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Quebrada Seca – Cu, Au

Catamarca Province, Argentina

Property Advance Report 2009

Project summary

The Quebrada Seca option property, together with the surrounding Teck claims, are located 75km SW of
the Bajo de La Alumbrera Cu-Au mine, in the Catamarca Province of NW Argentina. The property lies
within the southern-most portion of a prominent NE-SW structural corridor (the Tucuman Transfer Zone)
which has been identified as being important in the emplacement history of the Upper Miocene Cu-Au-Mo
porphyries, in this part of Argentina.

At the Quebrada Seca project, detailed mapping, prospecting and sampling by Teck, in late 2008 and
early to mid 2009, has identified an area of the property where a probable concealed Cu-Au mineralized
porphyry system resides. Further exploration work, including geochemical sampling and geophysics, is
strongly recommended to establish if this is the case. Particularly, further detailed mapping on key
exposures is required to conclusively establish the chronology of the complex multi-phase intrusive
relationships, seen to date.

From initial work, therefore, significant potential exists for a large, previously unknown and unexplored,
Cu-Au porphyry on the property. This, in a metallogenic district, capable of generating world-class Cu-Au
deposits (e.g. Bajo de la Alumbrera 650Mt @ 0,54% Cu, 0,64 g/t Au).

Quebrada Seca Property Advance Report 2009 (DJ)

 Contents Page
Subsection Contents Page N°
1.0 Project staking history…………………………………..…………...……..……...…..……..………..….4
2.0 Property location, access and physiology...………………..…………….…………...…..…………..5-6
3.0 Work Done …………………………………………………..……………………………..….…….……..6
3.1 Work done prior to 2008……………………………………………..………………....………..6
3.2 Work done by Teck (2008-2009)…………………………………….…………….……………6
3.2.1 Initial evaluation by Teck (2008)………………………...……….......…….……….6-7
3.2.2 Orientation survey silt sampling (early 2009)……….......…………….……..………7
3.2.3 Detailed geological mapping (mid 2009)……………………………………………..8
3.2.4 Follow-up rock and silt sampling (mid 2009)………………………..……...………..8
3.2.5 Magnetic susceptibility readings………...…….………….…………....…..…..……..8
4.0 Geology………..………………………...………………………….…………………………..………..…9
4.1 Regional and Local Tectonic history……………………………………………….....…..…......9-12
4.2 Lithology at Quebrada Seca and the link to regional geology..................................................12
4.2.1 Basement granite (Ordovician)................................................................................12

4.2.2 Red-bed continental sediments (Middle Miocene)..............................................12-13

4.2.3 Bi-modal volcanics (Late Middle to Early Upper Miocene).................................13-14

4.2.4 Intrusives (Upper Miocene)......................................................................................14

4.2.4.1 Fine grained diorite stock (pre-mineral)..............................................14-15

4.2.4.2 Porphyritic diorite stock (pre-mineral / early inter-mineral)......................18

4.2.4.3 Granite/dacitic porphyry (pre-mineral / early inter-mineral)................18-19

4.2.4.4 Diorite dike/sill (early inter-mineral)..........................................................21

4.2.4.5 Flow banded dacite dike (post mineral)...................................................21

5.0 Geochemistry.................................................................................................................................23

5.1 Rock sample assay results......................................................................................................23

5.2 Silt/soil sample assay results...................................................................................................26

5.3 Conclusions and recommendations for further work................................................................29

6.0 Geophysics....................................................................................................................................30

6.1 Magnetic Susceptibility results and conclusions.................................................................30-32

Quebrada Seca Property Report August 2009 (DNJ) 2 August 2009

 Contents Page cont…
Subsection Contents Page N°
6.2 Recommendations for further work (Ground Magnetics, IP/Res)………………………............32

7.0 General conclusions and recommendations.............................................................................32-33

Figures
Figure Detail Page N°
Figure 1 Quebrada Seca tenure – Teck and option properties………………...………………………4
Figure 2 Location map of the Quebrada Seca Property ………………………………..…...…..……..5
Figure 3 Tectonic evolution of Tucuman Transfer Zone in NW Argentina ..………………..………...9
Figure 4 Simplified regional geology –NW Argentina.…………………………..……….......….…….10
Figure 5 Schematic structural section Aconquija transect…………………………………….………10
Figure 6 Mid Miocene – Ordovician basement unconformity...………………..…....…..........….…..13
Figure 7 Mid Miocene sediments – Ordovician basement………….…….......................…………..13
Figure 8 Hydrothermal breccias in diorite………………..……………….………..…..........…………15
Figure 9 Compiled lithology from 1:1,000 scale mapping…………….………….............…………..16
Figure 10 Cross section A-A’ – from mapped lithology…………….…..……..........….…...…………..16
Figure 11 Compiled alteration from 1:1,000 scale mapping…………….…..........………...………….17
Figure 12 Cross section A-A’ – from mapped alteration …………………….…....…..........….………17
Figure 13 Diorite xenoliths in granite porphyry …………………………………..…...........….……..…19
Figure 14 “A” veins cutting argillic altered granite porphyry ……….…….............…..……....…….…20
Figure 15 “D” veins cutting granite porphyry intrusive ……………………..............…..…..………….20
Figure 16 Schematic paragenesis of igneous rocks- Quebrada Seca..............................................22
Figure 17 Rock/float samples Teck 2008-2009…………………………………………......…..……….24
Figures 18, 19, 20 Rock geochemistry: Copper, Gold, Molybdenum……………..........………...25-26
Figure 21 Silt geochemistry………...……………………………...………………....….……...……..….27
Figures 22, 23 Geochemistry: Copper, Gold………………………..……………….....…..………........……28
Figure 24 Vertical rock walls – headwaters of Shincal drainag…………….…..........…...…..……….29
Figure 25 Hydrothermal magnetite-bearing Cu-Au porphyry systems..............................................31
Figure 26 Shincal drainage catchment with proposed geophysics….....................................…….…32

