TECHNICAL REPORT DYNASTY GOLDFIELD PROJECT CELICA, LOJA PROVINCE ECUADOR

Transcription

1 Form F1 TECHNICAL REPORT DYNASTY GOLDFIELD PROJECT CELICA, LOJA PROVINCE ECUADOR Author: Allen J Maynard, BAppSc (Geol), MAIG, MAusIMM Al Maynard & Associates, Suite 9, 280 Hay St., Subiaco, WA, Australia al@geological.com.au Date: October 22, 2014 Prepared for: Dynasty Metals & Mining Inc. # Burrard Street Vancouver B.C. Canada V6C 2X8

2 TABLE OF CONTENTS 1.0 SUMMARY Introduction Property Description and Location History, Exploration and Drilling Geology and Mineralization Mineral Resource Estimate Critical Risk Factors Conclusions and Recommendations INTRODUCTION INTRODUCTION Terms of Reference Report Purpose Field Involvement Qualified Person Responsibilities Units, Currency and Rounding Sources of Information and Data Reliance on Other Experts PROPERTY DESCRIPTION AND LOCATION Location Tenure Royalties, Rights and Encumbrances Environmental Permitting ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY Access Proximity to Population Local Resources & Infrastructure Topography, Elevation and Vegetation Climate Local Resources and Infrastructure EXPLORATION HISTORY Prior Ownership Previous Exploration GEOLOGICAL SETTING AND MINERALIZATION Regional Geology Local and Property Geology DEPOSIT TYPES Deposit Model Alteration Mineralization Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page i

3 9.0 EXPLORATION Exploration Exploration Potential Adequacy of Exploration DRILLING Drilling Sampling Method and Approach SAMPLE PREPARATION, ANALYSIS AND SECURITY Sample Methods Chemical Analysis Method Specific Gravity Measurements Sample Security Sample Locations Adequacy of Sample Preparation, Security and Analytical Procedures DATA VERIFICATION MINERAL PROCESSING AND METALLURGICAL TESTING MINERAL RESOURCE ESTIMATE Geological and Resource Modelling Method Mineral Resource Estimate ADJACENT PROPERTIES OTHER RELEVANT DATA AND INFORMATION INTERPRETATIONS AND CONCLUSIONS RECOMMENDATIONS REFERENCES DATE AND SIGNATURE Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page ii

4 List of Figures Figure 1: Dynasty Goldfield Project Location Figure 2: Dynasty Project Concessions and Prospects Location Map Figure 3: Access to Concessions Figure 4: Simplified Geology of Ecuador (Derived from US Geological Survey OFR D) Figure 5: Simplified Structural Zones of Ecuador Figure 6: Geology of Dynasty Concessions Figure 7: Veins at Cerro Verde Figure 8: Veins at Trapichillo Figure 9: Veins at Papayal Figure 10: Drill Hole Locations Figure 11: Trench Sample Locations Figure 12: Photograph of Sampled Trench Figure 13: Plot of Standard 284 within +/- 3 SD Figure 14: Plot of Standard 256 +/- 3 SD Figure 15: Plot of Standard 306 +/- 3 SD Figure 16: Plot of Duplicate Assays Figure 17: Plot of Blank Assays within +/- 3SD Figure 18: Mineralised Zones in the Vicinity of Cerro Verde Project Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page iii

5 List of Tables Table 1: Current Resource Estimate for Dynasty Goldfield Project Table 2: Mining Concessions at Dynasty Goldfield Table 3: Meteorological Data over 40 years Table 4: Summary of Trenching and Drilling Completed at Dynasty Goldfield Table 5: Summary of Representative Drill Hole Intervals Table 6: Basic Statistics of Drill Hole Data Table 7: Summary of Representative Trench Samples Table 8: Basic Statistics of Trenching Data Table 9: Test of Density in Quartz Veins and Waste Rock Table 10: Cut-off Grade Determination Zaruma Project Table 11: Current Vein Resource Estimates for the Dynasty Goldfield Table 12: Current Resource Estimate Summary for the Dynasty Goldfield Table 13: Current Resource Estimate for Dynasty Goldfield Project Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page iv

6 1.0 SUMMARY 1.1 Introduction This report has been prepared by Consulting Geologist, Mr. A.J. Maynard, BAppSC (Geol), MAIG, MAusIMM. Mr. Maynard visited the project site in March 2005, February-March 2007 and September This Report was prepared at the request of Dynasty Metals & Mining Inc. ( Dynasty or the Company ) and resulted from: The aforementioned site visits; and A review of geological and geophysical data, drill logs, technical reports and selected drill core from exploration programs. 1.2 Property Description and Location Dynasty, through its indirect wholly owned subsidiary, Elipe S.A. ( Elipe ), holds a portfolio of exploration properties in Ecuador. Amongst these, Elipe has acquired the rights to seven mining concessions in the Celica area which form the Dynasty Goldfield Project located in the Province of Loja. These concessions have been the focus of a series of exploration programs since The Dynasty Goldfield Project is located at the southern end of the Occidental Andean Cordillera, 25km from the Peruvian border to the south with central coordinates of latitude 04º 07 south and longitude 79º 52 west. The town of Celica is about half an hour s drive from the project. Three concessions, PILO 9, ZAR and ZAR 1, are subject to a 1% Net Smelter Royalty (NSR) payable to Minera Australiana, a related party, as part of contractual obligations agreed to when the concessions were acquired by Dynasty. No royalties have been paid to-date as no extraction has occurred on the Project. If the Project goes into production in the future, it may also be subject to further royalties payable to the Ecuador Government in accordance with regulatory requirements at that time. 1.3 History, Exploration and Drilling The Spanish-Ecuadorian joint venture company, Enadimsa, claimed 1,350 hectares (ha) in the La Zanja (Cerro Verde) area for exploration in During the 1970s and 1980s the United Nations explored the Curiplaya area, 2 km east of the Dynasty Goldfield Project. Copper and gold were detected in small quantities. During , BHP Exploration Ltd. covered the general area with concessions but the tenements eventually lapsed after minimal work. Between 2001 and 2003, a private prospecting company, Ecuasaxon, undertook investigations in the general area and discovered anomalous gold and silver in quartz-sulphide veins in what is now the concession area. Since Dynasty acquired the project in 2003 until 2007, when the Ecuadorian Government introduced an exploration moratorium, it has carried out geological mapping, sampling, Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 1

7 geophysical surveys and diamond drilling. These works resulted in the identification of high grade gold and silver vein systems in the Cerro Verde, Papayal and Trapichillo areas. To date a total of 201 drill holes totalling 26,733.5 metres (m) have been completed by Dynasty, at Cerro Verde and Papayal. A further 2,033 rock channel samples were taken from 1,161 surface trenches at Cerro Verde, Iguana Este, Trapichillo and Papayal by the end of The Ecuadorian Government introduced a Mining Mandate that came into effect in 2008 causing delays in granting environmental licenses, permitting and other matters required before further exploration can commence. There has not been any significant mine production from any of the Dynasty concessions. 1.4 Geology and Mineralization The Dynasty Goldfield Project is part of the larger Dynasty Copper-Gold Belt extending north from Peru. The Dynasty Copper-Gold Belt lies within the compressional Inter-Andean Graben that is bounded by regional scale faults. The graben is composed of thick Oligocene to Miocene volcanosedimentary sequences that cover the Chaucha, Amotape and Guamote terrains. This structural zone hosts several significant epithermal, porphyry, mesothermal, S type granitoid, VHMS and ultramafic/ophiolite precious metal and base metal mineral deposits. The western side of the Dynasty concessions include volcanic rocks (breccias and andesitic lavas) belonging to the Cretaceous to Palaeocene Pisayambo Volcanics and Celica Formation which has been intruded sporadically by diorite dykes and slightly argillic gold bearing quartz veins and veinlets with occasional calcite-barite veins to the south, southeast and west. As many as 110 mineralised veins of varying thicknesses and without preferred orientation have been identified to date in the Dynasty Goldfield Project. The vertical extent of these veins has not yet been fully tested but some veins could exceed 400 m. The mineralised veins in the volcanics mainly occur along a faulted zone near and sub-parallel to the contact with the Cretaceous Tangula Batholith outcropping in the east and south of the concessions that extends north from Peru. Within the batholith, the quartz veins appear to have little depth extent. The mineralised faults have undergone post mineralization reactivation by a northeast fault system that displaced the earlier veins by up to a few metres. A major north east lineament with crosscutting features at 90º angle possibly indicates strike slip shears with sinistral stress that could have generated open spaces for the infilling quartz-sulphide vein systems. A porphyry intrusion hosting gold, silver and some base metal mineralization has also been mapped at Trapichillo (Bravo, 2005). Three mostly steeply dipping vein systems have been identified to date at Papayal (2.2 km x 2.0 km), Cerro Verde (1.4 km x 1.0 km) and Trapichillo - Cola (2 km x 2.5 km). Individual veins have Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 2

