Copper Project

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CRISTAL COPPER PROPERTY
Situated in a region with excellent access and infrastructure, and in a geologic setting that is noted for the occurrence of world-class copper deposits, the Cristal Project is considered prospective for the potential discovery of a buried porphyry copper deposit.

The Cristal property is located on the west slope of the Andes in northernmost Chile, adjacent to the border with Peru. Access is from Arica, Chile, east and north via Chile highway 135 at approximately kilometer 70.
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Location

The West Fissure and related structures that host many significant porphyry copper deposits in Chile trend trough the Cristal Project area, and northwest of the Project area, the Incapuquio fault system in Peru hosts additional significant porphyry copper deposits similar to those of northern Chile. These two important fault systems are projected to intersect near the Project area and provide a geologic environment favorable for the occurrence of buried porphyry deposits.

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Location

The West Fissure and related structures that host many significant porphyry copper deposits in Chile trend trough the Cristal Project area, and northwest of the Project area, the Incapuquio fault system in Peru hosts additional significant porphyry copper deposits similar to those of northern Chile. These two important fault systems are projected to intersect near the Project area and provide a geologic environment favorable for the occurrence of buried porphyry deposits.

Five Major Metallogenic Belts
Northern Chile – Southern Peru
Porphyry Copper Belts and Major Porphyry Copper Deposits in South America (from Sillitoe, R.H., and Perello, J., 2005, Andean copper province – Techonomagmatic settings, deposit types, metallogeny, exploration, and discovery: Society of Economic Geologists, Economic Geology 100 th Anniversary Volume, p. 845-890)

Early exploration work in the Project area was conducted by various exploration companies in the 1990’s, with the first significant work on the Project conducted by BHP Billiton (“BHP”) under an option agreement in 2012. BHP conducted airborne magnetics, gravity, and EM studies, and limited drilling, and terminated the option in 2014. In the BHP summary report, it was stated that an enhancement of the magnetics data had identified a 2-3km diameter circular doughnut feature with a weak magnetic high core surrounded by a magnetic low, accepted by geologists and geophysicists as a typical signature of buried porphyry copper deposits. This significant anomaly was not tested and occurs near where the West Fissure undergoes an abrupt change in direction from N-S to N45W at the intersection with the NE-SW regional structure. No exploration work has been conducted on the property since, however, the Project area is now surrounded by large land positions held by several senior copper producers.

The Project comprises 9 square kilometers of concessions on Chilean public land held by the ultimate vendor near Arica, Chile.

The Company’s initial exploration focus will be on the area where the large geophysical anomaly (aeromagnetic low and gravity high) was identified by the previous exploration activities. The anomaly, which measures several kilometers across, shows a weak magnetic high surrounded by a magnetic low, and could potentially represent a buried porphyry copper deposit. A coincident northwest trending gravity high could represent a topographic high within a potential porphyry copper system.

Enhanced Magnetic Anomaly on the Cristal Claims
Gravity – gDD pm the Cristal Property

The Company’s proposed exploration program for the Project will involve a drill program of 4-6 holes to test the principal target, for a total budget of US$1,000,000 – $1,500,000. The all-in cost of approximately US$250 per meter is anticipated to cover permitting and all ancillary costs for the program.

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Porphyry Copper Deposit Model:

Geophyscists can predict the response they expect in certain deposits from various geophysical methods. The expected response at the Property to a buried porphyry system can be broadly modelled:

Model for a porphyry copper deposit buried under younger volcanic cover rocks in a similar situation as interpreted at the Cristal Project. An expected magnetic response is illustrated above the geological section. (John, David A. editor, with contributions by Robert A. Ayuso, Mark D. Barton, Richard J. Blakely, Robert J. Bodnar, John H. Dilles, Floyd Gray, Fred T. Graybeal, John C. Mars, Darcy K. McPhee, Robert R. Seal, Ryan D. Taylor, and Peter G. Vikre, 2010, Pophyry Copper Deposit Model, in Chapter B, Mineral Deposit Models for Natural Resource Development, Scientific Investigations Report 2010–5070–B, US Geological Survey)
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Qualified Person

Dr. Thomas A. Henricksen, an independent consulting geologist, is a qualified person as defined by National Instrument 43-101. Mr. Henricksen has reviewed the scientific and technical information that forms the basis of the summary above and has approved the disclosure herein. Mr. Henricksen is independent of the Company.

(refer to National Instrument 43-101 Technical Report for the Cristal Copper Property, Province of Arica, XV Region of Arica and Parinacota, Chile prepared for Darien Resource Development Corp., by Thomas A. Henricksen, March 20, 2018)

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Summary of Cristal Agreement

The Company entered into the Agreement with Artemis Mining SpA (“Artemis”), a private Chilean company that had previously entered into an option agreement (the “Underlying Option Agreement”) with the current owner of the Project, Patrick Burns. Pursuant to the terms of the Agreement, the Company agreed to assume the Underlying Option Agreement and to reimburse Artemis for expenses and property payments previously incurred totaling US$150,000. The Company has now established a Chilean subsidiary which has assumed the Underlying Option Agreement in accordance with Chilean law.

To earn a 100% interest in the Project pursuant to the terms of the Underlying Option Agreement, the Company will be required to make the following payments:

The vendor under the Underlying Option Agreement retains a 3% NSR royalty, of which two-thirds can be bought back (leaving a 1% NSR royalty) by paying US$2,000,000 for each percentage point of the NSR royalty bought back.

There is an existing underlying 1% NSR royalty in favour of Condor Resources Inc. that can be repurchased in its entirety upon a payment of $1,000,000.

Copper 101

The Copper price per pound has grown over the past 10 years at a Compound Annual Growth Rate of 3.0%

As the world turns to renewable energy storage and generation, Copper will continue to be the backbone of this revolution, providing the majority of battery and storage circuitry

One of the main sources of Copper growth is due to the recent massive expansion of the EV (Electric Vehicle) market. EV’s are expected to reach 27 million by 2027, up from 3 million this year. Research predicts this increase will raise copper demand for EV batteries and components from 185,000 tonnes in 2017 to 1.74 million tonnes in 2027 (a 9x increase) – Source: IDTechEx / International Copper Association (ICA) 2017

Major applications of Copper include: Li-ion battery construction (EVs), heat conduction, electrical equipment and building materials worldwide

Copper Graph v3

2300 – 1177
West Hastings Street.
Vancouver, British Columbia
Canada V6E 2K3
604.484.1232

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2300 – 1177 West Hastings Street
Vancouver, British Columbia
Canada V6E 2K3