Quebrada Seca Property Report August 2009 (DNJ) 3 August 2009

1.0 Project staking history

Porphyry potential on the Quebrada Seca property was first identified by a Teck geologist, after a brief
visit with the claim and surface rights owner (P. Alvarez) in August 2008. An initial tenure check showed
that the area of interest was un-staked, and Teck thus applied for a large exploration claim to cover it.
Subsequently, Teck was made aware that the surface rites owner had prior staking rites, and at this
juncture Teck entered into a deal to option the property from him. The Quebrada Seca project includes
the option property (Cateo “144” – 416 Has) and Teck´s surrounding exploration ground (four contiguous
claims totaling 3,005Has). Concession of Teck´s exploration ground that falls outside of the optioned
ground is pending (Figure 1). The form of the optioned claim – an inclined elongated rhomb - is not,
according to the mining code in Argentina, a legitimate claim shape. However the claim has been
accepted by the mines office. It is considered expedient to rectify the situation, before the claim is
concessioned, and this can be done by filing new coordinates for an N-S oriented rectangle, with Teck
presenting a note of acceptance, as the owner of the surrounding claims. At the time of writing, this
process is underway.

Figure 1. Quebrada Seca tenure – Teck and option properties

Quebrada Seca Property Report August 2009 (DNJ) 4 August 2009

 Figure 2. Location map of the Quebrada Seca Property

2.0 Property location, access and physiology

The Quebrada Seca property is located in the Belén department of the Catamarca Province of NW
Argentina. Access to the general area is good via the paved highway (Ruta 40) that connects the city of
Catamarca, from the south, with the small town of Londres, located approximately 7.5km to the east of
the property (see Figure 2). Before entering the town, a well-maintained dirt road exits to the west from
the main paved road and follows the line of high tension power lines along a well graded dirt road to the
village of Las Aguadas (approx 5 km). This dirt road provides vehicle access to the southernmost part of
the Teck claims. The main area of interest, however, is accessed on foot or on horse-back, along a trail,

Quebrada Seca Property Report August 2009 (DNJ) 5 August 2009

that has been cleared of bush by Teck, from Las Aguadas village and into the dry Quebrada Seca creek -
a distance of approximately 6km. Fresh river water is only available in two places on the property and
field camps can be made here.

The main area of interest is located in the base - and on the steep sides of- the deeply incised Quebrada
Seca river valley, which is one of the tributaries of the main Quimivil river, in this area. Access away from
the main Quebrada Seca creek bed, and some of its main tributaries, is hampered by the steep, and
locally very rocky, nature of the terrain and the thickness - particularly in summer - of the covering
vegetation. This vegetation varies in density and type depending upon the attitude. In the base of creeks
and on west and south-facing slopes, it comprises low-growing trees, with hanging lianas, and damp
dense leafy undergrowth; whilst on the ridges and north and east-facing slopes, it is head-high spiny dry
thorn-bush and cactus. Access by horses along the main Quebrdada Seca creek bottom was achieved by
prior clearance of the undergrowth with machetes and axes during April 2009.

3.0 Work Done

3.1 Work done prior to 2008

No mention of the Quebrada Seca area of interest can be found in any published or unpublished work.
The igneous rocks mapped by Teck during 2008-2009 do not appear on published geological maps in
Argentina. This, despite the fact, that the area is visible from the main paved highway south of the
Londres village (see Figure 26)

The regional silt program undertaken by the UN during the late 1960´s did take at least 8 samples from
the Quebrada Seca catchment, but none from the Shincal tributary, where Teck´s sampling has
subsequently detected moderate copper anomalies in silt.

3.2 Work done by Teck (2008-2009)

3.2.1 Initial evaluation by Teck (2008)

The initial visits by Teck to the area were at the invitation of the surface rights owner (Mr. Alvarez) during
August and September 2008. Mr. Alvarez and his sons acted as guides and horse-handlers during these
visits by Teck´s Humberto Torres (geologist) and Juan Manuel Alianis (field assistant). These initial visits
were completed without prior clearance of the thick bush and this complicated somewhat the evaluation.
Despite this, a reconnaissance-style geological map was made at 1:25,000 scale, in conjunction with
creek and ridgeline prospecting and geochemical sampling. During both field campaigns, a total of 111
rocks samples were taken, including; 46 composite chips (with an average of 2m sample interval); 14
float samples, and the remaining 77 rocks as grabs from individual outcrops. A total of 18 drainage silt
samples were also taken, mostly from streams draining from the west, together with 5 talus fines

Quebrada Seca Property Report August 2009 (DNJ) 6 August 2009

samples. All geochemical samples were assayed for the standard ICP-32 elements package + fire assay
gold by Alex Stewart Laboratory in Mendoza.

A further 7 selected hand specimen “fresh” rock samples were analysed for Whole Rock (major oxide).

All of the work undertaken by Teck in 2008 was completed with the knowledge and aid of the surface rites
owner (who subsequently became the exploration title claim owner) and prior to any option agreement
being discussed or agreed upon with him.
st
The option agreement was signed on the 1 October 2008.

3.2.2 Orientation survey silt sampling (early 2009)

Results from the initial rock geochemical sampling returned very strongly anomalous Cu and Au values
from localized surface exposures and selected float samples. Results, however, from conventional silt
samples, from the same drainages, returned only subdued values for these two elements. Only one silt
sample from the Shincal tributary drainage returned anomalous copper (240ppmCu) and this has
subsequently proven to be a highly significant anomaly. The remainder of the silt samples failed to return
significant copper or gold anomalies. An orientation silt survey was undertaken, therefore, from creeks
draining areas with known outcropping Cu and Au mineralization, in order to establish the optimum
sample medium and size fraction, needed to geochemically highlight them. This resulted in the collection
of twenty five drainage samples taken from ten separate sample sites. At five sites, three different sample
mediums were collected (two conventional silt samples sieved to -100 mesh and -10 mesh and one pan
concentrated silt sample). At a further five sites, two sample mediums were also collected (one
conventional silt sieved to -16 mesh and one panned concentrated silt sample). Furthermore, two rock
samples and two soil/talus fine samples were taken from previously known Cu-Au mineralized areas as
check samples.

