Chalcobamba P00142 PFS Independent Peer Review June 2018 Final Report Rev 0 Compiled

Minera Las Bambas S.A.
Chalcobamba PFS
Independent Peer Report
Final Report Rev 0
P00142
June 2018
Independent Peer Review
Chalcobamba PFS, Minera Las Bambas S.A.
02.07.2018 Final Report

Project P00142
PMG-FOR-100061 – Rev. 0
Chalcobamba PFS
Important Notice
This report was prepared exclusively for MMG Minera Las Bambas S.A.
(MMG) by Amec Foster Wheeler Lima (Wood). The quality of
information, conclusions and estimates contained herein is consistent
with the level of effort involved in Wood’s services and based on:
i) information available at the time of preparation, ii) data supplied by
outside sources and iii) the assumptions, conditions and qualifications
set forth in this report. This report is intended to be used by MMG only,
subject to the terms and conditions of its contract with Wood. Any other
use of, or reliance on, this report by any third party is at that party’s
sole risk.
Cecilia Artica, Don East, Willmer Cancho,

Michael Woloschuk, Kevin Brown, Luis Neyra,
Prepared by: Jorge Arnaiz
Print name
Kirk Hanson, Tim Khul, Kyle Marte,

Reviewed by: Mike Woloschuk
Print name
Approved by: William Colquhoun

Print name
Approved: William Colquhoun
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Contents
1.0 Executive Summary ........................................................................................................ 1-1

2.0 Introduction and Background....................................................................................... 2-6
3.0 Key Technical Findings .................................................................................................. 3-1
3.1 WQR Compliance 3-2
3.1.1 Introduction ...................................................................................................................................... 3-2
3.1.2 Location and Setting ..................................................................................................................... 3-2
3.1.3 Legal Environment and Approvals........................................................................................... 3-2
3.1.4 Stakeholders and Community ................................................................................................... 3-2
3.1.5 Geology and Resource Estimate ............................................................................................... 3-3
3.1.6 Mining ................................................................................................................................................. 3-3
3.1.7 Mineral Processing ......................................................................................................................... 3-4
3.1.8 Waste................................................................................................................................................... 3-4
3.1.9 Infrastructure .................................................................................................................................... 3-5
3.1.10 Safety, Security, Health, Environment .................................................................................... 3-5
3.1.11 Marketing .......................................................................................................................................... 3-5
3.1.12 Operations Management ............................................................................................................ 3-6
3.1.13 Operational Contracts .................................................................................................................. 3-6
3.1.14 Project Execution ............................................................................................................................ 3-6
3.1.15 Capital Cost Estimate .................................................................................................................... 3-6
3.1.16 Operating Cost Estimate.............................................................................................................. 3-8
3.1.17 Business Risk .................................................................................................................................... 3-9
3.2 Adherence to Best Industry Practice and Technical Observations 3-9
3.2.1 Introduction ...................................................................................................................................... 3-9
3.2.2 Location and Setting ..................................................................................................................... 3-9
3.2.3 Legal Environment and Approvals........................................................................................... 3-9
3.2.4 Stakeholders and Community ................................................................................................ 3-11
3.2.5 Geology and Reource Estimation.......................................................................................... 3-14
3.2.6 Mining .............................................................................................................................................. 3-39
3.2.7 Mineral Processing ...................................................................................................................... 3-43
3.2.8 Waste................................................................................................................................................ 3-46
3.2.9 Infrastructure ................................................................................................................................. 3-48
3.2.10 Safety, Security, Health, Environment ................................................................................. 3-48
3.2.11 Marketing ....................................................................................................................................... 3-49
3.2.12 Operations Management ......................................................................................................... 3-49
3.2.13 Operational Contracts ............................................................................................................... 3-49
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3.2.14 Project Execution ......................................................................................................................... 3-49

3.2.15 Capital Cost Estimate ................................................................................................................. 3-51
3.2.16 Operating Cost Estimate........................................................................................................... 3-52
3.2.17 Business Risk ................................................................................................................................. 3-54
4.0 Investment Evaluation ................................................................................................. 4-55
5.0 Recommendations for FS Work Plan ......................................................................... 5-61
6.0 Conclusions and Recommendations .......................................................................... 6-62
Tables
Table 1-1: IPR Traffic Light Report – WQR Standards Compliance and Issue Register ............................ 1-4
Table 3-1: Statistics of Lithology Group Codes used for Geological Model Construction ................. 3-16
Table 3-2: Average samples distances -inside the final pit - Used to build the Lithological Model 3-18
Table 3-3: Average samples distances -inside the final pit - used to build the Minzone model ..... 3-18
Table 3-4: Statistic evaluation of Lithology in the OXIDOM=1 (Oxide) ..................................................... 3-19
Table 3-5: Statistic evaluation of Lithology in the OXIDOM=2 (Mixed) ..................................................... 3-20
Table 3-6: Statistic evaluation of Lithology in the OXIDOM=3 (Sulfide) .................................................. 3-21
Table 3-7: Statistic evaluation of Specific Gravity in the OXIDOM 1,2 and 3 ............................................ 3-22
Table 3-8: MMG Lithology Estimation Domain ..................................................................................................... 3-23
Table 3-9: Top-Cut Value Comparison for Copper Domains ........................................................................... 3-27
Table 3-10: Cu Variogram Parameters ......................................................................................................................... 3-30
Table 3-11: Number Cu Samples and Ranges per Pass ........................................................................................ 3-32
Table 3-12: Wood OK Model Validation Statistics .................................................................................................. 3-36
Table 3-13: Classification Parameters .......................................................................................................................... 3-37
Table 3-14: Comparison Optimization Mine Cost Vs. Results Mine Cost (OW2-OW6) ........................... 3-40
Table 3-15: Pit Sensitivity .................................................................................................................................................. 3-41
Table 3-16: Support Equipment Estimation Criteria .............................................................................................. 3-43
Table 4-1: Price Assumptions ....................................................................................................................................... 4-57
Table 4-2: Closure Costs Deviations ........................................................................................................................... 4-60
Figures
Figure 3-1: Lithological model Plan Section 4480 .................................................................................................. 3-17

Figure 3-2 Boxplot CuT (%) by Lithology Domain (MMG Data) ...................................................................... 3-24
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Figure 3-3: Boxplot Cu (%) by Lithology in Oxide Zone ...................................................................................... 3-24

Figure 3-4: Boxplot Cu (%) by Lithology in Mixed Zone ...................................................................................... 3-25
Figure 3-5: Boxplot Cu (%) by Lithology in Primary Zone ................................................................................. 3-25
Figure 3-6: Contact Plot Cu (%) SK vs MSK ............................................................................................................... 3-28
Figure 3-7: Example of Swath Domain 78 (MMG Report)................................................................................... 3-34
Figure 3-8: Cu Domain 40 Swath Plot ......................................................................................................................... 3-35
Figure 3-9: Cu Domain 41 Swath Plot ......................................................................................................................... 3-35
Figure 3-10: Example of Copper Global Statistics (MMG Report) ...................................................................... 3-36
Figure 3-11: Change of Support Exoskarn (40) (MMG Report) ........................................................................... 3-37
Figure 3-12: Plan-section 4300......................................................................................................................................... 3-38
Appendices
Appendix A : Independent Peer review Traffic Light Report – PFS Standards Compliance and Issue Register
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1.0 Executive Summary

Wood was commisioned by MMG to conduct an Independent Project Review (IPR) of the Las
Bambas Chalcobamba pre-feasibility study (PFS) and to provide our opinion on the suitability
of the PFS to meet MMG´s requirements to advance to a feasibility study (FS).
Table 1-1 presents a high level summary of the results of the IPR relative to MMG´s internal
Project Development Phase Work Quality Requirements (WQRs) standards for PFS.
Overall, the PFS study objectives have been met and the study generally meets or exceeds the
MMG’s internal WQRs standards for PFS, with a few specific items in the areas of business risk,
and economic evaluation that could be addressed for full compliance.
In general, Wood concurs with the MMG study team recommendation to advance the
Chalcobamba project to a FS stage.
In addition, some recommendations have been made based on our own experience in industry-
standard practices at the PFS level, to address potential shortcomings and progress
opportunities identified during the FS:
• During the FS stage it is recommended that the IPR process is initiated earlier with an
interim stage gate review, and finalized only after the compilation, internal review and
issue of the complete study report to the IPR team.
• Wood believe that, for the most part, the Cu domains need to be reviewed in FS, and
recommends that consideration be given to combining the lithology, mineralization,
faults and alteration.
• Neither dilution nor recovery were considered for pit optimization, mine planning or
economic assessment. Only a 6% of dilution was considered in the block model due to
the reblocking effect. This would not be WQR compliant. However Wood carried out a
sensitivity analysis to evaluate the effect of the addition of a operational dilution and
mining recovery factor and concluded that the variation is not material for the business
case. This should be considered in FS stage.
• The economic parameters used (mining cost, process, etc.) for the pit optimization were
based on 2016 LoA Mid Case. It is recommended that the pit optimization is updated
with the PFS results in the FS and its impact evaluated based on the sensitivity analysis
to evaluate optimization opportunities.
• The performance of the crusher should be evaluated by ore type (magnetite, porphyry,
etc.) and it is recommended that the optimization and scheduling will be based on
throughput US$/h by lithology and pit area.
• It is recommended that the final pit design be reviewed by the Geotechnical and
Hydrogeological Department, considering that there are changes in the location ramps
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and the pit bottom axis. There is an opportunity to use a single lane ramp in pit bottoms
for a limited number of benches with the objective of mine more ore blocks in these
last benches.
• It was identified in Scenario 4-OW2 (Stage 1) that mining of the phase 3 has been
included, representing a 102Mt of material (27Mt of ore and 75Mt of waste, SR 2.8).
This is out of the Stage 1 scope and this could be generating a loss of value in the
Stage 1 because of the high strip ratio which should be evaluated in FS stage.
• The FB-CB haul road profile developed by Ausenco (revB) was reviewed. It was noted
that a section of the road greater than 1.7km with a negative gradient does not include
safety stretches. A section of 150m (progressive from 5+500 to 5+700) with a gradient
of 13.5% was also found which exceeds the standard of 10%.
• The final pit selected for CB was the pit with revenue factor 1. However, Wood
recommends evaluating a smaller pit during FS with higher NPV, because currently the
phase 4 adds a significant quantity of waste with a small return and additional risk. The
benefit may not cover the investment in the additional trucks needed for mining this
phase.
• As a mining opportunity, autonomous trucks could be evaluated considering that this
will improve the efficiencies and will reduce the operational risks.
• The use of only one fleet of drilling and loading equipment could increase operational
risk due to mechanical availability and generate unscheduled stops of the whole mine.
The annual productivity of the shovel meets exactly the required production for the
two first years (2021 – 2022). Therefore, it is recommended a lowboy is available in FB
able to transport a drill equipment and a FEL capable to replace the shovel for
unscheduled stops.
• Wood concurs with the PFS recommendation that additional comminution test work is
recommended on samples representing the next five years of processing and that
throughput modelling is aligned with the mine production plan to identify throughput
optimization opportunities.
• The existing tailing storage facility (TSF1) is suitable for additional ore processing and
is proposed as the primary tailing storage facility for Chalcobamba stage 1 tailings.
• The PFS states that of January, 2018, TSF1 has a remaining potential of approximately
675Mt when built to final elevation at Stage 6 of 4150m. This tonnage is based on an
average tailings dry density of 1.65t/m3. The PFS does not, however, provide the
supporting data to indicate that TSF 1 has the capacity to contain the CB tailings at the
designed capacity plus freeboard.
• Under current operating conditions, it is estimated that approximately 90% of the

surface area of the tailings basin is covered with water. Tailings are currently being
discharge at a single point near the plant and the slurry flow discharges almost directly
into the pond. This subaqueous deposition is known to create low density underwater
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deposits, so it is not known whether the assumed density of 1.65t/m3 is being achieved
or by how much the density is being reduced. Obviously, any reduction in the tailing
density will reduce the available tonnage within the same volume.
• The PFS proposes an additional study for the identification of wetlands that could be
affected by the components of the Chalcobamba project, especially close to the waste
dumps. There is a risk of potential impact to the wetlands which according to the
national environmental regulations could result in a compensation claim. It is
recommended that potential costs associated with incurring a wetlands compensation
claim should be considered in the FS estimates.
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Table 1-1: IPR Traffic Light Report – WQR Standards Compliance and Issue Register
Independent Peer Review Traffic Light report – WQR Standards Compliance and Issue Register
Study: Las Bambas Chalcobamba Expansion Project in Pre-Feasibility (PFS) seeking to go to Feasibility (FS)
=Full Compliance = Majority Compliance (>50%) = Low Compliance (<50%)
Report Content Objective: IPR observations on PFS with respect to compliance to WQR Compliance
Objectives & Standards Criteria Assessment
1. Introduction Objective: Outline context, project scope, work done to date, and the strategic
drivers for the project.
2. Locations and Objective: Document any physical aspects, including ownership, of the site that
Setting impact on the project.
3. Legal Objective: Provide a detailed analysis of relevant legislation highlighting the legal
Environment and requirements, risks and major approvals and agreements required. A work plan is
Approvals required, and timing (including contingency) for approvals must be factored into
the project schedule and next phase resource estimate. Demonstrate adequate
progress towards obtaining the required approvals. Any issues that may have a
significant bearing on the project should be identified, and mitigation plans
defined.
4. Stakeholders and Objective: Refine the stakeholders analysis highlighting any shifts in opinion or
Community position resulting in opinion resulting from recent engagements or activity. Fully
define requirements for, and status towards any third party agreements. In
particular, fully define land access and acquisition requirements and timelines
required to secure.
5. Geology Objective: Outline current understanding of the deposit geology noting any work
done in this phase to improve understanding. Intent is to indicate a reasonably
firm estimate of the size/quality of the resource and the scale of the project. Any
risks and uncertainties in the underlying data should be highlighted, and the
program of work required in the next phase should be outlined.
6. Mining Objective : Develop the selected option to the standard required highlighting
risks, uncertainties, and areas for optimization. Analyse closure options and select
approach based on whole project optimization.
7. Mineral Objective: Develop the process design and expected performance parameter for
Processing the selected option. Process will be robust, but un-optimized. Any knowledge
gaps (representing both risks and opportunities) will be highlighted. Develop the
corresponding design of the process plant.
8. Waste
8.1 Tailings Objective: Finalize the locations and storage approach for tailings and progress
design.
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8.2 Waste Rock Objective: Finalize the locations and storage approach for waste rock dumps and
Disposal progress design.
8.3 Water Objective: Develop a preliminary design of required water management

Management infrastructure
9. Infrastructure Objective: Develop a preliminary design for all on-site infrastructure
10.1 Safety, Security, Objective: Outline how any key safety, security, health issues will be mitigated
Health through the design and/or operational readiness processes.
10.2 Environmental Objective: Outline how any key environmental issues will be mitigated through
the design and/or operational readiness procedure. Summarise progress with
baseline data and highlight any gaps or issues.
11. Marketing Objective: Validate Scoping Phase Assumptions
12. Operations Objective: Develop a preliminary estimate of the labour resource required for the
Management project- structure, head count, agreements and conditions
13. Operational Objective: Initiate and advance discussions with suppliers to ensure both security
Contracts of supply within timeframe, and robust estimate of cost.
14. Project Objective: Conduct preliminary planning for project execution to ensure
Execution integration of PEP with design, schedule and cost estimate. A preliminary project
schedule, highlighting critical path should be developed.
15. Capital Cost Objective: Refine the capital cost estimate for the selected project option based
Estimate on improved definition. The estimate must be complete and cover all capital
including subsequent feasibility phase, mine development and infrastructure,
process plant, and on and off site infrastructure.
15. Operating Cost Objective: Fully develop the estimate of operating costs for the project, and
Estimate define the uncertainty in the estimate.
16. Business Risk Objective: Identify, analyse and define mitigate strategies for project risks at a
level of detail commensurate with the overall definition of the project. Material
residual risks to be included in valuation. This analysis should highlight a range of
issues that need to be resolved or progressed during the next phase.
17. Economic Objective: Assessment based on the selected development scenario. The
Evaluation assessment of risk and uncertainty is revised and used to illustrate probable range
of outcomes and also to highlight key focus areas for further refinement.
18. Objective: Outline recommendation and key aspects of work plan for the next
Recommendation phase.
and Work Plan
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2.0 Introduction and Background