8 been mapped continuously for up to 2,000 m along strike and remain open at depth beyond the current drilling. The mineralised veins are principally open space fillings along dilational faults. Banded seams consisting of quartz and sulphides occur especially at Cerro Verde along with massive quartz veins containing disseminated sulphides. The mineralised veins have a low carbonate content at Papayal, Trapichillo and Cola, while quartz veins coexist with quartz - barite - calcite, and barite being replaced by silica at Cerro Verde and part of Trapiche Labrado. Gold occurs in its native form along with sulphides, including pyrite, sphalerite, galena, arsenopyrite, chalcopyrite and bornite. The gold/base metal mineralization is restricted to the veins and stockworks with associated argillic alteration. North-south mineralization zoning has been interpreted. The gold and silver grades vary along strike and across the vein width with "ore shoots" or "high grade pipes" producing very erratic values up to 600 grams per tonne (g/t) Au and 750 g/t Ag in some veins at Trapichillo and Papayal. A total of 74 veins have been identified between Cerro Verde - Yaraco- Trapichillo and Quebrada Trapiche Labrado of which 67 average >2 g/t Au. Seven potentially economic veins were identified at Papayal and five further veins with grades >6 g/t Au at Trapichillo. 1.5 Mineral Resource Estimate Dynasty has utilised the sampling results from 967 trenches and 152 drillholes in the Dynasty Goldfield Project collected between 2003 and 2008 to estimate the project resource. The QA/QC protocols followed by Dynasty while sampling the drill core and trenches met industry standards and indicated that the sampling and assays are accurate and unbiased. In the opinion of the author, the sampling data is sufficient and adequate for the purposes used in this Report including resource estimation. The resource was estimated using GEMCOM software and verified by non-software and other software (MineMap) based methods. Table 1 contains the current mineral resource estimate for the Dynasty Goldfield Project. Tonnes Au Ag Contained Au Contained Ag Category (Thousands) (g/t) (g/t) (1,000 ozs) (1,000 ozs) Measured 2, ,567 Indicated 3, ,936 Total Measured + Indicated 6, ,022 8,504 Inferred 7, ,118 9,901 Note: Lower cut-off grade of 2.0 g/t Au. Table 1: Current Resource Estimate for Dynasty Goldfield Project. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 3

9 1.6 Critical Risk Factors The most significant risks associated with the Project are resource risks, risks inherent in exploration and mining, poor access to mining areas as a result of remoteness and difficult terrain and sovereign risk bought about through changes in government or major changes in government policy, laws and regulations, which are common to most mining projects in South America. 1.7 Conclusions and Recommendations It is the author s opinion that the property merits further exploration and that Dynasty develops a further exploration program. No exploration program is planned by Dynasty until uncertainties associated with Ecuador's proposed new Mining Law have been resolved. The following cost estimate is based upon a drilling program that would involve: 80 diamond drill holes for approximately 5,150 m at Trapichillo and Iguana Este over a total area of approximately 4 km2. 20 diamond drill holes for approximately 1,350 m at Papayal Norte over an area of approximately 1 km2. This conceptual exploration program would take approximately 3.5 years to complete. 3.5 YEARS EXPLORATION BUDGET - TRAPICHILLO AND PAPAYAL NORTH Quantity Unit Description DYNASTY PROJECT Indiv. Cost (USD $) Unit Cost (USD $) Time (years) Total (USD $) 6,500 m Drilling (80 drill holes) $180/m $ 1,170, samples Drill core assays $ 34/sample $ 32, ,100 m Trenches $20/m $ 22, samples Trench samples assays $ 34/sample $ 27, Camp and core storage $ 15,000 15, $ 0.00 Environment & Rehabilitation $ 1,000/month 1, $ 0.00 Social Programme $ 50,000 50, $ 0.00 Administration and Contingencies $ 8,000/month 8, $ 0.00 SUBTOTAL $ 1,251, Ecuadorian Taxes (12 %) $ 150, TOTAL $ 1,401, Depending on results obtained by this exploration program, the Company may be able to proceed towards conducting a preliminary economic assessment (PEA) to determine the potential economic viability of the Project. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 4

10 2.0 INTRODUCTION 2.1 INTRODUCTION Dynasty was incorporated under the Business Corporations Act (Yukon) in Its common shares are listed and posted for trading on the Toronto Stock Exchange under the symbol DMM. 2.2 Terms of Reference The author of this Report has been requested by Dynasty to update the technical report entitled Independent Geological Evaluation Dynasty Goldfield Project, Celica, Loja Province, Ecuador by A.J. Maynard dated October 30, 2007 (the 2007 Report ). The Dynasty Goldfield Project is not currently a property material to Dynasty and there is no current intention by Dynasty to further explore and develop the Project. 2.3 Report Purpose This report is to be submitted to applicable Canadian securities regulatory authorities and is to be used by the Company for further exploration and to potentially proceed towards a preliminary economic assessment. 2.4 Field Involvement The author visited the project site and offices of the Company between 11th and 13th March, 2005, between February 27 and March 3 of 2007 and between 24th and 28th September of Discussions were held with responsible personnel and data reviewed pertaining to geology, mineral resource estimation and environmental issues. As there has been no further exploration work undertaken by Dynasty since 2008 and the Company has advised that it has no current exploration or mining plan for this Project, the author determined that a more recent personal inspection was unnecessary. 2.5 Qualified Person Responsibilities Mr. Maynard has worked as a geologist in the field of mineral exploration continuously for the last 35 years in Australasia, North and South America, Africa, China and south-east Asia, eastern and western Europe, Wales, Ireland and Greenland. He is a graduate of Curtin University in the State of Western Australia and obtained a Bachelor of Applied Science, majoring in Geology, in 1978 (Certificate No ). The author of this Report has no beneficial interest in Dynasty and is not an insider, associate or affiliate of Dynasty. The results of this Technical Report are not dependent on any prior agreements concerning the conclusions to be reached, nor are there any undisclosed understandings concerning any future business dealings between Dynasty and the author. The author is being paid a fee for his work in accordance with normal professional consulting practice. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 5

11 The author of this report, by virtue of his education, experience and professional association, is considered an independent qualified person ( QP ) as defined by NI , and is a member in good standing of an appropriate professional institution. 2.6 Units, Currency and Rounding Unless otherwise specified or noted, the units used in this Technical Report are metric. Ounces (oz) refer to troy ounces. Every effort has been made to clearly display the appropriate units being used throughout this Technical Report. Currency is in United States dollars ($) unless otherwise noted. This Report includes technical information that required subsequent calculations to derive subtotals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, the QP does not consider them to be material. 2.7 Sources of Information and Data The main sources of information in this report are: Information provided by Dynasty staff; Historic reports by prior owners detailed in the section entitled References ; and Previous NI documentation, primarily the 2007 Report. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 6

12 3.0 RELIANCE ON OTHER EXPERTS In preparing this Technical Report, the author has relied substantially upon the data supplied to him by Dynasty with respect to legal, political and environmental information in formulating his opinion and conclusions, augmented by direct field examination. The portions of the Technical Report to which such reliance applies include Item 4.0 (in respect of ownership and permit details, title, royalties and other rights affecting the project and environmental matters) and Item 6.0 (in respect of prior ownership details). The information is considered by the author to be accurate. The agreements under which Dynasty holds title to the concessions for these projects have neither been investigated nor confirmed by the author. The author has not carried out any independent exploration work, drilled any holes nor carried out any sampling and assaying. The author considers the Report to be a true and accurate representation of the exploration potential of the Dynasty Goldfield Project. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 7