The results of this orientation survey suggest that silt sieved to -100 mesh, taken from the centre of each
drainage, and from on top of- and around large boulders, is the optimum material required to highlight
copper and gold anomalies. Panned concentrate samples tended to highlight only anomalous gold. The
results of this orientation survey provides us with confidence in interpreting the results of a subsequent
property-wide silt exploration program, undertaken in the follow-up campaign, in search of, as yet,
undetected porphyry Cu and Au mineralization.

It should be noted that soil sampling from around known Cu and Au showings has also highlighted both
elements and this could be a useful medium for future sampling programs. The soils here are relatively
thin, organic rich and are undergoing mass wastage down slope in this steep terrain. A base-of-slope soil
provides a quick and easily-taken sample that could detect mineralization upslope, concealed beneath
thin soil cover.

Quebrada Seca Property Report August 2009 (DNJ) 7 August 2009

3.2.3 Detailed geological mapping (mid 2009)

Starting in late April 2009, two field mapping campaigns were undertaken (28/04/09 to 11/05/09 and
10/06/09 to 22/06/09) by Darren Jones (Principal Geologist) and Luis Nehue (Field Assistant). Mapping
was completed on 1:1,000 scale map sheets, and the data then transferred to compilation maps at
1:2,500 scale. Base maps for geological mapping were produced from the publically available high
definition Quickbird satellite image for this area. This image has approximately 5% cloud cover, mostly in
the centre of the property. The extreme west of the property was mapped at 1:5,000, on an available
ASTER satellite image.

The “Anaconda Method” of geological mapping was employed (Einaudi, 1997), comprising the use of
three separate plastic film overlays (“fact maps”) for the representation of selected, color-coded,
geological features. These features were: i) the outcrop outline, intrusive contacts and structure (bedding,
faulting, jointing) (Base Map), ii) the presence and intensity of “non-ore” alteration minerals (Alteration
Overlay) and iii) the presence and intensity of hypogene and supergene “ore” minerals (Limonite
Overlay).

A total of twenty three mapping traverses were completed. Five traverses were along ridgelines and the
remainder from the sides and base of creeks, where most rock is exposed. Mapping of creek beds, albeit
productive, is complicated by the steepness and rockiness of the drainages. Locally, the creeks are
deeply incised into bare rock and frequently flow over vertical rock faces that can be as high as 40
metres, making access difficult and dangerous. The thick vegetation growing in the creek beds and up the
steep sides of the valley further hinder access for mapping and obviously conceal the geology. It is
estimated that on a property-wide scale there may be only 10% rock exposure, of which, only half has
been accessed and mapped to date. Without further bush clearance, and possibly the need for rock–
climbing gear and techniques, further mapping is not recommended, in some areas.

3.2.4 Follow-up rock and silt sampling (mid 2009)

In conjunction with the detailed mapping program, prospecting and a property-wide silt sample program
was also completed. A total of 55 rock samples were taken, including 32 float samples; 22 grab samples,
and one 8 meter semi-continuous chip sample. 52 conventional -100 mesh (0.15mm, 150 microns) sieved
silt samples were also collected. Three internal Teck Cu-Au standards were also inserted, as silt samples.

3.2.5 Magnetic susceptibility readings

During the mapping program, systematic magnetic susceptibility readings were taken at all available
outcrops. This was accomplished with a KT-14 model magnetic susceptibility meter. Several composite
readings were taken at any one site, from the same rock type, and the average results noted. A total of
139 composite readings were collected across the property and this may help, ultimately, in the
interpretation of future ground or airborne magnetic work.

Quebrada Seca Property Report August 2009 (DNJ) 8 August 2009

4.0 Geology

4.1 Regional and Local Tectonic history

The Quebrada Seca property lies on the extreme southern margin of a prominent NE-SW structural
corridor - the Tucuman Transfer Zone. During Miocene times, this zone was affected by both extensional
and compressional tectonics, and into which were emplaced several Cu-Au (Mo) porphyry centers, at the
very end of the Miocene. (see Figure 3, taken from Sasso et al 1995).

The tectonic history of this “transfer zone” begins during the Middle Miocene times, when, in this area, an
extensional basin was forming in the back-arc setting behind an Andean-type magmatic arc, and being
filled by continental-derived sediments. During the Late Middle Miocene a shallowing of the angle in the
subducting slab, had a far-reaching effect on this region, including the gradual easterly broadening of the
magmatic activity into the foreland. This resulted in the localized emplacement of magma through
extended crust and the accumulation of thick piles of volcanic rocks on top of the continental sediment fill.

Figure 3. Tectonic evolution of Tucuman Transfer Zone and porphyry Cu-Au

emplacement during the Miocene in NW Argentina (from Sasso and Clark, 1995)

Quebrada Seca Property Report August 2009 (DNJ) 9 August 2009

 Figure 4. Simplified regional geology –NW Argentina

Figure 5. Schematic structural section Aconquija transect.

Quebrada Seca Property Report August 2009 (DNJ) 10 August 2009

Shortly after-, or contemporaneous with-, the final deposition of these volcanic rocks (during the latest
Miocene) numerous high level porphyritic stocks, with locally accompanying hydrothermal alteration and
Cu-Au-Mo mineralization, were emplaced; a) directly into the volcanic pile (e.g. Bajo de la Alumbera Cu-
Au-Mo deposit - 7.10 - 6.83 Ma magmatic biotite) and/or; b) into basement granites and metamorphic
sedimentary rocks that were being contemporaneously uplifted, very rapidly, along inverted basin margins
(e.g. Agua Rica Cu-Mo-Au deposit – 6.29Ma potassic alteration). Uplift, within the last 5-6 M.a has
brought basement blocks to elevation exceeding 6,000m.a.s.l (e.g. Aconguija mountain ranges due east
of Agua Rica). Such extreme crustal shortening is directly attributed to the under-plating effect (foreland-
directed fold and thrusting and hinterland–directed back thrusting) of the shallow subducting plate, from
latest Miocene to Present day times. Evidence for porphyry emplacement at the onset of uplift can be
seen at the Agua Rica deposit, where the porphyry system was being unroofed and eroded whilst still
hydrothermally active. This has left us with a high sulphidation epithermal system superimposed
(telescoped) onto deeper Cu porphyry stockwork. A similar setting has been proposed recently (Pudack,
et al, 2009) for the La Mexicana HS epithermal Au system (and presumably the new Valle Ancha HS Au
discovery of Barrick?) - both juxtaposed with a cluster of Cu-Au-Mo porphyries at Famatina, located south
of the Farallón Negro District.

