2010 Feed Study - Cobre Panama Project

IMPORTANT NOTICE

This report was prepared exclusively for Minera Panamá, S.A. (MPSA)
by AMEC Americas Limited (AMEC). The quality of information,
conclusions and estimates contained herein is consistent with the level
of effort involved in AMEC’s services and based on: i) information
available at the time of preparation, ii) data supplied by outside
sources and iii) the assumptions, conditions and qualifications set forth
in this report. This report is intended to be used by MPSA only, subject
to the terms and conditions of its contract with AMEC. Any other use
of this report by any third party is at that party’s sole risk.

MINERA PANAMA, S.A.
MINA DE COBRE PANAMÁ PROJECT
FEED STUDY
EXECUTIVE SUMMARY

CONTENTS

1.0 INTRODUCTION ...................................................................................................... 1-1
1.1 Purpose and Objective of the FEED Report ................................................. 1-1
1.2 Terms of Reference ...................................................................................... 1-1
1.3 Scope of Facilities ........................................................................................ 1-2
1.4 Production Summary .................................................................................... 1-4
1.5 Project Background and History ................................................................... 1-5
1.6 Property Description and Location ............................................................... 1-6
1.7 Legal Status.................................................................................................. 1-6
2.0 TECHNICAL SUMMARY.......................................................................................... 2-1
2.1 Geology ........................................................................................................ 2-1
2.2 Mining ........................................................................................................... 2-4
2.3 Metallurgy ..................................................................................................... 2-7
2.4 Waste and Water Management .................................................................... 2-8
2.5 Process Plant ............................................................................................. 2-10
2.5.1 Plant Site Location .......................................................................... 2-10
2.5.2 Process Description ........................................................................ 2-12
2.5.3 Tailings Disposal ............................................................................. 2-14
2.5.4 Port Site Process Facilities ............................................................. 2-15
2.6 Infrastructure/Ancillary Facilities ................................................................. 2-15
2.6.1 Mine/Plant Site ................................................................................ 2-19
2.6.2 Eastern Infrastructure Area ............................................................. 2-19
2.6.3 Port Site Infrastructure .................................................................... 2-20
2.6.3.1 On-Shore Facilities............................................................ 2-20
2.6.3.2 Marine Facilities ................................................................ 2-20
2.6.4 Security Buildings ........................................................................... 2-21
2.6.5 On-Site Roads ................................................................................ 2-21
2.6.6 Access Roads to Site ...................................................................... 2-21
2.6.7 Other Services and Facilities .......................................................... 2-22
2.6.7.1 Water Supply..................................................................... 2-22
2.6.7.2 Power Supply .................................................................... 2-23
2.6.7.3 Pipeline Systems............................................................... 2-23
2.6.7.4 Diesel Storage................................................................... 2-24
2.6.7.5 Solid Waste Management ................................................. 2-24
2.6.7.6 Sewage Treatment ............................................................ 2-24
2.6.7.7 Communications Services................................................. 2-25
2.7 Power Generating Plant ............................................................................. 2-25
3.0 SOCIAL AND ENVIRONMENTAL IMPACT ASSESSMENT ................................... 3-1
3.1 Sustainability Objectives ............................................................................... 3-1
3.2 The ESIA ...................................................................................................... 3-1

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3.3 Stakeholder Consultations and Engagement ............................................... 3-2
3.4 Baseline Studies ........................................................................................... 3-2
3.4.1 Scope of Studies ............................................................................... 3-2
3.4.2 Existing Environmental Conditions ................................................... 3-2
3.4.3 Existing Socioeconomic Conditions .................................................. 3-2
3.5 Impact Assessment ...................................................................................... 3-3
3.5.1 Valued Ecosystem Components ....................................................... 3-3
3.5.2 Potential Environmental Impacts ...................................................... 3-3
3.5.3 Potential Socioeconomic Effects ...................................................... 3-3
3.5.4 Measures to Limit/Mitigate Project Impacts ...................................... 3-4
3.5.5 Residual Impacts and Mitigation ....................................................... 3-4
4.0 MARKETING AND MARINE TRANSPORT OF CONCENTRATE ........................... 4-1
4.1 Concentrate Production ................................................................................ 4-1
4.2 Copper Concentrate ..................................................................................... 4-1
4.3 Molybdenum Concentrate ............................................................................ 4-2
5.0 PROJECT EXECUTION........................................................................................... 5-1
5.1 Project Delivery ............................................................................................ 5-1
5.2 Engineering and Procurement ...................................................................... 5-2
5.3 Access and Transportation ........................................................................... 5-3
5.4 Safety, Environmental, and Community Affairs (SECA) Program ................ 5-3
5.5 Scheduling Considerations ........................................................................... 5-4
5.6 Temporary Infrastructure .............................................................................. 5-5
5.7 Construction Workforce ................................................................................ 5-6
5.8 Security......................................................................................................... 5-6
6.0 LOGISTICS .............................................................................................................. 6-1
6.1 Introduction ................................................................................................... 6-1
6.2 Inbound Freight Volumes ............................................................................. 6-1
6.3 Ocean Transport........................................................................................... 6-3
6.3.1 Ports in Panamá ............................................................................... 6-3
6.3.2 Colón Marshalling Yard .................................................................... 6-3
6.3.3 Barging and Crew Supply Vessel ..................................................... 6-3
6.3.4 Punta Rincón .................................................................................... 6-3
6.4 Road Transport............................................................................................. 6-4
7.0 CAPITAL COST ESTIMATE .................................................................................... 7-1
8.0 OPERATING COST ESTIMATE .............................................................................. 8-1
9.0 FINANCIAL EVALUATION ....................................................................................... 9-1
9.1 Introduction ................................................................................................... 9-1
9.2 Base Case .................................................................................................... 9-1
9.3 Levered Case ............................................................................................... 9-3
9.4 Performance Statistics.................................................................................. 9-4
10.0 KEY RISKS AND OPPORTUNITIES ..................................................................... 10-1

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TABLES

Table 1-1: Mine Production Summary .............................................................................................. 1-4
Table 1-2: Mill Production Details ..................................................................................................... 1-5
Table 2-1: Summary of Mina de Cobre Panamá Resource ............................................................. 2-3
Table 2-2: Mine Production Schedule .............................................................................................. 2-5
Table 2-3: Mineral Reserve Estimates by Classification and Ore Type ........................................... 2-6
Table 2-4: Concentrator Production Summary ................................................................................. 2-8
Table 6-1: Inbound Freight Volumes* (tonnes) ................................................................................ 6-1
Table 7-1: Summary of Capital Costs .............................................................................................. 7-2
Table 8-1: Summary of Operating Cost Estimate ($/t milled) ........................................................... 8-1
Table 9-1: Long-Term Metal Price Assumptions .............................................................................. 9-1
Table 9-2: Summary of Key Financials (base case)......................................................................... 9-2
Table 9-3: Impact of Metal Price Change ......................................................................................... 9-3
Table 9-4: Levered Case Financial Results ..................................................................................... 9-4
Table 9-5: Summary of Base Case Performance Statistics ............................................................. 9-4
Table 9-6: Summary of Levered Case Performance Statistics ........................................................ 9-4
Table 10-1: Key Higher-Risk Items for Project Development........................................................... 10-1