13 4.0 PROPERTY DESCRIPTION AND LOCATION 4.1 Location The Dynasty Goldfield Project is located at the southern end of the Occidental Andean Cordillera, 25km from the Peruvian border with central coordinates of latitude 04º 07 south and longitude 79º 52 west (Figure 1 and Figure 2). The town of Celica is about half an hour s drive from the project. 4.2 Tenure The Dynasty Goldfield Project comprises seven un-surveyed concessions covering a total area of 21,909 ha. The mining concessions were acquired between 2001 and 2004 and are held 100% by Elipe. Table 2 below gives details of the concessions held by Elipe. The Dynasty Goldfield Project is comprised of two gold mineralised porphyry-style systems associated with large quartz-sulphide vein swarms and stockworks, named the Cerro Verde and Papayal systems. The main mineralized deposit is located at Cerro Verde within the Pilo 9 and Zar 1 concessions. No Concession ID Code Area (Ha) Registration Transfer Expiry 1 Pilo , Oct Apr Oct-31 2 Zar , Dec Apr Dec-31 3 Zar , Dec Apr Dec-31 4 Zar Dos A , Dec-03 na 12-Dec-33 5 Zar Tres A , Dec-03 na 12-Dec-33 6 Cruz , Oct-04 na 18-Oct-34 7 Quiara , Dec-04 na 09-Dec-34 Table 2: Mining Concessions at Dynasty Goldfield. The concession boundaries are based on map grid coordinates and are not surveyed. All known mineralised zones, mineral resources, mine workings, existing tailing ponds, waste deposits and important natural features and improvements described in this report are wholly located within the boundaries of the Company s concessions listed in Table 2. Mineral rights in Ecuador are held by individuals or corporations as mining concessions upon application to, in the form mandated by regulation, and approval by the Government. A mining concession may not exceed 5,000 contiguous mining hectares, a mining hectare having a dimension of one hectare on the surface and, conceptually, continuing vertically to the center of Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 8

14 the earth, thus having a wedge-shape in the vertical dimension. A mining concession has a term of duration of up to 30 years, and will be automatically renewed for equal periods, providing that before expiration a written notice of intention to renew shall be made by the concession holder. Only the following are valid reasons for the extinction of a mining concession: completion of the term of the concession, no notice of intention to renew being given; reduction or abandonment at the discretion of the concession holder; and failure to pay the concession fees. 4.3 Royalties, Rights and Encumbrances Three concessions, PILO 9, ZAR and ZAR 1, are subject to a 1% Net Smelter Royalty (NSR) payable to Minera Australiana, a related party, as part of contractual obligations agreed to when the concessions were acquired by Dynasty. No royalties have been paid to-date as no extraction has occurred on the Project. If the Project goes into production in the future, it may also be subject to further royalties payable to the Ecuador Government in accordance with regulatory requirements at that time. Under Ecuador mining law the holders of mining concessions may install such infrastructure as they require, including but not limited to processing plants, smelters and refineries, providing that those plants are on the concession and only process minerals from the concession on which they are situated. Ecuadorian Mining Law states that concession holders have an implied right to use water and the right to benefit from any easements. Holders of mining rights may alter the course of rivers, as long as it does not affect third parties and as long as it is done with authorisation from the National Council of Water Resources. The Dynasty Goldfield concessions give the Company the right to mine the subsurface but not the surface minerals which belong to local residents. The Company may purchase this land at a fair price agreed with the owners or may negotiate access. To retain the property under the Ecuadorian Mining Law requires: payment of an annual conservation fee per hectare; an annual environmental update report for the concessions including details of the environmental protection works program to be followed for the following year. These works do not need approval; an annual report on the previous year s exploration activity. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 9

15 Figure 1: Dynasty Goldfield Project Location. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 10

16 4.4 Environmental Permitting Before exploration work can commence on mining concessions in Ecuador, the Ministry of Energy and Mines must approve an Environmental Management Plan covering the coming year s exploration program. Dynasty currently has no proposed exploration and drilling programs planned for the Dynasty Goldfield Project and will have to obtain all necessary permits if it seeks to re-commence such activity at the project in the future. The concessions have also been registered with the Property Registry. An Environmental Management Plan aims to mitigate any impacts that may affect the environment by conserving the natural environment and remaining in harmony with the socioeconomic development of villages influenced by the operation of a plant. A Management Plan for a mining operation would include the following management details: 1. Description of the project and the environmental means to be applied, including: (a) Protection of natural elements and native communities; (b) Prevention and control of contamination, deforestation, erosion and sedimentation; (c) Follow-up and monitoring; (d) Rehabilitation and restoration of natural elements; (e) Maintenance of infrastructure; (f) Emergency and contingency plans; (g) Mitigation of any negative impacts; and (h) Compensation to persons or communities negatively affected by the project. 2. Chronology of planned activities. 3. Maps showing locations of planned activities and infrastructure. 4. Waste treatment strategies. 5. Evaluation that the stated program from exploration through to mining and eventual mine closure complies with all the relevant laws and regulations. 6. Environmental Impact Studies for the stages of exploitation, design, construction, operation and dismantling. 7. Environmental training and education programs for employees. The implementation of these programs will be carried out through the Company s technical, administrative staff and field workers. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 11

17 Figure 2: Dynasty Project Concessions and Prospects Location Map. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 12

18 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 5.1 Access The most important access roads in the area are: The Pan-American Highway which links Loja with Catacocha to the north and Macará to the south; The Machala-Piñas-Loja road which connects the Provinces of Loja and El Oro; and The Loja-Zamora-Gualaquiza road which connects Loja with the Province of Zamora Chinchipe. The paved Pan American Highway traverses the length of the concessions and thence access is gained via gravel roads and footpaths on steep hills in certain areas. The steep topography with deeply incised river valleys means that transport can be difficult in areas not serviced by preexisting tracks and roads. The steep topography however makes future portal access to the underground mineralization relatively simple. 5.2 Proximity to Population Figure 3: Access to Concessions. The area covered by the concessions is generally lightly populated with only a few widely scattered small villages. The nearest town is Celica, approximately 6 km away by road (Figure 2). The closest city is Loja, about 120km to the east by road. The local village, La Zanja, has a small general store but few other amenities. Each of these areas could provide a labour pool, as necessary. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 13

19 There are no informal miners on the concessions. 5.3 Local Resources & Infrastructure Small local airports are located at Loja (La Toma), Machala, Macará and Gualaquiza connecting with the larger airports at Quito, Guayaquil and Cuenca. Electricity for any future mining operations would need to be generated on site and water would need to be sourced from the local rivers. The concessions provide sufficient surface and access rights for mining operations and suitable areas for any potential tailings storage areas, potential waste disposal areas, heap leach pad areas and potential processing plant sites should mining commence, however formal studies on these items has not been undertaken given that the project is still in the initial exploration phase. 5.4 Topography, Elevation and Vegetation The terrain is moderately steep and sparsely vegetated with low acacia scrub incised by shallow ephemeral river beds that are typically dry. The elevation ranges from 1,830m in the northeast of the project area down to 1,100m on the south-eastern edge of the concessions. Slopes are mainly moderately steep, with an average grade of 20% while some intervening slopes are locally as steep as 30%. 5.5 Climate The climate is described as dry equatorial with medium temperatures and low rainfall with little seasonal variation in temperature and rainfall. Table 3 below summarises meteorological information obtained over a forty year span at two meteorological stations located 5 km and 15 km from the project. Temperatures Mean Maxima Mean Minima Daily Mean Rainfall 16.9º C 14.2º C 15.3º C Average Humidity 90% Cloudiness Average Wind Velocity 1,180 mm/year (at Celica, 5km distant) 1,369 mm/year (at Alamor,15km distant) 3.2 eighths 0.8 km/h Table 3: Meteorological Data over 40 years. The climate is amenable for year round exploration and mining activities. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 14

20 5.6 Local Resources and Infrastructure The location of Loja with population of approximately 170,000 approximately 100km by road from the Project area and numerous small villages and towns could provide both the labour force and all other facilities a mining operation needs, e.g. hotels, food supply, material supplies, communication resources, public security and government institution representatives. A strong mining background for the district guarantees skilled workers for underground mining and the availability of basic mining-related material in the Project area. Several rivers could be dammed to supply adequate fresh water for mining operations throughout the year. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 15

21 6.0 EXPLORATION HISTORY 6.1 Prior Ownership In 1977 a Spanish-Ecuadorian joint venture company, Enadimsa, claimed 1,350 ha in the La Zanja (Cerro Verde) area for exploration. During , BHP Exploration Ltd. covered the general area with concessions but the tenements eventually lapsed. Minimal work was carried out in the Dynasty area by BHP, having focused their efforts on other areas in Ecuador. 6.2 Previous Exploration During the 1970s and 1980s the United Nations explored the Curiplaya area, 2 km east of the Dynasty Goldfield Project. The group drilled a total of 13 holes. Copper and gold were detected in small quantities. Between 2001 and 2003, a private prospecting company, Ecuasaxon, undertook investigations in the general area and discovered anomalous gold and silver in quartz-sulphide veins in what is now the concession area. Results from historical exploration were not used in calculating the mineral resource estimates contained herein. There has not been any significant mine production from the Dynasty concessions. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 16

