Peru Portfolio

Overview and Highlights

Auryn Resources has acquired the rights to the Huilacollo, Curibaya and Baños properties in the Tacna province of Southern Peru. Together these projects encompass a total of 14,700 hectares within the prolific Pliocene Au/Ag epithermal and Miocene Cu/Au porphyry belts respectively. The epithermal belt in this region of Peru is host to four multi-million ounce gold discoveries since the year 2000 and the porphyry belt is host to four of the largest porphyry deposits in Peru.

The Company has acquired the rights to over 100,000 hectares that make up the Sombrero copper-gold project located 300 kilometres SE of Lima in southern Peru. This property lies within the north-western most projections of the Andahuaylas-Yauri Belt, which can be traced for more than 300 kilometres and is host to several significant copper-gold deposits including Las Bambas, Haquira, Los Chancas, Cotambambas, Antapacay, Tintaya, and Constancia.

Location Map
Location Map
Location Map
Concessions and Regional Structures
Concessions and Regional Structures
Concessions and Regional Structures

Sombrero

The Sombrero copper-gold property comprises over 100,000 hectares located 340 kilometres SE of Lima in southern Peru.

The Sombrero property is hosted in the Andahuaylas-Yauri belt and is interpreted to be on the north-western margins of the Eocene-Oligocene aged copper-gold porphyry and skarn belt that hosts the Las Bambas, Haquira, Los Chancas, Cotambambas, Constancia, Antapaccay and Tintaya deposits. The principal target at Sombrero is copper-gold skarn mineralization that Auryn feels has similarities to the Tintaya and Las Bambas mines in terms of their geological setting.

Historical surface samples from Sombrero indicate significant copper and gold values. Geological mapping and geochemical sampling were completed over the project in 2007, and high-resolution ground magnetic and induced polarization surveys were completed during 2008. Importantly there has been no drilling that has occurred on the project to date.

The Mollecruz concessions are approximately 1,000 hectares and represent another cluster of mineralizing intrusive bodies in the Sombrero district that are characterized by copper-gold skarn mineralization. The Mollecruz concessions were acquired in June 2018 and include the Good Lucky prospect. The principle skarn body at the Good Lucky prospect demonstrates high-grade copper-gold mineralization sampled over a 600-meter length and over 250 vertical meters. Rock samples graded up to 5.12 g/t gold and 4.29% copper in sulphide mineralization.

In addition, two new prospects, Totora and Uchuy, have also been discovered through sampling. At Totora, Auryn’s geologists have sampled gold values up to 5.07 g/t and copper values up to 3.14%. At Uchuy, strong arsenic and antimony values have been sampled which indicate the potential for proximal base and precious metal mineralization.

The Company acquired the rights to the Sombrero property through an option agreement with Alturas Minerals Corp. In order to exercise the Option and acquire a participating interests (“Interest”) for 80% of the Sombrero concessions, Auryn must incur up to US$2.1 million work expenditures within a five year period and make cash payments of $200,000 as follows:

  • $140,000 upon entering into this Agreement which has been paid; and
  • $60,000 on or before the first anniversary of the Effective Date

Upon Auryn having completed its requirements to earn an 80% interest in the Sombrero Project, the parties shall form a customary 80:20 joint venture vehicle. For a period of 1 year after the formation of the Joint Venture (the “Initial Period”), Alturas’ 20% interest shall be “free carried” and Auryn shall have a right to acquire the remaining 20% from Alturas for $5 million.

Surface Results:

The best results Auryn’s technical team has seen at the project have been in Trench 18, with 30 meters of 1.93% CuEq, 24 meters of 0.73% CuEq and 54 meters of 0.34% CuEq.

Broad zones of oxide copper and gold mineralization (endoskarn) have been encountered within a diorite-monzondiorite intrusive complex. This is peripheral to the main exoskarn target areas between the intrusive body and the Ferrobamba limestone sequence. Importantly, the endoskarn mineralization has been encountered over an approximate width of one kilometer, demonstrating the potential size of the mineralized system at Sombrero.

The encountered mineralized intervals in Trench 18 are separated by an interval where the trench was unable to reach bedrock. If the intervals of copper-gold mineralization are composited together with the area where no bedrock was encountered, using values of zero for both the copper and gold grades in the unsampled part of the trench, Trench 18 has a result of 109 meters at 0.7% CuEq.

Trench highlights are presented in the table below.

Sombrero Trench 2018 – Copper & Gold Significant Intercepts*

TrenchFrom
(m)
To
(m)
Interval
(m)
Cu
(%)
Au
(g/t)
CuEQ
(%)
AuEQ
(g/t)
18SRT-17626860.100.910.631.08
13614260.190.040.210.37
162178160.140.050.160.29
18SRT-181430160.470.100.530.92
4979301.860.121.933.34
79104not sampledbedrock not encountered
104158540.320.040.340.60
182206240.660.110.731.26
230244140.140.020.150.27
*No less than 5m of >= 0.1 g/t Cu, maximum dilution 5m
Metal price used for Eq calculations: Au $1300/oz and Cu $3.28/lb, no adjustments for metallurgical recoveries have been made.
Auryn believes these trenches represent true widths of the mineralized system.

