Project Constellation Update

NGEx continued to take advantage of opportunities to add value to Project Constellation by evaluating lower cost development options, testing the potential to recover gold from the oxide cap at Josemaría by heap leaching, and continuing baseline environmental studies.

Over the past few months, the Company evaluated the leach amenability of the oxide cap at Josemaría through a series of metallurgical tests and studies and explored whether this material is amenable to heap leaching. The oxidized leached cap at Josemaría contains approximately 450,000 ounces of gold within an Indicated resource of 43 million tonnes at an average grade of 0.32 g/t gold. This material was considered waste in the Preliminary Economic Assessment completed in early 2016 (the “PEA”) as no metallurgical testwork had been completed at that time. Preliminary results were received from column leach metallurgical testwork on material from the oxide cap and the results show good leach kinetics, with gold recovery ranging between 72% and 78%, depending on crush size, and indicate that leach recovery of gold from this portion of the resource is technically feasible.

The Company is actively working on building its project portfolio with a focus on copper-gold projects in Chile and Argentina and evaluating a number of exploration projects in Argentina for potential acquisition.

 

Outlook

During the remainder of 2017, the Company will focus on advancing Project Constellation by continuing to optimize and de-risk the Project and explore options to advance the Project toward eventual development, including more active engagement with potential development partners or acquirers.

In addition, work is planned to explore the varied development options that the Project provides. Specifically, the Company will seek opportunities to add value, at modest costs, by:

• Evaluating high potential exploration targets within a few kilometers of the existing deposits and the proposed plant site;
• Continuing to look for opportunities to optimize the engineering studies;
• Continuing ongoing environmental baseline data collection surveys; and
• Exploring potential regional synergies and cooperative development plans with other regional operators to use spare capacity of processing plants and infrastructure, including port facilities. Innovative development concepts, such as those used at Teck & Goldcorp’s NuevaUnión Project, open up the potential for sharing infrastructure on a regional scale by connecting deposits via long distance materials handling systems.

The Company continues to pursue these de-risking opportunities and will seek to engage with potential partners to lay the groundwork for either the eventual development by the Company and its partners or through a sale to a third party. Efforts will be focused on exploring all potential development scenarios for Los Helados and Josemaria. In addition, the Company will continue to pursue opportunities to add high quality new copper-gold exploration projects to its portfolio.

 

A new and shinning future for Copper, and Argentina Gone are the times when the pound of copper was trading below US$2.50. A mix between increased demand and a delay in supply has allowed the red metal to gain space between ferrous metals, being one of the most attractive not only as an investment but also to boost copper projects. Analysts pointed out that 2018 will be the year of the definitive change, where supply will not track the demand level, as a result of the recovery observed not only in China but also in the European Union. Few countries have world-class copper projects like Argentina. From the north to the center of this country, there is a long list of projects in different stages of progress. Some of the highlights include: – Taca Taca (copper, gold, molybdenum / operated by First Quantum) in the province of Salta – Agua Rica (copper, gold / operated by Yamana Gold) in the province of Catamarca, and only 35 km from the Bajo la Alumbrera mine – Constellation (copper, gold and silver / operated by NGEx Resources Inc. 60% and Pan Pacific Copper 40%), a binational project located in the province of San Juan and Region III of Chile – Filo del Sol (copper, gold and silver / operated by Filo Mining), another binational project located in the province of San Juan and Region III of Chile – El Pachon (copper, molybdenum / operated by Glencore) in the province of San Juan – Los Azules (copper, gold and molybdenum / operated by McEwen Mining) in the province of San Juan – Altar Río Cenicero (copper and gold / operated by Sibanye Gold), in the province of San Juan These giants are some of the most important undeveloped copper deposits on a global scale. On the basis of preliminary analyzes, each of these could produce approximately a quarter of a million tons of copper. In this way, if only two projects were in operation, Argentina would be among the main producers of the red metal. Copper has regained ground, and projects have gained appeal again.