22 7.0 GEOLOGICAL SETTING AND MINERALIZATION 7.1 Regional Geology The Dynasty Goldfield Project is part of the larger Dynasty Copper-Gold Belt extending north from Peru. Subduction of the Pacific Ocean Nazca Tectonic Plate beneath the South American continent has produced crustal deformation forming the Andes mountain range over the last 25 million years (Figure 4). The resultant compressional forces have produced several Tertiary and Quaternary tectonic basins along major regional faults that cut both the Pacific and Amazonian piedmonts and the Andean range itself (Figure 5). The Dynasty Copper-Gold Belt lies within the compressional Inter-Andean Graben that is bounded by regional scale faults. The graben is composed of thick Oligocene to Miocene volcanosedimentary sequences that cover the Chaucha, Amotape and Guamote terrains. This structural zone hosts several significant epithermal, porphyry, mesothermal, S type granitoid, VHMS and ultramafic/ophiolite precious metal and base metal mineral deposits. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 17

23 Figure 4: Simplified Geology of Ecuador (Derived from US Geological Survey OFR D). Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 18

24 Figure 5: Simplified Structural Zones of Ecuador. 7.2 Local and Property Geology The western side of the Dynasty concessions include volcanic rocks (breccias and andesitic lavas) belonging to the Cretaceous to Palaeocene Pisayambo Volcanics and Celica Formation (Figure 6). The Celica Formation volcanics are highly fractured and composed of monolithic volcanic breccia, green andesite and some sub-volcanic andesite. This unit is intruded sporadically by diorite dykes and slightly argillic gold bearing quartz veins and veinlets with occasional calcite-barite veins to the south, southeast and west. As many as 110 mineralised veins of varying thicknesses and without Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 19

25 preferred orientation have been identified to date in the Dynasty Goldfield Project. The vertical extent of these veins has not yet been fully tested but some veins could exceed 400 m. The mineralised veins in the volcanics mainly occur along a faulted zone near and sub-parallel to the contact with the Cretaceous Tangula Batholith outcropping in the east and south of the concessions. The Tangula Batholith is believed to be a northern extension of the large batholith forming coastal Peru. Within the batholith, the quartz veins appear to have little depth extent. The mineralised faults have undergone post mineralization reactivation by a NE fault system that displaced the earlier veins by up to a few metres. A clear example of this shift is recorded in a dominant vein in the NE sector of Cerro Verde called La Foto. A wide circular structure is located north and west of the neighbouring Casas Quemadas which forms the Yaraco and Cola valleys. The Catamayo River, in the west of the Dynasty concessions, follows a north east lineament with tributaries converging at a 90º angle possibly defining a structural strike slip with sinistral stress. This dilational stress shearing could have generated open spaces for the infilling quartz-sulphide vein systems. In the Lucarqui area, at the beginning of the Papayal and Trapichillo track, a microdiorite with numerous magnetite and epidote filled fractures is exposed that is interpreted to be a possible late igneous event unrelated to the Tangula Batholith. A porphyry intrusion hosting gold, silver and some base metal mineralization has also been mapped at Trapichillo (Bravo, 2005). Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 20

26 See Item 8.3 for mineralization information. Figure 6: Geology of Dynasty Concessions. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 21

27 8.0 DEPOSIT TYPES 8.1 Deposit Model The Dynasty Goldfield mineral deposits are typical of plate boundary tectonic zones. Extensive epithermal gold/silver vein systems were formed by late stage hot acidic sulphur rich hydrothermal solutions, under intense pressure from the nearby batholith, being forced along dilational faults and fractures. The mineralized solutions reacted with the volcanics resulting in the precipitation of quartz with variable barite and sulphide minerals along with gold and silver. These veins range in thickness from 15 cm to 1.6 m, are easily identifiable in surface outcrops, and have multiple strike orientations and variable dips. To date 110 quartz veins hosting gold mineralization have been identified. These epithermal veins make up all the reported resources at the Dynasty Goldfield. A younger low grade Cu-Au mineralised porphyry has been identified at La Zanja, Trapiche Labrado and west of Trapichillo. Drilling by Dynasty at Trapiche Labrado produced intersections up to % Cu and 0.5 g/t Au. Mapping and sampling at La Zanja has identified significant rock-chip Cu anomalies and widespread sericitic alteration. 8.2 Alteration The dominant argillic alteration associated with the mineralization occurs along the vein margins as haloes, from a few centimetres to about 4 m thick, with feldspars altered to ilite, kaolinite and epidote. Only a few veins show abrupt transition from the quartz vein to the propylitic zone. Sericitic alteration fringes are hardly determinable. Most of the quartz veins are banded comb type, crustiform, and porous. The gold and base metal mineralization is located on the edges of the comb textures and within the outer bands in the banded quartz having formed during the latter phases. Some pale weathered adularia is found along the edge of the Esperanza, La Foto and Venado veins. The andesite and green breccia host rocks are almost unaltered with only a weak chlorite alteration, typical of deuteric regional alteration. Brecciated and tectonic shear zones in the andesites, near the Catamayo River and along the paved road, exhibit minor epidote and hydrothermal alteration. At Cerro Verde and Trapiche Labrado Creek a widespread prophyllitic halo is distinguishable, apparently associated with a diorite intrusion located to the south of the mineralised zones. Between Trapiche Labrado and La Zanja there is widespread sericitic and argillic alteration associated with quartz veinlets and stockworks with abundant silicified boulders along La Zanja Creek. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 22

28 8.3 Mineralization Three mostly steeply dipping vein systems have been identified to date: Papayal (2.2 km x 2.0 km), Cerro Verde (1.4 km x 1.0 km) and Trapichillo - Cola (2 km x 2.5 km). Individual veins have been mapped continuously for up to 2,000 m along strike and remain open at depth beyond the current drilling (Figure 7 to Figure 9). The mineralised veins are principally open space fillings along dilational faults. Banded seams consisting of quartz and sulphides occur especially at Cerro Verde along with massive quartz veins containing disseminated sulphides. The mineralised veins have a low carbonate content at Papayal, Trapichillo and Cola, while quartz veins coexist with quartz - barite - calcite, and barite being replaced by silica at Cerro Verde and part of Trapiche Labrado. Gold occurs in its native form. Sulphides, in roughly decreasing order of abundance, are as follows: iron as pyrite zinc with variable iron as sphalerite lead as galena arsenic as arsenopyrite copper as chalcopyrite copper as bornite The gold/base metal mineralization is restricted to the veins and stockworks with associated argillic alteration. A black silver mineral occurs sporadically in the more northern areas of the Papayal 5 vein. Traces of malachite and neotocite have been identified within the argillic alteration zones along Trapiche Creek and in some peripheral veins south of Papayal 1. Sphalerite is very scarce except in the distal Papayal 3 and 5 veins. North-south mineralization zoning has been interpreted with a more epi-mesothermal system in the south becoming more epithermal and low sulphur towards the north at Trapiche Labrado. The galena and sphalerite content increases towards the NE towards Papayal. Chalcopyrite and covellite are rare but found throughout the entire district however copper does not represent an economic target. The gold and silver grades vary along strike and across the vein width with "ore shoots" or "high grade pipes" producing very erratic values up to 600 g/t Au and 750 g/t Ag in some veins at Trapichillo and Papayal. The distribution of values at Cerro Verde is more even, averaging between 5 g/t Au and 35 g/t Ag in almost all the veins, however the "mineralised pipes" have a greater length and depth than at Trapichillo and Papayal. A total of 74 veins have been identified between Cerro Verde - Yaraco-Trapichillo and Quebrada Trapiche Labrado of which 67 average >2 g/t Au. Seven potentially economic veins were identified at Papayal and five further veins with grades >6 g/t Au at Trapichillo. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 23