The thrusting that uplifts the Agua Rica basement block, is west-verging, i.e. hinterland directed back-
thrusting. The Alumbrera deposit, conversely, is located in an area of “double-wedge thrusting” i.e. in a
structural block that is being overridden between two conjugate west- and east-verging thrust sheets (see
Figures 4 and 5). This may not have been an area undergoing uplift, therefore, and as a result the Cu-Au
porphyries in this area are emplaced into their, in part co-magmatic, volcanic pile (Farallón Negro
Complex), which was not been removed by erosion and has effectively “contained” the hydrothermal
system in the mesothermal environment. Consequently the “high level” high sulphidation epithermal
systems were not developed here, but rather the “deeper” epithermal intermediate- to low sulphidation
veins and stockworks, emplaced laterally to the porphyries (e.g. Farallón Negron Au-Ag vein deposit,
located 5km NW of Alumbrera)

The tectonic setting at the Quebrada Seca property appears to be a combination of both of the above
scenarios. Here, we observe a Cu-Au-Mo mineralized porphyry system intruding, not only, into the old
basement granite, but also into Middle Miocene-aged continental sediments and the overlying Late
Middle Miocene volcanic rocks. Both east- and west-verging thrusting is evident in the immediate area of
the property. Two kilometres west of the property, east-verging high angle thrust faults (probably an
inverted basin margin) have uplifted granite basement blocks and wedges of Miocene sedimentary rocks
to >4,500m.a.s.l (Cerro Fraile). Located immediately to the east of the Quebrada Seca property, should
be the eastern margin of the same (inverted) basin – actually the same basin margin along which the
Agua Rica basement is back-thrust. Elevation at Quebrada Seca is around 2,000m.a.s.l, and so,

Quebrada Seca Property Report August 2009 (DNJ) 11 August 2009

evidently, crustal shortening here was not extreme, but enough, to expose the basement granite, into
which the Cu-Au mineralized porphyry system, is, in part, emplaced. The structural location at Quebrada
Seca - between opposing thrusts sheets - is similar to the structural setting at Alumbrera. However, the
very thin nature of the volcanic rocks at the former (<100m thick) suggests that a good portion of the
volcanic pile may i) either have been eroded away - down to the emplacement level of the underlying
porphyry - or conversely; ii) that the porphyry intrusive phase and its thin volcanic cap, represent a
localized, restricted igneous outlier from the more extensive Farallón Negro Volcanic Complex, to the
north. This latter scenario would therefore be more akin to the Agua Rica structural and porphyry
emplacement setting, but, for the apparent absence of “high level” epithermal alteration at Quebrada
Seca. Clearly more property- and district-scale structural work is required here to establish the tectonic
drivers. This should be done, in conjunction with dating, of the Miocene igneous phases.

4.2 Lithology at Quebrada Seca and its link to regional geology

To date, no age dating has been undertaken by Teck at the Quebrada Seca property and no published
age dates are available for the rocks exposed there. However, from cross-cutting relationships observed
on the property, we can establish the following estimated chronology for the mapped area (see Figures 4
and 16).

4.2.1 Basement granite (Ordovician)

The oldest rock exposed at Quebrada Seca is Ordovician-aged coarse-grained equigranular quartz -
potassium feldspar - biotite granite. The lack of hornblende in this intrusive rock, and the local presence
of tin-tungsten mineralization, suggest that it may be an S-type granite. This basement granite, at
Quebrada Seca, hosts all other intrusive and extrusive igneous phases, which are assumed to be Middle
to Upper Miocene in age. The granite is essentially non-magnetic, except locally, where intruded by
magnetic diorite stock and dikes (see subsection 6.1. Magnetic susceptibility results and conclusions).

4.2.2 Red-bed continental sediments (Middle Miocene)

The basement granite is unconformably overlain by brick red coloured, poorly consolidated, coarse-
grained conglomeratic sandstone. These sedimentary rocks are equivalent to those of the Morterito
Formation found regionally. They are the continentally-derived material that filled the extensional basins,
behind the magmatic arc, located to the west, during the Miocene. The depocentre of this basin, located
north and northeast of the Quebrada Seca property, accumulated several hundred metres of this material.
At Quebrada Seca, the base of this unit is exposed, in the valley sides due west of the property (Figure
6). The top of the unit is also, possibly, exposed with the overlying volcanic rocks. If there is no structural
complexity present, the sedimentary unit is, therefore, only some tens of metres thick, in this area. This
may indicate that we are close to the original basin margin or possibly on a local paleohigh (horst) feature
within the basin. Still further west of Quebrada Seca (see Figure 7) a fault-bounded granite basement

Quebrada Seca Property Report August 2009 (DNJ) 12 August 2009

block, that makes up the Los Fraile mountain range, has been structurally uplifted to >4,500m.a.s.l. No
red bed sediments are mapped further west of these high angle thrust faults. This area may also have
been an original extension-faulted basin margin, where listric faults with maximum extensional throw,
then, are now thrust faults with extreme reverse throw.

Figure 6. Mid Miocene – Ordovician basement unconformity

Figure 7. Mid Miocene sediments – Ordovician basement

4.2.3 Bi-modal volcanic/volcanoclastic rocks (Late Middle to Early Upper Miocene)

Conformably overlying the red-bed sediments in the Quebrada Seca area are bi-modal volcanic and
volcanoclastic rocks. These are considered to be equivalent, in some part, to the Farallón Negro volcanic
complex, laid down in this region during the Late Middle to Early Upper Miocene. Around the Alumbrera
mine site, deep exploration drilling has confirmed the thickness of these volcanic rocks are, up to,
1,150m. There they also overlie a thin (compared to sections east and west) sequence of red beds of the
Morterito Formation. The base of the volcanic pile is dominantly andesitic breccias and tuffs with large
quantities of cross cutting andesite dikes and other intrusions; whilst towards the top, the volcanic rocks
are more dacitic. The dacite volcanic are not seen to be cut by andesite dikes however, except locally at

Quebrada Seca Property Report August 2009 (DNJ) 13 August 2009

the base of the sequence (Proffett, 2003) and thus interpreted to be post- main dike phase emplacement
and probably unconformable with the andesite volcanic rocks. The extrusive dacite at Alumbrera is also
considered to be compositionally- and time-equivalent to the Cu-Au mineralized porphyries in the area.