FIGURES

Figure 1-1: General Arrangement of Project Facilities ...................................................................... 1-3
Figure 2-1: Regional Geology and Deposit Locations ....................................................................... 2-2
Figure 2-2: Mineral Resources by Category ...................................................................................... 2-3
Figure 2-3: Layout of Process Plant Area ........................................................................................ 2-11
Figure 2-4: Process Flow Diagram .................................................................................................. 2-13
Figure 2-5: Layout of Mine/Plant Site .............................................................................................. 2-16
Figure 2-6: Layout of Eastern Infrastructure Area ........................................................................... 2-17
Figure 2-7: General Arrangement of Port Site Facilities .................................................................. 2-18
Figure 2-8: Locations of Electricity Supply Components ................................................................. 2-27
Figure 2-9: Power Plant and Port Site ............................................................................................. 2-29
Figure 6-1: Inbound Volumes by Material Type (tonnes/quarter) ...................................................... 6-2
Figure 6-2: Inbound Volumes by Access Points (tonnes/quarter) ..................................................... 6-2
Figure 6-3: Coclecito Access Road – Average Number of One-way Trips Each Day....................... 6-4
Figure 9-1: Sensitivity of After-Tax NPV @ 8% ................................................................................. 9-2
Figure 9-2: Sensitivity Spider Graph for After-Tax IRR ..................................................................... 9-3

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FEED STUDY
E X EC U T I V E S U M M A R Y

1.0 INTRODUCTION

1.1 Purpose and Objective of the FEED Report
The purpose of the FEED Study (Front End Engineering Design) is to describe the status
of the Mina de Cobre Panamá project, in the Donoso District of Panamá, as of 12 March
2010 in sufficient detail for MPSA to pursue international financing options and move on
to the next stage of project delivery. AMEC was retained in early 2007 to develop the
Draft Interim FEED Report (AMEC, 2008), a study produced for Teck Cominco to bring
the Mina de Cobre Panamá project (then known as the Petaquilla project) to full feasibility
level. This FEED Study follows on from that body of work.

The objective of the FEED Study is to produce a capital cost estimate with an accuracy of
+15%/-15% with a confidence level of 80% of estimated final cost based on 10%
completion of engineering.

1.2 Terms of Reference
The FEED Study addresses the mineral resource, mine plan, processing and support
facilities, management of tailings, water, and waste rock, site access, transportation of
materials and equipment, port requirements, power supply, environmental aspects, and
project execution. MPSA commissioned AMEC to prepare this report with input from
MPSA, Inmet, and their various consultants, as listed below.

 Inmet/MPSA
 WLR Consultants, Inc.
 Sim Geological Inc.
 AMEC
 SGS Mineral Services Limited
 G&T Metallurgical Services Ltd.
 Pocock Industrial, Inc.
 Sandwell Inc.
 Swiss Energy LLC
 Golder Associates Ltd.
 Pipeline Systems Inc. (PSI)
 DJB Consultants Inc.
 Estudios Electricos.

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FEED STUDY
E X EC U T I V E S U M M A R Y

1.3 Scope of Facilities
 The mine plan has been developed for the life of mine and includes three open pit
areas: Botija, Colina, and Valle Grande. The FEED Study develops the project
facilities sufficiently to commence production from Botija. In the early years of
production, both Colina and Valle Grande will be brought into production well before
the process plant expansion planned for Year 10.
 The copper concentrate will be pumped as a slurry through a pipeline to the port site
for filtration, storage, and loading into ocean-going vessels for shipment to market
destinations. The molybdenum concentrate will be dewatered at the mine / plant site
and bagged for truck delivery to the port site.
 The new project port site at Punta Rincón will cover close to 28 ha, approximately
one-third of which will be used for laydown and container storage. The power plant,
including ash storage facilities, covers an area of 61 ha. The port will be used for
material import, including coal for the new power generating plant adjacent to the port
site, and for concentrate export. Marine facilities will include a causeway and jetty, a
radial shiploader, a shore-based crane, a main berth for ships from 30,000 dwt to
65,000 dwt in size, a separate berth for barges and costal vessels, and a tug pen.
 Both the mine/plant site and port site operations will be supported by equipment
maintenance shops, warehouses, container storage areas, administration and
security facilities, potable water supply, sewage treatment plants, and gravel batch
plants for use during both construction and operations. A permanent camp will be
established at the mine / plant site for personnel working in both operating areas.
 The independently owned and operated coal-fired power station will generate
300 MW of electricity for distribution to the project and connection to the Panamanian
power grid.
 A new access road will be constructed between the mine/plant site and the port site.
Three pipelines will be buried in the shoulder of the road, one for pumping the copper
concentrate to the port site, one for diesel fuel delivery to the mine, and the third for
returning filtrate water from the dewatered concentrate, together with fly ash from the
power plant, back to the tailings management facility (TMF) at the mine / plant site.
 Another new access road will be constructed from approximately 5.2 km west of
Coclecito to the southeast corner of the TMF. This will permit project traffic to access
the mine site from the Pan-American Highway via the existing road from Penonomé
and avoid the Molejón mine site.
 All facilities are designed to operate continuously, 24 h/d, 365 days per year.

A general arrangement drawing of the project facilities is provided in Figure 1-1.

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Figure 1-1: General Arrangement of Project Facilities

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FEED STUDY
EXECUTIVE SUMMARY

1.4 Production Summary
 Ore from the Botija, Colina, and Valle Grande pits will be treated in a large
concentrator using current technology to produce a copper concentrate and a
molybdenum concentrate for sale on the world market. The concentrator will initially
treat a nominal 150,000 t/d of ore supplied from the Botija pit; later, ore will be
received from the Colina and Valle Grande pits. From Year 10, the concentrator ore
throughput will be increased by 50%, to a nominal 225,000 t/d, to maintain production
of concentrate despite a falling head grade. Crushing, grinding, bulk rougher flotation,
water, and air systems will increase in capacity by 50% to accomplish the increase in
ore treatment rate; all other systems will remain at the same size.
 The metallurgical testwork supports a conventional flowsheet of crushing, grinding,
differential flotation, and filtration designed to process a nominal 150,000 t/d of ore at
a head grade of up to 0.7% copper and 0.013% molybdenum.
 The metallurgical results indicate that the concentrates will be of good quality with no
significant levels of deleterious constituents. A total of 27.289 million dry tonnes of
copper concentrate at a grade of 28% Cu, containing 7.641 million tonnes of copper,
2.690 million troy ounces of gold, and 45.228 million troy ounces of silver, is
scheduled to be produced over the 30-year life of the mine. Production of
molybdenum concentrate is expected to total 185,648 dry tonnes at a grade of 52%,
containing 96,537 tonnes of molybdenum. The molybdenum concentrate will also
contain 520 g/t of rhenium.
 Project cash costs are estimated to average US$0.78/lb during Years 2 to 16 and
US$0.90/lb LOM.