29 Figure 7: Veins at Cerro Verde. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 24

30 Figure 8: Veins at Trapichillo. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 25

31 Figure 9: Veins at Papayal. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 26

32 9.0 EXPLORATION 9.1 Exploration Dynasty commenced exploration within the project area after it acquired the rights to the concessions in 2003 using staff employed by the Company. This work consisted of geological mapping, trenching, channel sampling of trenches, geochemical soil and geophysical surveys and diamond drilling with the aim of identifying mineralised vein systems. Dynasty was successful in its preliminary exploration efforts having discovered twelve mineralised vein systems at Papayal, Cerro Verde and Trapichillo-Cola (Figure 7 to Figure 9). Drilling commenced in 2005 and by the end of 2006 a total of 58 drill holes for 2,602m had been completed in the Papayal and Cerro Verde project areas. The most important veins recognized were Papayal 1, Papayal 3, Papayal 5, La Esperanza, Los Encuentros, La Gorda and La Foto. These veins are within a NE SW trending zone approximately 11 km long by 3 km wide that includes swarms of massive quartz, quartz-calcite and quartz-calcite-barite-siderite veins with varying amounts of sulfide. These veins are typical epithermal veins, commonly crustiform with combs and sporadic banding. Between 2006 and 2008 a further 143 drill holes were completed for 24,131m at Cerro Verde and north Papayal. At least 45 veins were identified in this drilling program with the most important veins being the Iguana, Flaca, Encuentros 2, Picos, Clavo, Foto Sur, Kaliman, Venado, Barita and Larga. The best gold and silver intersections were obtained at Cerro Verde and Yaraco along with significantly improving grades towards the north of Papayal. There has been no further drilling or exploration at Dynasty Goldfield since February A total of 2,033 rock channel samples were taken from 1,161 surface trenches at Cerro Verde, Iguana Este, Trapichillo and Papayal by the end of 2007 (Table 4). Significant drilling and trenching results are summarized in Table 5 to Table 8. Dynasty's exploration field work began with recognizing surface outcrops of altered rocks, structures, veins and mineralization. Once a vein outcrop/target has been selected, detailed geological mapping was carried out together with structural and positioning observations. In terms of Dynasty's trenching protocol, after a surface vein outcrop was mapped and technically recorded, several photographs were taken from different angles. The trench is carefully planned always perpendicular to the vein strike. Trenches can be made manually or using an excavator depending on the access facility. Manual trenches (pick and shovel) have been the more appropriate and easy exploration surface works being developed in the concession areas. They have been extremely useful and providing accurate, solid and abundant data. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 27

33 A trench is planned after general geological and geochemical sampling has been carried out, and after having obtained the corresponding surface land permits and fulfilling all environmental requirements. The trench is designed in a manner such that there will be minimum impact to soil and agriculture. After starting a trench program in a specific location (vein), a differential GPS landmark is set to have a topographical control to tie all exploration works/sampling using tape and compass or total station. In places where no differential GPS land marks where located, a normal GPS location UTM PSAD56) was used. A trench is an elongated pit of about 1.2 m wide and 1.5 m to 3 m deep, dug until finding fresh rock of the target of interest or vein/structure. Trenches along structures such as veins are designed with 25 m (majority) to 50 m spacing along vein strike. They are dug by hand using picks and shovels and manpower. The organic surface layer is segregated, as well as each single soil horizon (A, B, C), in order to conduct appropriate reclamation afterwards. Once the structure/vein is clearly exposed in the trench, all technical measurements and recordings are executed. UTM coordinates (usually PSAD 56 for Ecuador) at the beginning of the trench plus direction and sampling distances; elevation, vein bearing and dipping, geological, mineralogical and petrographical observations, photographs, etc. The trench depth depends on the soil cover and also the topographical location of the exploration point. Normally flat or valley sectors have a thicker soil layer (up to 3 m) than those located in higher elevations. Watershed lines normally show outcropping solid rock. Once the trench is completely clean and the structure/vein exposed clearly, a perpendicular channel of about 5 cm wide x 5 cm deep is constructed with a portable saw or using chisel and hammer. One or several samples of about 1 m length or less are collected from the structure/vein taking care to avoid contamination. The vein foot and hanging walls are also sampled if they show evidence of mineralization such as quartz veinlets. Each sample normally weighs about 5 to 6 kg. The aim is to sample the totality of the mineralized rock, but when sample is bigger that the specified weight then an in situ riffling is executed to obtain a representative sample. The remaining sample material is normally used to replicate samples (duplicates). 9.2 Exploration Potential Good exploration potential exists at the Dynasty Goldfield Project for new vein discoveries, extending known veins and exploring for porphyry Style mineralization and mineralized breccias. There are reasonable prospects that further exploration and drilling programs could add to the known mineralization, and potentially add to the mineral resource inventory. 9.3 Adequacy of Exploration In the opinion of the author, the exploration programs completed to-date by Dynasty were appropriate for the known deposit types and mineralization styles and have delineated significant Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 28

34 gold silver mineralization and, if continued, will continue to develop the exploration potential of the Project. TRENCHES Sector Trenches Metres Samples Cerro Verde, Iguana East and Trapichillo 1,119 4,078 1,366 Papayal 42 2, TOTAL 1,161 7,051 2,033 DRILL HOLES Sector Holes Metres Samples Cerro Verde ,734 1,392 Papayal 26 2, TOTAL ,733 1,649 Table 4: Summary of Trenching and Drilling Completed at Dynasty Goldfield. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 29

35 Figure 10: Drill Hole Locations. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 30

36 Figure 11: Trench Sample Locations. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 31

37 HOLE ID From (m) To (m) Length* (m) Approximate Depth (m) SAMPLE ID DDH D , ,637 DDH , , DDH D DDH D DDH D DDH D DDH D ,105 DDH D DDH D DDH D *Intersection width which may be significantly longer than true width. Au g/t Ag g/t Table 5: Summary of Representative Drill Hole Intervals. Cu ppm Pb ppm Zn ppm HOLE Length* (m) Au g/t Ag g/t Cu ppm Pb ppm Zn ppm Maximum ,986 15,400 30,100 34,100 Minimum BD BD BD BD BD BD Average Median Mode Standard Deviation ,224 1,271 *Intersection width which may be significantly longer than true width BD = Below detection Table 6: Basic Statistics of Drill Hole Data. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 32

38 TRENCH ID FROM (m) TO (m) Length* (m) SAMPLE ID Au g/t Ag g/t Cu ppm Pb ppm Au ppm TLB D TLB D TLB D , TLB D , TLB D-RV , TCV D TLB M T D , TLB D-RV , TAA D-RV ,040 1,070 *Intersection width which may be significantly longer than true width. Table 7: Summary of Representative Trench Samples. TRENCH Length* (m) Au g/t Ag g/t Cu ppm Pb ppm Zn ppm Maximum ,477 28,800 3,129 Minimum BD BD BD BD BD BD Average Median Mode Standard Deviation , *Intersection width which may be significantly longer than true width. BD = Below detection. Table 8: Basic Statistics of Trenching Data. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 33

39 10.0 DRILLING 10.1 Drilling To date a total of 201 drill holes totalling 26,733.5 m have been completed by Dynasty, at Cerro Verde and Papayal. Two Hydracore 2000 wire-line diamond drills owned by Elipe were used for this drilling. All drilling was carried out using triple tube gear to maximize core recovery. The upper 10 m of each hole was drilled with HW (76 mm core diameter) rods and cased off, then HQ (63 mm core diameter) rods were used to 100 m followed by NQ (48 mm core diameter) for the remainder of the hole. The holes diameters are usually between 15 mm and 22 mm larger than the core diameters. Downhole surveying was carried out on all drill holes with dip and azimuths measured regularly down the length of the hole, generally at 50 m intervals. At the completion of each drill run the core was carefully transferred from the core barrel to the core trays. At the end of each shift the core trays were sealed with lids and transported to the core storage facility near the mine office where the core recovery, lithology and structural features of core was logged by the field geologist. After the core was logged by the geologist the core was marked up and sampled. Since the drilling was all collared at the surface and the locations of drill sites were determined by accessibility in steep topography, and the orientation of the mineralised veins varied considerably along strike and down dip, the holes intersect the veins at various oblique angles. Most holes intersect the veins nearly perpendicular to strike but at penetration angles well less than perpendicular to the dip. As a result the drill intersection widths are significantly longer than the vein true width, however the resource modelling considers the drilling in 3D and adjusts the drill intersections accordingly. Drilling targets were determined by detailed geological mapping and the channel sample assay results from trenches. Assay results in the drilling showed that higher grade gold and silver mineralization extends from the surface to depths of up to 250m. Dynasty s drilling program confirmed the existence of widespread gold and silver mineralization over the area drilled and extended the continuous strike length of the mineralized corridor to approximately 3.5km of surface mineralization. See Item 9.3 for further information on results of Dynasty s drilling at the Dynasty Goldfield Project Sampling Method and Approach The core recoveries were recorded for every hole and in all cases recoveries exceeded 95% over the mineralised intervals. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 34

