Three Projects in Chile’s Atacama Mineral Rich Region Close to Lundin Mining’s Candelaria IOCG Mine

Chilean Metals operates three projects in Chile’s Atacama Region, situated approximately 20 km south of Copiapó at an elevation of 650 m above sea level. These projects are easily accessible through the public road system, with Copiapó being a modern city offering all necessary services and boasting a population of around 170,000. Our employees primarily hail from Copiapó and the surrounding Atacama region. The Atacama airport, serving the region, is well-connected with daily commercial flights from Santiago and other destinations.

Chile’s mining sector is a cornerstone of the country’s economy, with copper exports contributing to over a third of government income. The majority of mining activities are concentrated in the Atacama Region, spanning the expansive Atacama Desert. Chile’s mining portfolio includes copper, gold, silver, molybdenum, iron, and coal. Notably, in 2019, Chile held the title of the world’s largest copper producer, the sixth-largest silver producer, the thirteenth in iron ore production, and a significant contributor to global gold production.

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Three Projects in Chile’s Atacama Mineral Rich Region Close to Lundin Mining’s Candelaria IOCG Mine

Our employees primarily hail from Copiapó and the surrounding Atacama region. The Atacama airport, serving the region, is well-connected with daily commercial flights from Santiago and other destinations.

Palo Negro Project

The Palo Negro Project – High-grade Cu, Au, Ag and Fe Deposits

The Palo Negro Property, 100% owned by Chilean Metals (formerly Power Metallic Inc.), comprises of over 6,672 acres in the Atacama Province of Chile’s Third Region. The property covers a 14 km strike length of the Atacama Structural Zone, locus of numerous high-grade Cu, Au, Ag and Fe deposits including the large Candelaria deposit of Lundin Mining Corporation less than 30 km to the northeast. Pre-mining reserves at the Candelaria IOCG deposit stood at 470Mt grading 0.95% Cu, 0.22 g/t Au and 3.1 g/t Ag.

Lying on a splay fault of the Atacama Structural Zone, Candelaria is the largest of the iron oxide copper-gold deposits in the Punta del Cobre belt, and the second largest IOCG deposit in the world after Olympic Dam, Australia.

The Palo Negro Property is easily accessible by a network of well-maintained gravel roads 10 km from the Pan-American Highway. The property is well situated for low-cost exploration and future mine development.

The Osorniña mine is situated on a small third-party concession within the Palo Negro property. Magnetic surveys show an intense magnetic response over a strike length of 2.5 kms extending well beyond the Osorniña mine and coincident with the Atacama fault. Meta-sediments and meta-volcanics in this area have been hydrothermally altered by the introduction of iron oxides and copper. This and similar magnetic anomalies delineated over the Palo Negro Property is the priority IOCG targets.

IOCG deposits are generally responsive to magnetic and induced polarization (IP) surveys. Future exploration of the Palo Negro Property will require further geophysical surveys to define exploration targets, followed by reverse circulation drilling.

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Palo Negro Project

The Palo Negro Project – High-grade Cu, Au, Ag and Fe Deposits

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Tierra De Oro Project

Located Nearby Lundin Mining’s Candelaria IOCG, 470 Mt Deposit at 0.95 % Cu, 0.22 g/t Au, 3.1 g/t Ag

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Tierra De Oro’s Chancheo Target – Deeper and Untested

The 3d model indicates the proximity between an important magnetic anomaly & presence of a body represented by the IP anomaly, whose tonnage could reach 600Mt only in its core.
High IP coincident with low res, with surface geochemical anomalies of Au-Cu-Mo ; delimit a target with high potential, which has not yet been perforated.

Tierra De Oro Project

Located Nearby Lundin Mining’s Candelaria IOCG, 470 Mt Deposit at 0.95 % Cu, 0.22 g/t Au, 3.1 g/t Ag

Tierra de Oro (TDO) property is wholly-owned by Chilean Metals’ (formerly Power Nickel) and located in Chile’s prolific IOCG (iron oxide-copper-gold) belt. The belt hosts numerous copper-gold deposits including Mantos Blancos, Manto Verde and the nearby Candelaria IOCG deposit, owned by Lundin Mining Corporation, with reported reserves and production of 470 Mt at 0.95 % Cu, 0.22 g/t Au, 3.1 g/t Ag.

This 3,460-acre property is located 70 kms south of the mining town of Copiapo in Chile’s Third Region. It lies 20 km east of both the Pan American Highway and Chile’s main power grid and is accessed by well-maintained gravel roads. With a maximum elevation of only 1,500 meters the property enjoys good climactic conditions allowing year-round exploration. TDO hosts bulk-tonnage Au-Cu-Ag exploration targets.