Annual metal production over the life of the mine is shown in Table 1-1, followed by mill
production details in Table 1-2.

Table 1-1: Mine Production Summary
Average Annual Metal Production Total
Metal Years 2–16 Life of Mine Life of Mine
Copper (tonnes) 289,069 254,695 7,640,850
Gold (oz) 108,325 89,674 2,690,230
Silver (oz) 1,544,468 1,507,612 45,228,358
Molybdenum (tonnes) 3,604 3,218 96,537

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Table 1-2: Mill Production Details
Year kt NSR $/t Cu% Mo% Au g/t Ag g/t RCu %* RMo %* RAu g/t* Ag Rec %
Y1
Y1 Q1 5,775 15,04 0.41 0.010 0.08 1.31 0.36 0.006 0.05 47.3
Y1 Q2 10,580 17.47 0.47 0.008 0.11 1.35 0.42 0.005 0.07 47.3
Y1 Q3 12,739 18,99 0.52 0.009 0.11 1.30 0.46 0.006 0.07 47.3
Y1 Q4 13,351 19.69 0.53 0.010 0.11 1.53 0.48 0.006 0.07 47.3
Total Y1 42,445 18.29 0.50 0.009 0.11 1.39 0.44 0.006 0.06 47.3
Y2
Y2 Q1 14,857 20.40 0.55 0.010 0.12 1.43 0.49 0.007 0.07 47.3
Y2 Q2 14,674 20.75 0.56 0.009 0.12 1.42 0.51 0.006 0.07 47.3
Y2 Q3 14,056 19.66 0.53 0.010 0.11 1.31 0.48 0.006 0.07 47.3
Y2 Q4 14,600 20.62 0.56 0.010 0.11 1.51 0.51 0.006 0.06 47.3
Total Y2 58,187 20.37 0.55 0.010 0.11 1.42 0.50 0.006 0.07 47.3
3 57,221 20.73 0.56 0.011 0.11 1.41 0.50 0.007 0.07 47.3
4 57,106 20.67 0.56 0.010 0.11 1.46 0.51 0.006 0.07 47.3
5 55,906 22.00 0.59 0.011 0.11 1.61 0.54 0.007 0.07 47.3
6 57,104 21.88 0.59 0.011 0.11 1.69 0.54 0.007 0.07 47.3
7 56,811 20.61 0.56 0.008 0.14 1.74 0.50 0.005 0.09 47.3
8 56,676 19.23 0.53 0.009 0.09 1.73 0.47 0.006 0.06 47.3
9 54,800 18.74 0.52 0.010 0.09 1.67 0.46 0.006 0.05 47.3
10 80,187 15.47 0.43 0.008 0.08 1.48 0.38 0.005 0.04 47.3
11 82,601 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3
12 82,601 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3
13 82,601 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3
14 82,600 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3
15 82,600 14.22 0.41 0.007 0.06 1.37 0.35 0.004 0.03 47.3
16 84,078 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3
17 84,078 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3
18 84,078 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3
19 84,079 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3
20 84,079 14.22 0.40 0.008 0.08 1.39 0.35 0.005 0.04 47.3
21 73,879 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3
22 73,879 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3
23 73,879 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3
24 73,879 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3
25 73,880 11.97 0.35 0.006 0.05 1.50 0.30 0.004 0.03 47.3
26 81,120 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5
27 81,120 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5
28 81,120 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5
29 81,120 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5
30 38,938 10.12 0.32 0.006 0.05 1.29 0.24 0.003 0.02 37.5
Total 2,142,652 14.60 0.41 0.008 0.07 1.43 0.36 0.005 0.04 45.8
* Recovered grade

1.5 Project Background and History
The potential of the Mina de Cobre Panamá project has been investigated since 1968. A
preliminary feasibility report was prepared by Panamá Mineral Resources Development
Co. Ltd. in 1977 and updated in 1979. In 1994 and 1995, Kilborn Engineering Pacific Ltd.
issued a prefeasibility study and update for Adrian Resources Ltd., a precursor of
Petaquilla Minerals Ltd. and Petaquilla Copper Ltd. In November 1996, H.A. Simons,

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now AMEC, produced a feasibility study for Teck Corporation with a subsequent update in
January 1998.

In May 1998, the updated January 1998 document was submitted to Dirección General
de Recursos Minerales (General Directorate of Mineral Resources, DGRM) of the
Panamanian Ministry of Industry and Commerce, and was accepted as the official
Feasibility Study to satisfy concession law requirements for the delivery of a feasibility
study. The Petaquilla (Mina de Cobre Panamá) concession rights had been granted to
Minera Petaquilla, S.A., now Minera Panamá, S.A. (MPSA), under Panamanian Law No.
9 on 26 February 1997. At that time the shareholders of MPSA were Petaquilla Copper
Ltd., Teck Cominco, and Inmet Mining Corporation.

In September 2008 Inmet acquired Petaquilla Copper Ltd., and in November 2008 Inmet
acquired Teck Cominco’s remaining share in MPSA, taking Inmet to a 100% interest in
MPSA.

In October 2009 Inmet announced an option agreement with LS-Nikko Copper Inc. under
which LS-Nikko has the right to acquire a 20% interest in the Minera de Cobre Panamá
copper project. If LS-Nikko exercises the option, it will receive an equity interest in
MPSA.

The name of the project was changed to Mina de Cobre Panamá in 2009.

1.6 Property Description and Location
The Mina de Cobre Panamá Concession in Colón Province is approximately 20 km north
of the Continental Divide that bisects the northern and southern parts of Panamá. The
process plant site location is N8°50' and W80°38'; the port site location at Punta Rincón is
N9°02' and W80°41'.

The Concession Area is characterized by rugged topography with heavy rainforest cover.
The dominant landforms are relatively narrow ridges that parallel major geological
structural trends and are bisected by numerous surface water drainages.

Climatic conditions are equatorial, with a high average precipitation level of approximately
4,700 mm/a, high humidity, and relatively high temperatures of 25°C to 30°C year-round.

1.7 Legal Status
Inmet Mining Corporation, directly and through several wholly-owned subsidiaries, owns
100% of the shares of Minera Panamá, S.A. (MPSA). Korea Panamá Mining Corp, a
wholly-owned subsidiary of LS-Nikko Copper Inc., has an option to earn a 20% interest in
MPSA by funding its pro rata share of MPSA’s ongoing development costs, to a maximum

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of US$150 million, until a production decision is made, and re-imbursing its prorata share
of past expenditures.

Under Panamanian Ley Petaquilla, or Law No. 9, 1997, the concession rights to the Mina
de Cobre Panamá (then Petaquilla) property were granted to Minera Panamá, S.A. (then
Minera Petaquilla, S.A.). This project-specific law gave MPSA rights over the gold,
copper, and other mineral deposits for the purposes of exploring, extracting, processing,
transporting, and marketing of all base or precious minerals located in the 13,600 ha
Concession Area. The Molejón Gold Project Agreement, executed 1 June 2005 by and
between Teck Cominco Limited, Petaquilla Minerals Ltd. (PTQ), Inmet Mining
Corporation, and Minera Petaquilla, S.A. (now Minera Panamá, S.A.), assigns to PTQ the
surface and mineral rights over 600 ha located within the Concession Area (the Molejón
Concession) to permit PTQ to independently develop the Molejón gold deposit as the first
phase of a multiphase development of the Concession Area. PTQ was also given the
right to explore and mine gold deposits in the larger Concession Area, while MPSA
retains the right to develop any copper deposits on the Molejón Concession.