Wood was commisioned by MMG to conduct an Independent Project Review (IPR) of the Las
Bambas Chalcobamba prefeasibility study (PFS) and to provide our opinion on the suitability of
the PFS to meet MMG´s requirements to advance to a feasibility study (FS).
The IPR review of the Chalcobamba PFS report which has a base date of June 11, 2018 was
conducted relative to MMG’s internal Project Development Phase Work Quality Requirements
(WQRs) standards as well as our own experience in industry-standard practices at the PFS level
to also help identify other potential shortcomings or opportunities in the study.
Generally, a PFS should:
• provide sufficient evidence to support the assumptions made

• identify and assess relevant project risks
• include all necessary facilities to support the project
• provide realistic development and production schedules
• provide a work plan that addresses the project risks, adheres to the requirements of a FS
and includes the proper scope, schedule and budget
• address interactions with other development plans or work projects in progress and assess
the impacts these have on the Chalcobamba work plan and schedule.
The facilities reviewed included:
• open-pit mine and surface support infrastructure

• crusher and overland conveyor
• a third ball mill at Ferrobamba, but only for the purpose of inclusion in flowsheets (no cost
review). The third ball mill project and a SAG pebble crushing upgrade project are being
executed independent of the Chalcobamba PFS but is important to implement to achieve
planned production throughput of 53.7 Mt/a in an integrated Las Bambas operation.
• secondary mine support facilities, such as water management facilities
• the potential second tailings facility, but only to assess whether it is properly integrated in
the “with TSF2 [tailings storage facility]” option.
As part of the IPR, the cash-flow model that supports the preferred path forward and its
comparison in the PFS to any options that have been discounted was reviewed. We have also
compared at a high level the inputs to the economic evaluation against estimates provided in
other sections of the PFS, such as operating and capital costs, production schedules and
metallurgical recoveries.
The Wood IPR team comprised the following specialists (*conducted site visit):
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• William Colquhoun, Consulting Technical Services Manager (IPR Manager) *
• Donald East, Technical Director Geotechnical (Tailings, Geotechnical, Water

Management, Transport Corridor Lead)*
• Willmer Cancha, Senior OP Mining Engineer (Mining and Infrastructure Lead)*
• Cecilia Artica, Senior Geologist (Geology and Resource Estimation Lead)*
• Kevin Brown, Project Director, Program Management (Execution Lead)
• Rhea Hartt, Senior Estimating Specialist (Cost Estimation Lead)
• Michael Woloschuck, VP Consulting (Process Lead)
• Jorge Arnaiz, Environmental Manager ( Environmental and Permitting Lead)
• Alexandra Iquira, Environmental Specialist (Social and Community Lead)*
A kick off presentation meeting was held in Lima on 5 th June, 2018 and data reviews
commenced on June 6th. During the IPR, Woods opportunity to review the study sections with
the relevant PFS discipline technical author leads was minimal due to their limited availability.
Woods principal technical contact and interface during the IPR for clarifications on the PFS
report content was the Chalcobamba PFS Study Manager. Some discussions were held with the
new MMG regional management technical team who are also still assessing and familiarizing
themselves with the PFS study results and recommendations.
A site visit was subsequently conducted by some members the IPR review team on 14 th and 15th
June, 2018. During the site visit and ongoing data reviews it was evident there were still gaps
in the information provided and various support appendices were still being downloaded and
report sections updated as the review proceeded in response to the IPR clarifications.
In Wood`s experience this is unusual in the IPR process which is normally conducted on a
complete study definition package, based on Rev 0 issue drawings and support documentation,
following internal peer reviews and sign off by the Owners team. Some of the support
documentation and drawings initially missing were provided following clarification as Rev B
Issued for Client Review. Wood do not believe overall this was material to this IPR assessment
and conclusions at this PFS stage, as although generally at the start of the review some of the
study sections could only be considered to be partially compliant. These became largely
compliant as the IPR proceeded as a result of clarifications and updates provided. However,
this iterative process required the IPR to team spend additional time assessing information to
determine potential information gaps and inconsistencies in the main report that were
subsequently updated.
During the FS stage, Wood recommends the IPR process is initiated earlier, with an interim
stage gate review, and finalized after internal review and issue of the complete study report to
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the IPR team. This will help further mitigate study and schedule risks associated with potential
definition gaps, cost estimation, and quality issues that form the basis for final investment
recommendations and early operational readiness planning.
As a general observation Wood notes two additional strategic key objectives considered by
MMG for advancing and bringing forward the Chalcobamba project development through
trucking:
• Recent geotechnical failures/concerns in the Ferrobamba Wood also observed during

the site visit which have placed a higher priority on bringing the Chalcobamba mine
into production as soon as practically achievable.
• Provides the opportunity to maintain Las Bambas production at 400 ktpa with an
improved NPV relative to any Ferrobamba do nothing, or expansion standalone case.
The PFS-B consequently evaluated alternative configurations to develop Chalcobamba as soon

as possible and demonstrates the trucking alternative based on a Stage 1 mining plan has the
highest NPV. In addition, this option allows MMG to defer a crushing and conveying option
that might be better optimized in a future Stage 2 to support a transport corridor for
developing other potential nearby deposits, other than mining at Chalcobamba alone.
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3.0 Key Technical Findings

The Project Development WQR document of MMG is an internal guideline to provide the
minimum internal requirements to complete a development phase of a project, and to ensure
that all project development phases are completed using a consistent and agreed methodology
and to a predetermined standard.
The WQR defines a pre-feasibility study with two stages:
• Pre-Feasibility A (PFS-A) Alternatives Assessment Stage. This stage focuses on evaluating

investment alternatives based on a range of resource, mining, processing strategic options.
The options are evaluated economically and on other business factors (such as risk) to
identify the preferred alternative in PFS phase B (PFS-B). The PFS-A report must report on
the basis of the study support and the process of evaluating the strategic options.
• Pre-Feasibility B (PFS-B) Definition Stage. This stage ensures that the selected single
business case and preferred alternative is rigorously reviewed and a detailed evaluation of
the options full value and risk profile is conducted to confirm the business case. All PFS
study definition requirements are completed during this phase. In addition, the work
program to subsequently optimise the option and develop an investment proposal is
outlined.
The present PFS work and report are considered by MMG Project Team to be at the PFS-B
Stage. Wood comments that although the selected preferred FS forward case is considered to
be appropriately defined and evaluated for PFS –B, it is presented in the context of several other
alternatives that were also evaluated. This results in higher potential risks for errors in
transposition from other alternatives and is more difficult to independently audit and trace the
relevant inputs in models. This supplementary Alternatives assessment arose out of the
recommendations of the PFS-A report.
The WQR establishes lower and upper study criteria for a PFS. The following section summarizes
the IPR assessment of the PFS compliance with the WQR criteria. In addition, our own
experience of best industry-standard practices at the PFS level is discussed in the subsequent
sections of the report.
During the IPR design deliverables for plants and key facilities were assessed to check
compliance with at least the minimum standard defined in the Capital Estimation and
Engineering Deliverable Standard (Section B WQR). As a minimum standard for PFS, this was
defined to include conceptual drawings or similar outlines based on assessed data and
measured dimensions. Both primary and secondary features should be shown, some multi-
disciplinary checking conducted, and in sufficient detail to support preliminary MTOs.
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3.1 WQR Compliance
A traffic light report register was used to present the assessment of this IPR. Details of the IPR
Traffic Light Report – WQR Standards Compliance and Issue Register are provided in Appendix
A. The following sections provide additional clarifying commentary on this review.
3.1.1 Introduction
Compliant. The earlier scoping study and results are well summarized. A brief description and
clarity of work completed and conclusions from the preceding PFS – A, leading to the current
PFS-B work plan, would be helpful.
3.1.2 Location and Setting
Compliant. An indication of the geological potential of areas close to the pit and those that
need sterilization would normally be disclosed here, however this is covered in the geology
section.
3.1.3 Legal Environment and Approvals
Compliant. The review of environmental permitting strategy concludes that it includes all
required permits, there is clear timeline and identified risks. The plan appears realistic and
considers a reasonable contingency for uncertainty in the response time by the government.
3.1.4 Stakeholders and Community
Compliant. The PFS adequately presents the internal and external stakeholders of the project,
the social processes and agreements reached with external stakeholders (communities and
local, provincial and regional authorities), as well as the requirements for the acquisition and
access to communal lands.
Potential confusion between prior consultation and citizen participation processes should be
assessed. This risk should be evaluated and mitigated if necessary.
Negative influence from micro and meso stakeholders could potentially affect timelines.
Construction of housing in surrounding areas or within the Huancuire community could affect
resettlement plans and land access negotiations. Environmental modelling is recommended for
those new housing areas.
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3.1.5 Geology and Resource Estimate
The current understanding of the deposit geology and resource estimation is reasonably
outlined and work done in this phase to improve understanding is noted.
Compliant. JORC code. The resource statement tabulation includes oxides which are not
scheduled in the mine plan, but will be ore controlled and deposited in a dedicated stockpile
as it has the potential to be economic.
Compliant. The standard of resource definition complies with at least the ideal minimum of:
• 80 % indicated for the first three years

• 50 % indicated for life of mine
• Unclassified material is not be included in the valuation.
3.1.6 Mining
Compliant. In general, the development of the Chalcobamba PFS meets the requirements of
the WQR standards, and recommendations and analyses are proposed for the next stage at
feasibility study.
• Hydrogeological and geotechnical design calculated from site data: The

hydrogeological and geotechnical design criteria were developed according to standards,
based on the following studies: “Prefeasibility Pit Slope Design and Ground Water
Assessment” by Piteau Engineering Latin America in 2009, and ”Chalcobamba Slope
Geotechnical Design Guidance for 2015-2017” by Geotechnical and Hydrogeological
Department Technical Services – Minera Las Bambas S.A.
• Dilution and recovery estimates calculated: Neither dilution nor recovery were
considered for pit optimization, mine planning or economic assessment. A 6% dilution was
considered in the block model due to the reblocking effect. Wood carried out a sensibility
to evaluate the effect of the addition of an operational dilution and mining recovery factor
and concluded that the variation is not relevant for the business case.
• Cost estimates for contract mining based on budged pricing/regional experience, and
for owner/operator based on bottom-up cost model: The cost model was developed
considering an owner scenario. The mining cost was estimated in compliance with the WQR
standard.
• Closure requirements consistent with closure planning WQR, and closure cost
estimate developed to class V level: Mining closure was developed according to the
standards and cost estimation to class V level.
• Reference documents: All the listed documents were reviewed. The mine plans include
details of the material movement and fleet equipment list differentiated for FB-CB.
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3.1.7 Mineral Processing
Compliant. The WQR requirements for mineral processing design is based on “completed ore
characterisation”. Testwork on metallurgical samples in Phase 1 of the program is limited due
to community issues restricting access to the north side of CB Phase 1 pit. A major geo-
metallurgical campaign is planned for Las Bambas from 2020 to 2025 and will be conducted in
2019. This Phase 2 program will incorporate Chalcobamba and Ferrobamba orebodies. This is
expected to feed into the feasibility study to support an execution decision. This test program
should incorporate lithologies and domains within the LOM pits.
Some pilot testing was conducted and reported but confirmatory piloting will require additional
sampling as noted above.
The process design criteria should include recovery algorithms and reagent dosing
requirements to ensure the existing systems are adequately sized.
Throughput modeling should incorporate results from Phase 2 of the testwork program and
throughput predictions based on geometallurgical modeling parameters.
Preliminary piloting provided a concentrate assay. Locked cycle testing in Phase 2 is

recommended to determine potential pay and penalty elements in the concentrates.
3.1.8 Waste
3.1.8.1 Tailings
Compliant. The existing Ferrobamba tailings storage facility, TSF1, is the operating tailings
storage facility for the Ferrobamba mine and has been proposed as the primary tailings storage
facility for Chalcobamba Stage 1. The Chalcobamba PFS does not include the supporting data
to indicate that TSF1 has the capacity to contain the CB tailings at the designed capacity plus
freeboard. However, as there will be no increase in the total mill throughput with the future
inclusion of Chalcobamba ore, it is reasonable to expect that the expansion plans for TSF1 will
accommodate the CB tailings and that WQR compliance has been achieved.
A second TSF site has been identified in the Tambo valley near to TSF1 and a pre-feasibility
study was completed in 2015. A study is being currently conducted to confirm the site selection
and construction materials before any land purchase activities are started. A prefeasibility study
of the preferred site, including all geological, geotechnical, hydrological and other supporting
investigations will be conducted in 2019 with a full feasibility planned for 2020. This tailings
facility is outside the scope of the current CB PFS.
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3.1.8.2 Waste Rock Disposal
Compliant. The two Chalcobamba waste rock sites are well sited in valleys to the north-east
(70Mm3) and south-west (88Mm3) immediately adjacent to the mine. The outer slopes will be
constructed in accordance with the closure design so to avoid future regrading and to speed-
up rehabilitation.
Perimeter drains will divert non-contact water and contact water will be collected via
underdrains to a collection pond for recycle to the plant. In addition, sediment control
structures will be designed downstream to minimize impacts to community lands.
No geotechnical work has been conducted within the area proposed for the waste rock or
associated infrastructure. Feasibility stage geotechnical drilling (5 holes over 260m) is planned
for the NE dump and dump infrastructure.
3.1.8.3 Water Management
Compliant. A complete and detailed report on Chalcobamba contact and non-contact water
is presented in Chapter 7, Appendix D. A simplified water balance presented therein indicates
that approximately 2,300m3/hr (1.7Mm3/month) of fresh water is required into the
Chalcobamba plant from the Chalhuahuacho river. In sourcing water for the Chalcobamba
plant, or indeed the existing Ferrobamba plant, every effort should be made to recycle water
from the tailings storage facility. The hydrographic survey completed on 15 May, 2018
measured 10.2Mm3 of water that could be extracted from TSF1.
3.1.9 Infrastructure
Compliant. Preliminary designs are provided and costed for the mine service area, haul truck
safety check area, heavy vehicle work shop, explosive storage, refuelling bay and haul road.
3.1.10 Safety, Security, Health, Environment
Compliant. The studies required have been properly assessed and included as part of the IV
MEAId scope.
3.1.11 Marketing
Compliant. In general, marketing considerations are in line with Project Development Phase
WQR requirements, using existing sales strategies and logistics, based on existing customers
and LOM off-take agreements in place.
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3.1.12 Operations Management
Compliant. Labor resources: There is a preliminary organization chart for CB based on the
current organizational structure for Ferrobamba. It is possible that additional supervision and
operator equipment will be needed for CB. For Stage 2, operator and maintainers will be
required for the crusher and conveyor and this should be reviewed.
3.1.13 Operational Contracts
Compliant. Road construction contract: Note there is no evidence of quotations from

contractors for mining or construction of the FB-CB road.
3.1.14 Project Execution
Compliant. The project execution plan summarized in Chapter 13 of the Chalcobamba PFS
report generally conforms with MMG’s Project Development Phase WQRs, addressing (at a
preliminary level) all sub-elements of the project execution plan. A preliminary project schedule
has been developed, illustrating the critical path activities for both phases of the project.
The schedule detail and logic demonstrates a sound understanding of the execution
requirements. However, there remains an opportunity to draw together information presented
in other sections of the report, including construction quantities and construction logistics
commentary, together with planning parameters used in developing the schedule, to serve as
a preliminary “basis of schedule”.
3.1.15 Capital Cost Estimate
Compliant. The capital cost estimate review is based on the Chalcobamba Prefeasibility Study
report, Chapter 14 Capital Costs, for Option 7 Phase A.
The estimate was reviewed based on the Work Quality Requirements (WQR) document,
provided by MMG. The review effort includes qualitatively assessing the estimating process,
methods, and tools used, as well as a quantitatively validating the project estimate at a high
level.
A capital cost estimate for a prefeasibility study is expected to be at an accuracy of -20% to +

25% after a P50 contingency has been applied, to the standard of AUSIMM Monograph 27
Capital Estimating Handbook. The estimate and report is consistent with the expectation for
this level of study, with minor inconsistencies as described below.
The capital estimate was presented in Excel format with thousands of lines of detail, categorized
by work breakdown structure and commodity codes applicable to the project. The structure of
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Chalcobamba PFS
the estimate is a build-up of the direct cost of quantities, installation / construction hours, unit
labour rates and contractor distributable costs, bulk material, equipment and subcontract costs.
Indirect costs are a combination of parametric and detailed estimating approaches. These
methods are compliant to the WQR.
The construction labour rates were based on information provided by contractors and the
productivities were based on data from the EPCM consultant. These methods are in compliance
with the WQR and the AUSIMM Handbook.
The bulk materials are based on a combination of material takeoffs based on engineering
drawings and factorised values, which is the appropriate methodology, based on the AUSIMM
Handbook.
The pricing basis for major costs is by budget quotation or contractor quotations, with minor
costs based on the EPCM contractor’s in-house data or factorised. These methods comply with
expectations.
Indirect costs have been based on a combination of calculated and factored methods. The
AUSIMM Handbook suggests a percentage of directs as a minimum guideline and the estimate
meets that expectation.
The construction accommodation is typically determined during the prefeasibility stage of the
project. Although the capital estimate is based on construction personnel residing off-site,
there is mention of the existing camp being a consideration for use during construction.
Changing the philosophy can have significant impact on capital costs of the on-site
infrastructure and maintenance required for on-site accommodation. This is an inconsistency
in the prefeasibility report and should be addressed.
Import duties and taxes have not been included in the capital cost estimate, but have been
included in the financial model.
The WQR document indicates the capital cost estimate is to be inclusive of all capital, including
subsequent feasibility phase. The feasibility study costs for Phase 1 $14.38M and Phase 2
$33.14M are not included in the capital cost, but included in financial modelling.
A schedule to a reasonable level of detail was included in the study documentation, although
a detailed review of the validity of the construction schedule was not performed. Of note,
however, the site capture and temporary facilities and services have not been included in the
schedule. Depending on the nature of the facilities and services required, approval for financial
commitments may be affected.
A high-level cashflow of the capital cost estimate was found in the report, which is consistent
with expectations for this level of study.
The estimate and estimating methods for the base case is clear; however, estimating indirect
costs at the same percentage established for base option for other options is more consistent
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Chalcobamba PFS
with an Order of Magnitude/Conceptual estimate or minimum standards for a PFS approach.

