San Manuel 1999 Ore Reserves Report (Draft)

BHP COPPER

SAN MANUEL OPERATIONS

OXIDE ORE RESERVES REPORT

JUNE 1, 1999

Prepared by

Technical Oxide Planning and Projects Group

TABLE OF CONTENTS1. Introduction 42. Executive Summary 53. Property Description 6

3.1 Location and Access 63.2 Land Status 63.3 History 63.4 Production 7

3.4.1 In Situ Leaching 73.4.2 Residual Heap Leaching 8

3.5 Development 83.6 Exploration 83.7 Plant and Equipment 8

3.7.1 Solvent Extraction Plant 93.7.2 Electrowinning Plant 93.7.3 In Situ Leaching 9

4. 20F Statement 115. Current Recalculation 126. Geology 13

6.1 Regional Geology (Within Sulfide Report) 136.2 Geologic History (Excerpt from Sulfide Report) 136.3 Deposit Geology 15

6.3.1 Rock Types 156.3.2 Structure 186.3.3 Alteration and Mineralization 20

7. Database 237.1 Components 23

7.1.1 Sulfide 237.1.2 Reverse Circulation 237.1.3 1990 Drilling Campaign 23

7.2 Verification and Manipulation 257.3 Sampling 267.4 Quality Process Control 267.5 Copper Assays 26

8. Block Model 278.1 Geologic Model 278.2 Model Database 318.3 Assay Data 328.4 Topography 338.5 Composite Data 348.6 Model Statistics 34

8.6.1 Assays 348.7 Geostatistics 388.8 Interpolation 398.9 Minesight 40

8.9.1 Drillholes 40

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8.9.2 Grids 418.9.3 3D Geometry 418.9.4 Models 448.9.5 VBM 44

8.10 Previous Modeling 458.10.1 Early Modeling 458.10.2 Fault Zone Model 468.10.3 1995 Model 47

9. Geologic Resources 5010. Metallurgy 51

10.1 Residual Heap Leaching 5110.2 In Situ Leaching 51

11. Hydrology 5212. Mine Planning 53

12.1 Optimization 5313. Mine Design 54

13.1 Mineable Resource 5413.1.1 Final Pit Design 5413.1.2 In Situ Leaching Design 55

14. Ore Reserves 5914.1 Resource Recovery Test 6014.2 Economic Cutoff 60

15. Reconciliation 6116. Updates 6217. Opportunities 63

17.1 Increasing Saturation 6317.2 San Manuel Resource Definition Project 63

18. Risks 6419. Conclusions and Recommendations 65

19.1 Geology 6520. References 66


1. Introduction

This internal ore reserve report is designed to complement and serve as a source of backup information for the 20-F statement for the oxide leaching portion of the San Manuel Operation’s ore reserves.

This document contains a partial history of the oxide ore reserves. Within it is the methodology used for estimating the ore reserves as of May 31, 1999. To complement the methodology, a description of the property and infrastructure is included. A description of the regional and deposit geology is also included.

The report concludes with statements around the updates, opportunities, risks, conclusions and recommendations for the future.


2. Executive Summary

This internal ore reserves report of the San Manuel Operations Oxide deposit is to serve as backup information for the 20F statements. The details of the oxide resource and reserve calculation will be found in this document.

The San Manuel Oxide Project has experienced tremendous success in extracting copper from leachable copper minerals using open pit/heap leach and in situ mining methods. Reserves remaining in the ground as of May 31, 1999 contain xxx.x million kilograms of recoverable copper. It is also expected that another 9.0 million kilograms will be recovered from the heap leach before its operation is terminated. As the table below illustrates, most of the recoverable pounds (kg) remaining are contained in the in situ mining reserve.

Total Oxide Resource

Mineral Zone Tonnes TCu Contained Cu (kg)

Total

Total Oxide Ore Reserves

Ore Type Tonnes TCu ASCu Recoverable Cu (kg)

In Situ – ProvenIn Situ – ProbableHeapsTotal

The last external audit on in-situ reserves was completed in late 1993-by the Winters Group, Tucson, Arizona.

State the major changes from last year.

*Percent Acid Soluble Copper as determined by San Manuel Metallurgical standard test number AP-101


3. Property Description

3.1 Location and Access

The Oxide Leaching operation at San Manuel shares land and facilities with the Underground block caving operation.

3.2 Land Status

All Oxide operations occur on patented land. The SX-EW facility resides on some of the oldest claims in the district dating to the 1870's. The heap and open pit is located on land claimed as part of the San Manuel deposit.

3.3 History

During early 1945 through late 1947 the now-merged International Smelting and Refining Company drilled a series of churn drill holes (CD series) to attempt to locate two extensions to two known mineralized deposits in the immediate vicinity, namely the St. Anthony (Tiger) Mine and the San Manuel Mine. At the time, International owned the lease on the Houghton group of claims adjacent to the San Manuel Copper Corporation (later Magma) property on the eastern most side. A total of seventeen churn drill holes and one directional diamond core hole were drilled with the intent of locating these possible mineral deposit extensions. The total footage drilled for churn drilling, deepening churn drill holes with diamond core drilling, and directional diamond core drilling was 29,793 feet. This drilling discouraged the exploration for an extension to the Dream Vein in the St. Anthony Mine but encouraged the exploration for an extension to the San Manuel mineral deposit. The exploration program delineated an estimated 15,960,000 tons of primarily sulfide-rich rock at a reported grade of 0.849 weight percent total copper and 0.116 weight percent acid soluble copper in a 285 foot thick blanket-like geometry. This tonnage of sulfide mineralized rock was considered too little to justify the investment in developing the area for mining. At the time the oxidized zone over this sulfide rock was delineated and assayed, but according to H.J. Steele (1948), "the tonnage of oxidized ore within the area was not sufficient to consider in a tonnage estimate".