MPSA will exercise its rights under Law No. 9, 1997, to acquire or lease state lands
located in the proposed TMF area. MPSA has undertaken an investigation of existing
private holders of surface rights and will initiate negotiations for the acquisition of these
properties according to the procedures established by Law No. 9 and other applicable
laws. In the event that lands are occupied, MPSA will adhere to International Finance
Corporation’s Performance Standard 5 in connection with relocation and resettlement of
affected persons and communities. MPSA will also conform with the requirements of IFC
PS 6 regarding protected areas, since the proposed TMF is located within the Donoso
Multiple-Use Area, a form of protected area in Panamá.

At Punta Rincón, where the proposed port site facilities are located, MPSA purchased
surface title to much of the land required for construction and permanent use of the site
between 1998 and 2000. Additional land will be acquired as above.

MPSA is entitled under Law No. 9 to an easement for the Coast Road between the
Concession and Punta Rincón.

In accordance with current Panamanian legislation, MPSA must submit an Estudio de
Impacto Ambiental Category III (ESIA, or Environmental and Social Impact Assessment)
to the environmental authority, Autoridad Nacional del Ambiente (ANAM, or the National
Environmental Authority). ANAM’s approval of the ESIA is the key element of the
permitting process.

More than 150 additional permits have been identified as being required for development
activities such as tree clearing, use of water, and general construction. Other regulatory
agencies include the maritime authority for port facilities and the municipality of Donoso

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for general construction. Application for these permits will proceed in parallel with and
immediately following the ESIA approval process.

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2.0 TECHNICAL SUMMARY

2.1 Geology
Copper-gold-molybdenum porphyry-style mineralization was discovered in central
Panamá during a regional survey by the United Nations in 1968. Exploration by several
companies has since outlined three large deposits and several smaller ones. Drill
programs have been conducted by United Nations Development Program (1968-1969),
Panamá Mineral Resources Development Company (PMRD), a Japanese consortium
(1970-1980), Inmet-Adrian Resources-Teck (1990-1997), Petaquilla Copper (2006-2008),
and Minera Panamá (MPSA) (2007-2009). A total of 1,275 diamond drill holes
(230,555 m) have been completed.

The porphyry deposits occur at the southern margin of a large granodioritic batholith of
mid-Oligocene age (36.4 Ma), in a WNW-ESE-oriented zone with dimensions of 9 km x
4.5 km (Figure 2-1). The three main deposits are Botija, Colina, and Valle Grande. There
are also a number of smaller zones, the most significant being Brazo and Botija Abajo.

All of the porphyry-style mineralization on the property is hosted in granodiorite,
feldspar-quartz-hornblende porphyry, and adjacent andesitic volcanic rocks. At Botija, a
number of north-dipping feldspar-quartz-hornblende porphyry dikes cut the granodiorite.
Two roof pendants of andesitic volcanic rocks occur in the central and eastern margin of
the deposit. At Colina, mineralization is associated with an east-southeasterly trending,
shallow, north-dipping, 2.5 km x 1 km feldspar-quartz-hornblende porphyry sill and dike
complex that intrudes granodiorite and andesitic volcanic rocks. The Valle Grande zone
is associated with a southeast-trending feldspar-quartz-hornblende porphyry lopolith
bounded to the north and south by andesitic volcanic rocks and minor granodioritic dikes.
At Brazo and Botija Abajo, the host rocks are dominantly feldspar-quartz or
feldspar-quartz-hornblende porphyries.

Hydrothermal alteration along the Cobre mineral trend is primarily silica-chlorite, which is
interpreted to be a form of propylitic alteration. Potassic alteration, consisting of salmon
coloured potassium feldspar and secondary biotite, is seen in the central parts of Botija.
Argillic and phyllic alteration is patchy in the three main deposits, with the latter variety
being most prevalent near the tops of the deposits. At Brazo, pervasive sericite, clay, and
pyrite are associated with well-developed quartz stockworks.

Hypogene sulphides occur as disseminations, micro-veinlets, fracture fillings, and
quartz-sulphide stockworks. Chalcopyrite is the dominant copper mineral, with lesser
bornite. Traces of molybdenite are commonly found in quartz veinlets. There is no
significant zone of supergene enrichment at Botija, Colina, or Valle Grande. At Brazo,
supergene mineralization consisting of chalcocite-coated pyrite and rare native copper is
found to a depth of at least 150 m.

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Figure 2-1: Regional Geology and Deposit Locations

The mineral resources for the porphyry deposits on the Mina de Cobre Panamá
Concession were estimated using the entire drill hole and assay database that exists for
the project and a pit shell defined with a copper price of $2.30 per lb and a Cu cutoff
grade of 0.15%. The resources are summarized in Table 2-1 and Figure 2-2.

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Table 2-1: Summary of Mina de Cobre Panamá Resource
Tonnes
Deposit Category (Mt) Cu (%) Mo (%) Au (g/t) Ag (g/t)
Botija Measured 261 0.56 0.009 0.13 1.50
Indicated 907 0.33 0.007 0.06 1.00
Inferred 407 0.21 0.004 0.03 0.70
Colina Indicated 1,178 0.35 0.007 0.05 1.50
Inferred 1,090 0.24 0.005 0.03 1.20
Valle Grande Indicated 671 0.34 0.006 0.04 1.30
Inferred 1,141 0.24 0.005 0.03 1.00
Botija Abajo Indicated 184 0.28 0.004 0.09 0.90
Inferred 287 0.22 0.005 0.07 0.90
Brazo Indicated 71 0.43 0.004 0.12 0.70
Inferred 269 0.27 0.004 0.07 0.60
All Areas Measured 261 0.56 0.009 0.13 1.50
Indicated 3,010 0.34 0.006 0.06 1.20
Measured + Indicated 3,271 0.36 0.007 0.06 1.30
Inferred 3,194 0.24 0.005 0.04 1.00

Figure 2-2: Mineral Resources by Category

Note: Tick marks at 1 km spacing

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2.2 Mining
The mine plan was initially developed from the deposit models produced by MPSA and
Inmet Mining as of 1 November 2009. A series of floating cone analyses were conducted
to determine economic pit limits and the mining phase development sequence for three
mineral deposits in the project Concession Area: Botija, Colina, and Valle Grande. Botija
is immediately northeast of the proposed process plant site, Colina is about 2 km to the
west-northwest, and Valle Grande is roughly 1 km to the southwest.