Direct/Indirect cost ratios were assessed separately for the mining and crushing/conveying
scope. These ratios were used to determine the indirect costs for different scenarios. The
impact would potentially be on options that are not the base case, so are not a significant
compliance issue.
3.1.16 Operating Cost Estimate
3.1.16.1 Processing
Compliant. The process plant operating cost basis and estimate is outlined in the following
reports:
• Chalcobamaba PFS Report Chapter 15 Operating Costs Rev. B
• PFS Report Chapter 15 Appendix A PFS-B Opex and Mine Equipment Capex Report
• PFS Report Chapter 15 Appendix B
• Excel file 20180227_CB-PFSB_CB-OW2_v12
• Excel File 20180227_CB-PFSB_CB-OW6_v12
• 20170522_LB_CoG_Report_Eng_rev12, Open Pit Cut-Off Grade Report, May 22nd, 2017.
Processing costs are based on 2017 Budget (2017-2019) and 2016 Life of Asset actuals, updated
with economic assumptions for prices used in 2017 Budget and reviewed consumption ratios
representative of the life of mine. These processing costs were categorized by process plant
area.
Fixed ($0.69/t milled) and variable ($4.43/t ) components of the direct processing costs are
unchanged for Chalcobamba and Ferrobamba in the economic models.
The details were not provided to confirm energy consumption estimates, staffing levels or
maintenance supplies, however the basis of the estimate is derived from actual plant data.
The operating cost estimate does not take into account the variations in consumables
consumptions with differing blends of ore fed to the processing plant throughout the life of
mine. Testwork reports indicate overall reagent consumptions to remain the same as current
consumptions but Wood has not been able to validate this assumption. Based on information
available and reviewed, Wood is of the opinion the operating cost estimate requires a range
analysis to understand uncertainty in the estimate before it would be fully compliant with MMG
WQ requirements.
However, the operating cost estimate would meet industry standards for prefeasibility Class 4
estimate.
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3.1.16.2 Mining
Compliant. Base of Estimation Document: No difference was observed between material type
and pit FB-CB. CB is composed by a magnetite dominant skarn ore which imply a higher steel,
bit, bucket and GET cost.
3.1.17 Business Risk
Partly Compliant. Project risks were identified and analyzed and mitigation strategies were
reasonable defined consistent with a pre-feasibility level of study. These were integrated in a
detailed risk register included in the pre-feasibility study report.
Material residual risks (with a current rate as Very High) were taken into account in the work
plan for the next phase. However, these were partially included in the project valuation. It was
explained by the MMG study team that the permitting and community risks were taken into
account in the assessment by deferring the crushing and conveying option, which is associated
with a more complex permitting, and the resource confidence risk was included, in terms of
head grade and recovery, in the risk range analysis performed presented in Chapter 17 –
Investment Evaluation. However, the geotechnical risk identified as a potential cause of capital
growth has not been assessed in the project valuation. Nevertheless, according to the PFS
report, a geotechnical drilling and evaluation program has been planned targeting major
infrastructure locations to support the permitting process, feasibility design and capital cost
estimation.
3.2 Adherence to Best Industry Practice and Technical Observations
3.2.1 Introduction
Same comments as WQR.
3.2.2 Location and Setting
Same comments as WQR.
3.2.3 Legal Environment and Approvals
A site visit was conducted to review the proposed process for permitting the Chalcobamba pit
and delivery of ore to Ferrobamba, within the context of Peruvian regulatory requirements and
expected timelines and costs for achieving the necessary permits. This section provides an
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Chalcobamba PFS
opinion on the proposed approach, schedule and costs for securing and maintaining access to
the Chalcobamba site.
The IPR review addressed:
• existing project permits that might apply to or affect new permits required for
Chalcobamba
• schedule and budget for acquisition of required permits
• options for securing access to Chalcobamba site
• current community relationship plan and the status of the existing relationships, including
an examination of the status of “promise registers” which would transfer with the mineral
holdings
• the adequacy of environmental and social management plan and performance to date.
It is our understanding that the initial EIA includes Chalcobamba pit and therefore there is no
need to wait for an EIA amendment (IV MEIA) in order to ask for a construction permit (“inicio
de actividades”) and start with the initial activities. The IV MEIA is needed mainly to redefine
transportation and the waste dumps, changes that will be required for the operation permit
“concesión de beneficio”. The construction permit will require a prior consultation process that
will be conducted in parallel with the IV MEIA citizen´s participation process.
We consider that a strategy must be in place to mitigate the potential interference between the
process of prior consultation of the start of activities and the process of citizen participation of
the IV MEIAD. Execution of the prior consultation process in parallel with the process of citizen
participation of the 4th MEIAD could generate confusion in the population by attending two
different participatory processes. On the other hand, the resistance of the community during
the process could generate delays and / or suspensions to the elaboration of the 4th MEIAd
(gathering of information in the field and / or first citizen participation workshop). An action
plan to mitigate this risks needs to be implemented.
The proper development of the Project should considers legality and legitimacy. In this sense,
the study points out -in the context of the prior consultation process for the exploitation of
Chalcobamba and Sulfobamba- "indigenous peoples do not have the right to veto a
government decision nor do they have the power to prevent a mining project." Although in
legal terms it is correct, in terms of social legitimacy it is necessary to clarify that there are
mining, energy and hydrocarbon projects that have had delays in the beginning of their
operations and / or have not developed at all due to the resistance of the communities of its
area of influence.
In this sense, the study should consider that although the Framework Agreement legally
guarantees the acquisition of 2 033 ha, the possessors still maintain certain economic activities
in the area, such as the grazing of their livestock. Such is the case that Las Bambas has started
negotiations for the purchase of the more than 1000 head of cattle of the owners and the
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construction of a perimeter fence to correctly define the limits and restrict the passage for
safety issues.
In addition, the study indicates that a license will be requested to take surface water in the
water infrastructure located downstream of the waste rock dump northeast for Phase 1 of
Chalcobamba, in order to avoid the release of contact water. It is specified that the evaluation
time for the application for the water license usually takes two months. However, it does not
consider that this source of water has social uses, mainly of Hankochiri villagers for domestic
consumption and irrigation of agricultural crops. To address this aspect of social legitimacy, Las
Bambas has allocated resources to prepare a Water Management Plan and a participatory
monitoring committee on the source in coordination with the area of permits and the
environment.
Therefore, the social and community analysis must, inevitably, consider the legal and legitimate
aspect of the context and the processes necessary for the start of construction and activities of
Chalcobamba.
3.2.4 Stakeholders and Community
This section has been developed based on a site visit and a review of the following documents:
• Detailed Environmental Impact Study of the Las Bambas Project

• Third Amendment of the Detailed Environmental Impact Study of the Las Bambas Project.
• Due Diligence prepared by Wood (2015)
• Reports of Social Conflicts (2018) of the Ombudsman's Office
A structured review was conducted. Initially, the social and community context of the Project in
general was assessed, with emphasis on the Chalcobamba area. On the basis of this, the social
and community potential risks are identified. Finally, recommendations and suggestions for the
development of Chalcobamba are provided.
3.2.4.1 Social and Community Context
According to the EIAd, the area of direct social influence of the Project involves 19 rural
communities located in five districts of the provinces of Cotabambas and Grau in the Apurímac
region and three districts of the provinces of Chumbivilcas and Espinar in the Cusco region. In
the last modification of the EIAd (3rd MEIAD), 16 of the 19 peasant communities are considered.
It is important to mention that the great social processes of Las Bambas were the resettlement
of Fuerabamba, the resettlement of Taquiruta and the Huancuire agreement.
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For the resettlement of Fuerabamba, Las Bambas generated an agreement with the community
for the relocation to Nueva Fuerabamba (a city with a capacity of 1,600 inhabitants). The
construction finished in 2014 and the resettlement ended in 2016. Currently Las Bambas,
together with the community, are executing the commitments stipulated in the agreement.
Regarding the Huancuire agreement, in 2013 a framework agreement of 108 obligations was
signed with the community for the purchase of land in the area known as Chalcobamba.
However, from 2014 to 2016 the relationships were broken due to the breach of some
agreements. As a result, they opposed the 2nd MEIAD and obstructed the access road to
Chalcobamba. The community proposal was to revise the Framework Agreement. After its
review during 2017, the following was established: i) Huancuire will recognize the Las Bambas
property right of 2,033 hectares, ii) 27 more obligations will be included, iii) an additional
payment of 100 million soles will be included, iv ) the schedule for the execution of the
commitments will be updated. The Addendum to the Framework Agreement was signed in
December 2017.
In addition to the agreements signed, the Project has a social fund (FOSBAM) that promotes
sustainable development activities. There are 18 beneficiary communities and 02 population
centers. The directory is made up of district mayors and 02 representatives of Las Bambas.
Regarding the management of social and community issues, Las Bambas executes the Social
Management Plan and the Community Relations Plan approved in the EIA. Likewise, four (04)
management units were created with the aim of assertively addressing the business objectives.
One of them is the so-called West Zone Project Management Unit, which has five work areas:
land acquisition, environment, communications, community relations and social development.
This unit is in charge of generating the adequate conditions for the expansion to Chalcobamba,
Sulfobamba and the Tailings Dam 2.
A Multisectorial Committee composed of 10 representatives of the community and 10

representatives of Las Bambas has been established, whose objective is to follow up on the
fulfillment of the commitments of the Framework Agreement (2013) and the addendum
(December 2017), to carry out early work for the formation of local companies in Chalcobamba,
attend the hydrological study in the Chalcobamba basin (Pamputa River), and prepare the
Social Investment Plan.
Finally, social monitoring is carried out through a mapping of actors at three levels: macro
(national, regional and local authorities), meso (communal authorities and NGOs) and micro
(possessional families, local workers and local companies). At the macro and meso level
communication and relationship seeks sustainable development in the project area; At the
micro level, it focuses on supporting the approval of permits and authorizations for the activities
of the mine. Businesses and local businesses are considered micro level.
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The antecedents of social conflict indicate that from 2014 to 2016 there was an active conflict
between the community of Huancuire and Las Bambas for the breach of the commitments
assumed in the Framework Agreement. This conflict restricted entry into the area. The social
conflict is resolved after the signing of the addendum in 2017. Since March 2018, three local
companies apparently dissatisfied with the additional agreements were identified; these have
put pressure on the Board of Directors of the CC Huancuire to interrupt and paralyze the
progress of compliance with the commitments stipulated in the Framework Agreement. The
Community Relations team has met with the board of directors, the three local companies and
all the community members, through a one-to-one strategy, in order to resume the fulfillment
of the commitments.
The reports of the Ombudsman's Office register an active conflict linked to the Defense Front
of the Province of Cotabambas, the Combat Committee of the Provinces of Cotabambas and
Grau, the Challhuahuacho Peasant Federation, the Defense Front of the Interests of the
Challhuahuacho district, among other social organizations, as well as peasant communities in
the provinces of Cotabambas and Grau, as they demand compliance with agreements and
commitments assumed by the State and the operating company of the Minera Las Bambas
unit. However, to date, this conflict has not had an impact on the Huancuire community.
3.2.4.2 Social and Community Risks
Regarding the best practices for the mining sector, Las Bambas presents a robust system in
terms of attention to social and community issues. It is implementing the Social Management
Plan and Community Relations Plan approved in the EIAd, as well as the commitments assumed
in the Framework Agreement and the addendum of December 2017.
Notwithstanding the foregoing, it is necessary that Las Bambas consider the implementation
of preventive strategies regarding the following topics:
• Awareness about prior consultation

• Compensation for the use of a water source in the Hanccochiri community, located
downstream of the Northeast sterile waste dump for Phase 1 of Chalcobamba, which is part
of the Pamputa basin. According with WSP about 20% of this source will be lost, water
needs downstream needs and compensation costs need to be identified.
• Liberation of economic activities in the footprint of the Project, specifically in the
Chalcobamba area.
The social and community analysis identified some risks to the development of the
Chalcobamba Project:
• Access to the Chalcobamba area: The community of Huancuire is susceptible to negative

influences from micro and meso stakeholders (local companies, for example). Even after
the signing of the addendum in December 2017, the implementation of the commitments
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Chalcobamba PFS
due to this influence was suspended.

• Construction of housing in areas surrounding the Huancuire community. Although they are
not close to the Chalcobamba area, they could be part of a subsequent compensation
negotiation process. They could be part of the micro and meso level influence mentioned
in the previous bullet.
• Execution of the prior consultation process in parallel with the process of citizen
participation of the 4th MEIAD. It could generate confusion in the population by attending
two different participatory processes. On the other hand, the resistance of the community
during the process could generate delays and / or suspensions to the elaboration of the
4th MEIAd (gathering of information in the field and / or first citizen participation
workshop). An action plan to mitigate this risks needs to be implemented.
• Resettlement (informative / administrative process, social complexity, other communities
may want to join), impacts beyond the CC Huancuire (two new population centers have
already been installed).
3.2.5 Geology and Reource Estimation
3.2.5.1 Geology and Data Base
Resource Estimation Data Base
• There is no evidence of an external Data Base Audit.
• Errors were identified in the Sequential Copper grades of the Vulcan Data Base. These
errors do not have a material impact in the Resources estimation, but indicated an audit
should be completed for the FS database.
• Internal audits were performed by Ben Mackay-Scollay and Ana Lewis in 2015. It is not
clear if the audit recommendations were implemented.
• There is no evidence of an audit of the geological information in the database.
• There has not been an audit of the 2016 MMG drilling Campaign.
Geological model
• The geological model was created by grouping some lithologies. Wood performed
Exploratory Data Analysis (EDA) for assays data and concluded the grouping criteria
should be reviewed.
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• Code 40, includes Code 42 (GSK) + 43 (PSK) + ESK (44). The first one lithology has a
medium CuT grade and the other two have almost 50% higher CuT grade than the first
one. See Table 3-1.
• Code 47, includes Code 34 (LMT) + 47 (MBL) + 48 (MBC). The first two lithologies have
low Cut grade while the third is more than 200% higher than the first two, been medium
grade. See Table 3-1.
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Table 3-1: Statistics of Lithology Group Codes used for Geological Model Construction
Description Logging Code Model Code All Inside pit Differences

(inpit vs all)
(Litho2) (Litho2 code) (Litho Group) Samples CuT% N Sampls CuT%
GSK 42 22,669 0.522 19,259 0.571 9%