40 After the field geologist logged the core, the sampling limits determined by logged veins and alteration zones were marked with a pen, and then another line was marked along the long axis of the core along which the core would be split by diamond saw. This line is marked as close as possible perpendicular to the edges of the quartz veins and designed to make an unbiased and representative sample of the mineralization in the veins and altered zones. The core was then cut by diamond saw along the marked lines by trained technicians with one half of the core retained in the core tray for future reference and the other half bagged in a uniquely labelled calico bag to be dispatched to the laboratory for chemical analysis. The calico bags were stored in sealed plastic drums until they were dispatched to the laboratory under continual supervision by a Company representative to ensure the security of the sample. A total of 3,555 samples from drill core were collected by trained company staff for chemical analysis at BSI Inspectorate Sample Preparation Laboratory, an internationally accredited laboratory located at Quito and certified as complying with ISO 9001:2008 (Certificate FS 34143). In most holes only veins and mineralised structures, as logged by the geologists, were analyzed for Au along with 32 other elements including Ag, Cu, Pb and Zn. In a few holes where wide zones of Cu mineralization were logged by the geologist, continuous one metre samples were collected through the mineralised zone. The split core is presently stored at Dynasty s facility at Divino Niño outside Celica. The author reviewed drill core from several holes and confirmed the presence of the quartz veins and sulphide mineralization as previously logged in the core. Observed core recovery was good ranging from 95% to 100% and the sampling orientation is representative for the core inspected. The core boxes are in good condition. Trenches were cut at all three prospects to enable geological mapping below any overburden and to take samples below the surficial weathering zone of the veins and altered zones exposed in the trenches, generally at between 1.5m and 3.0m depth. The sampled channels 5cm wide and 5cm deep were cut by either chisels or portable diamond saw along the cleaned trench floor producing samples each weighing an average 5-6kg. The trenches were cut as close as possible perpendicular to the veins to a maximum depth of 3.0m. Samples were collected between geological boundaries by trained personnel, covering the mapped mineralization as well as additional 1.0m samples in the mapped footwall and hangingwall waste. The geological boundaries, generally quartz veins and highly altered zones, between which the samples are collected were identified by field geologists. Care was taken that these samples represented the intervals being sampled and there was no bias due to selectively sampling any particular type of rock or mineral such as soft or sheared zones. The sample limits were accurately surveyed by Differential GPS (DGPS). Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 35

41 Figure 12: Photograph of Sampled Trench. The drilling, trenching and sampling methods employed at Dynasty are considered by the author as appropriate and meet all the necessary mining industry standards for the type and style of mineralization tested and has resulted in unbiased representative samples suitable for resource modelling and estimation. The samples collected from the trenches were from below the surficial weathering zone in fresh rock. It is the author s opinion that the sampling methods are appropriate for the gold/silver mineralization. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 36

42 11.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY 11.1 Sample Methods Trench samples were stored in plastic bags of 30 x 60 cm and sealed with plastic locks. A sampling record was kept by geologists with the corresponding sample ID and description (geology, structural, location UTM, mineralogy, lithology, etc.) for each sample. Trench sampling locations were charted using aluminum tags. A standard, blank and duplicates were inserted each batch of 50 samples comprising approximately 6% of QA/QC sampling. Once trench sampling was completed, the trench is immediately reclaimed according to the Environmental Managing Plan approved by local authorities. Before submitting samples to BSI Inspectorate, each sample bag was fully re-checked and weighted to ensure it has been properly identified. Sacks able to contain no more than eight samples each were utilized to facilitate transportation. A chain of custody was set for the transportation process and confirmation as received once samples reached the lab. Requested sample assay results were reported in ppm. All the sample preparation, i.e. drying, crushing and pulverising, was done at the BSI Inspectorate Sample Preparation Laboratory in Quito, Ecuador by the laboratory staff. The following procedures were employed at the laboratory: dried for at least 12 hours at 60º C; crushed in a jaw crusher to 95% -10 mesh (95% of the sample will pass through a wire sieve with 2.0 mm openings); pulverised in a ring pulveriser to 95% -40 mesh (0.4 mm openings) then split in a Jones riffle splitter; 300 g of material retained for further processing with the remainder stored in the BSI warehouse; pulverised in a Labtech ring pulveriser to > 95% -150 mesh then split in a Jones riffle splitter; and 100 g pulp splits sent to the laboratory s facilities in Lima, Peru for analysis with the remaining 200 g stored in the BSI warehouse Chemical Analysis Method Gold was analyzed using the fire assay (FA) method on 30 g charges followed by either Atomic Absorption Spectroscopy (AAS) detection or gravimetric measurement of gold, depending on the weight of the gold button produced by the fire assay method. Silver assays were determined using Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 37

43 aqua regia digestion with an AAS assay finish. A further 31 other elements including copper, lead and zinc were analysed by the Inductive Coupled Plasma (ICP) method. The laboratory followed industry standard QA/QC procedures when preparing and analysing the samples including the use of blanks, standards and repeats. Where anomalies were found in the QA/QC results appropriate action was taken, usually the sample batch was completely re-assayed Specific Gravity Measurements A total of 19 samples, mostly drill core, were submitted to the National Metallurgical Laboratories of the Escuela Politecnica Nacional Departamento de Metalurgia Extractiva (the Institute ) for Specific Gravity (SG) tests using the waxed sample - water displacement method. The average measured SG for the mineralization was 2.7, which is typical for a massive quartz vein. The Institute is located in Ecuador, and although its laboratory does not have an international accreditation it is the highest ranking university in Ecuador and as such is competent to conduct SG testing. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 38

44 SAMPLE DESCRIPTION CODE DENSITY (t/m3) Esperanza vein, county rock, Hole 36 EV Esperanza vein, waste rock in core, Hole 38 EV Esperanza vein, quartz vein D Foto Vein, quartz vein + sulphides D Foto South vein, Quartz vein D Venado Vein, Quatz oxidized vein D Venado Place, Andesitic rock in surface Venado Papayal vein, Hole 3, Quartz vein D Papayal vein, Hole 3,Waste, 117 m depth PPY Papayal 5, Hole 4, Waste m depth PPY Papayal 5. Hole 8. Waste. 74 m depth PPY Papayal 5. Hole 8. Quartz vein m depth D Encuentros vein, Qtz vein. 28 m depth.hole 16 D Encuentros vein, Qtz vein m depth.hole 21 D Encuentros vein. Waste. Hole 21. Depth:32 m WH Esperanza vein.qtz vein. 188 m depth-hole 33 D Esperanza vein. Waste. Hole 33. Depth 215m WEV Foto vein. Qtz +sulphides vein. Hole 39 D Foto vein. Waste fragment. Hole m depth WFV Average SG in quartz veins-papayal 2.72 Average SG in quartz veins-cerro Verde 2.70 Average SG in andesitic rocks. Waste Sample Security Table 9: Test of Density in Quartz Veins and Waste Rock. Dynasty employed rigorous sample security procedures when transporting samples between the sampling sites and at the laboratory. The samples were recorded and logged before being sealed in plastic drums on site and were continuously monitored by Company personnel until they were delivered to the laboratory where all the samples were checked against the Company s inventory by the laboratory staff and a receipt was issued for every delivery Sample Locations All drill hole collars and sample trenches have been surveyed by qualified surveyors using differential GPS (DGPS) instruments with accuracies within 10cm in all 3 dimensions. All drill holes had their dip and azimuths measured regularly down the length of the hole, generally at 50 m intervals, to measure any down-the-hole deviations. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 39

45 11.6 Adequacy of Sample Preparation, Security and Analytical Procedures It is the author s opinion that the sampling methods, preparation, security and analytical procedures have been adequate and in keeping with requirements for this stage of exploration work and to define the resources in the categories as stated. There is no evidence that the sample techniques used have resulted in any sample bias and they are therefore representative of the mineralization being tested by the sampling. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 40

46 Au ppm Form F1 Dynasty Goldfield Project Dynasty Metals & Mining Inc DATA VERIFICATION Dynasty used a variety of QA/QC techniques to measure the accuracy and precision of the assays in the database including the use of standards, blanks and duplicates. Recognised gold standards from Gannet Industries of Australia were used to determine the accuracy of the gold assays. Standards were inserted at a rate of one every 40 (2.5%) in each batch of samples, collected from drill core and trenching, sent to the laboratory for chemical analysis. Blanks inserted in sample batches measure any contamination between samples during the preparation stage at the analytical laboratory. Blanks were prepared by Dynasty from unaltered, dark green, massive, fine grained andesite sourced on site. These blanks were included in each sample batch, collected from drill core and trenching, and if a blank returned an elevated gold or silver value the samples were re-assayed. Duplicates inserted in sample batches measure the accuracy and repeatability of sampling and laboratory assays. Duplicates of pulps were regularly assayed at sample intervals of 1 per 40 to 60 samples. Figure 13 to Figure 17 show plots of the QA/QC data. The graphs show that the QA/QC results are within acceptable limits of +/- 3 Standard Deviations. STD Samples + 3 S.D. - 3 S.D SAMPLES Figure 13: Plot of Standard 284 within +/- 3 SD. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 41

47 Au ppm Au ppm Form F1 Dynasty Goldfield Project Dynasty Metals & Mining Inc. STD Samples + 3 S.D. - 3 S.D SAMPLES Figure 14: Plot of Standard 256 +/- 3 SD. STD Sam ples Samples + 3 S.D. - 3 S.D. Figure 15: Plot of Standard 306 +/- 3 SD. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 42