The floating cone evaluations, mine design, and reserve estimates are based on metal
prices of $2.00/lb Cu, $12.00/lb Mo, $750/oz Au, and $12.50/oz Ag. Recoveries for Cu,
Mo, and Au vary by grade, ore type, and deposit, while Ag recovery is generally fixed
except for deductions for saprock ore. Over the life of the project, concentrator recoveries
will average about 86% for Cu, 59% for Mo, 54% for Au, and 46% for Ag. Weighted
average mining costs of $1.33/t were used in the pit limit analyses, along with base ore
processing and general/administration costs of $3.88/t and $1.49/t, respectively. Grinding
rates will vary by ore type and deposit, which affects the unit ore processing and G&A
costs and, therefore, the cutoff grades used for reserve estimation.

A construction materials quarry and 11 additional mining phases were designed using pit
slope recommendations from AMEC E&E geotechnical engineers and the floating cone
pit shells for guidance. Four principal mining phases, or pushbacks, were generated for
Botija, four for Colina, and three for Valle Grande. A contractor will excavate and
distribute construction materials to project facilities, clear mining areas, and remove
saprolite. The Owner’s mining equipment fleet and crews will be active only in the 11
primary phases, focusing almost exclusively on hard-rock mining.

A mine production schedule was developed using a variable NSR cutoff grade strategy to
increase early revenues to improve overall project returns. Cutoffs will be elevated
significantly during the first seven years of operations and then gradually decline to
internal cutoffs around Year 14. A third grinding circuit will be added to the concentrator
and will commence operation in Year 10, increasing the base ore processing rate from
150,000 t/d to 225,000 t/d. Owner’s preproduction stripping would commence about 15
months before plant start-up.

After completion of the mining phase designs and the open pit sequence and waste rock
storage facility (WRSF) plans, a new model of the Botija deposit was completed in late
January 2010 and subsequently released for mine planning purposes. This model
includes additional in-fill drill hole data, updated geological interpretations, new metal
grade interpolations, minor adjustments to in-situ densities, and updated projections of
daily milling rates based on the latest metallurgical testwork. Milling rates for ore types in
Colina and Valle Grande were also updated, but no other changes were made to the
model of these two deposits (i.e., no new geologic interpretations, densities, or grade

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interpolations from the November 2009 model). Because the milling rates affect unit ore
processing and general and administration (G&A) costs, new cutoff grades were
determined and applied to the open pit sequence plans to re-estimate the mine
production schedule.

Table 2-2 summarizes the resulting mine production and material handling schedule.
Mine operations will be scheduled for two 12-hour shifts per day, 365 days per year. The
concentrator will operate an estimated 29.5 years and will process about 173 Mt of
stockpiled ore during Years 28 to 30.

The changes caused by the new Botija model and milling rates are small. Ore tonnages
within the Botija ultimate pit decreased approximately 3% compared to the previous
deposit model, but copper grades are about 3% higher, resulting in nearly the same
estimates of contained metal. The ore reserves estimated from the open pit sequence
plans are generally within 2% to 3% of target levels computed from the variable grinding
rates. These differences are within resource/reserve estimation error; consequently, the
mining phase designs and open pit sequence plans were not changed.

Table 2-2: Mine Production Schedule
Ore to ROM To Saprock To Low-Grade Waste Rock
Stockpile or Mill Ore Stockpile Ore Stockpile & Saprolite Total Material Contractor Owner
Time Period (kt) (kt) (kt) (kt) (kt) Strip Ratio (kt) (kt)
Prior to M-15 166 1,279 402 55,567 57,414 344.87 57,414 -
PP M-15 to M0 1,306 5,745 4,933 48,902 60,886 45.62 10,021 50,865
Y1 42,445 3,548 16,857 64,674 127,524 2.00 6,729 120,795
Y2 58,187 3,127 20,900 39,745 121,959 1.10 - 121,959
Y3 57,221 - 22,892 25,493 105,606 0.85 2,096 103,510
Y4 57,106 2,504 18,880 34,849 113,339 0.98 10,435 102,904
Y5 55,906 11,425 10,913 31,349 109,593 0.96 6,368 103,225
Y6 57,104 4,610 5,353 40,218 107,285 0.88 8,505 98,780
Y7 56,811 10,782 5,738 52,040 125,371 1.21 12,571 112,800
Y8 56,676 3,725 3,607 60,599 124,607 1.20 7,316 117,291
Y9 54,800 4,220 4,127 57,190 120,337 1.20 - 120,337
Y10 80,187 239 4,365 53,717 138,508 0.73 - 138,508
Y11-Y15 413,003 3,066 - 294,492 710,561 0.72 20,355 690,206
Y16-Y20 420,392 8,484 - 269,593 698,469 0.66 44,664 653,805
Y21-Y25 369,396 2,344 - 135,213 506,953 0.37 - 506,953
Y26-Y30 * 363,418 - - 24,392 387,810 0.07 - 387,810
Total 2,144,124 65,098 118,967 1,288,033 3,616,222 0.69 186,474 3,429,748
* Includes 172,549 kt of ore reclaimed from stockpile in Years 28 to 30

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The Mina de Cobre Panamá project mineral reserve estimates are based on proven and
probable ore; all inferred mineral resources were treated as waste. Table 2-3 presents
the mineral reserves by classification and ore type, based on cutoff grades that vary by
ore type, deposit, and the time period in which the reserves are to be mined.

Total material within the designed ultimate pits is estimated at 3.444 billion tonnes,
resulting in a stripping ratio of 0.61:1 (tonnes of waste per tonne of ore). Contained metal
is projected at approximately 19.6 billion pounds of copper, 361 million pounds of
molybdenum, 4.96 million troy ounces of gold, and 98.7 million troy ounces of silver.

Table 2-3: Mineral Reserve Estimates by Classification and Ore Type
Ore Type kt NSR $/t Cu % Mo % Au g/t Ag g/t
Proven Mineral Reserves
Saprock 4,400 11.78 0.43 0.013 0.11 1.62
Andesite 19,500 16.67 0.45 0.010 0.09 1.05
Porphyry 117,100 24.26 0.64 0.010 0.16 1.74
Granodiorite 104,300 21.25 0.57 0.010 0.13 1.57
Total 245,300 22.15 0.59 0.010 0.14 1.61
Probable Mineral Reserves
Saprock 56,100 9.63 0.39 0.007 0.09 1.49
Andesite 414,700 13.52 0.39 0.007 0.06 1.42
Porphyry 927,500 14.50 0.41 0.007 0.07 1.52
Granodiorite 499,100 12.55 0.36 0.007 0.05 1.20
Total 1,897,400 13.63 0.39 0.007 0.06 1.41
Proven + Probable Mineral Reserves
Saprock 60,500 9.79 0.39 0.008 0.09 1.50
Andesite 434,200 13.66 0.39 0.007 0.06 1.40
Porphyry 1,044,500 15.59 0.44 0.008 0.08 1.54
Granodiorite 603,400 14.05 0.39 0.008 0.07 1.26
Total 2,142,600 14.60 0.41 0.008 0.07 1.43
Note: Estimates based on metal prices of $2.00/lb Cu, $12.00/lb Mo, $750/oz Au, $12.50/oz Ag, and
variable NSR cutoff grades

The following primary equipment will be required for the peak mining rates during Years
11 to 20:

 7 blasthole drills ................................................ 311 mm diameter, 60 tonne bit loading
 4 electric shovels .............................................. 55 m3
 2 front-end loaders ............................................ 38 m3
 36 off-highway haul truck .................................. 360 t payload
 2 crawler dozers ............................................... 635 kW (D11-class)
 8 crawler dozers ............................................... 435 kW (D10-class)

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 4 rubber-tired dozers ........................................ 370 kW (834H-class)
 2 motor graders ................................................ 400 kW (24M-class)
 3 motor graders ................................................ 220 kW (16M-class)
 3 water trucks ................................................... 80,000 litre (96 tonne)

Mine workforce levels will vary between about 317 and 563 people during the operating
years, depending on production rates and haulage distances. This includes both salaried
and hourly workers, expatriates, and nationals. Four rotating crews will provide
continuous operator and maintenance coverage in the mine.