At Quebrada Seca, on the western ridgeline and its western slopes, there is a poorly exposed thin
(<100m thick) sequence of flat-lying dacite to andesite volcanic to volcanoclastic rocks. From the base
upwards these rocks comprise: volcanic sandstone, vesicular andesite lava, andesitic volcanic breccias
and finally fine-grained dacitic lava. To the immediate west of these outcrops, basement granite is
exposed, with a very thin red-bed sedimentary unit unconformably overlain. It appears, therefore, that we
have the same chronological sequence of rocks, on the western side of the Quebrada Seca property, to
those present around the Alumbrera deposit, to the north. Also, the presence of dacitic lava, at Quebrada
Seca, cut by diorite/andesite dikes and stocks, suggests that we are at the very base of the upper felsic
volcanic unit of the Farallón Negro Volcanic Complex. The presence of potential Cu-Au porphyry, directly
beneath these dacite volcanic rocks, here, could be significant, given the timing connection made
between these two igeneous events at the Alumbrera Cu-Au deposit, further north.

The volcanic rocks, at Quebrada Seca, are variously affected by alteration type and intensity. The more
dacitic units are affected by locally intense phyllic alteration (quartz-sericite-pyrite) and cut by moderate to
dense structurally-aligned “D” veins. The more andesitic units (lava and breccias) are affected by weak to
moderate propylitic alteration (chlorite-epidote-pyrite).

4.2.4 Intrusives (Upper Miocene)

4.2.4.1 Fine-grained diorite stock (pre-mineral)

The main intrusive phase in the southern part of the Quebrada Seca property is hornblende-plagiclase-
biotite diorie. This is dominantly fine-grained, equigranular to locally strongly porphyritic (with 1-3cm long
plagioclase phenocrysts) and the intrusion has stock-like proportions, extending over 1.5km NNE-SSW by
up to 750m WNW-ESE. It is best exposed on the western side of the Quebrada Seca catchment area and
in the bottom and immediate steep incised sides of the Quebrada Seca river valley. It has also been
mapped on the eastern side of this valley, but its limits there have not been deliminated. The stock is
emplaced into the basement granite, although only rarely do xenoliths of the later appear in it. Often the
contact, between the two rock types, is intensely brecciated. The diorite is notably more magnetic than its
host rock. Magnetite is present both as an accessory mineral and as part of a weak to locally strong
propylitic and/or potassic alteration affect.

Potassic alteration is strongest in the diorite, where it is in close proximity to altered and mineralized
diorite dikes and sills, described more fully in subsection 4.2.4.4 Potassic and/or propyliyic alteration
affecting the diorite stock is comprised of chlorite - amphibole (hornblende) and secondary biotite
replacing primary mafic sites (biotite or hornblende) and locally as selvages to quartz-poor Cu and Fe

Quebrada Seca Property Report August 2009 (DNJ) 14 August 2009

sulphide vienlets. Locally white K-feldspar and/or albite occurs with quartz, as a vein assemblage and/or
groundmass flooding in the weakly porphyritic portions of the diorite stock. The above alteration
assemblage is described as “deep propylitic” and indicates a deep level of erosion in the stock. Such,
amphibole (Ca-bearing) and albite (Na-plagiclase) alteration with quartz and magnetite, is an early (pre-
potassic), sulphide-poor, central to deep marginal, hydrothermal phase, well-documented from other Cu-
Au(Mo) porphyries worldwide (e.g. Island Copper, B.C, Panguna, Bougainville, PNG and the Shaxi-
Changpushan, in China). Incidentally, often these amphibole-bearing Cu-Au porphyries tend to be of
alkali (as opposed to calk-alkali) composition, and usually contain significant gold.

Locally, in the diorite stock, at Quebrada Seca, magnetite is seen as an alteration phase, as masses
and/or vein selvages to quartz and/or secondary biotite veinlets (“A” and “EB” veins). Evidently magnetite
is very abundant in the diorite, regardless of the intensity of the other secondary alteration minerals.
Locally the diorite is also cut by hydrothermal breccias bodies that tend to be spatially-related and
elongated parallel to the early-mineral diorite dikes (see sub section 4.2.4.4) The breccias are open-
spaced and composed of dog-tooth quartz crystals with very coarse-grained secondary biotite and
chalcopyrite + gold. Other hydrothermal breccias have been seen, but only as float boulders, in the main
Quebrada Seca river valley. These are composed of sub-angular clasts of the fine-grained diorite
intrusive set in a matrix of secondary black biotite ± plagioclase (see Figure 8).

The two dominant directions for dikes, breccias and veins, cutting the diorite stock, in the southern area,
are NNW-SSE and NW-SE.

