Santa Rita Mining Joint Venture

The Rosita D Joint Venture is a joint venture between Calibre Mining (30%) and Rosita Mining (70%). On October 25, 2018 Calibre Mining and Rosita Mining entered into a joint venture agreement with Century Mining (“Century”) for the further development and advancement of the Rosita D Joint Venture (the “Project”) in Northeastern Nicaragua.

Pursuant to the JV Agreement Calibre and Rosita Mining have agreed with Century that they will form a new Nicaraguan joint venture company, Santa Rita Mining, with Century ultimately holding 75% of the outstanding shares and Rosita Mining and Calibre holding 17.5% and 7.5% of the outstanding shares respectively.  Century will contribute a total of US$8.5 million to Santa Rita Mining in tranches of $1.5 million and $7.0 million which funds will be used for the construction, commissioning and operation of the processing facility to treat the Santa Rita stockpile resource on the Rosita D Project.

As previously announced via press release by Rosita Mining on October 11th the Project has received the Environmental Permit to proceed with the processing plant.  With funding concluded, further engineering, final land status work and other technical aspects of Project Development can proceed.

Calibre and Rosita Mining will transfer the Rosita D Concession as well as all technical know how of the Project to Santa Rita Mining for their interest in the joint venture company.  Calibre will also receive a one-time payment of $50,000 for certain surface rights associated with the Project.

A Preliminary Economic Assessment on the Rosita D Project and the processing of the Santa Rita Stockpile Resource was completed by Rosita Mining in 2016.  The Preliminary Economic Assessment is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.  The reporting of the investment by Century is not an indication that a production decision has been made by Calibre and the Company confirms that it has not made a production decision with respect to the Project. The Company has not completed a feasibility study or established the economic viability of the Project or proposed operations on the Project, and no mineral reserves have been established for the Project that would support a production decision. Projects which are put into production without first establishing mineral reserves and completing a feasibility study have historically had a higher risk of economic or technical failure

The town of Rosita and the Rosita D Joint Venture are located in the North Caribbean Coast Autonomous Region (RACCN) of northeastern Nicaragua, approximately 275km northeast of the capital city of Managua. Rosita is one of the original towns in the historic mining triangle of Nicaragua (Triangulo Minero) which together with Siuna and Bonanza have combined to produce more than 5.0 million ounces of gold, 4.0 million ounces of silver and 305 million pounds of copper (Arengi, 2002). The Bonanza Mine located 24 kilometers to the northwest of Rosita is currently in operation.

The historic Rosita (Santa Rita) open pit copper mine (skarn) is located at the eastern end of the town of Rosita, within the Alder optioned Rosita D concession. The concession covers a 33.6 km2 area and is located in the center of Calibre’s eastern Borosi concessions. Formal mining in the Rosita area dates back to 1906 with total historic production from the mine estimated at 305 million pounds of copper, 177,737 ounces of gold, and 2,629,720 ounces of silver from 5,924,572 tons of ore. Average historic grades from the mine were calculated at 2.06% Cu, 0.925 g/t Au, and 15.08 g/t silver (Arengi, 2002). The Rosita D concession is prospective for Cu-Au skarn and porphyry Cu-Au mineralization.

Work completed by Rosita Mining has included trenching, surface sampling, geologic mapping and diamond drilling at five high priority targets (Santa Rita, R13, R13 West, Tipispan and T3). A map of the prospects is shown below. The mineralization is related to mid-Cretaceous or later multi-phase intrusions that lie in contact with the early Cretaceous calcareous host sediments. The mineralized zones show a strong northeast and northwest structural control with grades and widths being higher near structural intersections.

Results from the Rosita D exploration program include: 12.1 metres grading 5.21% Cu, 4.4 g/t Au and 44 g/t Ag (Tipispan); 29.0 metres grading 2.09% Cu, 0.19 g/t Au and 14.6 g/t Ag (T3); 30.0 metres grading 0.8% Cu, 0.31 g/t Au and 14.7 g/t Ag (Santa Rita); 8.0 metres grading 29.54 g/t Au (Santa Rita gold zone). Work has identified a series of targets including Santa Rita, R13, R13 West, Tipispan and T3 prospects with multiple mineralized zones ready for additional drill testing.

In February 2016 the Rosita D Resource Update included; Stockpile resources upgraded to Indicated category, Total gold and copper resources increased from the 2012 estimate by 24% and 8% respectively, and the maiden tailings resources estimated.

The resource estimate in stockpiles totals 70.9 million lbs. of copper and 96,660 oz. of gold and 46.2 million lbs. of copper and 50,330 oz. of gold in the Indicated and Inferred categories respectively. Indicated resources total 6.46 million tonnes grading 0.47 grams gold per tonne and 0.5% copper per tonne whilst Inferred resources total 3.44 million tonnes grading 0.46 grams gold per tonne and 0.61% copper per tonne in a series of stockpiles located near the former producing Santa Rita gold-copper open pit mine. These estimates have been based on a US$10 net smelter return (“NSR”) cut off. In addition, the Company is also reporting maiden Inferred resources of 1.96 million tonnes grading 0.56 grams gold per tonne at cut-off of 0.3 g/t gold in tailings located proximal to the Santa Rita stockpiles. 

The results of these resource estimates, which are summarized in Table below, were prepared by Yungang Wu., P. Geo., an independent Qualified Person as defined by NI 43-101. 

Table- Indicated and Inferred Mineral Resource Estimate, Santa Rita Stockpiles and Tailings

ZONEClassTonnesAu
(g/t)
Au
oz
Cu
%
Cu
(lbs)
Ag
(g/t)
Ag
oz
StockpileIndicated6,460,0000.4796,7000.570,968,8007.31,520,500
Stockpile TotalInferred3,437,0000.4650,3000.6146,284,0008.7957,500
TailingsInferred1,956,0000.5635,2000.218,816,0009.7607,000
TOTALInferred5,393,0000.4985,5000.4655,100,0009.01,564,500
ZONEClassAuEq g/tAu Eq oz
StockpileIndicated1.21251,526
Stockpile TotalInferred1.36150,279
TailingsInferred0.9761,058
TOTALInferred1.22211,337

1. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.
2. A gold price of US$1,200/oz, copper price of US$2.5/lb and silver price of US$16/oz were utilized in the NSR calculations of block values with process recoveries of 80% for gold, 35% for Cu (10% deducted for smelting) and 65% for silver. These values were equated against a cut-off grade of US$10 for stockpiles and 0.3 g/t Au for tailing mineral resources.
3. For the cut-off grade, mining costs were assumed at US$1.00/t, process costs at US$7.50/t and G&A costs at US$1.50/t
4. CIM definition standards were followed for the resource estimate.
5. Numbers may not add exactly due to rounding.
6. Mineral Resources that are not mineral reserves do not have economic viability
7. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been
insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.

The updated NI 43-101 resource estimates incorporated the results of a reverse circulation drilling campaign completed by Rosita in the fourth quarter of 2015. This work included 1,040 m of drilling in 55 vertical in-fill holes on five stockpiles located near the former Santa Rita open pit and 87 auger holes totaling 460 metres in a portion of the tailings piles, drilled in 2012 and 2013. Drilling to test the tailings only tested a small portion of the overall tailing piles which remain open for possible resource expansion

The stockpiles at the project were generated over a 17-year operating life from 1959 to 1975 at the Santa Rita open pit mine. A total of 5.4 million tonnes averaging 2.06% copper, 0.93 grams gold and 15.08 grams silver per tonne were mined. In addition to the stockpile resources, the concessions also include 15 exploration targets for gold-copper skarn and porphyry mineralization.


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