2.3 Metallurgy
The property has been investigated on behalf of several owners since 1968, and
preliminary feasibility studies and prefeasibility studies were done in 1977, 1979, and
1994; feasibility studies were produced in 1994 (updated in 1995), 1996, and 1998. In all
of these studies, testwork was done commensurate with the requirements of the times;
the study produced in 1997 and published in early 1998 (Teck Corporation Petaquilla
Feasibility Study, Simons Project No. U11G, Volume 1, January 1998) built mostly upon
work done in the earlier studies.

In 1997, an extensive program of metallurgical testing was designed to confirm earlier
work on the metallurgical response of material from the Botija and Colina deposits. Most
of the work was done at Lakefield Research Ltd., Lakefield, Ontario. Grinding, flotation,
dewatering, and mineralogical work were performed as part of this program. In addition
to the Lakefield work, locked-cycle flotation testwork and modal analysis were performed
at G&T Metallurgical Services Ltd., Kamloops, B.C. (G&T) to assist in defining grind
requirements for both rougher and cleaner flotation. Copper-molybdenum separation by
differential flotation was conducted by International Metallurgical and Environmental,
Kelowna, B.C. (IME). The metallurgical work done for the present study has built upon
the 1997/1998 study with some knowledge of, but no reliance on, work performed before
that time.

The testwork before 2007 was based on large composite samples, and the results,
particularly for flotation testing, could not be used for interpreting the variability of
response for material within the deposits. Consequently, a large sampling program was
undertaken in 2008/2009 to bolster the knowledge from previous work and provide the
missing insight into the variability of response. A total of 16 special holes for metallurgical
grinding and flotation tests were drilled in the Botija, Valle Grande, and Colina orebodies.
Sample preparation, flotation testing, and testing of flotation products were done primarily
at G&T. Grinding work was conducted at SGS Mineral Services, Lakefield, Ontario, and
at Philips Enterprises LLC, Golden, Colorado.

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The program resulted in:

 additional geological data
 a comprehensive suite of grindability parameters, leading to new throughput
estimates
 additional flotation response data for estimating concentrates production and
operating costs
 sample materials for marketing purposes
 additional design data for solid-liquid separation, regrinding, and pipeline design.

The resulting life-of-mine production data are shown in Table 2-4.

Table 2-4: Concentrator Production Summary
Parameter Unit Years 2-20 Years 21-30 Life of Mine
Throughput tonnes 1,367,393,000 732,814,000 2,142,652,000
t/a 71,968,053 73,281,400 71,421,733
t/d 197,173 200,771 195,676
Head Grade % Cu 0.46 0.34 0.41
% Mo 0.008 0.006 0.008
g/t Au 0.08 0.05 0.07
oz/t Ag 1.46 1.39 1.43
Recovery % Cu 88.4 79.5 85.9
% Mo 61.9 53.1 59.0
% Au 57.2 44.6 54.3
% Ag 47.3 42.8 45.8
Copper Concentrate Production t/a 1,033,685 697,813 909,625
% Cu 28 28 28
Molybdenum Concentrate t/a 7,090 4,741 6,188
Production % Mo 52 52 52

2.4 Waste and Water Management
Three general forms of waste will be generated as a direct result of project construction
and mining operations: earthworks construction waste, mine process tailings, and pit
waste.

Earthworks construction waste, such as organics, unsuitable foundation material, and
over-wet material, will be stored in waste rock storage facilities (WRSFs) or spoil piles, in
the TMF, or in separate stockpiles for use during closure and reclamation.
Comprehensive erosion and sediment control measures will be implemented to minimize
sediment transport downstream of the work areas.

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For the first 22 years of the 30-year mine life, tailings will be stored in the TMF. For the
last 8 years, tailings will be deposited in mined-out pits (first Botija, then Colina). Tailings
will be transported from the plant site through a pump and pipeline system. Water from
the TMF and later the backfilled pits will be recycled to the mill for use as process water.

The TMF will be contained by means of several dams – North, East, West, and South –
with a total ultimate length of about 11 km and an average height of approximately 80 m.
Saprolite will be used for the North and East starter dams, but the bulk of the structures
will be constructed of hydraulically placed cycloned sand produced from the mill tailings.
The starter dam for the South Dam, as well as its annual raises, will be constructed of
saprolite. The West Dam will be constructed as a water-retaining structure with a
saprolite core, granular filters, and upstream and downstream rockfill shells.

In terms of water storage within the TMF, the design for the facility includes provision for
contingency storage equivalent to the 1-in-1,000-year return period storm, 24-hour
duration rainfall event. Emergency spillways capable of passing the 24-hour PMP will be
maintained during operations. The closure spillway will be designed to operate in
perpetuity, as required, and to convey the 24-hour PMP. Drainage blankets and
collection ponds at the tailings dams will manage construction water from the ongoing
cyclone sand operations, the associated runoff from these operations, and rainfall events.
Excess water in the TMF will be pumped to a polishing pond by means of an active
discharge system and then released to Río del Medio, downstream of the North Dam.

Mine waste, including saprolite, weakly weathered rock, and competent rock, will be
placed in the WRSFs developed near the pits. The WRSFs will be constructed by
end-dumping. Weaker material – saprolite and weathered rock – will be stored upslope
and away from the toe foundation areas. Encapsulation techniques will be used to
manage potentially sulphide-rich (reactive) waste rock. The saprolite storage facility will
be constructed by end-dumping saprolite and pushing it into place with a dozer. Waste
rock roads along low areas and creek bottoms will aid in drainage of the saprolite waste
and enhance trafficability on the saprolite.

With nearly 5 m of precipitation falling at the site every year, including very intense rainfall
events of considerable duration, water management will be a key and integral part of
project construction development and operation.

Water inflows to the open pits will be managed through a series of diversion ditches
constructed around the top bench of each pit to route non-contact water from the
upstream catchment areas. The diversion structures will be lengthened as the pit shell
increases over time. Non-contact water collected in the diversions will be diverted to the
environment. Pit water derived from direct precipitation or seepage will be pumped from
the pit to the process water reservoir. A sediment pond will be required for pre-stripping

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during preproduction construction, as this water will be released directly to the
environment.

