Ayawilca

Geology and Mineral Resources


GEOLOGY

Zinc mineralization was discovered at Ayawilca in 2012 while the Company was seeking to expand its silver resources at Colquipucro. Zinc mineralization at Ayawilca lies at depths of between 150 metres to 450 metres from surface. It is a “blind” deposit and therefore does not outcrop. Mineralization occurs in the form of flat-lying sulphide ‘mantos’ typically ranging from 6 to 30 metres thick, up to 50 metres thick in individual mantos. At West and South Ayawilca, mantos are stacked on top of each other to form almost vertically continuous mineralization up to 200 metres in thickness. Zinc in the resources occurs as sulphide, both as marmatite and sphalerite accompanied by pyrite, pyrrhotite, and magnetite with minor galena and other base metal sulphides. Zinc is typically accompanied by high levels of indium (“In”), a high value specialty metal used in the hi-tech industry. Company geologists believe there are many similarities in style of mineralization between Ayawilca and Cerro de Pasco, a style of 'carbonate replacement deposit' or "CRD".

Both zinc and tin mineralization at Ayawilca is predominantly hosted by the Pucará Group limestones, a Triassic-Jurassic formation between 100 and 200 metres thick, in turn overlain by flat-lying Goyllarisguizga (“Goyllar”) Group sandstones-siltstones of Cretaceous age. The Goyllar Group rocks are generally weakly mineralized, except for zinc-rich steep-dipping veins (not part of the resource) and minor high-grade mantos. Goyllar Group rocks pre-dated mineralization and acted as an impermeable seal, ‘trapping’ the zinc mineralization in the limestones beneath. The zinc mineralization is interpreted to be Miocene age (10 to 15 million years ago), associated with an intrusion at depth which is yet to be identified.

The Tin Zone resources occur in separate lenses from the Zinc Zone Mineral Resources, and do not overlap. The Tin Zone mineralization is believed to immediately pre-date the Zinc Zone mineralization. Tin Zone Mineral Resources are hosted as disseminated cassiterite and chalcopyrite in massive to semi-massive pyrrhotite lenses at the contact between the Pucará Group and underlying phyllite of the Devonian Excelsior Group. Parts of the Tin Zone mineralization also occur as minor quartz sulphide stockwork veinlets hosted by phyllite.


MINERAL RESOURCES

Table 1 – Zinc Zone Mineral Resources at Ayawilca as of November 26, 2018

Area

Tonnage (Mt)

ZnEq

(%)

Zn

(%)

Pb

(%)

In

(g/t)

Ag

(g/t)

Zn

(Mlb)

Pb

(Mlb)

In

(t)

Ag

(Moz)

Indicated

West

7.8

7.7

6.5

0.20

72

15

1,126

35

561

3.9

South

3.9

9.1

7.6

0.09

108

16

652

8

422

2.0

Total Indicated

11.7

8.1

6.9

0.16

84

15

1,778

42

983

5.8

Inferred

West

5.0

7.1

6.4

0.27

34

17

699

30

170

2.8

Central

18.6

5.6

4.6

0.23

62

12

1,884

95

1,153

7.5

East

11.3

5.9

5.0

0.18

56

14

1,238

44

633

5.0

South

10.2

9.6

7.9

0.27

103

30

1,764

61

1,047

9.9

Total Inferred

45.0

6.7

5.6

0.23

67

17

5,585

230

3,003

25.2

Notes:

1.CIM definitions were followed for Mineral Resources.

2.Mineral Resources are reported above a cut-off NSR value of US$55 per tonne.

3.The NSR value was based on estimated metallurgical recoveries, assumed metal prices and smelter terms, which include payable factors, treatment charges, penalties, and refining charges. Metal price assumptions were: US$1.15/lb Zn, US$300/kg In, US$15/oz Ag, and US$1.00/lb Pb. Metal recovery assumptions were: 90% Zn, 75% In, 60% Ag, and 75% Pb.The NSR value for each block was calculated using the following NSR factors: US$15.34 per % Zn, US$4.70 per % Pb, US$0.18 per gram In, and US$0.22 per gram Ag.

4.The NSR value was calculated using the following formula:

NSR = Zn(%)*US$15.34+Pb(%)*US$4.70+In(g/t)*US$0.18+Ag(g/t)*US$0.22

5.The ZnEq value was calculated using the following formula:

ZnEq = NSR/US$15.34

6.Numbers may not add due to rounding.


Table 2 – Tin Zone Inferred Mineral Resources at Ayawilca as of November 26, 2018

Tonnage (Mt)

Sn Eq.

Sn (%)

Cu

(%)

Ag (g/t)

Sn

Cu

Ag

(%)

(Mlb)

(Mlb)

(Moz)

Tin Zones

14.5

0.70

0.63

0.21

18

201

67

8

Notes:

1.CIM definitions were followed for Mineral Resources.

2.Mineral Resources are reported above a cut-off grade of US$55 per tonne NSR value.