Geologically, the property is underlain by two distinct domains: a Western Domain of intrusive rocks with Au-Cu mineralization, and an Eastern Domain of volcanic strata with Cu-Ag mineralization. The two domains are separated by a major north-easterly trending fault, a splay of the main Atacama Fault some 20 kilometres further west.

The Western Domain presents several inadequately-tested gold exploration targets. Previous exploration was focused principally on establishing a resource on gold veins developed and mined in past years by artisanal miners. These veins locally contain in excess of an ounce per ton of gold. Individual veins can be traced on surface for up to a kilometer but are generally narrow and discontinuous, pinching and swelling like beads on a string. Several bulk-mineable targets have been identified, the most promising of which is the Cerro Chanchero zone where strong Au-Cu soil geochemical anomalies coincide with a prominent IP (induced polarization) anomaly and intense argillic alteration. Previous drill holes which tested the periphery of this target encountered abundant disseminated pyrite. The 500m x 250m core of this promising porphyry Au-Cu target remains untested by drill holes.

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Tierra De Oro’s Chancheo Target – Deeper and Untested

The 3d model indicates the proximity between an important magnetic anomaly & presence of a body represented by the IP anomaly, whose tonnage could reach 600Mt only in its core.
High IP coincident with low res, with surface geochemical anomalies of Au-Cu-Mo ; delimit a target with high potential, which has not yet been perforated.

Zulema Project

Zulema Project – Potential for a Major IOCG-type (Iron-Oxide-Copper-Gold) Deposit

Zulema is located 30 Kilometres from Lundin Mining Corporation’s Candelaria mine and with similar geology, the Company’s Zulema project comprises 1,462 acre in the heart of the productive Atacama mineral belt in Chile’s 3rd Region.

The association of major IOCG-type (Iron-Oxide-Copper-Gold) mineral deposits with the Atacama Fault zone and its splay faults is well-recognized. Candelaria, the world’s second largest “IOCG” deposit lies adjacent to one such splay fault. Pre-mining reserves at Candelaria were 470Mt @0.95% Cu, 0.22 g/t Au, 3.1 g/t Ag. The Candelaria orebody does not outcrop but is overlain by 100-200m of barren siliceous hornfels and calc-silicate skarn. Copper sulphides occur as stringers, disseminations, breccia in-fillings and mantos. The orebody measures one kilometer in length, 600 metres in depth and is being exploited by low-cost, open pit bulk mining.

The Zulema property is owned 100% by Chilean Metals’ (formerly Power Nickel) with no underlying third-party royalties or net profits interests. It is road accessible and ideally located at low elevations of less than 400 metres, 30 kms from the mining town of Copaipo, 15 kms from both the Pan-American Highway and Chile’s main northern power grid, and 25 kms from the coast.

Intensely skarned hydrothermal breccia is exposed on the property over an area of one square km and is open to extension beneath sand plains. Sporadic but widespread disseminated copper oxides on surface assay in the range of 0.4 to 5.5% Cu and 0.2 to 0.4 gpt Au. Previous drilling at the extreme southern tip of the main prospective area encountered up to 22 metres of 0.45% Cu and 0.11 grams/tonne Au in stockworks.

Zulema Project

Zulema Project – Potential for a Major IOCG-type (Iron-Oxide-Copper-Gold) Deposit

Initial Drilling Highlights

DDH1 defined the extent of the eastern skarn, intersecting local Cpy between 107 and 126
DDH3 collared adjacent to historic copper workings on east flank of magnetic high
285 – 334 m, garnet magnetite skarn with multiple lenses of copper – magnetite mineralization
Within the skarn, copper ranged from 0.12 – 1.19% Cu, Au between 0.05 – 0.99 g/t Au
Mineralization was most intense at the upper skarn contact
DDH5 collared approximately 175m. north of DDH3
Starting at 146m +/-, large clots of Cpy to 5cm. appear in addition to potassic feldspar alteration
Below 182 m, magnetite becomes a significant component
179.00 – 218.50 – copper variable, individual assay sections up to 0.44% Cu and 0.27 g/t Au
322.00 – 375.20 – Hydrothermal breccia with extensive quartz veining at base accompanied by minor copper mineralization
DDH8 collared in the northerly magnetic high, intersecting a quartz, magnetite pyrite, chalcopyrite breccia.
Individual assay sections up to 0.60% Cu and 0.15 g/t Au

The target is a Candelaria look-alike: a blind, Cu-Au deposit beneath desert sands and siliceous skarn breccias associated with strong surface geophysical features and amenable to bulk, open pit mining methods.