The WRSFs will be constructed at the headwaters of Río Botija, Río Petaquilla, and Río
del Medio. As such, most of the facilities will require minimal non-contact water diversion
ditches. Collection ponds will be needed during operations, however, to collect seepage
and runoff from the WRSFs. The collected water will be pumped to the TMF. Sediment
ponds will be required for construction of the low-grade ore stockpile and saprolite WRSF
during preproduction to manage runoff water, sediment control, and TSS levels, as this
water will be released directly to the environment until the TMF is constructed.

Site grading at both the mine/plant and port sites will incorporate sloping, ditching, and
sediment ponds as required to manage runoff water.

The access road will incorporate a series of culverts and bridges to handle water from
intersected watercourses. Ditches along the road section will concentrate and direct
water to the nearest water management structure.

Erosion and sediment control will be a significant issue throughout site development,
construction, and operation of the Mine de Cobre Panamá project. The need for such
control is based on the climate, surficial geology (primarily saprolite) at the site, local
experience, and experience at sites with similar conditions elsewhere. Erosion control
measures will include lining all diversions, ditches, and ponds excavated in or constructed
using saprolite with processed granular materials such as filters and rip-rap; providing
flocculant stations at the sediment ponds; and protecting fill slopes with a combination of
geosynthetic liners and vegetation. These structures will need to be maintained and
reconstructed throughout the project life.

2.5 Process Plant
2.5.1 Plant Site Location
The locations of the process plant and ancillary facilities at the mine/plant site are shown
in Figure 2-3. The facilities are centrally located with respect to the three open pits and
associated WRSFs. The available area is rather limited, but the layout has been
designed for efficient material flow and personnel access to the buildings.

The facilities will be constructed along ridgelines or on hill tops to maximize the use of
gravity for milling, flotation, and tailings discharge, to minimize cut-and-fill quantities, and
to place the structures on competent ground.

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Figure 2-3: Layout of Process Plant Area

Process Water Pond
Bulk
Thickener
Plant Maintenance Shop
Copper
Thickener

Laboratory
Site of Future 3rd Line
Flotation

Site of Future Stockpile Reagents
Main
Substation

Coarse Ore Stockpile

Process Water Tanks

Service Vehicle Shop
Truck Shop

ROM Stockpile

Primary Crushers

Based on analysis of the available geotechnical data, it has been determined that the
surface is underlain by approximately 8 m of saprolite followed by 14 m of saprolitic rock
above bedrock. Further investigative work will be required to better define the subsurface
conditions to optimize foundation design during the next phase of work.

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The plant site ranges in elevation from 194 m at the mill feed end to 168 m at the bulk
concentrates thickener at the opposite end. This arrangement enhances the sloping
design of the process plant, providing gravity flow through the process from the mill down
through the flotation circuit. The elevation of tailings discharge from the plant, at
nominally 172 m, also provides gravity flow down to the TMF, although some pumping will
be required for tailings distribution around the beaches of the impoundment from Year 10
onward.

Site grading will incorporate sloping, ditching, and sediment ponds as required to manage
excess runoff from heavy precipitation events. The stabilized slopes of the final
embankments are expected to generate very little sediment load, however, and runoff
from non-contact areas will generally be allowed to follow the natural watercourse down
to the Botija drainage channels. Contact water will be routed to join drainage from the
WRSFs for ultimate disposal in the TMF.

2.5.2 Process Description
Ore from the Botija, Colina, and Valle Grande pits will be treated in a concentrator to
produce a copper concentrate and a molybdenum concentrate for sale on the world
market. Initially, the concentrator will treat nominally 150,000 t/d of ore supplied from the
Botija pit; later, ore will be received from the Colina and Valle Grande pits. From Year 10,
the concentrator ore throughput will be increased by 50%, to a nominal 225,000 t/d, to
maintain production of concentrate despite a falling head grade. Crushing, grinding, bulk
rougher flotation, water, and air systems will increase in capacity by 50% to accomplish
the increase in ore treatment rate; all other systems will remain at the same size.

The process plant is designed to process ore at a head grade of 0.7% Cu and
0.013% Mo. These levels are higher than the highest sustained head grades of
0.58% Cu and 0.011% Mo expected to be mined in Year 5, but the design provides the
flexibility to accommodate a wide range of head grades over the project life. The plant
design also allows for 15% day-to-day fluctuations in throughput. The process includes
the following facilities:

 crushing and grinding to liberate minerals from the ore
 froth flotation to separate most of the copper and molybdenum minerals from minerals
of no commercial worth
 differential flotation to separate the copper and molybdenum minerals from each other
 facilities to store tailings and provide reclaim water for the process
 facilities to remove water from the products and to ship concentrates to market.

A simplified flow diagram is provided in Figure 2-4.

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Figure 2-4: Process Flow Diagram

Pebble
Open Pit Mine Crushers (2) Cyclone Cluster (4)

SAG Mills (2)

Primary Screens
Crusher
Coarse
Ore
Stockpile Ball Mills (4)

Tailings to Impoundment
Rougher Flotation
(4 banks of 7) st
Potentially Acid-Generating
1 Cleaner Flotation (2 banks of 8)
Tailings to Impoundment

Regrind Cyclone
Vertimills Cluster (2) Bulk Conc.
(4) Thickener To Process Water

Mine
2nd Cleaner 3rd Cleaner
Bulk Site
Flotation (6) Flotation (4)
Concentrate
o/f Storage
Tanks (2)
Port

Mo Rougher Pipelines (32 km)
Mo Mo Scav.
Flotation
Conditioner Flotation Overflow
Mainline
Cu Conc. Cu Conc. Pumps (2x5)
Thickener Storage Tank (2) Thickener/
nd
2 Mo Clnr Clarifier
Flotation
Cu Conc
1st Mo Storage Tank
Clnr (2)
Regrind Vertimill Mo Bins Copper
Flotation Filter Filters (4)

Shiploader

Mo Conc.
Mo Dryer Packing
Cu Conc. Loadout
3rd Mo Clnr 4th Mo Clnr 5th Mo Clnr Mo Concentrate
Flotation Flotation Flotation Thickener

Run-of-mine (ROM) ore will be delivered by haul truck to the dump pockets of two primary
gyratory crushers installed in a single in-ground concrete structure close to the rim of the
Botija pit. A 400,000 tonne ROM stockpile will be located close to the crushers to provide
a 2½-day supply of ore for times when weather conditions preclude hauling ore out of the
pit. The ROM stockpile will be operated on a first-in, first-out basis to prevent the
accumulation of aged ore.

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Separate feeders and take-away conveyors will move the ore from each crusher to a
series of conveyors, which will discharge the ore onto a conical coarse ore stockpile at
the concentrator. Provision will be made at the transfer point between the two overland
conveyors to accept mill feed from future crushed ore sources. The coarse ore stockpile
will hold a 2½-day supply for the mill, 15 hours of which will be available to the reclaim
feeders without the assistance of a bulldozer.

