Anglo American : Quellaveco Depth Extension Exploration Target Report

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Summary

Significant potential exists for mineralisation to continue at depth below the Mineral Resource at Quellaveco. Most of the resource definition drilling is restricted to approximately 400m below the surface and only a few drill holes have tested the system to below 600m depth. Recent deeper holes suggest that hypogene grades may improve locally with depth, a geologically plausible outcome given the known characteristics of nearby porphyry copper orebodies of similar age.

The Exploration Target shown in Table 1 represents the depth extension potential of the Quellaveco orebody. The range of tonnes and grade was estimated using the Anglo American Endowment Modelling Framework.

					Low		High
	Billion tonnes				5		11
	Cu%				0.4		0.6

Table 1. Estimated Exploration Target for Quellaveco Depth Extension

The Exploration Target is exclusive of the Quellaveco Ore Reserves and Mineral Resources (see Anglo American Ore Reserves and Mineral Resources Report, 2023). The potential quantity and grade are conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

A deep drilling program of 4 holes totalling 5,100 m is commencing in 2024 to test the Exploration Target, with a larger deep drilling program planned over the following 5 years.

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Table of Contents
Summary	2
1	Introduction	4
2	Tenure	4
3	Geology and Mineralisation	5
4	Exploration	7
5	Modelling Assumptions and Estimation Methods	8
6	Appendix 1: JORC Table 1	10
7	Appendix 2: Tenements	13
8	Appendix 3: Results	15
9	Appendix 3: Competent Person Statement	16

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1 Introduction

The Quellaveco district is located at approximately 3,500 m above sea level in the valley of the Asana River in the Moquegua District of the Mariscal Nieto Province, in the Department of Moquegua, Peru (Figure 1). The district lies at approximately 17° south latitude. The Quellaveco plant and mine site are located approximately 30 km east of Moquegua, 130 km south of Arequipa, 1,000 km southeast of Lima and 180 km from Arica, Chile's northern most city as shown in the inset of Figure 1. The closest ports are Ilo (82 km west of Moquegua) and Matarani, approximately 180 km northwest.

Figure 1. Location map of the Quellaveco District

2 Tenure

The spatial distribution of Quellaveco tenements is shown in Figure 2 and a tabulation of the tenements in which the Exploration Target is located (as at 31 December 2023) is included in Appendix 2. The ownership of the tenements is shown in Table 2.

Entity

Anglo American

Mitsubishi Corporation

Ownership percentage (%)

60

40

Table 2. Ownership of Quellaveco Exploration Target tenements

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Figure 2. Tenements and claims pertaining to the Exploration Target and surrounds.

3 Geology and Mineralisation

Much of the Quellaveco porphyry Cu-Mo district is hosted within a large batholithic, equigranular granodiorite intrusive complex (Yarabamba Batholith ~60 Ma), which intruded into the volcanic Toquepala Group between ~92 Ma and ~65 Ma (Figure 3). Several generations of porphyry intrusions were emplaced into the granodiorite batholith from ~53 Ma to ~58 Ma, often associated with igneous and lesser hydrothermal breccias that are spatially associated with hydrothermal alteration and mineralisation, including chalcopyrite, molybdenite and

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pyrite. These porphyry intrusions include a pre-mineral precursor porphyry and several stages of inter-mineral to late and post mineral phases. These rocks later went through a partial erosion stage and were subsequently unconformably covered by pyroclastic volcanic rocks (Figure 3). Finally, the area was affected by a more recent stage of erosion.

Quartz and early-dark-mica vein stockworks are locally developed but have not yet been shown to be related to a specific porphyry phase and generally tend to overprint both the host rocks and the earlier stages of porphyry intrusions. These veins are generally only weakly mineralised. Only weak evidence for Potassic alteration (secondary biotite) has been observed to date and, along with the presence of high level rhodochrosite bearing hydrothermal breccias, suggests that drilling to date has only tested the upper part of this porphyry system. Weak propylitic (chlorite +/- epidote carbonates) alteration is developed along the flanks of the deposit. Several stages of grey-green sericite, and chlorite-sericite veinlets, related to late hypogene enrichment events, overprint most of the earlier alteration in both host rocks and early to inter-mineral porphyry dikes.