PSK 43 40 2,459 0.713 1,910 0.821 15%
ESK 44 650 0.718 594 0.758 6%
LMT 34 33 0.096 32 0.101 5%
MBL 47 47 1,408 0.107 808 0.114 7%
MBC 48 283 0.397 206 0.375 -6%
EGT 51 1,047 0.375 815 0.431 15%
EEP 52 50 793 0.482 716 0.492 2%
EPG 53 6,472 0.276 4,567 0.325 18%
MSK 41 41 2,935 1.494 2,872 1.512 1%
HFL 46 46 1,981 0.103 409 0.163 58%
BX 62 62 4,464 0.731 2,443 0.874 19%
DI 71 71 1,053 0.522 564 0.621 19%
MZB 76 76 6,142 0.171 3,385 0.194 13%
MZH 77 77 5,527 0.161 1,481 0.251 55%
MZM 78 78 12,835 0.298 4,623 0.376 26%
MZQ 79 79 11,982 0.082 7,885 0.101 24%
QFP 80 80 588 0.039 211 0.063 60%
QFS 81 NN 14 0.002
LA 85 NN 123 0.074 41 0.052 -29%
QT 91 91 67 0.646 56 0.750 16%
NR 95 NN 3 0.271 2 0.374 38%
AN -1 NN 4 0.153
Geological model wireframing
Wood completed a Nearest Neighbor estimation in a 10 x 10 x 5 m block model to review the

construction of the Implicit Lithological Model and the Mineralization Zone model (OXIDOM
model). A visual inspection was also performed. The following was observed:
• The lithological model shows a good comparison to the grouped lithology’s in the
composites (Figure 3-1).
• The average distance used for Exoskarn and Hornfels interpolation/interpretation,

inside the Final Pit area, are longer than the distances used for the block model
measured classification. Similar observations were noted for the porphyry’s domains
(Table 3-2).
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• The average distances used for the mine zone interpolation/interpretation inside the
final pit area are reasonable (inside the pit). See Table 3-3
• The interpretation extends much further than the drillhole information can be inferred.
Figure 3-1: Lithological model Plan Section 4480
Note: Geological model wireframes. Composites showing back flag of the lithological wireframes. Block Model
showing the Volume checking (NN).
Note: Dark Green: Exoskarn; Light pulple: Magnetite Exoskarn; Blue: Hornfels, Light blue: Marble; Dark brown:
Endoskarn; Light green: Breccia; Dark orange: Diorite; Orange: Biotite Monzonite; Red: Hornblende
Monzonite; Light pink: Mafic Monzonite; Yellow: Quartz Monzonite Dike; Purple: Quartz Feldspar
Porphyry; Grey: Quaternary. Black polygon: Final Pit
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Table 3-2: Average samples distances -inside the final pit - Used to build the Lithological
Model
Lithcode Average Distance

40 22.8
41 21.5
46 41.9
47 26.0
50 40.7
62 20.5
71 34.6
76 26.5
77 27.2
78 42.1
79 34.9
80 42.9
91 128.2
Table 3-3: Average samples distances -inside the final pit - used to build the
Minzone model
Oxidom Average Distance

1 (Oxides) 27.6
2 (Mixed) 22.7
3 (Sulphides) 29.9
Estimation Domains
• The Estimation Domains used for the Resources Estimation are based on Lithology
domains.
• Wood evaluated the relationship between Oxidation Zones defined by MMG

(OXIDOM) and the Lithology “as Logged” (no grouped lithology). It was found that
Oxidation Stages affect the CuT concentration in the same lithology. See Tables 3-4 for
Oxidom1, Table 3-5 for Oxidom 2 and Table 3-6 for Oxidom 3
• The Oxidation Stages affect also the lithological grouping criteria. The results are
variable or indistinct. For some lithologies the CuT grade increases while in others
decreases. For example in the case or the MSK (41) in the Oxides zone the CuT grade
is 0.833% CuT, while in the Sulphide zone is 1.6% CuT , in both cases inside the final pit
shell. This should be evaluated by MMG with respect to the CuAs for the Oxides.
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• Wood has not evaluated this with respect to the alteration stages. Also no evaluation
has been performed for other elements.
Table 3-4: Statistic evaluation of Lithology in the OXIDOM=1 (Oxide)
Logging
Description Code Model Code All Inside pit Differences
(inpit vs all)
(Litho2) (Litho2 code) (Litho Group) N Sampls CuT% N Sampls CuT%
GSK 42 2,884 0.614 2,750 0.610 -1%

40
PSK 43 177 0.563 177 0.563 0%
ESK 44 103 0.471 100 0.480 2%
LMT 34 18 0.124 18 0.124
47
MBL 47 559 0.082 369 0.077
MBC 48 84 0.457 45 0.248 -46%
EGT 51 171 0.609 167 0.618 1%
50
EEP 52 148 0.307 148 0.307 0%
EPG 53 652 0.508 598 0.506 0%
MSK 41 41 100 0.809 96 0.833 3%
HFL 46 46 229 0.113 80 0.138 22%
BX 62 62 1,240 0.892 860 0.990 11%
DI 71 71 156 0.612 115 0.682 11%
MZB 76 76 686 0.241 536 0.242 0%
MZH 77 77 57 0.249 29 0.080 -68%
MZM 78 78 797 0.393 583 0.427 9%
MZQ 79 79 3,116 0.106 2,745 0.115 9%
QFP 80 80 212 0.050 58 0.109
LA 85 NN 3 0.170
QT 91 91 64 0.661 53 0.774 17%
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Table 3-5: Statistic evaluation of Lithology in the OXIDOM=2 (Mixed)
Logging
Description Code Model Code All Inside pit Diff
(inpit vs
(Litho N all)
(Litho2) (Litho2 code) Group) Sampls CuT% N Sampls CuT%
GSK 42 4,194 0.425 3,830 0.441 4%

40
PSK 43 398 0.668 339 0.678 1%
ESK 44 93 0.405 93 0.405 0%
LMT 34 5 0.206 5 0.206 0%

47
MBL 47 204 0.164 138 0.204 24%
MBC 48 66 0.359 60 0.381 6%
EGT 51 207 0.223 176 0.223 0%

50
EEP 52 161 0.642 160 0.645 0%
EPG 53 1,366 0.305 1,108 0.307 1%
MSK 41 41 360 1.166 359 1.167 0%
HFL 46 46 374 0.128 109 0.203 59%
BX 62 62 1,586 0.581 798 0.669 15%
DI 71 71 439 0.489 195 0.593 21%
MZB 76 76 1,221 0.192 905 0.191 0%
MZH 77 77 495 0.205 334 0.226 10%
MZM 78 78 1,481 0.321 867 0.333 4%
MZQ 79 79 2,092 0.118 1,797 0.128 8%
QFP 80 80 33 0.033 28 0.036
LA 85 NN 19 0.103
QT 91 91 1 0.240 1 0.240
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Table 3-6: Statistic evaluation of Lithology in the OXIDOM=3 (Sulfide)
Description Logging Code Model Code All Inside pit Differences

(inpit vs all)
(Litho2) (Litho2 code) (Litho Group) N Sampls CuT% N Sampls CuT%
GSK 42 15,562 0.530 12,650 0.600 13%

40
PSK 43 1,883 0.739 1,393 0.894 21%
ESK 44 454 0.835 401 0.907 9%
LMT 34 10 0.011 9 0.013 13%

47
MBL 47 640 0.110 296 0.119 8%
MBC 48 133 0.381 101 0.425 12%
EGT 51 667 0.365 470 0.446 22%

50
EEP 52 484 0.483 408 0.500 4%
EPG 53 4,450 0.231 2,857 0.292 27%
MSK 41 41 2,465 1.577 2,407 1.599 1%
HFL 46 46 1,378 0.095 220 0.152 59%
BX 62 62 1,638 0.750 785 0.948 26%
DI 71 71 458 0.521 254 0.613 18%
MZB 76 76 4,231 0.154 1,940 0.182 18%
MZH 77 77 4,975 0.156 1,118 0.263 69%
MZM 78 78 10,557 0.287 3,173 0.378 32%
MZQ 79 79 6,760 0.059 3,329 0.075
QFP 80 80 342 0.033 124 0.048
LA 85 NN 101 0.066 41 0.052
Specific Gravity
• Two determination methods were used depending on the conditions of the core:
competent samples had direct contact with water, fractured or porous samples were
paraffin coated.
• The procedure for measuring SG is not documented.
• There has been no evaluation comparing paraffine coasted samples to uncoated
samples.
• The Table 3-7 summarizes the Specific Gravity data for the three oxidation stages and
lithology domains. Highlights mark variations >5%.
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Table 3-7: Statistic evaluation of Specific Gravity in the OXIDOM 1,2 and 3
Logging Model
Description Code Code Average OXI 1 _inpit OXI 2 _inpit OXI 3 _inpit
(Litho2 (Litho N SG N SG N SG N SG
(Litho2) code) Group) Sampls gr/cm3 Sampls gr/cm3 Sampls gr/cm3 Sampls gr/cm3
3355 3.484
GSK 42 420 3.366 641 3.485 2,294 3.506
40 304 3.154
PSK 43 28 2.963 53 3.137 223 3.190
108 3.146
ESK 44 11 2.991 15 3.171 82 3.164
3 2.720
LMT 34 1 2.690 2 2.750
47 88 2.683
MBL 47 36 2.693 17 2.712 35 2.664
26 2.751
MBC 48 12 2.769 6 2.723 8 2.752
119 3.077
EGT 51 22 2.900 33 3.121 64 3.122
50 99 3.123
EEP 52 20 3.050 26 3.114 53 3.157
536 2.752
EPG 53 71 2.746 117 2.710 348 2.770
MSK 41 41 544 4.214 14 3.775 69 4.151 461 4.235
HFL 46 46 24 2.569 7 2.600 3 2.538 14 2.554
BX 62 62 268 2.615 87 2.595 92 2.622 89 2.626
DI 71 71 50 2.692 8 2.601 15 2.700 27 2.715
MZB 76 76 333 2.633 42 2.605 100 2.628 191 2.641
MZH 77 77 143 2.642 2 2.570 37 2.634 104 2.646
MZM 78 78 425 2.639 60 2.549 66 2.623 299 2.662
MZQ 79 79 769 2.610 275 2.579 166 2.635 328 2.622
QFP 80 80 26 2.590 7 2.513 3 2.624 16 2.616
Final Report
• The final report is not updated or consistent with the information received and
reviewed.
• The final report includes relict text from Xstrata model construction that was not
performed by MMG.
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Procedures
• The process for the construction of the implicit geological model is not well
documented. The lithology groupings from logged lithology to model lithology is not
documented.
• No procedures document the methods for density determinations.
• Laboratory procedure used for the last drilling campaign performed by MMG are
available.
3.2.5.2 Resource Estimation
Estimation Domain
MMG Estimation Domains are based in lithology domain wireframes for all elements (Table 3-
8).
Table 3-8: MMG Lithology Estimation Domain
Lithology Domain Lithology Lithology Code
Exoskarn (garnet+epidote+pyroxene) SK 40
Magnetite Skarn MSK 41
Hornfels HFL 46
Calcsilicate Marble MBL 47
Endoskarn (garnet+epidote+plagioclase) ENDO 50
Breccia BX 62
Diorite DI 71
Biotite monzonite MZB 76
Hornblende monzonite MZH 77
Mafic monzonite MZM 78
Quartz monzonite dyke MZQ 79
Quartz feldspar porphyry QFP 80
Quaternary QT 81
Wood prepared a Boxplot of 4 m composites by lithology Domain (Figure 3-2). Lithology

group MSK has a mean Cu grade of 1.282%.
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Figure 3-2 Boxplot CuT (%) by Lithology Domain (MMG Data)
MMG estimation domains do not include mineralization types based on degrees of oxidation.
Wood completed box plots of lithology domains by mineralization type. Lithology domain
MSK shows high variability between mineralization types. MSK has a mean grade of 0.66% Cu,
1.01% Cu and 1.47% Cu for Oxide, Mixed and Sulfide mineralization types respectively. Box
plots are shown in Figures 3-3, 3-4, and 3-5.
Figure 3-3: Boxplot Cu (%) by Lithology in Oxide Zone
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Figure 3-4: Boxplot Cu (%) by Lithology in Mixed Zone
Figure 3-5: Boxplot Cu (%) by Lithology in Primary Zone
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Exploratory Data Analysis
Compositing
• The assays were composited to 4m length composites controlled by lithology. All

composites were retained for the resource estimation.
• The composite length is considered small compared to the 30 x 30 x 15 m block size.

Approximately 50% of the composite samples are <4 m in length and approximately
10% are >4 m in length. The composite grades should be length weighted during
estimation.
Declustering
• The 4 m composites were declustered by MMG in Vulcan using Ordinary Kriging (OK)
model with one sample per 30 x 30 x 15 m block estimate. Blocks were discretized into
4 x 4 x 4 points for the estimation.
• Cell declustered statistics were used for the selectivity checks and used to add a
composite profile on the block model validation swaths.
• Wood generated a Nearest Neighbor (NN) model in Vulcan using capped 4 m

composites and a 30 x30 x 15 m block size. This NN model was used to compare to
the OK model.
Top-Cut Values
• Top-cutting refers to the practice of reducing a grade above a defined grade to reduce
the influence of grade outliers. Top-cutting was assessed by lithology domain using
probability plots, relative error plots, coefficient of variation (CV) and spatial
distribution.
• Wood re-assessed the copper top-cut values for the thirteen domains using histograms
and probability plots. Table 3-9 compares the top-cut values for MMG and the values
determined by Wood. Woods top-cuts are lower than MMG’s top-cuts.
• The impact of the top-cuts was not assessed by determining metal removed.
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Table 3-9: Top-Cut Value Comparison for Copper Domains
MMG Wood
Rock type
Cu (%) Cu (%)
SK 8 15
MSK 5 8
HFL 1.5 1.5
MBL 1.5 1.5
ENDO 3 3
BX 4 3
DI 1 1.5
MZB 2 1.2
MZH 2 2
MZM 2 2
MZQ 2.5 2.5
QFP 1 0.8
QT 1.5 1.4
Statistics by Domain
• Uncapped copper grade composite boxplots per domain have been produced.
• Top-cut declustered statistics are not included in the MMG report.
Contact Plots
• The MMG reported contact plots have been produced between the various domains
and boundaries are consider hard.
• Wood constructed contact plots between SK and MSK (Figure 3-6) and confirmed hard
contacts. Wood concluded hard boundaries are appropriate.
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Figure 3-6: Contact Plot Cu (%) SK vs MSK
Variography
• Downhole variograms were calculated to determinate the nugget. Lag sizes for the
downhole correlograms were generally set to 4 m for copper. Orientations of
continuity were determined, when possible, by multi-directional variogram analysis.
Other domains were determined by geological constraints, Table 3-10 show Cu
variogram parameters. Experimental variograms were calculated using a normalised
semivariogram or correlogram.
• Wood checked the anisotropy of Domain SK (40) and concluded the variogram
anisotropies (directions and anisotropy) were consistent with the geological
understanding.
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• Wood considers the MMG procedure for calculating and fitting variograms reasonable.
• Variogram maps could be used to improve the understanding of the variogram

orientation and anisotropies.
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Table 3-10: Cu Variogram Parameters
BX MZB MZM MZQ

DOMAIN SK (40) MSK (41) HFL (46) MBL (47) ENDO (50) (65) DI (71) (76) (78) (79) QFP (80) QT (91)
C0 0.16 0.12 0.29 0.25 0.25 0.35 0.18 0.14 0.19 0.15
Type SPH SPH SPH SPH SPH SPH SPH SPH SPH SPH
Est Type OK OK OK OK OK OK OK OK OK OK ID ID
C1 0.35 0.55 0.47 0.5 0.37 0.37 0.32 0.42 0.3 0.54 0 0
Minor Range (m) 40 75 130 20 70 54 126 35 75 110 0 0
Semi Range (m) 35 125 86 200 95 88 100 40 65 50 0 0
Major Range (m) 70 100 90 195 189 120 16 60 111 98 0 0
Rot 1 (Z) -25 50 270 20 320 130.28 10 0 171.17 60 0 0
Rot 1 (Y) -1 0 80 -20 -20 3.405 60 70 28.024 0 0 0
Rot 1 (X) 19 50 0 0 0 -9.408 0 -90 67.204 -70 0 0
C2 0.49 0.33 0.24 0.24 0.38 0.28 0.5 0.44 0.51 0.3 0 0
Minor Range (m) 190 120 215 68 130 143 148 142 291 180 0 0
Semi Range (m) 165 150 459 264 450 250 130 250 450 136 0 0
Major Range (m) 235 210 170 314 600 400 135 390 871 477 0 0
Rot 2 (Z) -25 50 270 20 320 130.28 10 0 171.17 60 0 0
Rot 2 (Y) -1 0 80 -20 -20 3.405 60 70 28.024 0 0 0
Rot 2 (X) 19 50 0 0 0 -9.408 0 -90 67.204 -70 0 0
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Block Model Estimation
Kriging Neighbourhood Analysis (KNA)

• The objective of KNA is to choose the sample search criteria such that the kriging
regression slope and kriging efficiency are as close to one as possible, the number of
negative weights is low, and the SK weight on the mean is close to zero.
• Woods experience is that KNA may over-smooth the grade estimate.
• KNA was applied by MMG in Snowden Supervisor to assess the block size and initial
values for the minimum and maximum number of samples per estimate. The selected
block size is 30 x 30 x 15 m and the final number of samples per estimate were based
on KNA work undertaken for the Ferrobamba and Sulfobamba. The minimum and
maximum samples were 8 and 24 respectively using octants, Table 3-11 summarizes
the sample selection.
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Table 3-11: Number Cu Samples and Ranges per Pass