48 Au ppm Au ppm Form F1 Dynasty Goldfield Project Dynasty Metals & Mining Inc. DUPLICATES D D D D D D Samples D D D Samples Duplicated Samples Figure 16: Plot of Duplicate Assays. Blanks Result samples + 3 S.D. - 3 S.D. Average Samples Note that assays of represent below detection limit. Figure 17: Plot of Blank Assays within +/- 3SD. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 43

49 No independent samples were collected by the author to verify the quality of the assays in the database since the QA/QC procedures followed by Dynasty are sufficiently rigorous to ensure the assays used in the resource modelling are reliable. The author verified the integrity of the database by comparing several assay certificates as received from the laboratory with their transcription into the Company s database and records. The transcribed assays were found to be accurate. In the opinion of the author, the data is sufficient and adequate for the purposes used in this Report including resource estimation, and that the sample preparation security and analytical procedures followed relating to the Project are adequate for ensuring that the data is suitable for the resource model, as described in this Report. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 44

50 13.0 MINERAL PROCESSING AND METALLURGICAL TESTING No metallurgical or mineral processing tests have been carried out by Dynasty on this project other than bulk density measurements. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 45

51 14.0 MINERAL RESOURCE ESTIMATE The Mineral Resource Estimates described in this section have been prepared for the Dynasty Goldfield property to conform with the guidelines set forth by National Instrument and incorporates terms as defined by the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Reserves: Definitions and Guidelines (adopted in 2010). The interpretation, assumptions and parameters used in preparing this estimate are described in the following sections. The Dynasty Goldfield deposits are considered to be a gold/silver deposit. Other minor mineral concentrations have not been considered as part of these estimates Geological and Resource Modelling Further feasibility work will be required to determine the extent to which the estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socioeconomic, marketing, political and other relevant issues. The Company s mining operation at Zaruma, where similar style mineralization is mined, uses an economic cut-off grade based on the cut-off grade estimate calculation in Table 10. Since the mineralization at Dynasty Goldfield is similar to Zaruma, this calculation is considered to be a reasonable conceptual basis on which to decide whether mined underground material should report to the processing plant or be sent to the waste stockpile at Dynasty Goldfield. Table 10: Cut-off Grade Determination Zaruma Project. A reasonable economic cut-off grade for underground mining of mineralised quartz veins at Dynasty Goldfield, based on the calculations in Table 10, has been rounded down to 2.0 g/t Au Method Royalties 5 % Recovery plant 94 % Purity Au-Ag bullion 97.8 % Gold Price 1260 $/oz Opex 73 $/t Factor 0.87 % price Au opex cut-off $/oz $/t g/t Au Resources for all the veins were calculated using the polygonal method. This method was considered appropriate by the Company and the author for vein mineral deposits exhibiting no major variations and tectonically controlled. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 46

52 Long sections were created along each vein separately with the topography as the upper limit. Polygons were then created around the drilling and trench samples with squares with sides as follows: 25 m for Measured Resources, 25 m 50 m for Indicated Resources and 50 m 100 m for Inferred Resources. See Appendix 1 for resource cross-sections for selected veins incorporated in the resource estimate. The author determined that trench sampling was appropriate in the context of surface exploration for the types of deposits at the Dynasty Goldfield Project. Trench sampling followed a continuous channel sample in the mineralized rock at the bottom of each trench. The samples were larger than those obtained by drill core and the assays were similar to those from drilling, and enabled the Company to derive accurate and direct vein structural data. Both trench and drill samples could be replicated and re-assayed. The polygonal estimates are based on a total of 201 drill holes totalling 26,733.5 m at Cerro Verde and Papayal along with a further 2,033 rock channel samples taken from 1,161 surface trenches at Cerro Verde, Iguana Este, Trapichillo and Papayal. The area of each polygon was multiplied by the vein width to get a volume of the vein, then multiplied by the specific gravity (2.7) to calculate the tonnes. Veins < 0.20m were not considered in the resources calculation. Measured resources were only derived from drilling samples while veins sampled by trenching, without diamond drilling, were only categorized as indicated or inferred. Vein thickness, density and precious metal grades were assumed constant in the polygon area surrounding a drill intersection. The search ranges (radii) used based on experience at similar deposit resources. All resource modelling was carried out by qualified local geologists supervised by either a geologist or mining engineer who are members of the AusIMM. The QP has considered the methods used to estimate the resources and the parameters used including the minimum vein widths, lower cut-off grades and upper grade cutting and believe that they are reasonable for the style of mineralization being modelled and the mining methods that would be used Mineral Resource Estimate The mineral resource estimates are summarised in Table 11 below. Tonnes VEIN (1,000) CERRO VERDE SECTOR MEASURED INDICATED INFERRED Au (g/t) Ag (g/t) Tonnes (1,000) Au (g/t) Ag (g/t) Tonnes (1,000) Au (g/t) Ag (g/t) Armijos Atun Barita Bonanza Bonanza Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 47

53 VEIN Tonnes (1,000) MEASURED INDICATED INFERRED Au (g/t) Ag (g/t) Tonnes (1,000) Au (g/t) Ag (g/t) Tonnes (1,000) Brecha Bryan Buele Chula Clavo Colorada Comanche David Jair Esperanza Esperanza Esperanza Norte Esperanza Sur Extrin Flaca Flaca Foto Foto Sur Fred Herradura Herradura Jose A. West Jt Jt Jt West La Ensillada La Gorda La Tranca La Tranca Norte Linderos Linderos Linderos Los Encuentros Los Encuentros Main S Mula Nine Overal Au (g/t) Ag (g/t) Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 48

54 VEIN Tonnes (1,000) MEASURED INDICATED INFERRED Au (g/t) Ag (g/t) Tonnes (1,000) Au (g/t) Ag (g/t) Tonnes (1,000) Perdida Norte Piojo Playo Playo Rebelde Resbalosa Santi Santi Seven Una Venado Au (g/t) Ag (g/t) TRAPICHILLO SECTOR Andres Andrey Cris Este Cris Cross Sur Fernand Gold Jaramillo Juan Panay Parcemon Rio Sol IGUANA ESTE SECTOR Cisne Chiva Eleven Fortuna Iguana Iguana Este Ingrid Isabel Isabel Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 49

55 VEIN Tonnes (1,000) MEASURED INDICATED INFERRED Au (g/t) Ag (g/t) Tonnes (1,000) Au (g/t) Ag (g/t) Tonnes (1,000) Sola Au (g/t) Ag (g/t) PAPAYAL SECTOR Papayal 1 Veta Veta Veta Veta Veta Papayal 2 Veta Veta Veta Veta Veta Papayal 3 Veta Veta Veta Veta Veta Veta Veta Veta Papayal 5 Veta Veta Veta Veta Veta Veta Veta Veta Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 50

56 VEIN RODRIGO SECTOR Tonnes (1,000) MEASURED INDICATED INFERRED Au (g/t) Ag (g/t) Tonnes (1,000) Au (g/t) Ag (g/t) Tonnes (1,000) Au (g/t) Ag (g/t) Extremo Extremo Main 1n Mango Note: Lower cut-off grade of 2.0 g/t Au. Table 11: Current Vein Resource Estimates for the Dynasty Goldfield. Tonnes Au Ag Contained Au Contained Ag Category (Thousands) (g/t) (g/t) (1,000 ozs) (1,000 ozs) Measured 2, ,567 Indicated 3, ,936 Total Measured + Indicated 6, ,022 8,504 Inferred 7, ,118 9,901 Note: Lower cut-off grade of 2.0 g/t Au. Table 12: Current Resource Estimate Summary for the Dynasty Goldfield. Since the Mining Mandate came into effect in 2008, Dynasty and the Ecuadorian Government have continued to work to resolve the conflict that is causing a delay in granting environmental licenses, permitting and other matters and seeking socio-economic solutions. There is no assurance that these will be resolved and accordingly, the main risk to the project is political in nature if Dynasty were to proceed with development activities. Any mining at the Dynasty Goldfield Project will have to comply with all the laws of Ecuador. Other than as disclosed above, there are no unusual environmental, permitting, legal, title and taxation features at the Dynasty Goldfield Project that will materially affect any future mining operations. The country has a long history of mining and there are several successful mining operations nearby on similar mineral deposits. Critical risk factors applicable to the project are as follows: - Mining cost risk: mining costs are rising in the current world market, the effect of which could be offset by lower labour costs in Ecuador. - Metallurgical risk: test work needs to be completed to assess recoverability of both precious and base metals. - Sovereign, country, geographical and topographical risks. - Market price of precious metals: a significant decrease in the market price of precious metals could affect the viability of any future development project on this project. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 51

