Name: Casposo mine.

Location: The Casposo mine is situated about 150 km north-west of San Juan, in the Department of Calingasta, San Juan province, Argentina.

Controlling Company: Troy Resources.

Brief History: Troy Resources acquired a 100% interest in the Casposo gold/silver project from Intrepid Mines in May 2009. There was no commercial production prior to Troy acquiring the project. Troy started development in August 2009 and first gold pour took place in November 2010.

Brief Description: The Casposo mine comprises an openpit and underground mine, and a processing plant. The openpit mine comprises the Kamila and Mercado desposits. The primary portal for the underground mine has been positioned within the already mined Kamila south-east/vein pit.

Geology/Mineralisation: The Casposo gold/silver mineralisation occurs in rhyolite and underlying andesite of the Permian-Triassic Choiyoi group, where it is associated with banded quartz- chalcedony veins, typical of low-sulphidation epithermal environments. Adularia in the main veins gives an age date of 280± 0.8Ma (K/Ar), very close to the published age dates for the andesite unit.

Mineralisation at Casposo occurs along a 10-km-long west-northwest east-southeast regional structural corridor, with the main Kamila vein system forming a 500-m-long sigmoidal set near the centre. The Mercado vein system is the north-western continuation of Kamila, separated by an east-west fault from the Kamila deposit. A series of east-west veins – Casposo Norte, Cerro Norte and Oveja Negra systems – appear to splay off these major sets to the east and north-east. Together with the mineralisation south-east of Kamila, including the SEXT vein and the Kamila south-east – INCA 2 zone, and the Julieta veins, the Casposo district identified to date covers about 100 km2.

Reserves: Total probable gold equivalent and silver reserves as at June 30, 2013, were 1.63-million tonnes, grading 9.3 g/t of gold and 283.7 g/t of silver.
Products: Casposo is a low sulphidation gold/silver deposit. Visible coarse gold is rare.

Mining Method: Openpit and underground. Two underground mining techniques are currently used to extract ore. Most underground stoping blocks are mined using the long-hole retreat stoping method, with about 10% of the mine being more conducive to the cut and fill mining method, owing to the ground conditions.

Major Infrastructure and Equipment: The openpit has two Atlas Copco ROC F9s production drills, five Volvo A40 articulated dump trucks, two E460 Volvo excavators and one Komatsu D155 dozer.

The Casposo underground mine moved to owner operator mining in August 2013. To enable this, Troy acquired twin boom jumbos, one-hole drill rigs and articulated dump trucks, among other equipment.

The processing plant has a throughput of 400 000 t/y of ore. The ore is crushed and fed to the primary semiautogenous grinding mill and a secondary mill for regrind to produce a pulp. The pulp is thickened and fed to leach tanks to form a solution containing the gold and silver. The gold/silver pregnant licker is separated from the pulp and a gold/silver cake is produced using the Merrill Crowe system. This cake is dried using special ovens and fired in a furnace to produce gold and silver doré. The tailings waste from the plant is cleaned and water is recovered using a vacuum system solution. The tailings are deposited on top of a clay and high-density polyethylene impermeable membrane. Any water generated from the tailings area is recovered and sent back to the plant for processing.

Prospects: During the quarter ended December 31, 2014, 21 holes for 2 613 m were drilled into gaps and the periphery of the underground reserve at Casposo, targeting the INCA 1 and INCA 2 veins. This drilling was completed to assist with mine planning and scheduling of operations

Drilling is continuing, with the next series of holes planned to further test extensions of the north-west margin of the INCA 2 reserve in the vicinity of post-mineral Dyke 2. Once the current phase of drilling is completed, the results will be incorporated into the existing resource model.

Contact Person: Company secretary Stacey Apostolou.

Contact Details:
Troy Resources,
tel +61 8 9481 1277,
email troy@troyres.com.au, and
website http://www.troyres.com.au.