MBL ENDO MZB MZM
DOMAIN SK (40) MSK (41) HFL (46) (47) (50) BX (65) DI (71) (76) (78) MZQ (79) QFP (80) QT (91)
Minor Range (m) 40 40 75 75 50 40 50 75 75 75 75 75
Semi Range (m) 30 40 75 75 50 40 50 75 75 75 75 75
Major Range (m) 40 40 75 75 50 40 50 75 75 75 75 75
Pass 1
Min # Samples 8 8 8 8 8 8 8 8 8 8 8 8
Max # Samples 24 24 24 24 24 24 24 24 24 24 24 24
Max # Samples per Octant 3 8 8 8 8 8 8 8 8 8 8 8
Min # Octant w Samples 4 4 4 4 4 4 4 4 4 4 4 1
Min # Samples per Octant 2 2 2 2 4 4 4 4 4 4 4 1
Minor Range (m) 75 75 200 200 75 75 75 250 250 200 200 150
Semi Range (m) 55 75 200 200 75 75 75 250 250 200 200 150
Major Range (m) 75 75 200 200 75 75 75 250 250 200 200 150
Pass 2
Min # Samples 8 8 4 4 8 8 8 8 8 8 8 8
Max # Samples 24 24 24 24 24 24 24 24 24 24 24 24
Max # Samples per Octant 3 8 1 1 8 8 8 8 8 8 8 8
Min # Octant w Samples 4 4 1 1 3 3 3 1 1 1 1 1
Min # Samples per Octant 2 2 1 1 4 4 4 1 1 1 1 1
Minor Range (m) 200 200 200 200 150
Semi Range (m) 140 200 200 200 150
Major Range (m) 200 200 200 200 150
Pass 3
Min # Samples 4 4 4 4 4
Max # Samples 24 24 24 24 24
Max # Samples per Octant 1 1 1 1 1
Min # Octant w Samples 1 1 1 1 1
Min # Samples per Octant 1 1 1 1 1
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Estimation Plan
• Ordinary Kriging (OK) with capped composite grades was used to estimate the
lithology domains in three passes.
• The sample search orientations are the same as the variogram orientations and are
consistent with the various domain orientations. The Pass 1 search size is 50% of the
variogram ranges. The Pass 2 search is generally 50 to 100% larger than Pass 1. The
Pass 3 is 25 to 100% larger than Pass 2.
• The minimum and maximum number of samples were selected based on global
validation results. Sample selection is summarized by estimation domain in Table 3-
11.
• Estimation domain boundaries were hard.
• The search orientations are consistent with the geological understanding.
• The search sizes are considered reasonable
• The capping is considered reasonable. A summary of metal removed by capping

should be reported.
Block Model Statistical Validation
• Wood completed a visual inspection comparing the composite and estimated CuT
grades. The review concluded the block model is not over-smoothed, there is a good
local agreement between kriged grades and composite data and the mineralization
trends appears reasonable.
• Blocks with negative Cu grades and blocks not estimated were assigned a value of 0.
• Swath plots comparing the resources block model to the 4 m composite samples were
prepared by MMG and is show in Figure 3-7.
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Figure 3-7: Example of Swath Domain 78 (MMG Report)
• Wood produced a series of swaths plots to compare the Chalcobamba OK model and
Woods capped NN model. Examples of swath plots generated by Wood are given in
Figure 3-8 to Figure 3-9.
• Figure 3-8 of the Domain 40 swath plot shows that OK model is locally biased high
with respect to the NN model. High grade spikes are also visible. The high bias and
spikes could be indicate local smearing of high-grade.
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Figure 3-8: Cu Domain 40 Swath Plot
Figure 3-9: Cu Domain 41 Swath Plot
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• Global statistics comparing the block model to the 4 m composite samples database
were obtained by MMG and are shown in Figure 3-10.
Figure 3-10: Example of Copper Global Statistics (MMG Report)
• Wood completed validation statistics comparing the OK Cu grades to the Wood NN

model. A high bias is observed for Domains MSK and QV. A low bias is observed for
MBL (Table 3-12). These domains should be investigated. Wood considers grade
estimation within ±5% to be unbiased.
Table 3-12: Wood OK Model Validation Statistics
Nearest-Neighbor
Lithology Kriged Model %Rel Diff
Model
Domain (CUKR) (CUNN)
No. Mean Mean (CUKR-CUNN)/CUNN

CV CV
Block Cu (%) Cu (%)
SK (40) 34,742 0.427 1.043 0.432 1.872 -1%

MSK (41) 3,229 1.282 0.575 1.124 0.983 14%
HFL (46) 13,740 0.120 0.844 0.126 1.408 -5%
MBL (47) 12,303 0.166 0.875 0.199 1.854 -17%
ENDO (50) 11,795 0.280 0.905 0.282 1.373 -1%
BX (62) 6,083 0.614 0.520 0.604 0.887 2%
DI (71) 2,800 0.382 0.506 0.406 0.640 -6%
MZB (76) 20,917 0.135 0.639 0.139 1.351 -3%
MZH (77) 25,544 0.132 0.532 0.141 1.168 -6%
MZM (78) 52,526 0.184 0.828 0.171 1.289 8%
MZQ (79) 56,021 0.074 1.196 0.077 2.314 -3%
QFP (80) 9,923 0.037 0.921 0.037 2.099 -2%
QT (91) 557 0.824 0.104 0.477 0.774 73%
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• A change of support analysis was undertaken by MMG on the skarn (40) and magnetite
exoskarn (41). Figure 3-11 for Skarn (40) shows the tonnage difference between the
SMU support model and the OK block model a 0.2 % Cu cut off 20% higher and 25%
less grade suggesting the grade estimate is over-smoothed.
Figure 3-11: Change of Support Exoskarn (40) (MMG Report)
Resource Classification
Classification parameters were based in drill hole spacing study undertaken for Ferrobamba
mine in 2015. See Table 3-13.
Table 3-13: Classification Parameters
Drill Hole Spacing

Category
Skarn (m) Porphyry (m) Holes
Measured Average distance 25 50 3
Indicated Average distance less than 50 100 2
Inferred Average distance greater than 50 100 1
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Different search distances were applied to two rock groups: Skarns (SK, MSK, HFL, ENDO and
BX) and porphyry groups (DI, MZB, MZH, MZQ and QFP).
Computerized classification systems similar to the one used at Chalcobamba always produce
discontinuous results (see isolated Measured blocks within a zone of Indicated blocks in Figure
3-12). Wood considers that this issue should not have a significant impact on the final resource
tabulation.
Figure 3-12: Plan-section 4300
Recommendation on Resource Estimation
• Wood believe that, for the most part, the Cu domains need to be review, and
recommends that consideration be given to combining the lithology, mineralization,
faults and alteration.
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• Wood recommends investigating 7.5 m composites by domain. Short composites

(<1/2 composite length) should be merged/stitched with the previous composites.
• Wood recommends lower top-cut thresholds. The resulting metal reduction should be
assessed and reported.
• Variogram maps should be used to assess anisotropic directions.
• Consider selection of the block size to be based on the anticipated mining method,
drill hole spacing, the estimation domain geometry, and the estimation methodology.
• Validation should include a complete battery of validation checks. Good validation

should be obtained for blocks that are Measured or Indicated. Poor validation is
expected for Inferred blocks. The checks are:
− Global bias checks should be accomplished by comparing kriged grades to NN

grade by estimation domains. An Unbiased model is ±5%.
− Local bias can be checked with Swath plots comparing of kriged and NN grades.
− Change of support checks
− Contact plots to compare grade profiles of composites and block estimates across
domain boundaries..
− Visual check on plans and sections comparing block grades to composite grades,
observing grade trends,
• A post-processing (smoothing) procedure to eliminate isolated blocks and islands in
the classification.
3.2.6 Mining
Overall Slope Angle (OSA): The overall slope angle used for the pit optimization is lower
than obtained in the preliminary pit design. The geomechanical parameters used for the
pit design were based on the studies: “Prefeasibility Pit Slope Design and Ground Water
Assessment”, submitted by Piteau Engineering Latin America in 2009, and ”Chalcobamba
Slope Geotechnical Design Guidance for 2015-2017” by Geotechnical and Hydrogeological
Department Technical Services – Minera Las Bambas S.A. Along the optimization process,
lower angles than what was recommended were used, which could mean a reduction in the
final pit value.
However, Wood conducted a sensitivity analysis and concluded that the effect of an
updating of the angles is not relevant for the definition of the final pit, meaning a variation
of less than 2%.
• Economic Parameters: The economic parameters used (mining cost, process, etc) for the
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pit optimization were based on 2016 LoA Mid Case. These parameters were differentiated
for CB and FB.
Wood compared the costs obtained along the PFS for the Stage 1 and Stage 2 and a
significant difference was observed (24% of the mining cost and 19% of the processing cost
for the stage 1 or OW2; and, 21% of the mining cost and -3% of the processing cost for the
stage 2 or OW6) , as is shown in the 3-14. For this reason, is recommended that the pit
optimization will be updated with the PFS results and evaluate its impact based on a the
sensitivity analysis.
Table 3-14: Comparison Optimization Mine Cost Vs. Results Mine Cost (OW2-OW6)
Chalcobamba Change
Cost Component Units
2017 OW2 OW6 OW2 OW6
Mining Cost
Ore Mining Cost US$/t mined 1.46 3.66 2.48 150% 69%
Waste Mining Cost US$/t mined 1.555 2.03 1.98 31% 27%
Total Mining Cost US$/t mined 1.52 2.77 2.17 83% 43%
Sustaining Capital Cost US$/t mined 0.451 0.451 0.451 0% 0%
Processing Cost US$/t processed 5.12 5.12 5.12 0% 0%
Sustaining Capital Cost US$/t processed 1.41 1.41 1.41 0% 0%
Optimization Cost (Whittle)
Mining Cost US$/t mined 2.006 2.481 2.431 24% 21%
Processing Cost US$/t processed 9.05 10.77 8.81 19% -3%
Wood conducted a sensitivity analysis for the main parameters as showed in the Table 3-
15, and concluded that there are no significant impacts in the final pit definition.
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Table 3-15: Pit Sensitivity
Total Rock Ore CU CUS MO AG AU Strip

(Mt) (Mt) (%) (%) (ppm) (gr/t) (gr/t) Ratio
Base Pit30 454.6 211.6 0.64 0.08 143.9 2.40 0.03 1.2
MC -30% 715.1 275.0 0.57 0.07 146.9 2.09 0.03 1.6
MC -20% 655.0 257.9 0.59 0.07 144.7 2.18 0.03 1.5
MC -10% 490.8 221.4 0.63 0.08 143.4 2.35 0.03 1.2
MC +10% 428.7 205.0 0.65 0.08 143.0 2.43 0.03 1.1
MC +20% 415.0 200.5 0.66 0.08 141.1 2.47 0.03 1.1
MC +30% 407.1 197.4 0.66 0.08 140.6 2.49 0.03 1.1
PC -30% 769.1 349.5 0.49 0.06 144.3 1.79 0.02 1.2
PC -20% 688.3 301.9 0.53 0.07 144.5 1.97 0.02 1.3
PC -10% 495.2 234.9 0.60 0.08 144.2 2.26 0.03 1.1
PC +10% 423.3 194.0 0.67 0.08 142.8 2.52 0.03 1.2
PC +20% 407.1 182.1 0.70 0.09 140.8 2.62 0.03 1.2
PC +30% 389.2 169.8 0.73 0.09 140.0 2.72 0.03 1.3

OSA -5° 491.0 208.6 0.64 0.08 143.6 2.42 0.03 1.4
OSA -3° 461.5 207.3 0.64 0.08 144.2 2.42 0.03 1.2
OSA +3° 459.5 218.8 0.63 0.08 142.6 2.36 0.03 1.1
OSA +5° 524.3 237.0 0.62 0.08 139.5 2.29 0.03 1.2
Variation (%)
MC -30% 57% 30% -11% -13% 2% -13% -12% 39%
MC -20% 44% 22% -8% -8% 1% -9% -8% 34%
MC -10% 8% 5% -2% -1% 0% -2% -2% 6%
MC +10% -6% -3% 1% 2% -1% 1% 2% -5%
MC +20% -9% -5% 3% 3% -2% 3% 3% -7%
MC +30% -10% -7% 3% 4% -2% 4% 4% -8%
PC -30% 69% 65% -24% -25% 0% -25% -24% 4%
PC -20% 51% 43% -17% -16% 0% -18% -17% 11%
PC -10% 9% 11% -6% -4% 0% -6% -5% -3%
PC +10% -7% -8% 5% 5% -1% 5% 5% 3%
PC +20% -10% -14% 9% 9% -2% 9% 9% 8%
PC +30% -14% -20% 14% 12% -3% 13% 13% 12%
OSA -5° 8% -1% 0% 1% 0% 1% 1% 17%
OSA -3° 2% -2% 1% 1% 0% 1% 1% 7%
OSA +3° 1% 3% -1% 0% -1% -2% -1% -4%
OSA +5° 15% 12% -4% -2% -3% -5% -4% 5%
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• Dilution and recovery estimates calculated: Neither dilution nor recovery were
considered for pit optimization, mine planning or economic assessment. Only a 6% of
dilution was considered in the block model due to the reblocking effect. Wood carried out
a sensibility to evaluate the effect of the addition of a operational dilution and mining
recovery factor and concluded that the variation is not relevant for the business case.
• Optimization and Final Pit Selection.

The final pit selected for CB was the pit with revenue factor 1. However, Wood recommends
evaluating a smaller pit during FS with higher NPV, because currently the phase 4 adds a
significant quantity of waste with a small return and additional risk. The benefit may not
cover the investment in the additional trucks needed for mining this phase.
The performance of the crusher should be evaluated by ore type (magnetite, porphyry, etc)
and it is recommended that the optimization and scheduling will be based on throughput
US$/h by lithology and pit area.
It is recommended a Whittle audit is carried out in the FS with the aim of verifying the
software is functioning correctly with the block value calculation because some minor
inconsistencies were observed in this review.
Pit Final Design. It is recommended that the final design be reviewed by the Geotechnical
and Hydrogeological Department, considering that there are changes in the location ramps
and the pit bottom axis. There is an opportunity to use a single lane ramp in pit bottoms
for a limited number of benches with the objective of mine more ore blocks in these last
benches.
• Haul Road Profile: The FB-CB haul road profile developed by Ausenco (revB) was reviewed.
It was noted there is a section of the road greater than 1.7km with a negative gradient
where safety stretches have not been included. A section of 150m (progressive from 5+500
to 5+700) with a gradient of 13.5% was also found.
According to industry standards, for this type of haulage equipment, the recommended
maximum slope, for both safety and performance of the equipment, is 10%. Runaway
should be included in the haul road design to meet the legal standard in Peru. These issues
can be corrected in the following FS stage.
As a mining opportunity, autonomous trucks could be evaluated considering that this will
improve the efficiencies and will reduce the operational risks.
• Main Equipment Fleet: Truck fleet has been estimated based on haulage profiles,
however, because of the long distances from the pit CB to the crusher in FB, it is
recommended to use a reduced TKPH rate with the aim of avoid heat failures on tires due
the long distance traveled by the trucks from CB to crusher FB.
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Additionally, the use of only one fleet of drilling and loading equipment, increase the
operational risk due to mechanical availability, could generate unscheduled stops of the
whole mine. Annual productivity of the shovel meets exactly the required production for
the two first years (2021 – 2022). Therefore, it is recommended to have available in FB a
lowboy able to transport a drill equipment and a FEL capable to replace to the shovel while
unscheduled stops.
• Support Equipment Fleet: The requirement of support equipment has been calculated
based in ratios by tonnage or distances.
Wood recommends as standard practice calculating the auxiliary equipment based on the
main fleet number and distances, and in some cases differentiated by each pit. An example
is shown in the following Table 3-15:
Table 3-16: Support Equipment Estimation Criteria
Type of Support Equipment Criteria for Estimation

