and selective mining to better control the particle size distributions of the leach
feed material.
2. Improve stacking practice to reduce compaction and promote agglomeration of finer materials to
improve wetting and percolation.
3. Continue column test work to quantify recovery response to various host rock and mineral types
and leaching parameters.
4. Update mine geological model and database incorporating alteration zones and faulting to
provide a better indication of the presence of fine alteration material and other difficult materials
in the ore grade material.
5. Examine the response of the oxidized, altered and clayey materials to agglomeration and
leaching to determine if use of a crushing and agglomeration system can be economically
justified.

ITEM 28 • REFERENCES
The following documents are referenced in this Amended Technical Report and are available for
review in the Company’s executive offices in Phoenix, Arizona.
“Piedras Verdes Prefeasibility Study, January 1, 1999”, by Phelps Dodge Corporation.
“Technical Report for the Piedras Verdes Copper Project, August, 2002,” by Jerry T. Hanks, P.E.;
Michael G. Hester, of IMC; Herbert E. Welhener, of IMC.
“Technical Report for the Piedras Verdes Copper Project, September, 2004”, by Conrad E. Huss,
Ph.D., P.E., of M3 Engineering and Technology Corp.
“Amended Technical Report for the Piedras Verdes Copper Project, December, 2005”, by Conrad E.
Huss, Ph.D., P.E., of M3 Engineering and Technology Corp.
“Technical Report for the Piedras Verdes Copper Project, March, 2008”, by Tim J. Swendseid, P.E.,
Herb Welhener of IMC, Matt Gray, P. Geol, of Resource Geosciences Mexico, and Jerry Hanks,
P.E.
12 February 2010 References 28-1

ITEM 29 • DATE & SIGNATU RE PAGE
The individuals listed below are “qualified persons” as defined by CSA NI 43-101 and are
responsible for this technical report. Certificates of qualifications are provided in Appendix A.
The effective date of this technical report is 12 February 2010.
12 February 2010
Brian Kennedy, P.Eng. Date
12 February 2010
John Nilsson, P.Eng. Date
12 February 2010
Matt Gray, P.Geo. Date
12 February 2010 Date and Signature Page 29-1

A PPENDIX A
Certificates of Qualified Persons
12 February 2010 A-1





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Cobre del Mayo S.A. de C.V.

Alamos, Sonora, Mexico

February 12, 2010

Information effective as of December 31, 2009

By: Brian Kennedy, P.Eng.

ITEM 1 • TITLE PAGE

ITEM 2 • TABLE OF CONTENTS

ITEM 3 • SUMMARY & CONCLUSIONS ............................................................................................... 3-1

ITEM 4 • INTRODUCTION & TERMS OF REFERENCE ....................................................................... 4-1

ITEM 5 • RELIANCE ON OTHERS ........................................................................................................ 5-1

ITEM 6 • PROPERTY DESCRIPTION & LOCATION ............................................................................ 6-1

ITEM 7 • ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE &

12 February 2010 Table of Contents 2-1

7.3.3 Mining Personnel...........................................................................................................7-4

ITEM 8 • HISTORY ................................................................................................................................. 8-1

ITEM 9 • GEOLOGICAL SETTING ........................................................................................................ 9-1

ITEM 10 • DEPOSIT TYPES................................................................................................................. 10-1

ITEM 11 • MINERALIZATION & ORE TYPES ..................................................................................... 11-1

ITEM 12 • EXPLORATION ................................................................................................................... 12-1

ITEM 13 • DRILLING ............................................................................................................................ 13-1

ITEM 14 • SAMPLING METHODS & APPROACH.............................................................................. 14-1

12 February 2010 Table of Contents 2-2

ITEM 15 • SAMPLE PREPARATION, ANALYSES & SECURITY ...................................................... 15-1

ITEM 16 • DATA VERIFICATION......................................................................................................... 16-1

ITEM 17 • ADJACENT PROPERTIES ................................................................................................. 17-1

ITEM 18 • MINERAL PROCESSING & METALLURGICAL TESTING ............................................... 18-1

ITEM 19 • MINERAL RESOURCE & MINERAL RESERVE ESTIMATE............................................. 19-1

12 February 2010 Table of Contents 2-3

19.5 Specific Gravity .........................................................................................................................19-22

ITEM 20 • OTHER RELEVANT DATA & INFORMATION ................................................................... 20-1

ITEM 21 • MINING ................................................................................................................................ 21-1

ITEM 22 • PROCESSING ..................................................................................................................... 22-1

12 February 2010 Table of Contents 2-4

ITEM 23 • INFRASTRUCTURE ............................................................................................................ 23-1

ITEM 24 • ENVIRONMENTAL & PERMITTING................................................................................... 24-1

12 February 2010 Table of Contents 2-5

24.4.13 Environmental Monitoring Plan .................................................................................24-18

ITEM 25 • RESULTS OF OPERATIONS .............................................................................................25-1

ITEM 26 • ECONOMIC ANALYSIS ...................................................................................................... 26-1

ITEM 27 • INTERPRETATION & CONCLUSIONS .............................................................................. 27-1

ITEM 28 • REFERENCES..................................................................................................................... 28-1

ITEM 29 • DATE & SIGNATURE PAGE .............................................................................................. 29-1

12 February 2010 Table of Contents 2-6

12 February 2010 Table of Contents 2-7

21.1 Pit Optimization Slope Design Sectors .......................................................................................21-2

12 February 2010 Table of Contents 2-8

18-4 Extrapolated Copper Recovery Curves by Ore Type .................................................................18-8

12 February 2010 Table of Contents 2-9

21-30 Heap Leach Pads As-built End of 2008 ....................................................................................21-28

12 February 2010 Table of Contents 2-10

ITEM 3 • SUMMARY & CON CLUSION S

12 February 2010 Summary & Conclusions 3-1

12 February 2010 Summary & Conclusions 3-2

12 February 2010 Summary & Conclusions 3-3

3.1 LOCATION & ACCESS

Figure 3-1: Piedras Verdes Project Regional Location Map

12 February 2010 Summary & Conclusions 3-4

3.3 MINING CONCESSIONS

12 February 2010 Summary & Conclusions 3-5

Figure 3-2: Mining Concessions

12 February 2010 Summary & Conclusions 3-6

Table 3.1: Mining Concessions Controlled by CDM

12 February 2010 Summary & Conclusions 3-7

3.4 SURFACE RIGHTS