Figure 8. Hydrothermal breccias in diorite

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 Figure 9. Compiled lithology from 1:1,000 scale mapping Teck May-June 2009

Figure 10. Cross section A-A’ – from mapped lithology

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Figure 11. Compiled alteration from 1:1,000 scale mapping (Teck June-July
2009)

Figure 12. Cross section A-A’ – from mapped alteration

Quebrada Seca Property Report August 2009 (DNJ) 17 August 2009

4.2.4.2 Porphyritic diorite stock (pre-mineral or early inter-mineral)

This appears to be roughly equivalent, in composition and timing, to the rock type described above (see
Figures 9-12). It has, to date, however, only been described from the northernmost part of the Quebrada
Seca property. It is comprised of weakly to strongly (micro- to mega) porphyritic to crowded porphyry
diorite and has stock-like proportions. It appears roughly circular, extending over an area of at least 1km²,
although the eastern limit has still not been delimited. Outcropping at 300 metres higher, in relative
elevation, than the southern fine-grained diorite stock (described above), it may, in fact, be a more
porphyritic (higher level) portion of the same larger (at depth) diorite intrusion. The northern diorite
porphyry is moderately to locally strongly magnetic and is affected primarily by a weak to locally strong
propylitic alteration (chlorite-epidote-magnetite replacing primary mafic sites) with local disseminated (1-
3% by volume) Fe and Cu sulphides. Amphibole is however not present as an alteration mineral phase,
unlike in the fine-grained southern diorite stock. The northern diorite is also hosted, primarily, into the
granite basement rock (pre-mineral), but also locally stopes beneath the volcanic rocks, exposed on the
western ridge. In turn, the diorite is cut by both the granite/dacitic porphyry, where xenoliths of Cu-
mineralized diorite porphyry have been observed, and also by the later dioritic and dacitic dikes,
described in the subsequent subsections. However, it is not apparently cut everywhere by the “A” vein
stockwork, affecting the granite porphyry, so would, in part, appear to be locally a late-mineral phase.
These two conflicting lines of evidence, suggest that the mineralized diorite porphyry, as mapped
presently, may be actually two separate intrusive events; an early- and then a late-mineral phase. If this
is shown to be correct, the granite porphyry, then, is, by definition, an inter-mineral phase. Further
detailed mapping on key exposures is required to conclusively establish the chronology of these complex
intrusive relationships.

4.2.4.3 Granite/dacitic porphyry stock (inter-mineral?)

Intruded into- and around the porphyritic diorite, is a roughly semi-circular (1km²) stock of medium to fine-
grained microgranite to locally quartz-phyric dacite porphyry. Evidence for the latter being younger than
the diorite is seen at contacts in the main tributary (Quebrada Shincal) to west of Quebrada Seca, where
dikes of the granite-dacite are clearly cross-cutting. In the same drainage, float boulders of granite
porphyry with porphyritic diorite xenoliths can be observed (see Figure 13) both being cut by thready “A”
vein quartz-limonite veinlets. However, as noted above, some diorite porphyry in contact with
stockworked granite porphyry, is not cut by the same veins, and appears to be later.

The granite-dacite porphyry is affected by various intensities of white clay (sericite / argillic) replacement
of biotite phenocyrsts and locally groundmass. Limonite staining is ubiquitous from the oxidation of
disseminated and veinlet-derived Fe and rare Cu sulphides. The veinlets are millimetre thick, straight,
multidirectional and usually with quartz with jarosite ≥ hematite > goethite. Locally green and black copper
oxides stain around veins, and remnant primary and secondary copper sulphides are sometimes also

Quebrada Seca Property Report August 2009 (DNJ) 18 August 2009

observed. These veins are classed as “A” veins (see photo collage in Figure 14). Locally, float boulders,
of the same granite porphyry, are cut by moderately dense “D” veins with jarosite-only millimetre wide
veins and well developed sericte haloes (see Figure 15). The granite-dacite porphyry is generally none to
only weakly magnetic.

Figure 13. Diorite xenoliths in granite porphyry

Quebrada Seca Property Report August 2009 (DNJ) 19 August 2009

 Figure 14. “A” veins cutting argillic altered granite porphyry Q. Shincal drainage

Figure 15. “D” veins cutting granite porphyry intrusive – Q. Seca main drainage

Quebrada Seca Property Report August 2009 (DNJ) 20 August 2009

4.2.4.4 Diorite dikes /sills (early inter-mineral?)

Outcropping both in the north and southern areas, are dikes, and rarely sills, of fine-grained equigranular
to micro-porphyritic diorite. Locally they contain large (up to 5cm) black book biotite and plagiclase
phenocysts. They are almost always affected, to varying degrees, by secondary biotite replacement of
primary mafic sites.

The dikes and sills are strongly magnetic and often have disseminated, and rarely veinlet-hosted, Fe and
Cu sulphides, with magnetite and hornblende. Geochemical analysis has also detected consistently
anomalous gold in these rocks, up to 3.31g/tAu. This is the only rock type to date, observed in outcrop,
that is unequivocally considered to be of an inter-mineral nature, whether early- or late-inter-mineral.
These diorite dikes cut all other rock types, previously described, but in turn are apparently also cut by the
“A” veins, at least locally. The dikes are therefore probably early inter-mineral, whilst the other intrusive
rocks hosting them (diorite and granite porphyry) are probably an even earlier inter-mineral phase.

4.2.4.5 Flow banded dacite/ryholite dike (post mineral)

Also observed across both the northern and southern areas of the property are one to two meter-wide
pale grey flow-banded aphanitic dacite/ryholite dikes. The dikes are only weakly argillic altered, non-
magnetic, trend from NNW-SSE to NW-SE and are considered post-mineral (see Figure 16 – Schematic
paragenesis at Quebrada Seca)

Quebrada Seca Property Report August 2009 (DNJ) 21 August 2009

 Figure 16 Schematic paragenesis of porphyry system - Quebrada Seca

Quebrada Seca Property Report August 2009 (DNJ) 22 August 2009

5.0 Geochemistry

5.1 Rock sample assay results

During the field campaigns in 2008 and 2009, a total of 166 rocks samples were taken from the Quebrada
Seca property. These include; 47 composite chips (with an average of 2m sample interval, exclusively
from continuous or semi-continuous exposure along the sides and base of creeks); 48 float samples and
the remaining 71 rock grabs from individual outcrops (see Figures 17-20).

Of the 47 composite chip samples the average values were: 0.09g/tAu and 244ppm Cu.

Results from individual continuous or semi-continuous chip lines, taken from along the length of
mineralized diorite dikes and hydrothermal breccias (where the dike or breccias body does not exceed 7
metres wide) include: 8m @ 0,61 g/t Au and 0,22% Cu; 6m @ 1,28 g/t Au and 1,69% Cu and 8m @
0,82 g/t Au and 0,39%Cu.