At shallower levels, weak chlorite-sericite-sulphide alteration overprints all previous alteration including the grey-greensericite-chlorite events. Moderate to locally strong quartz-sericite-pyrite (QSP) alteration is best developed on the outer edges and along structurally controlled zones within the core of the system. A leached lithocap and the underlying secondary (supergene) chalcocite enrichment blanket overprints hypogene mineralisation in the uppermost 50 to 200m of the deposit. Most of the hypogene sulphide mineralisation at Quellaveco is associated with the grey-green sericite and chlorite-sericite +/- magnetite veinlets and consists of chalcopyrite and pyrite. No bornite has been observed to date which supports the comment above that drilling to date has only tested the upper part of the system, and that the higher-grade potassic core at depth is currently untested.

Figure 3. Geology of the Quellaveco district. Cuajone and Toquepala are porphyry copper deposits similar in style and age to Quellaveco.

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4 Exploration

Quellaveco has been explored from 1939 to present. Most of the drilling prior to 1996 was to define the near surface supergene enrichment zone, and so is not relevant to the Exploration Target. Various phases of drilling in the hypogene zone followed, but most of this was restricted to 400 m below surface and only a few drill holes have tested the system below 600 m depth. Several recent deeper holes drilled at the northern end and in the southwest of the orebody have increasing grade at depth and suggest hypogene grades may improve with depth (Figure 4). Typical copper sulphide species zonation, from chalcopyrite at shallower levels to bornite at depth, has not been observed at Quellaveco to date. Some of the deepest holes also indicate that the green sericite enrichment is stronger and more pervasive at deeper levels. Gradation into bornite mineralisation (if defined) would drive increased average hypogene grade at depth. A summary of the deeper drill hole intersections which are relevant to the Exploration Target is presented in Appendix 2.

Figure 4. Section showing the extent of geological model (in grey) and drill holes at Quellaveco Mine.

A deep drilling campaign is planned to test the Exploration Target. A program of 4 holes totalling 5,100 m is commencing in 2024 (Figure 5), with a larger deep drilling program planned over the following 5 years.

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Figure 5. Cross sections through Quellaveco showing 4 drill holes planned to test the Exploration Target at depth, commencing 2024.

5 Modelling Assumptions and Estimation Methods

The Exploration Target shown in Table 1 is based upon the Anglo American Endowment Modelling Framework. Endowment assessment using this framework involves the participation of a multidisciplinary team (including for example resource estimation, exploration geology, mine geology and mine planning experts) collaborating on modelling criteria, mineralisation controls, and extensions of known estimation domains in the district.

Modelling firstly involves the generation of a range of 3D geological interpretations which are plausible based upon all the known information available. These geological domains relevant to the depth extension Exploration Target (Figure 6) are as follows:

• Low-gradeHypogene: this includes both the outer low grade envelope and a series of internal dilution zones. Copper grade ranges between 0.1 - 0.3% Cu, with an average of 0.2% Cu. A lateral gradation is expected in this zone, decreasing from the core to the borders.
• Enriched Hypogene: this a moderate to high grade zone. Copper grade ranges between 0.3 - 0.8% Cu, with an average of 0.6% Cu. A lateral gradation is expected in this zone, decreasing from the core to the borders, as well as increased grade with depth.
• Post-mineraldykes: a series of porphyries that go from 0% Cu grade up to locally 0.3% Cu, but averaging below 0.2% Cu.

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• Background: this is the regional granodiorite host rock surrounding the deposit, it is generally barren.

