Name: Santander mine.

Location: The Santander property is located in west-central Peru, about 215 km east-northeast of Lima.

Controlling Company: Trevali Mining.

Brief History: Santander, Sucursal de Peru, was established on April 9, 1957, as a Peruvian subsidiary of St Joe to exploit identified resources, primarily lead and silver at the Santander project.

In 1986, Santander purchased additional mineral rights to the north of the original Santander pipe to cover the Magistral deposits and Puajanca prospect. The Santander pipe was in production until August 1992, when work was suspended owing to adverse economic conditions. The property was dormant until mid-2007 when an evaluation was undertaken by Trevali.

Brief Description: The Santander property is a formerly producing property with several known and partly defined zinc-rich skarn and replacement occurrences. It comprises 66 mineral concessions covering 950.7 ha and six petitorios covering 3 504 ha.

Geology/Mineralisation: The Santander property is underlain by a package of Cretaceous clastic and carbonate sedimentary rocks that have been tightly folded into a series of north-west-trending anticlines and synclines. A large number of north-east to east-west-trending faults and fractures are observed on the property and represent important mineralisation controls. At a regional scale, the intersection of these faults and the north-west-trending fold structures are the loci for intrusion of subvolcanic stocks, hydrothermal activity and associated polymetallic mineralisation.

Mineralisation at the Santander property can be classified as a carbonate replacement deposit or a high temperature carbonate deposit type. Such deposits contain significant silver mineralisation and are frequently observed in Mexico and Peru, the world’s number 1 and number 2 silver producers respectively.

There are at least four other mineralised zones on the property known as the Magistral, which includes the North, Central and South deposits, and Puajanca prospect. These zones are more replacement or manto-like in character and were in the process of being explored and developed when operations ceased at the property in August 1992. Exploration of the Magistral deposits resumed in late December 2007, the results of which are the subject of this independent report.

Resources: As at July 5, 2012, Santander had a total indicated mineral resource of 6.26-million tonnes with an average grade of 3.62% of zinc, 1.30% of lead, 43 g/t of silver and 0.07% of copper for an estimated in situ metal inventory of 500-million pounds of zinc, 180-million pounds of lead, 8.7-million ounces of silver and 10.2-million pounds of copper at 3% zinc equivalent cutoff. Inferred mineral resources were estimated 13.85-million tonnes grading 4.62% of zinc, 0.40% of lead, 21 g/t of silver and 0.11% of copper for an estimated in situ metal inventory of 1.41-billion pounds of zinc, 121-million pounds of lead, 9.4-million ounces of silver and 34.9-million pounds of copper at a 3% zinc equivalent cutoff.

Products: Lead, zinc and silver.

Mining Method: Based on the style, geometry and geotechnical characteristics of the three Magistral zones in addition to Glencore’s operational experience in similar deposits in the Central Peruvian polymetallic belt, a sublevel stoping method (long-hole extraction modified Avoca style) was recommended and selected as the most appropriate long-term mining method for the Santander project at an initial anticipated production rate of 2 000 t/d. Backfill will be sourced from underground development and surface limestone tills.

Major Infrastructure and Equipment: Based on the recommended sublevel mining method, a small modern trackless mining equipment fleet has been selected for the Santander mine, which includes jumbos for development and production; loaders for development and production, UG trucks, jacklegs, stoppers; primary and secondary fans; primary and secondary pumps, as well as stationary compressors.

Prospects: In January this year, Trevali reported that it was encouraged by its first commercial production year at Santander and particularly pleased with the mill performance in the fourth quarter when it achieved above design throughput and recoveries of all metals.

The company said it would continue to focus on site optimisation and business efficiencies in 2015 to maximise site-performance before the expected strengthening of the zinc price later this year, as global supply constraints were forecast to start.

Contact Person: VP investor relations and corporate communications, Steve Stakiw.
Contact Details:
Trevali Mining,
tel +1 604 488 1661,
fax +1 604 408 7499, and
email info@trevali.com.