Initial Drilling Highlights

DDH1 defined the extent of the eastern skarn, intersecting local Cpy between 107 and 126
DDH3 collared adjacent to historic copper workings on east flank of magnetic high
285 – 334 m, garnet magnetite skarn with multiple lenses of copper – magnetite mineralization
Within the skarn, copper ranged from 0.12 – 1.19% Cu, Au between 0.05 – 0.99 g/t Au
Mineralization was most intense at the upper skarn contact
DDH5 collared approximately 175m. north of DDH3
Starting at 146m +/-, large clots of Cpy to 5cm. appear in addition to potassic feldspar alteration
Below 182 m, magnetite becomes a significant component
179.00 – 218.50 – copper variable, individual assay sections up to 0.44% Cu and 0.27 g/t Au
322.00 – 375.20 – Hydrothermal breccia with extensive quartz veining at base accompanied by minor copper mineralization
DDH8 collared in the northerly magnetic high, intersecting a quartz, magnetite pyrite, chalcopyrite breccia.
Individual assay sections up to 0.60% Cu and 0.15 g/t Au

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The Chilean Metals Team’s Comments About Next Steps

While the drilling on Zulema had some encouraging intercepts it deepened the mystery of what we may or may not have. We shot new Magnetics. Chilean Metals’ (formerly Power Metallic) had the opportunity to review the data on Zulema and Palo Negro with a major mining company with interests in the region. This group has without question the most data and expertise on deposits in this area. They had a four-man team review the data and spent four days on site reviewing Zulema and the adjoining Palo Negro.

The dialogue with this major mining company suggested we consider this potential deposit as not a Candelaria like deposit but one more like nearby Mantos Verde. This approach has revised our thinking collectively of the opportunity. They recommended a number of steps including additional geophysics, sampling and mapping. Our objective with this property will be to outline new drilling targets to pursue with a JV partner like this major company or on our own accord.

The Successful 2021 Exploration Program

The 2021 prospecting and geologic mapping program proved to be highly successful, leading to the discovery of two new high-grade gold zones, showcasing yields of 16.2 grams-per-tonne (g/t) gold (Au) and 15.1 g/t Au in outcrop. Executed during July and August 2021 at the Golden Ivan Property, this campaign involved the collection of 210 surface rock samples, including 7 channel samples. Reconnaissance geologic mapping and whole-rock geochemical analysis were conducted throughout the Property. Of the 210 rock samples, 17 returned greater than 0.1 g/t Au, with notable findings of up to 16.2 g/t Au from the newly identified Lone Goat Showing and 15.1 g/t Au over 0.75 meters from a channel sample at the newly discovered Molly B. East showing, along with significant silver and base metal values (refer to Table 1).

Mineralization and Alteration of New Discoveries

The newly discovered Lone Goat and Molly B. East gold showings, along with the historically high-grade gold-silver Molly B. trend to the south, align with northeast and northwest-trending airborne magnetic (low) lineaments (Figure 1).

General Geology

Reconnaissance geologic mapping results indicate that the Golden Ivan Property is underlain by a layered sequence of andesitic volcanic and volcaniclastic rocks from the Lower Jurassic Hazelton Group. Late andesite dykes and rhyolite bodies cut through the volcanic package, while the northeast area of the Property is in faulted contact with interpreted Stuhini Group metasediments.

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Golden Ivan Historical Data Compilation

Before initiating the 2021 exploration, Power Nickel commissioned a digital historical data compilation for the Golden Ivan Property, dating back to as early as 1929 and as recent as 2020. The compilation included publicly available mineral assessment reports and property files. A total of 124 rock and rock chip/channel samples were digitized, returning an average grade of 2.45 g/t Au and 79.4 g/t Ag, with a maximum of 118 g/t Au and 2,400 g/t Ag.

The historical data also revealed the potential for further exploration, as between the Silverado No. 4 and Magee Sky Annex shows, a northeast trend returned assays including 6.2 g/t Au, 1,300 g/t Ag, and 1.4 g/t Au, 2,400 g/t Ag. The significant Silverado No. 4 workings, located south outside the Property, returned values up to 60 g/t Au and 90 g/t Ag.

Methodology and QA/QC

Methodologically, the analytical work was conducted by ALS Global (ALS), an ISO-IEC 17025:2017 and ISO 9001:2015 accredited geoanalytical laboratory based in Vancouver, Canada. Rock samples underwent crushing, followed by pulverizing, with gold determination via standard atomic absorption spectroscopy (AAS) finish 30-gram fire-assay (FA) analysis, in addition to 48-element ICP-MS geochemistry. Power Nickel Inc. adheres to industry standard procedures for the Golden Ivan Project, incorporating a quality assurance/quality control (QA/QC) program. For the rock channel samples, blank and standard samples were inserted into the sample.

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Three Projects in Chile’s Atacama Mineral Rich Region Close to Lundin Mining’s Candelaria IOCG Mine

Three Projects in Chile’s Atacama Mineral Rich Region Close to Lundin Mining’s Candelaria IOCG Mine