Rock Sampling:

High-grade gold mineralization has been encountered in several discrete structures approximately 1 – 3 meters in width across a 400 meter by 1.5 kilometer long corridor. These samples were taken within the same endo-skarn intrusive body as our trenches with assays up to 193g/t gold. The structures sampled extend up to 1.5 kilometers north of the mineralized trenches and demonstrate a strong component of gold mineralization within the larger mineralized skarn complex. In addition, isolated gold-bearing jasperoid veins were sampled within the Ferrobamba limestone and returned assays up to 7.75g/t gold. This indicates the potential for an exo-skarn body at depth along the contact zone with the intrusive complex. A summary of 2018 rock samples are presented below.

Sombrero Rock 2018 Highlights

Sample IDAu (g/t)Cu (ppm)
W6450621931060
W64506415.05865
W64506511.05205
W6450147.751010
W6450264.791240
W6450253.81410
W6450563.09720
W6450232.27557
W6450241.781180
W6450201.38168.5
W6450630.882229
W6450130.81464
W6450510.758350
W6450290.6081460

MORE NEWS FROM SOMBRERO:

September 5, 2018: Auryn Identifies 3.5 Kilometer Drill Target at Sombrero and Initiates Permitting
June 25, 2018: Auryn Acquires Good Lucky Prospect and Discovers New Prospects at Sombrero
June 19, 2018: Auryn Trenches 99 meters of 0.46% Copper Equivalent and Samples up to 193g/t Gold in High-Grade Structures at Sombrero
April 26, 2018: Auryn Expands Sombrero District
April 17, 2018: Auryn initiates work and expands land position at the Sombrero Gold and Copper Project
February 24, 2017: Auryn trenches 53m at 1.75g/t Au at the Sombrero Project, Peru

Project Location Map
Project Location Map
Project Location Map
2018 Rock & Trench Highlights
2018 Rock & Trench Highlights
2018 Rock & Trench Highlights
2018 Trench Highlights
2018 Trench Highlights
2018 Trench Highlights

Huilacollo

The Huilacollo epithermal property is comprised of 3300 hectares of intense hydrothermal alteration that is consistent with epithermal Au/Ag mineralization over a 4 by 6 km area. Contigious to the Huilacollo property are the Tacora and Andamarca properties, which the company acquired in August 2017. Auryn’s technical team believes the epithermal system on the Tacora licenses is the continuation of the same oxide gold epithermal system observed on the Huilacollo licenses. The Andamarca license provides Auryn with a strategic land position that is considered important from an infrastructure standpoint if future mining were to occur.

Historical drilling has outlined a mineralized zone that is open for expansion along a 4km north-south trending corridor. Table 1 below highlights historical intercepts:

Table 1: Huilacollo selected intercepts

Hole IDFromToIntervalAu
g/t
Ag
g/t
Au g/t*
meters
AM-14082.582.51.166.595.6
AM-13062620.9412.158.1
AM-13128146181.044.318.7
AM-06088881.059.092.1
AM-16082820.9918.580.9
AM-01080801.2911.8103.2
AM-02050.6550.651.249.363.0
HU-35.4539.45342.1422.172.9
Intercepts were calculated using a minimum of a 0.2 g/t Au cut off at beginning and end of the intercept and allowing for no more than four meters of less than 0.2 g/t Au. True widths of the reported intercepts are believed to be approximately 60% of the drilled widths.

Higher grade zones within the mineralized zone appear to be focused along well defined feeder structures as highlighted by trench intercepts up to 38m at 6.7g/t Au and drill holes including 34m @ 2.14g/t. Importantly, the mineralization as currently defined, represents less than 10% of the area of first order geophysical targets defined by overlapping high resistivity and low chargeability zones that represent the potential for oxide gold mineralization within silica bodies. Initial exploration work will focus on rapidly establishing drill targets through structural mapping, trenching, volumetric sampling, and multi-spectral analysis with an initial drill program planned for the fourth quarter of 2016.

The Huilacollo property has excellent infrastructure with access by road, nearby high voltage power lines and water.

The Company acquired the rights to the Huilacollo property through an option agreement with a local Peruvian company, Inversiones Sol S.A.C. (the “Huilacollo Option”). Under the Huilacollo option, the Company may acquire a 100% interest, subject to a NSR, through a combination of work expenditures and cash payments as detailed in the table below.

The Tacora and Andamarca concessions were acquired in two seperate transactions with private Peruvian owners. Under the terms of the Tacora acquisition agreement, the Company will pay US $200,000 on signing of the Public Deed transferring the concessions in favor of Corisur Peru SAC. The Tacora concessions are subject to a 0.5% NSR, 50% of which is buyable for US $0.5 million. Under the terms of the Andamarca acquisition agreement, the Company will pay US $450,000 on signing of the Public Deed transferring the concession in favor of Corisur Peru SAC. The Andamarca concession is subject to 1.5% NSR, 50% of which is buyable for US $2.5 million.