Bull Dozer 0.5 per (load equipment FEL + drills) + 1@waste dump
Wheel Dozer 2 for pit floor, dump, stockpile, and road maintenance
Motor Grader 1 per 10 trucks
Water Truck 1 per 10 trucks
Backhoe Excavator 1 for development/construction mine
• Mining Plan: The mine plan was delivered in Excel format, detailed by pit, phase and
material type, which showed eight scenarios. The mine plan includes inferred material,
representing 4% of the total CB’s ore tonnage for the Scenario 4-OW2 and 6% of the total
CB’s ore tonnage for the Scenario 8-OW6. Although that this material shall not be
considered within the reserves, this will be diluted within the FB-CB production, meaning a
low risk.
It was identified in Scenario 4-OW2 (Stage 1) the mining of the phase 3 has been included,
representing a 102Mt of material (27Mt of ore and 75Mt of waste, SR 2.8). This is out of the
Stage 1 scope and this could be generating a loss of value in the Stage 1 because of the
high strip ratio. On the other hand, for Stage 2, the differential value will be incremented.
3.2.7 Mineral Processing
3.2.7.1 Scope of Work
Review of metallurgy and processing focused on metallurgical sampling and testwork on

Chalcobamba ores, and assumptions of metal recovery and milling characteristics derived from
these studies. In addition, we reviewed PFS-level engineering of the Chalcobamba crusher,
planned conveyance systems and the proposed third ball-mill circuit at Ferrobamba.
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The process review addressed the following:
• basis of metallurgical testwork and predictions of copper and molybdenum recovery
• geometallurgical studies
• suitability of Chalcobamba ores regarding processing in Ferrobamba mill and

concentrator
• third ball mill design
• crusher selection and sizing
• throughput expectations for Chalcobamba ore
• operating cost estimates
• proposed operations plans
• compliance with MMG WQRs.
We reviewed individual aspects of the LOM operating plan, by unit:
• process plant operating costs
• planned LOM sustaining capital costs
• production forecasts.
Throughput: Comminution testing indicates CB porphyrys and skarns have similar BWI and
would mill at similar rates in the ball mill. However, CB Porphyry are highly competent to impact
breakage when compared to FB porphyry and CB skarns. For A x b values measured for CB
porphyrys, there is higher degree of uncertainty with potential SAG mill bottleneck. Previous
testwork was reported to be biased to more competent MZM porphyry. Wood concurs with
the PFS recommendation that additional comminution test work is recommended on samples
representing the next five years of processing.
Preliminary throughput simulations confirm the need for additional grinding capacity. A third
ball mill was recommended to achieve 53.7 Mtpa at a P80 of 200 microns. To achieve this
throughput and target grind, a maximum transfer size T80 of about 4mm is required from the
SAG mill. For competent ores, throughput could be impacted if P80 from the SAG mill is coarse
while BWI exceeds about 13 kwh/t. Further simulation work with expanded geometallurgical
inputs should be conducted in the FS to confirm the PFS throughput models on the actual mine
plan to assess throughput optimization mine planning opportunities.
Potential risks of the impact of magnetite in skarn on ball mill circulating load and pebble
crusher performance was noted in Chapter 7. This risk will need to be managed by defining
constraints on maximum magnetite content to the mill as part of the mine planning during the
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FS. Throughput simulations used 50th percentile. Our experience is that 75 th percentile should
be used so there is some uncertainty with throughput compared to industry standard.
Process Design: The process design criteria is sufficiently detailed for PFS however, some
omissions observed include metal recovery algorithms and reagent dosing systems in flotation
and thickening. Recovery algorithms were referenced in supporting documents, Open Pit Cut-
Off Grade Report but those algorithms were superseded by another internal memo (Lamb)
which aligned with the algorithms used in the Financial model. The PDC should include the
recovery algorithms and the reagent dosing requirements to ensure existing equipment sizing
for those systems is adequate.
Blast fragmentation models in the study are based on preliminary geo-metallurgical inputs.
Further development of the geo-metallurgical database is recommended for each deposit to
validate the fragmentation, comminution circuit throughput and metallurgical recovery models.
The recommended sizing for the primary crusher of 1600mm X 3000mm and a 1200 kW drive
was based on catering for all eventualities of porphyry to skarn feed ratios assuming F80 of
350mm and a P80 of 120mm. Sizing and selection appears to be suitable for the duty specified
based on available testwork data.
Recovery: Copper recovery models were developed from extensive bench and pilot testing of
Ferrobamba and Chalcobamba ores, and more recently using actual plant data. For all ore
types, copper recovery is expected to follow simple linear models with acid soluble copper as
the variable but there is some scatter in the data. Metallurgical testwork conducted in
2016/2017 on composite and variability samples indicate the samples were biased high for
copper grade and low for TOx compared to the preliminary mine plan (years 1 - 3 for
Chalobamba). Future testwork should on samples should focus on reducing scatter to the
existing recovery algorithms.
Copper recovery algorithms for FB and CB used in the cash flow analysis were sourced from a
October 2017 report (Lamb). Chapter 6, Appendix B Cutoff Grade Report dated May 22, 2017
should be updated to reflect the more recent 2017 report.
Pilot plant testing in 2009 indicates some sensitivity of copper recovery to primary grind size
coarser than P80 of about 260 microns. By adding a third ball mill, metallurgical testwork and
actual plant data on grind sensitivity support the incremental recovery projections used in the
LoA financial models. However, no information was sighted to confirm the incremental
recovery estimated as a result of forced air flotation cells.
The head grade of molybdenum to the concentrator is expected to fall materially with the
inclusion of Chalcobamba ore. Some testing is recommended in FS stage to confirm the
production and upgrade of a saleable concentrate.
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Opportunities
Concentrate grade of 28.9% Cu obtained from pilot testing of CB may be conservative in early
years when processing more skarn material.
Fixed recoveries for gold, silver and molybdenum were used in cash flow models. Gold and
silver recoveries were averages from locked cycle testwork but molybdenum recovery to final
concentrate was based on existing plant data. While the combined revenues of these metals is
less than 10% over the LOM, recovery algorithms should be based on future testwork programs.
3.2.8 Waste
3.2.8.1 Tailings
The existing tailing storage facility (TSF1) is suitable for additional ore processing and is
proposed as the primary tailing storage facility for Chalcobamba stage 1 tailings.
The PFS states that of January, 2018, TSF1 has a remaining potential of approximately 675Mt
when built to final elevation at Stage 6 of 4150m. This tonnage is based on an average tailings
dry density of 1.65t/m3. The PFS does not, however, provide the supporting data to indicate
that TSF 1 has the capacity to contain the CB tailings at the designed capacity plus freeboard.
Under current operating conditions, it is estimated that approximately 90% of the surface area
of the tailings basin is covered with water. Tailings are currently being discharge at a single
point near the plant and the slurry flow discharges almost directly into the pond. This
subaqueous deposition is known to create low density underwater deposits, so it is not known
whether the assumed density of 1.65t/m3 is being achieved or by how much the density is
being reduced. Obviously, any reduction in the tailing density will reduce the available tonnage
within the same volume.
The PFS should discuss the results of ongoing bathymetric surveys of TSF1 to confirm the
average dry density of the tailings and check this against the planned filling curve (attached).
From the bathymetric survey of TSF1 completed on 15 May 2018, the total volume of tailings
deposited since start of operations measures 73.74Mm3. A check of the plant production
records will confirm the dry mass of tailings delivered over the same period and the in-place
average dry density may be determined. For example, in order to match the design density of
1.65t/m3, a total of 121Mt will have to have been delivered to TSF1 since the start of operations.
If the mill records show that the delivered tonnage of tailings since start of operations is
different to 121Mt then the newly determined average density should be used to modify the
filling curve so that construction scheduling for each stage meets the design freeboard
requirements for dam safety.
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The attached chart, supplied by Las Bambas TSF Projects, is the current filling curve for TSF1
and indicates construction stages 2 to 6 related to the calculated tailings and water elevation
for two filling scenarios, one containing 3 Mm3 of storm flow and a revised curve for 6 Mm3
storage. Due its size and location, TSF1 is likely to be classified in the highest consequence
category under the ANCOLD Guidelines on Tailings Dams (May 2012), which will require the
freeboard to contain the Possible Maximum Flood (PMF).
Construction of the third raise of TSF1 started in 1Q2018 and is scheduled to be completed to
elevation 4080m in 4Q2018. The PFS also needs to confirm that sufficient mine waste will be
available from the Ferrobamba mine to supply suitable rock at a rate of 3.3Mt/month for the
current third stage raise to elevation 4080m, plus the annual production rates of 24.1Mm3 for
stage 4 to 4105m, 30.2 Mm3 for stage 5 to 4130m, and ultimately 53.1 Mm3 for stage 6 to
4150m.
3.2.8.2 Waste Rock Disposal
Chalcobamba waste rock will be placed in two valleys NE and SW of the mine and immediately
adjacent to the mine. No geotechnical work has been conducted for the PFS but, in addition to
the foundation investigations for waste rock stability, drilling and/or test pitting will be required
to delineate the highly organic saturated soils in the valley floors for removal prior to the use
of the area. These unsuitable organic soils are to be placed in the organic soil retention facilities
as shown on the waste rock conceptual layout drawings.
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The Chalcobamba waste rock has been characterized geochemically similar to the Ferrobamba
waste rock as non-potentially acid generating. However, feasibility-level geochemical
modelling is recommend based on the specific mine plan and most recent block model at
different stages of mining to improve the prediction of contact water quality at the water quality
control points in each valley.
3.2.8.3 Water Management
As reported in the tailings section, an excess of water exists within the existing Ferrobamba
tailing storage facility, TSF1. The May 15, 2018 hydrographic survey quantified the volume of
free water to be 10.2Mm3. There is a need to determine how much of this tailings water can be
used by the Chalcobamba plant.
The existing Chalcobamba site-wide water balance should be extended to include the water
balance for the entire Ferrobamba and Chalcobamba sites.
3.2.9 Infrastructure
• Explosive Storage: The explosive storage building for CB is deferred until the Stage 2. That
means that for stage 1, should be considered and additional time and cost for the explosive
transport since the FB magazine. It is recommended the construction of a temporary
explosive storage in CB for the Stage 1.
• Fueling Facilities: The tuck re-fueling facility building for CB was differed until the Stage
2. A temporary tuck re-fueling facility is considered in CB for the Stage 1. Additionally,
Wood recommend the construction of fueling platforms along the CB-FB haul road.
• Haul Road FB-CB: The road width is adequate for the transit of the selected haul trucks.
The haul road profile should be modified with the aim of avoid steeper sections, above the
10%, and shall include rest platform for sections with continuous ramp length above 1km.
Additionally, runaway, reflective fences, central berm, warning by haze system shall be
considered in the haul road construction cost.
3.2.10 Safety, Security, Health, Environment
The following observations are made:
• As there is a population currently very close to the pit and which was not part of the initial
EIA (2011), these populations could be affected by the activities that will be carried out in
the pit. Although it has been proposed to update air quality, noise and vibration models in
the Chalcobamba project area, if as a result of this modeling a potential impact on new
receivers is predicted, one of the alternatives to comply with national regulations it would
be the resettlement of the affected receivers. The costs and risks associated with this
measure should be considered in the estimates.
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• The PFS proposes an additional study for the identification of wetlands that could be
affected by the components of the Chalcobamba project, especially close to the waste
dumps. There is a risk of potential impact to the wetlands which according to the national
environmental regulations could result in a compensation claim. It is recommended that
potential costs associated with incurring a wetlands compensation claim should be
considered in the FS estimates.
• The location of Chalcobamba project components, especially the Chalcobamba pit, has a
potential impact on small bodies of water (apart from rivers and streams). To characterize
these bodies of water and define the viability of some type of environmental impact
compensation, additional characterization studies are conducted in FS. Currently the
national regulation on environmental compensation for the loss of bodies of water does
not have a well-defined scope and it is necessary to define with the National Water
Authority (ANA) specific terms of reference for environmental compensation. The costs
associated with the implementation of this compensation for the loss of water bodies
should be considered in the FS estimates.
3.2.11 Marketing
Marketing parameters for the Chalcobamba PFS report are based on existing contract
conditions Wood did not review. However payable factors appear similar to those we
benchmark in other projects and no penalties are indicated. Concentrate grades produced
appear to be estimated appropriately based on the combined copper mineralogy of
Ferrobamba and Chalcobamba and forecasted to decline from historic levels of about 38% Cu
to about 34% Cu. In order to maintain 400 kt Cu annual copper production, concentrate
produced and shipped will increase by about 10% but this is not expected to materially affect
the transport infrastructure and corridor.
3.2.12 Operations Management
No additional specific issues identified.
3.2.13 Operational Contracts
No additional specific issues identified.
3.2.14 Project Execution
The information presented in Section 13 of the report (including its appendices) is general in
nature, and would benefit from further development of project-specific execution parameters
and risk. Much information is already available elsewhere within the report, including Section
7 – Mineral Processing, Section 8 – Tailings and Water Management, Section 9 – Infrastructure
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and Section 14 – Capital Costs, to both characterize and quantify the proposed work. That
information should be drawn together and analyzed to demonstrate the level of effort required
to implement the project.
Risk
Wood’s review of the Chalcobamba Pre-feasibility study has not identified any elements of
elevated technical risk pertaining to project execution.
The primary execution risks relate to schedule (and cost) variance relative to the current
estimates and assumptions. Understanding and mitigation of schedule risk will necessitate
validation of estimates and assumptions pertaining to the quantity and sequence of work, and
reflection of those estimates and assumptions in the execution plan and schedule.
Recommendations
Wood offers the following recommendations for future stages of evaluation:
• Construction scope (quantity by commodity by facility) should be summarized to
illustrate volume of work.
• Construction manhours (drawn from the capital estimate) should be summarized
(hours by trade by facility) to illustrate level of effort.
• Commodity and construction manhour / manpower schedules (curves) should be
prepared in accordance with the execution schedule.
• The preliminary packaging plan should be expanded to include scope details, forecast
cost, manhours and timing.
• The preliminary schedule should be structured to incorporate the packaging detail.
• A basis for schedule should be prepared to discuss schedule-development principles
and parameters including:
o Fundamental constraints
o Packaging implications
o Permitting assumptions
o Construction rates
• Workforce sources, availability and logistics (accommodations) should be evaluated in
accordance with the execution schedule. Base case assumptions should be clearly
stated.
• Constructability constraints, challenges and opportunities should be discussed in
detail, including base case assumptions.
• Specific procurement and logistics considerations should be discussed, together with
specific assumptions regarding implementation.
• A project-specific execution risk assessment should be conducted to assess cost and
schedule risk.
• Suppliers and contractors should be engaged to validate cost and schedule
assumptions, and to contribute to identification of risk and opportunities. Specific
subjects for contractors engagement would include construction of the Ferrobamba –
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Chalcobamba mine haul road, and the design-supply scope for the overland conveyor
and related facilities.
3.2.15 Capital Cost Estimate
The estimate was reviewed based on industry standard practices for a Class 4 Prefeasibility
estimate and found to be generally compliant, other than the issues or inconsistencies as
described below.
The construction labour rates were based on information provided by Peruvian contractors and
are inclusive of all contractor direct and support costs as well as construction equipment. The
rates were benchmarked with in-house data from another Peruvian project and found to be
reasonable, including the variances in some commodities.
Initial review of labour productivity adjustment is reasonable, as compared to Wood in-house