Figure 6. Schematic section of the Quellaveco Exploration Target depth extension. The base of the diagram represents the high case limit.

The interpretations of these units included assumptions about geological continuity, overall strike length, and width of the mineralised zone at depth. Assumptions were also applied to the continuity and geometry of the post-mineral porphyry units. The low estimate represents a depth extension of approximately 300 m below the current resource pit (i.e. elevation 2,350 m above sea level). The high estimate projects continuity of mineralisation down to elevation 1,500 m above sea level (approximately 2,000 m below surface). The depth projection in the high case is supported by known continuity of mineralisation in other deposits in the district (for example at Southern Copper's Toquepala mine).

Copper grade assumptions for the model were based on the continuity and extent of interpreted grey-green sericite associated chalcopyrite envelopes. In the low case, no improvement in grade with depth is assumed. The high case however assumes gradually increasing grades with depth based on increasing intensity and continuity of the hypogene enrichment, as well as possible gradation into bornite/chalcopyrite domains. For density (to estimate tonnages) the declustered average of the existing composites in each unit was assigned.

The mineralisation for both low and high cases was evaluated above a 0.2% cut-off grade for total copper.

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6	Appendix 1: JORC Table 1
	Section 1 Sampling Techniques and Data
	Criteria		Explanation
	Sampling techniques	• After visual logging of drill hole core, the intervals to be sampled are
			indicated on the core boxes. All those intervals that potentially contain
			mineralisation of interest (including internal waste) are collected. Samples
			are generally taken with 3.0 m lengths. Intervals can range from 2.0 m to
			approximately 4.0 m, depending on mineralised intervals and geological
			characteristics.
	Drilling techniques	• All drilling is completed using diamond drilling techniques.
			• A certified differential GPS and total station is used to calculate the collar
			position.
			• Drilling has been carried out using wireline with core recovery of PQ, HQ
			and NQ diameter. Older holes used conventional coring processes.
			• Most of the older holes are vertical. For inclined drillholes, gyroscope
			downhole survey equipment was used to obtain the deviation data.
	Drill sample recovery	• The drilling contract specifies minimum recovery requirements of ≥90%
			per drill hole. The core is measured at the drill site by the drillers and
			verified by an Anglo American supervisor, thereafter the boxes are
			photographed.
			• The drilling used to report the Exploration Target averages greater than
			90% sample recovery.
	Logging		• Geotechnical and geological logging is carried out by geologists in the
			core sheds, identifying the different lithotypes, geological contacts, zones
			of faulting or fracturing.
			• A photographic record has been established for all drill hole core.
			Photographs of the core are taken before core sampling.
			• The drill hole sample database was compiled and verified by the
			geological team. All drill hole information is stored on an acQuire/SQL
			database server containing collar locations, drill hole orientations, assay
			intervals with analytical results, and geologic intervals with rock types,
			alteration and mineralisation fields.
	Sub-sampling	• Core sampling is performed by initially cutting the core lengthwise in half
	techniques and	or quarter. Prior to 2017, the core was cut with hydraulic splitter,
	sample preparation	subsequently an electric disk cutter has been used.
			• The samples are then placed into bags pre-labelled with sample
			numbers, under the supervision of Anglo American staff. After bagging,
			the samples are sent to laboratory for mechanical preparation.
			• Sample preparation begins by first verifying the identification and sample
			preservation conditions upon receipt and then drying the sample followed
			by crushing and pulverizing.
	Quality of assay data	• Cu, Mo, Ag, and As concentrations are analysed using a combination of
	and laboratory tests	four acid chemical digestion followed by analysis using atomic absorption
			techniques.
			• A sample batch consists of 47 primary samples; 3 Certified Reference
			Materials; 2 Field duplicates, 3 coarse Crush Duplicates, 3 Pulp
			Duplicates, and 2 coarse Blanks.
			• Each batch should meet or exceed the minimum QA/QC criteria, failed
			batches are re-assayed.