Of the 48 float samples taken; 25 are from boulders of leached “A” vein (quartz-limonite) stockworked
granite-dacite porphyry, from the main Quebrada Seca valley and/or the Shincal Quebrada tributary. Of
these, the average values returned are; 0.04g/tAu (with a maximum of 0.24g/tAu); 161ppm Cu (with a
maximum of 453ppmCu) and 14ppm Mo (with a maximum of 61ppm Mo).

The remaining 23 float samples were taken from the main Quebrada Seca and side tributaries from the
southern area of the property, and these returned an average of; 0.35g/tAu (with a maximum of
3.31g/tAu) and 0.183% Cu (with a maximum of 0.983%Cu).

Of the 71 grab samples taken from outcrops across the property, the values averaged; 0.27gt/Au (with a
maximum of 2.83g/tAu) and 0.155%Cu (with a several maximums of >1%Cu above assay detection
level). Molybdenum is generally only weakly anomalous (5-10ppmMo) from all of the above sample types,
and only moderately anomalous (10-50ppmMo) from the float samples of “A” veined granite porphyry
from the Shincal and Quebrada Seca drainages.

Quebrada Seca Property Report August 2009 (DNJ) 23 August 2009

 Figure 17. Rock/float samples Teck 2008-2009

Quebrada Seca Property Report August 2009 (DNJ) 24 August 2009

Quebrada Seca Property Report August 2009 (DNJ) 25 August 2009
 Figures 18,19, 20. Rock geochemistry: Cu, Au, Mo

5.2 Silt/soil sample assay results

A total of 83 conventional drainage silt samples were taken on a property-wide scale. 10 panned
concentrates and 6 soil/talus fines samples were also been taken, as part of an orientation survey, from
around known Cu-Au showings (see figures 21-23).

Of the 83 silt samples taken, the average gold assay results are: 0.04g/tAu (40ppb) with 7 values
>0.01g/tAu (100ppbAu) and a maximum of 1.23g/tAu, all from drainages in the northern area of the
property. Of the 83 silt samples taken, the average copper assay results are: 32ppm Cu, with 5 values
>75ppm Cu and with a maximum of 240ppm Cu all from the Shincal Quebrada drainage. No anomalous
molybdenum was recorded from these silt samples.

Of the 10 panned concentrate samples taken, the average assay results are: 0.064g/tAu (64ppbAu) with
a maximum of 0.36g/tAu (360ppbAu) and 45ppm Cu with a maximum of 96ppm Cu.

Of the 6 soil/talus fines samples taken, the maximum was 0.24gtAu (240ppbAu) and 39ppm Cu from
around known outcropping Cu-Au mineralization.

Quebrada Seca Property Report August 2009 (DNJ) 26 August 2009

 Figure 21. Silt geochemistry

Quebrada Seca Property Report August 2009 (DNJ) 27 August 2009

 Figures 22, 23. Silt geochemistry: Cu, Au

Quebrada Seca Property Report August 2009 (DNJ) 28 August 2009

5.3 Conclusions and Recommendations for further work

The results of property-wide rock, float and silt sampling program, together with lithological and alteration
mapping and prospecting, conclude that the maximum interest, for potential porphyry-style Cu and/or Au
mineralization, exists in the northern most part of the Quebrada Seca project and particularly at the
headwaters of the Shincal tributary off the main valley. From this tributary, anomalous copper (up to
240ppmCu) has been detected in drainage samples, from the initial silt sample program in 2008.
Sampled float boulders, with veining, have returned anomalous Cu, Au and Mo. These boulders have not
been successfully followed to source, because of the ruggedness of the terrain at the headwaters of this
catchment. There, 30 metre high vertical rock faces, some with exotic green and black Cu oxide staining,
block further access to the likely source areas (see Figure 24). However, to date, no clear main inter-
mineral intrusive phase has yet been seen in outcrop or as float in this catchment. These float boulders
of stockworked granite porphyry (with anomalous in Cu, Au and Mo) are interpreted to be an early-
mineral phase that potentially hosts, as yet unseen, main inter-mineral porphyry.

The evidence presented in this report suggests that a mineralized inter-mineral intrusive is likely to be
present in the general area described above and/or concealed at depth. This area measures probably
500 metres by 200 metres (see Figure 26) and can only safety be accessed from the ridgelines above.
This would require prior clearance of the thick spiny bush that cloaks the hillsides here (approximately 45
days work with a gang of local labourers). Rock-climbing equipment (ropes, harnesses, helmets) may be
required, with appropriate training, to access some areas.

Figure 24. Vertical rock walls – headwaters of Shincal drainage

Quebrada Seca Property Report August 2009 (DNJ) 29 August 2009

6.0 Geophysics

6.1 Magnetic Susceptibility results and conclusions

A total of 167 composite readings of magnetic susceptibility of rock outcrops were collected during the
mapping program from across the property. The average results (as SI units) for each rock type described
in subsection 4.2 are as follows.

Basement granite (Ordovician) – 2.29 (from 27 composite readings)

Bi-modal volcanic/volcanoclastic rocks – 4.35 (from 3 composite readings)

Porphyritic diorite stock – 21.83 (from 34 composite readings)

Fine grained diorite stock – 57.98 (from 43 composite readings)

Granite/dacitic porphyry stock – 3.22 (from 21 composite readings)

Diorite dikes /sills – 71.87 (from 8 composite readings)

Flow banded dacite/ryholite dike – 2.25 (from 4 composite readings)

Results for the magnetic susceptibility reading work at Quebrada Seca show that the most magnetic
rocks are the Cu-Au mineralized and potassically altered diorite dikes (with an average of 71.87). These
dikes are considered to be an early-mineral event, being themselves cut, locally, by a weak Cu-Au-Mo
mineralized “A” vein stockwork event. The “A” veins are highly leached at surface, with abundant earthy
and metallic hematite, and may or may not have contained originally magnetite. The main rock host for
these veins is the granite/dacite porphyry stock, which is itself non-magnetic (averages only 3.22) and is
considered to be also probably early-mineral. Pre-mineral rocks, are essentially non magnetic (basement
granite – 2.29; bi-modal volcanic – 4.35) whilst other early- to possibly late-mineral rocks are moderately
to strongly magnetic (porphyritic diorite stock – 21.83; fine-grained diorite stock – 57.98).