data based on the execution strategy.
Initial review of concrete, steel and major mechanical manhours are reasonable, as compared
to Wood in-house data. The steel quantity for the crushing facilities was compared against a
similar in-house project and found to be significantly lower. No detailed review of quantities
was performed.
The earthmoving estimate was based on rates provided by one or more civil contractors, which
is a method exceeding the typical standards for a Class 4 estimate. The quotations were not
available for review, to determine if the size, complexity and execution strategy would be similar
to previous experiences at the Las Bambas mine. The most significant concern is the cost for
hauling material up to 5km, as the rates seem low in the estimate. This cost can vary depending
on the size of equipment used and may not be a significant concern if large equipment or
mining equipment is used. The growth included for most civil items was 13% and the
contingency evaluation used ranges similar to those in other commodities, but should be
higher. The estimating methodology is generally sound, however, civil is a high-risk area and
higher growth and contingencies should be considered.
Growth Allowance – Inclusion of a growth allowance in the direct costs of the estimate is
appropriate for a prefeasibility study. The percentages of growth applied to civil items seems
low, but overall, the inclusion of growth in the estimate is reasonable.
The temporary facilities & services estimate seems low compared to Wood benchmark data
and could have a potential impact of $3-4M. These costs were estimated by a percentage of
direct costs, which is a minimum standard, but typical industry standard is to estimate those
costs in some detail. Considering the complexity of the location and greenfields/brownfields
nature of the project, it is recommended to review these costs. Specific areas of concern are:
• Temporary power & fuel facilities & services
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• Construction warehousing
• Site transportation
• Construction waste management
• Safety and security
The estimate is based on the labour force residing off-site in local accommodation, which is a
concern that could impact community relations, cost and labour productivity. Analysis should
be performed by resource-loading the construction schedule that includes contractor support
personnel. Some issues are:
• The existing camp should be assessed for size and quality for the construction duration
• Indirect costs of on-site accommodation may be affected in the areas of on-site
infrastructure and maintenance required during construction
• The local community may be negatively affected with the number of people staying locally,
or the expected accommodations may not be available when needed
• Transporting workers off-site may pose a safety risk, especially if the workers are driving
themselves after working a full shift
• Labour productivity may decrease with potential worker fatigue from travelling off-site
every shift
Owner’s costs were reviewed as a percentage of total project cost against in-house data and
found to be close to average. Owner’s costs are very unique to each company and property,
so are difficult to assess.
Contingency was included in the estimate at 20% of the capital cost estimate, at P50. A
workshop was held to estimate ranges against the line items in the estimate, by commodity. A
Monte-Carlo simulation was run based on those ranges to arrive at the contingency. Typical
estimating methods for a prefeasibility can be either a deterministic method or simulation, so
the methodology is reasonable.
The ranges for civil items was used ranges similar to those in other commodities. Civil typically
has a higher risk and would generally expect to have a higher contingency due to the unknown
costs at this phase of a project. It is recommended to re-evaluate the contingency ranges
applied to the civil items to increase them.
3.2.16 Operating Cost Estimate
3.2.16.1 Processing
The process plant operating cost basis and estimate is outlined in the following reports:
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• Chalcobamaba PFS Report Chapter 15 Operating Costs Rev. B
• PFS Report Chapter 15 Appendix A PFS-B Opex and Mine Equipment Capex Report
• PFS Report Chapter 15 Appendix B
• Excel file 20180227_CB-PFSB_CB-OW2_v12
• Excel File 20180227_CB-PFSB_CB-OW6_v12
• 20170522_LB_CoG_Report_Eng_rev12, Open Pit Cut-Off Grade Report, May 22nd, 2017.
Processing costs are based on 2017 Budget (2017-2019) and 2016 Life of Asset actuals, updated
with economic assumptions for prices used in 2017 Budget and reviewed consumption ratios
representative of the life of mine. These processing costs were categorized by processing area.
Fixed ($0.69/t milled) and variable ($4.43/t ) components of the direct processing costs are
unchanged for Chalcobamba and Ferrobamba in the economic models.
The details were not provided to confirm energy consumption estimates, staffing levels or
maintenance supplies, however the basis of the estimate is derived from actual plant data.
The operating cost estimate does not take into account the variations in consumables
consumptions with differing blends of ore fed to the processing plant throughout the life of
mine. Testwork reports indicate overall reagent consumptions to remain the same as current
consumptions but Wood has not validated this assumption. Based on information available and
reviewed, Wood is of the opinion the operating cost estimate requires a range analysis to
understand uncertainty in the estimate before it would be fully compliant with MMG WQ
requirements. However, the operating cost estimate would meet industry standards for
prefeasibility Class 4 estimate.
3.2.16.2 Mining
Based in Las Bambas’ Xeras reports differentiated by pits FB-CB, the following issues were
found:
• CB´s drilling and blasting cost increased in 65% in comparison with the FB cost. This
increment due the drill pattern and powder factor. There were not identified increase in
steel or bit cost.
• CB´s loading cost increase due the low operational efficiency. There were not identified
increase in bucket or GET cost.
• CB´s hauling cost increased in 13% in comparison with the FB cost. However, considering
the conditions of the material to be handled it expected a higher increment due a rise in
the fuel cost.
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3.2.17 Business Risk
Project risks in the different areas appear to be reasonably identified and analyzed; however,
there is no evidence of the identification of opportunities as part of this assessment. It is
suggested that, as well as risks, opportunities are identified in an early stage of the project and
included in the forward work plan to ensure the proper actions are defined to materialize these
potential opportunities. Potential opportunities may include:
• Initial implementation of smaller crusher, as Chapter 17 (17.2.2, page 13) states that a
disadvantage for the crushing and conveyor option is that the crusher will not be able
to utilise its maximum capacity with Chalcobamba pit ores only as the capacity has
been sized to allow for future ore requirements such as the development of
Sulfobamba.
• Alternative configuration/location of TSF2.
There is the opportunity to provide a better reference on the proposed controls associated with
the different project risks by identifying the project stage when each of these will be
implemented.
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4.0 Investment Evaluation

Wood performed a high level review of the cash flow model utilized for the Chalcobamba
project evaluation to check that production schedules, metallurgical recoveries, costs, royalties,
taxes and revenues are properly accounted for, in accordance with MMG’s Project Development
Phase WQR and Business Evaluation standards and best industry practices.
Woods review included a high-level check on the project development options rationalization
and preferred option selection, in order to check that the less value options were discounted
and the higher value option was selected as the preferred option taken forward. As part of this,
a review of the project risks and their potential impacts was carried out, and the degree to
which these risks have been appropriately considered in the PFS in line with MMG’s standards,
identifying any risks that appear to have been ignored or improperly assessed.
Woods assessment of the investment evaluation compliance with MMG’s Project Development
Phase WQR is included in Appendix A.
4.1 WQR Compliance
Mostly Compliant. The economic assessment was performed on the proposed scenarios for
the project which include the selected development scenario. According to the PFS report, an
assessment of risk and uncertainty was carried out considering a selection of key production
variables, determining a probable range of outcomes for the incremental value for a selection
of relative comparisons of scenarios (OW1 – OWO1, OW2 – OWO2, and OW3 – OWO2). Based
on the incremental value assessment, key focus areas for further refinement were identified by
the study team and are presented as part of the conclusions and forward work plan included
in Chapter 17.
As reported in Chapter 17 of the PFS report, scope and framing activities were developed and
investment alternatives were defined. Value calculations were conducted based on a
discounted unlevered cash flow approach obtaining NPVs as the primary measure of value,
using real US dollars, and after-tax cash flows were obtained. Incremental values were
determined by comparing “optimised without” with “optimised with” scenarios.
The evaluation model used and the risk range analysis performed were included in the PFS
report. As reported by the study team, it is understood that the required endorsements for the
financial model, tax calculations and the investment evaluation methodology were obtained
and that each responsible technically competent person signed-off on the input assumptions
applied in the evaluation. It is suggested that these are documented and included as part of
the PFS report for potential future audits or general reference.
In general, the investment evaluation carried out by MMG’s Business Evaluation Team for the
Chalcobamba project, developed based on a Comprehensive Investment Evaluation in
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accordance to MMG’s investments classification convention, mostly complies with MMG’s

Project Development Phase WQR and Business Evaluation standards, with the following specific
items to be addressed by the MMG study team for completeness of compliance:
• Economic evaluation report chapter differs from the standard structure included in
section C of Appendix A of WQR.
• Investment to be evaluated in isolation without other unapproved investment decisions

being assumed, as it was understood from the study team that some currently
unapproved investment decisions were considered in the Chalcobamba investment
evaluation.
• Inclusion of the geotechnical high rated risk assessment in the project valuation.
In general, the economic evaluation appears reasonably carried out for a PFS level, considering
the applicable items and relevant taxes for this level of study. However, some items were
identified to improve the adherence to best industry practice, support or to refine the project
cash flows projection; however, it is expected that these will not have a material impact on the
investment evaluation outcomes.
Financial Model
As stated in Chapter 17, a LOA evaluation model Business Evaluation Group standard template
was utilized for the investment evaluation; however, this model appears unnecessarily complex
for this preliminary stage of study, not auditable in a short time and high level review such as
this IPR, with multiple input data scenarios, calculations sheets and complex structure,
compromising flexibility and transparency which are expected for an early phase of study when
multiple changes in the business cases are expected. Complexity may lead to errors that could
not be easily identified and could remain hidden in the model. For this PFS-B stage, a financial
model for the evaluation of alternatives and another model with the specific assessment of the
selected scenario would have been expected.
Input Assumptions
Based on a high level review of the input assumptions applied in the financial model against
estimates provided in different chapters of the PFS report, it seems that production schedules,
metallurgical recoveries, major costs, royalties, taxes and revenues were reasonable accounted
for in the investment evaluation, as could be expected for this level of study.
However, there is the opportunity to improve the reference and transparency on input and
modeling assumptions by expanding section 17.1.2 – Key Assumptions of Chapter 17, including
tabulated economic and input assumptions identifying those applied for the scenarios
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evaluation and those specifically applied to the selected scenario, that can be traced from other
sections in the report.
Metal prices assumptions seem reasonable, and appear similar to those considered in Wood
Guideline Long Term Metal Prices Q1 and Q2-2018 for internal use in cash flow models and
mining studies, as presented in Table 4-1.
Table 4-1: Price Assumptions
In general, mine production plans (tonnages and grades) and metallurgical recoveries for
scenarios 01 through 08 included in the scenarios input sheets (OWO1-TSF1 through OW6-
TR+C&C-TSF1&2-CBAII-2021+25) in the financial model appear aligned to mine production
plans and recoveries included in Appendix G – Mine Schedules of Chapter 06. However, the
financial calculations in the Financial Calc-With sheet (row 54, columns P and Q) of the financial
model not taking into account full tonnages for scenario 8 in years 2023 and 2024.
In general, Ferrobamba and Chalcobamba Cu concentrate grades for scenarios 01 through 08

included in the scenarios input sheets (OWO1-TSF1 through OW6-TR+C&C-TSF1&2-CBAII-
2021+25) in the financial model appear aligned to the concentrate grades reported in Chapter
11 – Marketing.
Cu concentrate treatment and refining charges, and port and ocean freight costs appear in a
similar order of magnitude, however at the lower end, to those we benchmark in other projects.
Au and Ag refining charges appear in a similar order of magnitude to those we benchmark in
other projects. No treatment or refining charges associated with Mo concentrate were included
in the financial model, so it is assumed that these are covered in the applied payable factor at
80%.
Project P00142
June 2018 Page 4-57
Chalcobamba PFS
Payable factors appear similar to those we benchmark in other projects with no penalties
applied. No evidence of applicable penalties on concentrates was found in the PFS report.
Concentrate land transport to port unit costs appear in the expected order of magnitude to
those we benchmark in other projects.
Operating costs inputs in the financial model were reviewed against OPEX estimates reported
in section 2.3 - Costs Results of Appendix A of Chapter 15:
• Total G&A and processing operating costs reported in the financial model (Financial
Calc-With sheet, rows 362 and 367) appear aligned to those reported in section 2.3 of
Appendix A of Chapter 15.
• Total mining operating costs applied in the financial model appear aligned to those
reported in section 2.3 of Appendix A of Chapter 15; however, these were then adjusted
in the financial model by adding a provision of US$5.0M/year from 2018 through 2020
(Financial Calc-With sheet, row 241), deducting a portion of the mining operating cost
(Financial Calc-With sheet, row 230) and capitalizing another portion (Financial Calc-
With sheet, row 360) from the total mining OPEX. However, no reference is provided
for the basis of these additions/deductions.
In general, tax assumptions appear reasonable in line with expected applicable taxes at the
current level of study; however, the following items were identified for review by the study team
to improve the support of tax assumptions or refine the project cash flows projection:
• No reference is provided for the basis of the withholding tax included at a rate of 18.0%
(Global assumptions sheet, row 207).
• Income tax rate with stabilization agreement was considered at 32% (Global
assumptions sheet, row 208) and without stabilization agreement at 29.5% (Global
assumptions sheet, row 209). Confirm if the income tax rate with stabilization
agreement is subject to a 2.5% premium, rather than a 2%.
• No reference is provided for the basis of the contractual royalty included at a rate of
3.0% (Global assumptions sheet, row 240), which is dependent on the Special Mining
Tax/Burden.
• Appears that the Modified Mining Royalty has not been included in those years without
tax stabilization agreement.
• Mining revenue net of freight costs was used to calculate the operating profit margin
(Tax Calc-With sheet, row 1029). For the purpose of calculating the operating profit
margin, normally freight costs are not deducted from the mining revenue (mining
revenue = amount payable - TCRCs); however, the impact of this on the project cash
flows is not significant.
Project P00142
June 2018 Page 4-58
Chalcobamba PFS
• Appears that Rehabilitation provision addition (Tax Calc-With sheet, row 59) was not
included in the calculation of the Taxable Income (Tax Calc-With sheet, rows 1407
through 1434) or in the Total operating expenditure (Financial Calc-With sheet, row
809). No reference was found on how this item was included in the project cash flows.
• No basis on the Rehabilitation paid/closure expenditure (Input-With sheet, row 240)

distribution was found. If assumed annual instalments in escrow account but incurred
at the end of project life the consideration of this item in the Taxable Income calculation
should be revisited to reflect this.
The major components of the total capital costs inputs in the financial model were reviewed
against the estimates included in the spreadsheet
20180522_LB_Capital_Expenditure_Summary_CB_PFSB_TSF2_Update_RZ.xlsx included in
Appendix A of Chapter 17 of the PFS report (hereinafter referred as the capital costs source
spreadsheet), which it is understood to be the source of capital costs used in the final model.
The following items were identified for review by the study team:
• Chalcobamba study costs applied at US$45.9M in all “optimised with” scenarios in the
capital costs source spreadsheet (sheets OW1_TR-TSF1-CB1-2021 through
OOW6_TR21-C&C-TSF1&2_23-CBAII, rows 11) differ from the total study cost reported
in the PFS report at US$47.5M (page 8 of Chapter 00 – Executive Summary).
• In general, Chalcobamba pit development costs included in the capital costs source
spreadsheet (sheets OW1_TR-TSF1-CB1-2021 through OOW6_TR21-C&C-TSF1&2_23-
CBAII, rows 14 through 29) appear to be reasonably aligned to those included in
Appendix A – Capital Cost Estimate – Fixed Plant of Chapter 14, with the exception of
the capital cost included for the scenario OW1 at US$170.4M which differs from the
capital cost reported in Appendix A of Chapter 14 at US$116.4M (Options Summary
sheet; cells I79, Q79 and Y79). However, this cost appear to be aligned to the capital
cost reported in Table 17.4 –Summary of Scenarios Inputs in Chapter 17 (page 7) for
this scenario. Thus, it is unclear if the capital cost for scenario OW1 in Appendix A of
Chapter 14 was later updated to a higher cost, or if this represents an opportunity to
revise the capital cost for this scenario in the financial model.
• In general, the mining fleet capital costs included in the capital costs source
spreadsheet (sheets CB_OWO1-675 through OOW6_TR21-C&C-TSF1&2_23-CBAII,
rows 109 through 110) appear to be reasonably aligned to those included in Table
14.14 – Mine Equipment Capital Summary All Scenarios in Chapter 14 of the PFS report
(page 28).
• TSF2 capital costs applied in the capital costs source spreadsheet in all scenarios (sheets
CB_OWO2-850-TFS2 through OOW6_TR21-C&C-TSF1&2_23-CBAII, rows 101 through
106) differ, in the range of -US$5M (minus), with respect to those reported in Table 8.4
Project P00142
June 2018 Page 4-59
Chalcobamba PFS
– Updated Estimated Capital Cost for TSF2 in Chapter 08 – Tailings and Water (page 7).
No basis on the TSF2 costs distribution along the project life was found.
• No basis on other costs included in the total capital cost estimate (LoA) applied in the
financial model, such as those associated with exploration, TSF1 (applied at US$506.4M
equally in all scenarios), ball mill 3 and other sustaining costs, was found. However, it
is understood that most of these are associated with common enabling projects that
are being developed separately out of the Chalcobamba scope of study. Thus, these
were not included in this high level review.
Total closure costs applied in scenarios 01 through 08 input sheets (OWO1-TSF1 through OW6-
TR+C&C-TSF1&2-CBAII-2021+25, cells G175) in the financial model were compared to those
reported in Table 10.5 – Closure Costs by Scenario of Chapter 10 of the PFS report, and
differences were found in scenarios OW4, OW5 and OW6 as shown in Table 4-2 for review by
the study team. No basis on the closure costs distribution over time was found.
Table 4-2: Closure Costs Deviations
Risk Range Analysis
A risk range analysis was performed; however, it can be understood from Chapter 17 (item 17.4,
page 28) that the ranges used in this analysis were established for a preliminary Scenario 7
(OW5). There is the opportunity to better reflect a probable range of outcomes if ranges would
have been established for each specific scenario based on the latest knowledge considering
the particularities of each scenario, particularly on the scenario selected.
Economic Results
Although a recommendation is made for the project based on the proposed scenarios
assessment, it is not clear if this recommendation is associated with a particular selected
scenario.
The basis for discounting and cost incurrence assumptions (e.g. mid-year, end-of-year) are not
clear, as Chapter 17 states valuation date set at 1 Jan 2018, but in the financial model (Global
Assumptions sheet, row 15) the discounting factor for 2018 was calculated using mid-point
discount = 1 / ( 1 + 8.0% ) ^ 0.50, not full year discounting. Full year discounting factors were
added on this (2019 onwards).
NPVs for scenarios 1, 2 and 8 in the summary table of NPVs in the financial model (Control
Panel sheet), reported as US$4,684M; US$4,683M and US$5,041M, differ from those presented
in the PFS report reported as US$6,115M; US$6,157M and US$6,818M, respectively.
Project P00142
June 2018 Page 4-60
Chalcobamba PFS
5.0 Recommendations for FS Work Plan
5.1 WQR Compliance
Compliant.
• Complete the drilling programme proposed by MMG.