57 15.0 ADJACENT PROPERTIES There are several other mineral deposits within 100 km on the project area. Dynasty has an 80% interest in the Copper Duke porphyry copper project area approximately 15 km east of the Cerro Verde project (Figure 18). Figure 18: Mineralised Zones in the Vicinity of Cerro Verde Project. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 52

58 16.0 OTHER RELEVANT DATA AND INFORMATION No further explanation is necessary to make this Technical Report understandable and not misleading. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 53

59 17.0 INTERPRETATIONS AND CONCLUSIONS The Dynasty Goldfield Project comprises of seven mining concessions in southern Ecuador. These concessions have been the focus of a series of exploration programs since The project area has undergone mapping, sampling, geophysical surveys and diamond drilling. These works resulted in the identification of high grade gold and silver vein systems in the Cerro Verde, Trapichillo, Iguana Esta and Papayal areas. A total of 967 trenches and 201 drill holes have been sampled in the Dynasty Goldfield from 2003, when Dynasty acquired the concession rights, to February Dynasty has not engaged in any further exploration activity since that time and has no current plan to recommence activities until uncertainties associated with Ecuador's proposed new Mining Law have been resolved. A resource estimate has been calculated using polygonal methods. Table 13 summarises the current mineral resource estimate for the Dynasty Goldfield Project: Category Tonnes (Thousands) Au (g/t) Ag (g/t) Contained Au (1,000 ozs) Contained Ag (1,000 ozs) Measured 2, ,567 Indicated 3, ,936 Total Measured + Indicated 6, ,022 8,504 Inferred 7, ,118 9,901 Note: Lower cut-off grade of 2.0 g/t Au. Table 13: Current Resource Estimate for Dynasty Goldfield Project. It is the author s opinion that there is good potential for outlining further gold and silver resources along strike of the same geological structures that Dynasty has already successfully explored. The author makes the following observations regarding sample collection: Drilling Dynasty have employed drilling methods and associated procedures to ensure the highest core recovery possible. Drill collar and downhole surveying follows industry best practice so the potential for significant impact on results is minimal. The sampling methods and QA/QC protocols followed by Dynasty when sampling the drill core meet industry standards and would provide reliable assays suitable for resource estimation. The geological logging of the core is considered to be in line with industry best practice and consistent with other systems employed at narrow-vein deposits. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 54

60 Trenching The sampling methods and QA/QC protocols followed by Dynasty when sampling surface trenches meet industry standards and would provide reliable assays suitable for resource estimation. Weathering effects at the surface could produce biased results, depending on the nature of the weathering either high or low, so assay results of samples collected at the surface should not be projected deeper than the weathered zone for resource estimation. Sample preparation and assaying Sampling of diamond drill core and trenches is of a consistent and of a repeatable nature, with appropriate QA/QC methodologies employed. The assay method used is considered to be appropriate for this style of mineralization. The laboratories used for chemical analysis are internationally accredited. The level of compliance and lack of bias displayed by the standard reference samples, duplicates and blanks is good and demonstrates the reliability of the gold and silver grades used for the Mineral Resource estimate. Security of samples being transported to the laboratory is adequate. Mineral resource estimates The data density from sampling trenches and diamond drilling is sufficient for the reported resources in the assigned categories however further surface mapping, trenching and diamond drilling is required on most of the veins explored to date before there is sufficient reliable data for a definitive feasibility study. The polygonal estimation method is valid for the narrow veins modelled however the author recommends that the resource estimates are progressively updated using more modern computer modelling methods with mining industry standard software. Geostatistical variography should be used on the vein assays to statistically determine valid search distances for grade interpolations and resource categorisation. The main risks pertaining to this project are as follows: Resource risk due to changes in geological interpretation, assumed mining and processing parameters and new geological information and/or sampling data; Commodity prices and exchange rates are constantly changing; Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 55

61 Risks inherent in exploration and mining include, among other things, successful exploration and identification of ore reserves, satisfactory performance of mining operations if a mineable deposit is discovered and competent management; Risks associated with obtaining renewal of tenements upon expiry of their current term, including the grant of subsequent titles where applied for over the same ground. The grant or refusal of tenements is subject to ministerial discretion and there is no certainty that the renewal of tenements will be granted; The risk of material adverse changes in the government policies or legislation of Ecuador that may affect the level and practicality of mining activities; Environmental management issues with which the Company may be required to comply from time to time; Poor access to mining areas as a result of remoteness and difficult terrain; and The availability and high cost of quality management, contractors and equipment for exploration, mining, and the corporate and administration functions and the cost of identifying, negotiating with and engaging the same. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 56

62 18.0 RECOMMENDATIONS It is recommended that the Company continues with surface mapping, trenching and diamond drilling, to fully delineate the extent of the mineralization along strike and at depth in all the known veins. Further infill drilling on the higher grade veins is required to improve the reliability of the resource estimates prior to commissioning a preliminary economic assessment (PEA). Large diameter core holes should be drilled in the better defined, most likely to be mined, veins to provide representative samples for metallurgical testing to determine optimal processing plant design to maximise gold and silver recoveries. It is recommended that the Company continues with its existing Social Program to maintain good relations with the local populace. No exploration program is planned by Dynasty until uncertainties associated with Ecuador's proposed new Mining Law have been resolved. The following cost estimate is based upon a drilling program that would involve: 60 diamond drill holes for approximately 5,150 m at Trapichillo and Iguana Este over a total area of approximately 4 km2. 20 diamond drill holes for approximately 1,350 m at Papayal Norte over an area of approximately 1 km2. This conceptual exploration program would take approximately 3.5 years to complete. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 57

63 3.5 YEARS EXPLORATION BUDGET - TRAPICHILLO AND PAPAYAL NORTH Quantity Unit Description DYNASTY PROJECT Indiv. Cost (USD $) Unit Cost (USD $) Time (years) Total (USD $) 6,500 m Drilling (80 drill holes) $180/m $ 1,170, samples Drill core assays $ 34/ sample $ 32, ,100 m Trenches $20/m $ 22, samples Trench samples assays $ 34/sample $ 27, Camp and core storage $ 15,000 15, $ 0.00 Environment & Rehabilitation $ 1,000/month 1, $ 0.00 Social Programme $ 50,000 50, $ 0.00 Administration and Contingencies $ 8,000/month 8, $ 0.00 SUBTOTAL $ 1,251, Ecuadorian Taxes (12 %) $ 150, TOTAL $ 1,401, Depending on results yielded, the Company may be able to proceed towards conducting a PEA. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 58

64 19.0 REFERENCES Baldock, J (Coordinator), 1982: Mapa Nacional Ecuador. Instituto Geografio Militar. Bravo, L., 2005: Dynasty Property, Papayal-Cerro Verde-Q. Trapiche Labrado, Celica. Internal Company Report. Unpublished. Enadimsa, 1977: Estudio Geologio Minero del Area La Zanja. Mision Geologico-Minera de Espana en Ecuador. Litherland and Zamora, 1991: A Terrane Configuration for the Northern Andes. Comunicaciones Departamento de Geologia Universidad de Chile No. 42. Maynard, A.J., October 30, 2007: Independent Geological Evaluation, Dynasty Goldfield Project, Celica, Loja Province, Ecuador. Company Technical Report. Pilatasig, L and Gordon, D, 2004: Mapa Geologico Region Sur del Ecuador. Ministerio de Energia y Minas. Edicion Provisional. Schenk, Viger, and Anderson, 1997: Maps Showing Geology, Oil and Gas Fields, and Geologic Provinces of the South America Region. United States Geological Survey OFR D. United Nations, 1972: Exploration for Metallic Minerals in Southern Ecuador. Technical Report No. 14, UN Development Programme. Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 59

65 20.0 DATE AND SIGNATURE The effective date of this Technical Report is October 22, 2014 Allen J. Maynard, BAppSc(Geol), MAIG, MAusIMM Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 60

66 Appendices Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 61

67 VEIN Appendix 1 Ten Largest Resources Long Sections Showing Polygons (not to scale) MEASURED INDICATED INFERRED Tonnes (Thousands) Au (g/t) Ag (g/t) Tonnes (Thousands) Au (g/t) Ag (g/t) Tonnes (Thousands) Au (g/t) Ag (g/t) IGUANA PAPAYAL CISNE ESPERANZA PAPAYAL FLACA FOTO LA TRANCA HERRADURA PERDIDA NORTE Dynasty Metals & Mining Inc. - Dynasty Goldfield Report Page 1

68 SW NE IGUANA VEIN LEGEND RESOURCES MEASURED INDICATED INFERRED TRENCH SAMPLE LOCATION DRILL HOLE metros

69