Due datesProperty PaymentsWork Expenditures
All amounts in US dollars
Effective Date (May 31, 2016)$ 250,000-
Within 24 months of the Effective Date$ 500,000$ 2,000,000
Within 36 months of the Effective Date-$ 3,000,000
Within 48 months of the Effective Date$ 250,000-
Within 60 months of the Effective Date$ 250,000$ 2,000,000
Within 72 months of the Effective Date$ 7,500,000-
Total$ 8,750,000$ 7,000,000

The Huilacollo NSR is 1.5% and buyable for $2,500,000 on precious metals and 2.5% buyable for $7,000,000 on base metals.

MORE NEWS FROM HUILACOLLO:

April 13, 2018: Auryn Resources expands oxide gold mineralization at the Huilacollo project, Peru
October 23, 2017: Auryn to commence drilling in Southern Peru at the Huilacollo Gold Project
September 12, 2017: Auryn Resources commences trenching and submits drilling application on the Huilacollo Project, Peru
January 31, 2017: Auryn discovers over 1.8km strike length of new gold-in-soil anomalies at Huilacollo

Huilacollo Technical Report
Huilacollo Technical Report
Huilacollo Technical Report
Sulphidation Alteration System
Sulphidation Alteration System
Sulphidation Alteration System
Historical Drilling
Historical Drilling
Historical Drilling
Oxide Gold Targets
Oxide Gold Targets
Oxide Gold Targets

Baños del Indio

The Baños del Indio epithermal property is comprised of 5,000 hectares of well-developed high-level steam heated epithermal style alteration and is considered by Auryn to be one of the largest untested epithermal alteration centers in Peru.

Baños del Indio shares many similarities with the La Coipa mine complex in northern Chile where economic mineralization is principally located beneath similar high-level steam heated epithermal alteration. Initial exploration to define drill targets will focus on structural mapping, multi-spectral analysis to identify high temperature clays, volumetric sampling and induced polarization geophysical surveys.

The Company acquired the rights to the Baños del Indio property through an option agreement with a local Peruvian company, Exploandes S.A.C (the “Banos Option”). Under the Baños Option, the Company may acquire a 100% interest, subject to a net smelter return royalty (NSR), through a combination of work expenditures and cash payments (all dollar amounts are in USD) as detailed in the table below:

Due datesProperty PaymentsWork Expenditures
On signing$ 100,000-
Within 12 months of the commence of work (additional)$ 100,000$ 200,000
Within 24 months of the commence of work (additional)$ 100,000$ 250,000
Within 36 months of the commence of work (additional)$ 200,000$ 1,000,000
Within 48 months of the commence of work (additional)$ 150,000$ 2,000,000
Within 60 months of the commence of work (additional)$ 2,500,000-
Total$ 3,150,000$ 3,450,000

The Banos del Indio NSR is 3.0% with 50% (being 1.5%) buyable for $6,000,000. In the event the Company does not complete a feasibility study within 3 years of exercising the option, an escalating advanced royalty starting at $200,000 per annum shall become payable. The total amount of the advanced royalty is capped at $1.5 million.

The Company is also obligated to pay a production bonus of $2,500,000 upon initial commercial production.

Steam heated, argillic and silica alteration
Steam heated, argillic and silica alteration
Steam heated, argillic and silica alteration

Curibaya

The Curibaya property comprises of 18,100 hectares covering the regional Incapuquio fault zone and subsidiary structures that are collectively interpreted as one of the fundamental controls for both epithermal and porphyry styles of mineralization within the region. Importantly the licenses host a number of cross structures to the Incapuquio fault zone that are considered highly prospective.

Auryn has undertaken some initial exploration efforts which consisted of a cyanide leach stream sediment survey that has identified a cluster of gold & copper anomalies in contiguous drainage basins within the SW portion of the claim block spanning an area of approximately 50 square kilometres. These anomalies are the first stage of developing Cu/Au porphyry and Au epithermal targets.

Stream Sediments and Catchment Areas - Gold
Stream Sediments and Catchment Areas - Gold
Stream Sediments and Catchment Areas - Gold
Stream Sediments and Catchment Areas - Copper
Stream Sediments and Catchment Areas - Copper
Stream Sediments and Catchment Areas - Copper

Cautionary Wording with Respect to the Mineral Interests

Auryn holds its interests in Peru through Corisur Peru SAC, which controls (among other) certain licenses (including the Huilacollo and Baños del Indio projects) that are located within a special legal zone which runs 50km back from the Peruvian border. As a non-Peruvian company, Auryn’s right to ultimately acquire title over the shares issued by Corisur Peru SAC and to own and/or exploit these licenses requires approval from the Peruvian government. While Auryn is in the process of submitting its applications with respect such the approval and does not currently foresee any legal reason why it would be denied the approval, some risk of denial or delay should be assumed to exist.

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