• There is a recommendation and mining work plan for the next phases which cover the key
aspects.
• There is a mining study cost and timing budget for the Stage 1 and 2.
• Perform a complete resource estimation data base audit.

• Evaluate the different methodology used for the specific gravity measurement.
• Incorporate Estimation Domains for the Resources Estimation for all economics and
deleterious elements. The Estimation Domains should be evaluated using the lithological ,
oxidation stages and alteration information.
• Incorporate Estimation Domains for the Density Estimation using the same criteria
described above.
• Perform a drillhole spacing study using only Chalcobamba information and incorporate
that result to the proposed drilling campaign for next level of the study and for
classification.
• Prepare a Resources Model report including methodology, files used and all the files that
supports the alternative selected
• The Stage 1 of the CB pit must be separately of the stage 2 of CB and independently of the
FB pit.
• It is recommended to carry on a new geotechnical drilling campaign to confirm the
geotechnical and hydrogeological parameters.
• In the next stage is recommended to use a differentiated pit optimization parameter for FB
and CB, with the objective of maximize the NPV of the Stage 1 for CB.
• To complete the pre-feasibility study, It is recommended to carry out an evaluation of
increase of FB production along the years 2021 and 2022 and in this way, move the
beginning of CB until the crushing and conveyor will be installed, and start CB production
in 2023.
Project P00142
June 2018 Page 5-61
Chalcobamba PFS
6.0 Conclusions and Recommendations

Overall, the PFS study objectives have been met and the study generally meets or exceeds the
MMG’s internal WQRs standards for PFS, with a few specific items in the areas of business risk,
and economic evaluation that could be addressed for full compliance.
The PFS-B evaluated alternative configurations to develop Chalcobamba as soon as possible

and demonstrates the trucking alternative based on a Stage 1 mining plan has the highest NPV.
In addition, this option allows MMG to defer a crushing and conveying option that might be
better optimized in a future Stage 2 to support a transport corridor for developing other
potential nearby deposits, other than mining at Chalcobamba alone.
In general, Wood concurs with the MMG study team recommendation to advance the
Chalcobamba project to a FS stage.
A number of recommendations have been made in the various sections of this report and the
following supplementary recommendations are provided:
• Perform an independent Data Base audit and document changes
• Investigate the impact of changes in the lithology groupings for the Geological Model.
• Investigate the application of probabilistic high grade domains to control high grades.
• Evaluate the geological data vs. grades inside the Final Pitshell.
• Perform a drill hole spacing study by lithology focused on skarn and porphyry
• Investigate estimation domains that include combinations of oxidation domain (OXIDOM)

and lithology and/or alteration.
• Investigate constructing a Specific Gravity model.
• Update the Final Report to include project reports completed during the study.
• Standardize and document the implicit geological model construction procedure
• Document the lithology groupings in the implicit geological model construction procedure.
• Document specific gravity determination procedures.
• Provide an opinion on the adequacy of assumptions that support the selected project
option
• Reassess the completeness of risk identification, classification and mitigation
Project P00142
June 2018 Page 6-62
Chalcobamba PFS
Appendix A : Independent Peer review Traffic Light

Report – PFS Standards Compliance and
Issue Register
Project P00142
June 2018 Page 6-63
Appendix A
Independent Peer review Traffic Light report –PFS Standards WQR Compliance and Issue Register
The Work Quality Requirements (WQR) document of MMG is an internal guideline to

provide the minimum internal requirements to complete a development phase of a project
and to ensure that all project development phases are completed using a consistent and
agreed methodology and to a predetermined standard.
The WQR defines a Prefeasibility Study with two stages:
• Prefeasibility A (PFS-A) Alternatives Assessment Stage. This stage focuses on

evaluating investment alternatives based on a range of resource, mining,
processing strategic options. The options are evaluated economically and on
other business factors (such as risk) to identify the preferred alternative in PFS
phase B (PFS-B). The PFS-A report must report on the basis of the study support
and the process of evaluating the strategic options.
• Prefeasibility B (PFS-B) Definition Stage. This stage ensures that the selected single
business case and preferred alternative is rigorously reviewed and a detailed
evaluation of the options full value and risk profile is conducted to confirm the
business case. All PFS study definition requirements are completed during this
phase. In addition, the work program to subsequently optimise the option and
develop an investment proposal is outlined.
The present PFS work and report are considered by MMG Project Team to be at the PFS-
B Stage.
The WQR establishes lower and upper study criteria for a PFS. The following table
summarizes the IPR assessment of the PFS compliance with the WQR criteria.
Design deliverables for plants and key facilities should be compliant with at least the
minimum standard defined in the Capital Estimation and Engineering Deliverable Standard
(Section B WQR). As a minimum standard for PFS this should include Engineers concept
drawings or similar outlines based on assessed data and measured dimensions. Both
primary and secondary features should be shown, some multi- disciplinary checking has
been conducted, and in sufficient detail to support preliminary MTOs
Independent Peer review Traffic Light report –WQR Standards Compliance and Issue Register
Study: Las Bambas Chalcobamba Expansion Project in Pre Feasibility (PFS) seeking to go to Feasibility (FS)
=Full Compliance = Majority Compliance (>50%) = Low Compliance (<50%)
Report Content Objective: IPR observations on PFS with respect to compliance to WQR Objectives & Standards Criteria Compliance
Assessment
1. Introduction Objective: Outline context, project scope, work done to date, and the strategic drivers for the project.
2. Locations and Setting Objective: Document any physical aspects, including ownership, of the site that impact on the project.
Standard: Analysis to be sufficiently comprehensive to ensure all relevant issues are satisfied.
Document. Site map.
3. Legal Environment and Objective: Provide a detailed analysis of relevant legislation highlighting the legal requirements, risks and
Approvals major approvals and agreements required. A work plan is required, and timing (including contingency)
for approvals must be factored into the project schedule and next phase resource estimate. Demonstrate
adequate progress towards obtaining the required approvals. Any issues that may have a significant
bearing on the project should be identified, and mitigation plans defined.
Standard: Formal legal analysis required. Agreements, contracts or approvals are required for the FS
developed to ¨in principle¨
Documents: Legal requirement matrix (Detailed); Detailed work plan
4. Stakeholders and Objective: Refine the stakeholders analysis highlighting any shifts in opinion or position resulting in
Community opinion resulting from recent engagements or activity. Fully define requirements for, and status towards
any third party agreements. In particular, fully define land access and acquisition requirements and
timelines required to secure.
Standard: Analysis and resolution of any community issues/concerns is to be consistent with MMGs
Community Standard. Sound working relationships should be established with all key stakeholders
enabling robust communication. Stakeholder expectations are fully understood, and
negotiations/discussions well advanced. The process for completing negotiations or resolving any
conflicts has been defined. Residual concerns or threats should be highlighted and included in the risk
assessment.
Documents: Social Impact Management Plan, Cultural Heritage Plan, Other deliverables identified in
MMGs Community Standard if critical to the development of the project.
5. Geology Objective: Outline current understanding of the deposit geology noting any work done in this phase to
improve understanding. Intent is to indicate a reasonably firm estimate of the size/quality of the resource
and the scale of the project. Any risks and uncertainties in the underlying data should be highlighted, and
the program of work required in the next phase should be outlined.
Standard: Resource Statement must be compliant with JORC Code.
Standard: The ideal minimum standard of resource definition is set at least:
• 80 % indicated for the first three years.

• 50 % indicated for life of mine.
• Unclassified material should not be included in the valuation.
Documents: Resource Model, Resource Estimate/Statement, Forward Work Plan

6. Mining Objective : Develop the selected option to the standard required highlighting risks, uncertainties, and
areas for optimization. Analyse closure options and select approach based on whole project optimization.
Standard:
• Hydrological and geotechnical design was developed according to standards

• The operational dilution and mining recovery were not estimated
• Based on the preliminary resource estimate (Section 5)
• Cost estimates for mining based on owner/operator bottom-up cost model
• Closure requirements consistent with Closure Planning WQR, and Class V estimate
Documents: Optimized Pit Designs, Mining Inventory, Mining Schedule (Annual), Blend Schedule,
Preliminary Mine Design/Layout, Preliminary Infrastructure Design, Equipment List, Cost Model,
Conceptual Closure Plan (Initial).
7. Mineral Processing Objective: Develop the process design and expected performance parameter for the selected option.
Process will be robust, but un-optimized. Any knowledge gaps (representing both risks and
opportunities) will be highlighted. Develop the corresponding design of the process plant.
Standard:
• Design based on completed ore characterization, bench scale testwork (including variability)
• Process Design Criteria
• Process Flow Diagrams
• Mass and Energy Balances
• Plant Design (minimum): Deliverables consistent with Capital Estimation and Engineering
Deliverable Standard (Section B WQR).
Documents: Process Design Criteria, Performance Parameters, Product Specification, Process Plant Design
8. Waste
8.1 Tailings Objective: Finalize the locations and storage approach for tailings and progress design.
Standard:
• Design based on tailings characterization testwork

• MMGs Fatal Risk Standard Outlines Requirements
• Design (minimum). Deliverables consistent with Capital Estimation and Engineering Deliverable
Standard (Section B WQR).
Documents: TSF Design (considering TSF 1 for Chalcobamba)
8.2 Waste Rock Disposal Objective: Finalize the locations and storage approach for waste rock dumps and progress design.
Standard:
• Design needs to be consistent with environmental requirements and based on waste

characterization tests
Documents: Waste Rock Dump Design
8.3 Water Management Objective: Develop a preliminary design of required water management infrastructure
Standard:
• Hydrology analysis based on site data

• Design consistent with environmental requirements
9. Infrastructure Objective: Develop a preliminary design for all on-site infrastructure
Standard: Design (minimum). Deliverables consistent with Capital Estimation and Engineering Deliverable
Documents: Infrastructure Design (onsite only for Chalcobamba)
10.1 Safety, Security, Objective: Outline how any key safety, security, health issues will be mitigated through the design and/or
Health operational readiness processes.
Standard:
• MMG Fatal Risk Standard

• MMG Occupational Health Standard
10.2 Environmental Objective: Outline how any key environmental issues will be mitigated through the design and/or
operational readiness procedure. Summarise progress with baseline data and highlight any gaps or
issues.
Standard: Both plant design and operations need to be consistent with MMG Environmental Standard
and regulatory requirements identified in 3.
Documents: Baseline studies will be developed to satisfy regulatory requirements.
11. Marketing Objective: Validate Scoping Phase Assumptions
Standard: Engagement with customer base.
Documents: Updated report.
12. Operations Objective: Develop a preliminary estimate of the labour resource required for the project- structure,
Management head count, agreements and conditions
Standard: High level organizational structure, approximate resource numbers based on similar
operations, recruitment areas identified
Documents: Preliminary organization chart.
13. Operational Contracts Objective: Initiate and advance discussions with suppliers to ensure both security of supply within
timeframe, and robust estimate of cost.
Standard: Budget estimates from several suppliers or agreement in principle with a single or existing
supplier.
14. Project Execution Objective: Conduct preliminary planning for project execution to ensure integration of PEP with design,
schedule and cost estimate. A preliminary project schedule, highlighting critical path should be
developed.
Standard:
• Preliminary project is developed

• Schedule developed to L3 detail
• Preliminary project team structure proposed to identify opportunities for personnel continuity
• Preliminary contracting and Procurement plans developed
• Engineering deliverables completed as outlined in Project Definition Criteria
Documents: Project Execution Plan (Preliminary), Project Schedule, Engineering Deliverables
15. Capital Cost Estimate Objective: Refine the capital cost estimate for the selected project option based on improved definition.
The estimate must be complete and cover all capital including subsequent feasibility phase, mine
development and infrastructure, process plant, and on and off site infrastructure.
Standard:
• The capital estimate must conform to the requirements of a Class 4 Estimate as identified by
AUSIMM 2012. This estimate has an accuracy of -20% to + 25% after a p50 contingency has
been applied.
• Estimate is based on quotes for major equipment, preliminary MTOs and regional rates data
Documents: Basis of Estimate, Capital Estimate
15. Operating Cost Objective: Fully develop the estimate of operating costs for the project, and define the uncertainty in the
Estimate estimate.
Standard:
• The operating cost estimate must conform to the requirements of a Class 4 estimate as defined
by AUSIMM 2012. This estimate has an accuracy of -10% to + 15% for known operations.
• The estimate should be based on calculations using budget prices or existing contracted rates.
Documents: Basis of Estimate, Operating Cost Estimate
16. Business Risk Objective: Identify, analyse and define mitigate strategies for project risks at a level of detail
commensurate with the overall definition of the project. Material residual risks to be included in
valuation. This analysis should highlight a range of issues that need to be resolved or progressed during
the next phase.
Standard : MMG Risk Management
Documents: Detailed Risk Register
17. Economic Evaluation Objective: Assessment based on the selected development scenario. The assessment of risk and
uncertainty is revised and used to illustrate probable range of outcomes and also to highlight key focus
areas for further refinement.
Standard : Economic analysis to conform to MMG´s Business Evaluation Standards
Documents: EV Model, Range Analysis
18. Recommendation and Objective: Outline recommendation and key aspects of work plan for the next phase.
Work Plan
Documents: Study Implementation Plan

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Minera Las Bambas S.A.

02.07.2018 Final Report

Cecilia Artica, Don East, Willmer Cancho,

Kirk Hanson, Tim Khul, Kyle Marte,

Approved by: William Colquhoun

Approved: William Colquhoun

Project no. here

1.0 Executive Summary ........................................................................................................ 1-1

Project no. here

3.2.14 Project Execution ......................................................................................................................... 3-49

Figure 3-1: Lithological model Plan Section 4480 .................................................................................................. 3-17

Project no. here

Figure 3-3: Boxplot Cu (%) by Lithology in Oxide Zone ...................................................................................... 3-24

Project no. here

1.0 Executive Summary

Project no. here

• Under current operating conditions, it is estimated that approximately 90% of the

Project no. here

Project no. here

=Full Compliance = Majority Compliance (>50%) = Low Compliance (<50%)

Project no. here

8.3 Water Objective: Develop a preliminary design of required water management

9. Infrastructure Objective: Develop a preliminary design for all on-site infrastructure

11. Marketing Objective: Validate Scoping Phase Assumptions

Project no. here

2.0 Introduction and Background

Generally, a PFS should:

• provide sufficient evidence to support the assumptions made

• open-pit mine and surface support infrastructure

Project no. here

• William Colquhoun, Consulting Technical Services Manager (IPR Manager) *

• Donald East, Technical Director Geotechnical (Tailings, Geotechnical, Water

• Willmer Cancha, Senior OP Mining Engineer (Mining and Infrastructure Lead)*

• Cecilia Artica, Senior Geologist (Geology and Resource Estimation Lead)*

• Kevin Brown, Project Director, Program Management (Execution Lead)

• Rhea Hartt, Senior Estimating Specialist (Cost Estimation Lead)

• Michael Woloschuck, VP Consulting (Process Lead)

• Jorge Arnaiz, Environmental Manager ( Environmental and Permitting Lead)

• Alexandra Iquira, Environmental Specialist (Social and Community Lead)*

Project no. here

• Recent geotechnical failures/concerns in the Ferrobamba Wood also observed during

The PFS-B consequently evaluated alternative configurations to develop Chalcobamba as soon

Project no. here

3.0 Key Technical Findings

The WQR defines a pre-feasibility study with two stages:

• Pre-Feasibility A (PFS-A) Alternatives Assessment Stage. This stage focuses on evaluating

Project no. here

3.1 WQR Compliance

3.1.2 Location and Setting

3.1.3 Legal Environment and Approvals

3.1.4 Stakeholders and Community

Project no. here

3.1.5 Geology and Resource Estimate

• 80 % indicated for the first three years

• Hydrogeological and geotechnical design calculated from site data: The

Project no. here

3.1.7 Mineral Processing

Preliminary piloting provided a concentrate assay. Locked cycle testing in Phase 2 is

Project no. here

3.1.8.2 Waste Rock Disposal

3.1.8.3 Water Management

3.1.10 Safety, Security, Health, Environment

Project no. here

3.1.12 Operations Management