How much of the magnetite, observed in these intrusive rocks at Quebrada Seca, is primary (accessory)
and how much is secondary (hydrothermal) is still to be resolved. When spatially associated with Cu and
Au mineralization, it is, evidently, an alteration mineral. This is the case for the majority of the magnetite in
the early-mineral dorite dikes, that carry the best Cu and Au grades, seen to date, on the property. It can
be assumed, therefore, that a main mineralized porphyry event (whatever its igneous composition) is also
likely to be associated with significant amounts of hydrothermal magnetite. This is the case at the
Alumbrera Cu-Au-Mo porphyry system, where up to 30% semi-massive early hydrothermal magnetite and
quartz (low-, no- sulphide) occupies the barren core of the deposit, and which is detectable in
aeromagnetic surveys flown over it (see Figure 25, upper and lower diagrams). The same situation is also
repeated at several other Cu-Au porphyry prospects in the Farallón Negro District (see Figure 25 left
diagram). Moreover, worldwide Au-rich porphyry Cu deposits, are also distinguished from other porphyry

Quebrada Seca Property Report August 2009 (DNJ) 30 August 2009

deposits, by an abundance of hydrothermal magnetite (e.g. Grasberg and Panguna, PNG (both
containing >700 tonnes of gold); Santa Tomas II and Far SE, Philippines, Batu Hijau, Indonesia, Ok Tedi,
PNG).

Figure 25. Schematic plan of hydrothermal magnetite-bearing Cu-Au porphyry systems in the
Farallón Negro District, NW Argentina (at same scale, left diagram) and aeromagnetic response over the
Alumbrera deposit (upper- and lower right diagrams).

At Quebrada Seca, the pre-mineral to early-mineral host rocks, in the Shincal tributary area, are
essentially non- to only moderately magnetic. This likely difference in magnetite content, therefore,
between the host rocks and a hypothetical inter-mineral porphyry (with a hydrothermal magnetite core)
could provide us with the necessary magnetic contrast to be able to interpret the results of any future by a
ground- or airborne magnetic survey, on the property. However, the presence of magnetic pre-mineral
fine–grained diorite stocks (albeit further south of this area) means that magnetic anomalies alone would
not be sufficient to characterise an anomaly related to a hydrothermal magnetite core. Only by using

Quebrada Seca Property Report August 2009 (DNJ) 31 August 2009

IP/Res can we expect to be able to distinguish a hydrothermal magnetite core within a larger Cu-Au
mineralized porphyry system.

6.2 Recommendations for further work (Ground Magnetics, IP/Res)

Given the above statement, an optimum geophysical anomaly, on the Shincal target area, would be a
pronounced magnetic high surrounded and/or overprinted by moderate to strong chargeability.

A ground magnetic survey is therefore recommended (13-line kms) using the main ridgelines and creek
bottoms in and around the Shincal catchment area (see figure 26) in conjunction with 10-line kms of
IP/Res, utilizing the same ridge and creek lines.

Figure 26. Panoramic photo of the Shincal drainage catchment with proposed geophysics

7.0 General conclusions and recommendations

At the Quebrada Seca property, potential for a new, previously unknown and undocumented Upper
Miocene aged Cu-Au porphyry system has been discovered by Teck. Previous published silt sampling
results (UN 1968) failed to detect anomalies in the Quebrada Seca catchment, but this survey did not
sample the anomalous Shincal tributary. Detailed mapping, prospecting and sampling by Teck in late
2008 and early to mid 2009 has identified the area where a probable concealed Cu-Au mineralized
porphyry system resides. Further exploration work (geochemical sampling and geophysics), is strongly
recommended to establish if this is the case. Further detailed mapping, on key exposures, is required to
conclusively established the chronology of the intrusive relationships to help guide future geochemical
and geophysical exploration work (see “Discussion and Conclusions” in Johnston, 2009).

Quebrada Seca Property Report August 2009 (DNJ) 32 August 2009

It is remarkable that the evidence for a mineralized porphyry system at the Quebrada Seca property, has
evaded prior detection, given that the general access to the area is good and within 50km of an operating
Cu-Au-Mo mine (Bajo de la Alumbrera). The thick bush cover, and rugged nature of the terrain, has
certainly been a factor in its concealment, so too, the failure of conventional silt sampling to detect
outcropping Cu-Au mineralization there. The orientation silt survey undertaken by Teck was an important
step in establishing optimum sample mediums, sample sieve sizes and geochemical thresholds, prior to
drainage work on the whole property. Before attempting more regional exploration, for potentially- and
likely- further concealed systems, an endeavour to fully understand the complex hydrological of
drainages, should be made.

Darren Jones (Principal Geologist)

Teck Exploraciones Mineras Chile Ltda.

August 2009

References

Einaudi, M.T., 1997, Mapping altered and mineralized rocks; an introduction to the “Anaconda Method”.
Stanford University. Unpublished.

Johnston, P.J., 2009, Quebrada Seca Project, Argentina. Internal company report. Teck Exploraciones
Mineras Chile Ltda.

Proffett,J.M., 2003, Geology of the Bajo de la Alumbrera Porphyry Copper-Gold Deposit, Argentina.
Economic Geology. Vol.98, pp.1535-1574.

Pudack, C., Halter, W.E., Heinrich,C.A., and Pettke,T., 2009. Evolution of Magmatic Vapor to Gold-Rich
Epithermal Liquid: The Porphyry to Epithermal Transition at Nevados de Famatina, Northwest Argentina.
Economic Geology. Vol.104, pp. 449-477.

Sasso, A.M., and Clarke, A.H., 1998, The Farallón Negro Group, Northwest Argentina: Magmatic,
Hydrothermal and Tectonic Evolution and Implications for Cu-Au Metallogeny in the Andean Back-arc:
SEG Newsletter, N°34, p 7-18.

Quebrada Seca Property Report August 2009 (DNJ) 33 August 2009