3.The NSR grade was based on estimated metallurgical recoveries, assumed metal prices and smelter terms, which include payable factors, treatment charges, penalties, and refining charges. Metal price assumptions were: US$9.00/lb Sn, US$2.85/lb Cu, and US$15/oz Ag. Metal recovery assumptions were: 86% Sn, 75% Cu, and 60% Ag.The NSR value for each block was calculated using the following NSR factors: US$155.21 per % Sn, US$37.59 per % Cu, and US$0.22 per gram Ag.

4.The NSR value was calculated using the following formula:

US$NSR = Sn(%)*US$155.21+Cu(%)*US$37.59+Ag(g/t)*US$0.22

5.The SnEq value was calculated using the following formula:

SnEq = NSR/US$155.21

6.Numbers may not add due to rounding.


Zinc Drillhole Intersections

As of November, 2018, Tinka has drilled over 67,000 metres in more than 150 diamond drill holes at Ayawilca since 2012.

Selected zinc drill intersections include:

  • A17-070: 39.3 metres at 7.1% zinc & 100 g/t indium from 317.5 metres depth, including 8.0 metres at 20.9% zinc & 265 g/t indium from 340.0 metres depth;
  • A17-069: 29.3 metres at 10.4% zinc & 278 g/t indium from 271.4 metres depth, including 12.1 metres at 19.1% zinc & 440 g/t indium from 287.3 metres depth;
  • A17-063: 47.4 metres at 11.3% zinc & 313 g/t indium from 302.2 metres depth, including 9.8 metres at 17.4% zinc & 587 g/t indium from 303.3 metres depth and 12.2 metres at 17.1% zinc & 495 g/t indium from 327.4 metres depth;
  • A17-056: 63.9 metres at 5.6% zinc & 29 g/t indium from 126.0 metres depth, including 5.8 metres at 22.5% zinc & 50g/t indium, and 51.9 metres at 10.1% zinc & 233 g/t indium from 242.0 metres depth, including 6.4 metres at 37.5% zinc & 916 g/t indium from 279.0 metres depth;
  • A13-05: 212.9 metres at 5.3 % zinc & 83 grams per tonne (g/t) indium from 130.3 metres depth, including 16.0 metres at 18.1 % zinc & 120 g/t indium from 150.0 metres depth, and 10.0 metres at 12.9 % zinc & 670 g/t indium from 316.0 metres depth;
  • A14-22: 32.8 metres at 7.4 % zinc & 66 g/t indium from 211.2 metres depth, including 5.8 metres at 16.8 % zinc & 170 g/t indium from 228.0 metres depth, and 31.0 metres at 6.3% zinc & 101 g/t indium from 283.5 metres depth;
  • A12-08: 36.5 metres at 6.5 % zinc & 63 g/t indium from 162.0 metres depth, and 38.0 metres at 4.6 % zinc & 117 g/t indium from 266.0 metres depth;
  • A12-04A: 20.0 metres at 7.1 % zinc & 127 g/t indium from 260.0 metres depth, including 12.0 metres at 10.5 % zinc & 200 g/t indium from 266.0 metres depth.

The style of mineralization at Ayawilca is commonly known as a Carbonate Replacement Deposit ("CRD"). In CRDs the limestone host rocks are replaced by sulphides (either partially or completely). CRD deposits like Ayawilca typically have mineralization in the form of horizontal “mantos”, subvertical bodies or “chimneys”, and also “veins” which are more narrow. Typical examples of the two main types of zinc mineralization at Ayawilca are shown below.

  1. Massive sphalerite (marmatite with high iron) accompanied by variable pyrite, pyrrhotite and/or magnetite – see samples from A17-056 and A17-063;
  2. Carbonate veins with sphalerite (low iron), galena, and silver minerals - see A17-072 sample. This style of mineralization is considered to post date the massive sphalerite replacement style.


Tin-Copper Drillhole Intersections

Tin mineralization was discovered in the Central, East, and North Ayawilca areas following the re-assaying of 2012-2013 drill holes . Tin-copper mineralization lies within tabular 'mantos' beneath, and separately to, the zinc sulphide mantos. The tin occurs predominantly as cassiterite within massive iron sulphide (pyrrhotite) mantos, together with minor chalcopyrite.

Selected tin-copper drill intersections include:

  • A15-40: 50.5 metres at 1.23% tin and 0.16% copper from 328.0 metres depth, including 2.5 metres at 8.81% tin and 0.18% copper from 330.0 metres;
  • A13-11: 16.2 metres at 1.03% tin and 0.67% copper from 328.0 metres depth, including 2.0 metres at 4.8% tin and 2.1% copper from 330 metres;
  • A13-12A: 30.8 metres at 0.54% tin and 0.17% copper from 326 metres depth, including 2.0 metres at 2.5% tin and 0.2% copper from 326 metres depth;
  • A13-01: 76.0 metres at 0.21 % tin and 0.36% copper from 276 metres depth, including 8 metres at 0.94% tin and 0.43% copper;
  • CDD46: 10.5 metres at 0.82 % tin and 0.10 % copper from 252.0 metres depth.