Two trains of feeders and conveyors will draw ore from below the coarse ore stockpile
and feed two parallel wet-grinding lines, each consisting of a semi-autogenous grinding
(SAG) mill and two ball mills, all equipped with gearless drives. The SAG mill circuits will
be closed by trommel screens followed by washing screens; conveyors will deliver screen
oversize to pebble crushers. The pebble crushing circuits will include pebble bins, cone
crushers, and a bypass arrangement. Crushed pebbles will return to the SAG mills via
the feed conveyors. From Year 10 of operation, another coarse ore stockpile and
grinding line will be added to increase the ore treatment rate.

Discharge from each SAG mill will be evenly split between two ball-mill circuits. The four
ball-mill circuits will be closed by hydrocyclones. Ground slurry will be directed to a
flotation circuit where a bulk sulphide concentrate, containing copper, molybdenum, and
gold values, will be collected and concentrated in a rougher followed by three stages of
cleaner flotation. The roughers and first cleaners will be tank cells, while the second and
third cleaners will be column cells. Before cleaning, rougher concentrate will be reground
in vertical stirred mills. From Year 10, a 50% increase in rougher capacity will be required
to accommodate the increase in throughout, but the amount of copper will be the same;
therefore, no change to the existing downstream regrind and cleaning capacity will be
needed.

When the molybdenum head grade warrants operating the molybdenum plant, the bulk
concentrate will be thickened in a conventional thickener (with no flocculant) and pumped
to a differential flotation plant, where copper minerals will be depressed, and molybdenite
will be floated into a molybdenum concentrate. The molybdenum concentrate will be
filtered, dried, and packaged in tote bags for shipment to offshore roasters. Tailings from
the molybdenum flotation circuit will constitute the copper concentrate, which will be
pumped approximately 30 km to a filter plant at the project port site on the Caribbean
coast. If the molybdenum head grade is very low, the molybdenum separation plant will
be bypassed.

2.5.3 Tailings Disposal
Rougher tailings, found in testwork to be non-acid-generating, will be piped by gravity to a
cyclone house at the south end of the TMF. Coarse material in the tails will be used to
construct sand dams to contain the tailings; about half of the coarse tailings will need to
be cycloned to provide enough material. Cyclone underflow (sand) will be spigotted onto

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the downstream faces of the dam, and cyclone underflow and uncycloned tailings will be
distributed around the upstream faces of the dams and onto the beaches of the TMF.
Cleaner tails are presumed to be potentially acid generating and will be directed by
gravity in a separate line for subaqueous discharge in the TMF.

Direct precipitation into the TMF, together with contact water directed to the facility from
the WRSFs and other disturbed land in the area, will result in a net excess of water in the
TMF. Some of this water will be recycled back to the process plant by barge-mounted
pumps. Excess water will be discharged at a controlled rate to the natural watercourses
downstream of the impoundment, via a polishing pond, and will meet all applicable
emission limit values and receiving water quality criteria.

2.5.4 Port Site Process Facilities
Copper concentrate will be pumped to the port through a pipeline buried in the shoulder of
the Coast Road and directed to a thickener-clarifier, and the thickened underflow will be
pumped to concentrate stock tanks. Concentrate from the stock tanks will be filtered in
automatic presses. Dry filter cake (8% to 9% moisture) will be stored in a covered
building with up to 100,000 tonnes of storage capacity, equivalent to approximately 30
days’ production. Concentrate will be reclaimed from the storage building and fed onto
conveyors by front-end loaders for transfer to the berth and loading onto bulk freighters.

Filtrate water from the presses and various concentrate-contact waste streams from the
plant will be collected in the thickener-clarifier. Thickener underflow will join the filter feed,
and the overflow will be used for process water. Excess water will be pumped through a
return water line to the TMF at the mine site; fly ash from the power plant will be slurried
and injected into the return water pipeline for disposal in the TMF.

2.6 Infrastructure/Ancillary Facilities
Various project support facilities will be provided at the mine site and the port site. The
mine site facilities are divided into two areas: the mine/plant site, which includes buildings
and structures for repair and maintenance of mine and plant equipment, and the eastern
infrastructure area, which includes facilities for personnel accommodations,
administration, and security. The port site includes facilities for concentrate storage and
load-out to ocean-going vessels, coal receiving facilities, a barge berth, and
inbound/export freight handling and storage facilities.

Layouts of the mine/plant site, eastern infrastructure area, and port site are shown in
Figures 2-5, 2-6, and 2-7.

March 2010

MINERA PANAMA, S.A.
FEED STUDY
EXECUTIVE SUMMARY

Figure 2-5: Layout of Mine/Plant Site

March 2010

MINERA PANAMA, S.A.
FEED STUDY
EXECUTIVE SUMMARY

Figure 2-6: Layout of Eastern Infrastructure Area

March 2010

MINERA PANAMA, S.A.
FEED STUDY
EXECUTIVE SUMMARY

Figure 2-7: General Arrangement of Port Site Facilities

March 2010

MINERA PANAMA, S.A.
FEED STUDY
EXECUTIVE SUMMARY

2.6.1 Mine/Plant Site
Support infrastructure for the mine and plant operations includes a truckshop, surface
vehicle shop, mill maintenance shop, fuel storage depot, substation, container storage
and laydown, facilities for storing and preparing blasting agents, process water pond,
process and fire water tanks, and site roads.

The mine truckshop will be the main services complex on site, containing maintenance
facilities for the mine mobile equipment fleet, warehouse space, a machine shop, offices,
and the mine dispatch centre.

A mine service vehicle shop will be provided for all light- and medium-duty vehicles such
as non-mining mobile equipment, road transport vehicles, personnel buses, and pickup
trucks.

Facilities for a licensed blasting contractor will be provided on the opposite side of a ridge
south of the plant site area. The foundations will be cut into the hillside to provide a
natural barrier to protect the mine/plant facilities as well as the nearby Molejón mine
property to the southeast.

2.6.2 Eastern Infrastructure Area
The eastern infrastructure area, about 4 km to the east of the plant site, will be used for
the mine site construction camp, the permanent camp, the administration building, the
construction power plant, and the 230 kV switchyard.

The construction camp will be sized for 3,500 workers and the permanent camp for 1,200
workers, including those employed at the port site during operations. A separate
900-person construction camp will be provided at the port site.

The main administration building will include a reception area, a small training room, and
other standard office features. An elevator will be provided for full accessibility. A
separate training facility adjacent to the permanent camp will be equipped to provide all
training functions for the mine and mill.

A medical clinic will be equipped to treat general injuries and sicknesses, stabilize serious
cases for medivac to off-site health facilities, and dispense drugs and medications. The
clinic will have 12 beds, 6 of which will be in single rooms with adjoining washrooms. The
facilities will include an emergency operating room, recovery room, x-ray room, two
consulting/examination rooms, pharmacist’s office, doctor’s office, nurse’s office, nursing
station, waiting room, and related support services, including a mortuary-type cold
storage drawer. The clinic will initially be installed near the construction camp facility and
relocated closer to the operations camp at the end of the construction phase of the
project.

March 2010

2010 Feed Study - Cobre Panama Project

2010 Feed Study - Cobre Panama Project

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