Amancaya

Elemental acquired a 2.25% NSR royalty on the Amancaya gold-silver mine in July 2018. In 2019, Amancaya provided US$1.9m in gross royalty revenue to Elemental.

The Amancaya mine is located in northern Chile approximately 200km south east of Antofagasta. The mine was acquired by Austral Gold Ltd (ASX: AGD) in 2014 from Yamana Gold (TSX: YRI), after which open pit operations began in March 2017.

Conventional open-pit mining is focussed on the Central Vein, carried out using 30t trucks and a combination of excavators and front-end loaders. Ore from Amancaya is currently mined at 400-500tpd then trucked about 70km to Austral’s new plant at the Guanaco mine where material is batch processed due to its higher silver content. Ore is crushed and processed by a 1,500tpd agitation leach plant before a pregnant solution is passed into a Merrill-Crowe circuit where gold and silver doré is produced. Decline development has commenced to establish underground ore sources to complement open-pit production.

Exploration to date at Amancaya represents the early development of a small part of an extensive vein swarm where the extent and pattern of low sulphidation epithermal veining appears similar to that at the 20yr ~10MOz @ 7.5g/t AuEq El Penon mine in same region. Numerous epithermal veins have been mapped since 2016 and significant areas of the licence remain covered by later volcanics and thin sediment cover.

Exploration Potential

Most current exploration is concentrated on understanding and extending the Central Vein, with preliminary work elsewhere in the tenement very encouraging with strong rock chips, trenching and reconnaissance drilling. The Nueva Vein has been identified as a prime target to the north, and it is noted that substantial portions of the lease are under younger volcanics and recent sedimentary cover.

For further information please visit the Austral Gold website.

• Unless otherwise noted, the disclosure contained on this website of a scientific or technical nature for the Amancaya mine is based on Austral Limited’s 2020 Annual Report dated March 17, 2020. The report is prepared in accordance with NI 43-101 and is available on the Austral Gold’s website at www.australgold.com and SEDAR at www.sedar.com and a technical report prepared for Austral Gold Limited pursuant to NI 43-101 entitled “Technical Report on the Guanaco and Amancaya Gold Project, Antofagasta Region, Chile”, dated June 16, 2017, and effective December 31, 2016.

• Open pit Mineral Resources are reported at a cut-off grade of 1.5 g/t AuEq. Pit optimization shells were used to constrain the resources. Underground Mineral Resources are estimated at a cut-off grade of 2.5 g/t AuEq beneath the open put shells. Cut-off grades for the Mineral Resources were established using a gold price of US$1,300 per ounce and a silver price of US$20 per ounce. Mineral resources have been updated to account for depletion from mining activities by an Austral Gold employee who is a Qualified Person as per NI 43-101 and a CP as per JORC 2012. Austral has publicly confirmed that it is not aware of any new information or data that materially affects the information included in the original market announcement on June 13, 2017 and, in the case of estimates of Mineral Resources or Mineral Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.

• Information included on this website with respect to each of the royalties has been prepared in accordance with the exemption set forth in section 9.2 of NI 43-101. Richard Evans, FAusIMM, is Senior Vice President, Technical for the Company and a qualified person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has reviewed and approved the scientific and technical disclosure.

• Certain Resource and Reserve estimates covering properties related to certain mining assets in this website have been prepared in reliance upon the JORC Code. Estimates based on JORC Code are recognized under NI 43-101 in certain circumstances. In each case, the Mineral Resources and Mineral Reserves included in this website are based on estimates previously disclosed by the relevant property owner or operator, without reference to the underlying data used to calculate the estimates. Accordingly, the Company is not able to reconcile the Resource and Reserve estimates prepared in reliance on JORC Code with that of CIM definitions. The Company previously sought confirmation from its Qualified Person who is experienced in the preparation of Resource and Reserve estimates using CIM and JORC Code, of the extent to which an estimate prepared under JORC Code would differ from that prepared under CIM definitions. The Company was advised that, while the CIM definitions are not identical to those of JORC Code, the Resource and Reserve definitions and categories are substantively the same as the CIM definitions mandated in NI 43-101 and will typically result in reporting of substantially similar Reserve and Resource estimates.