The oxide resource at San Manuel has been known since shortly after the beginning of exploration of the site. Early estimates from the churn drilling completed in the 1940's set the resource at 205 million tons at 0.491% acid soluble copper (ASCu), based on a 0.6% total copper (TCu) cutoff.

A serious study of the oxide resource started in 1982, which resulted in a favorable feasibility study completed in September 1984. This study confirmed the resource with reverse circulation drilling (ARM series). The original churn drill holes were translated in space to account for subsidence induced by the block caving operation. The resource was then believed to be approximately 286 million tons at 0.39% ASCu at a 0.30% TCu cutoff.


The open pit mine designed in the feasibility study, was estimated to contain 51.5 million tons of oxide ore at 0.730% TCu and 0.483% ASCu. The cutoff grade was set at 0.20% ASCu. The waste to ore ratio was 2.39 to 1. This pit design had several restrictions placed on it that were revised after production began. The final pit slope was set at 38 degrees. No part of the pit could extend above the north boundary of the 2615 underground mining level. The pit bottom of this design was at the 2300 elevation.

The project was approved based on this reserve, a capital requirement of $68 million, and $0.80 per pound copper produced, to yield a return on investment of 13.3%. The study predicted the operating cost to be $0.475 per pound.

Mining commenced in the 4th quarter of 1985. The first copper cathode was harvested in June 1986. The SX-EW plant had a capacity at that time of 50 million pounds per year. Investigation of the feasibility of in situ leaching of a portion of the rockmass began around that time.

The plant design capacity was expanded in 1989 to 100 million pounds per year. In-Situ production and increased open pit production was scheduled to fill the new capacity. The best production month from the plant exceeded 11 million pounds. Open pit operations terminated in January 1995. During the shutting down of pit operations, in-situ expansion began. In-Situ expansion continued through the end of 1995 and operations continue to date.

3.4 Production

3.4.1 In Situ Leaching

In-Situ production during the last year has ranged from 2.1 to 2.6 million copper lbs per month or 70,000 to 90,000 copper lbs per day. Total PLS flow rates have ranged from 7,400 to 8,100 GPM. During the year the average grade varied between 0.81 and 0.93 g/l. Total production from in-situ operations in fiscal 1998 was approximately 28 million pounds of cathode copper. The fiscal 2000 budget predicts that 36 million pounds of cathode copper will be produced by the in situ operation.

Surface production has remained steady during most of the year. Newly constructed wells have offset the normal production decline from aging wellfields.

Underground production has declined from 1.0 million lbs to 0.7 million lbs due to the natural production decline. Wells targeted for underground did not arrive there, instead they contributed to surface contribution. This left underground production below plan.

The production modeling for in-situ leaching was performed for the fiscal 2000 budget in accordance with state-of-the-art leach modeling techniques. The estimate of PLS copper production is optimized for flow rate, grade, and development cost within the context of the most recent underground block cave schedule. The corresponding production model parameters are generated from detailed analyses of historic leachfields and from an extensive literature review of technical subjects pertinent to in-situ and dump leach modeling.


The production timing schedule is based upon the optimum utilization of the minimum number of drill rigs coupled with the availability of suitable surface area on a pit wall to allow maximum copper production at the minimum development cost. The production design that is developed for the model is based upon 6 inch cased wells set in a pattern of 50-foot centers. A detailed well field design for each bench in each mineralogically and structurally discrete fault zone block is developed and linked to a development (mining) schedule to create a composite production plan for each individual fault block/leaching zone.

3.4.2 Residual Heap Leaching

The oxide open pit successfully completed mining operations on January 16th, 1995.

The base of the heap-leaching pad covers 242 acres. The base was contoured, compacted and entirely covered with HDPE liner prior to placement of any material. The heap rises to a maximum elevation of 3480 feet above sea level.

Total production from the heap leach pad in fiscal 1999 was xx.x million pounds (6.7 million-kg) of cathode copper. Since 1986, the Heaps have produced 691.4 million pounds (313.6 million-kg) of cathode, equivalent to a recovery of 84.3% of all acid soluble copper place on the pad. When the ultimate recovery of 87.5% is reached, the Heaps will have produced an additional 22 million pounds (10.0 million-kg) of copper. This recovery is expected to be reached in the year xxxx.

3.5 Development

Development of new wellfields consists of drilling wells and hooking up the necessary utilities for those wells. Drilling is typically done by mud rotary technique with the company owned drill rig. At times, additional drill rigs are used by contracting out work to local drilling companies.

3.6 Exploration

The San Manuel Resource Definition Project began in late 1996. This study is exploring the possibility of reopening the oxide pit. The early result of this study was to provide a better and more comprehensive drill hole database that included all of the drilling ever done on the property. From an excess of 2,000 drill holes, many were removed that existed within the block cave area. However, a few hundred still remained and these holes indicated that more oxide orebody existed at depth. The potential was great enough to justify a drilling program, which was completed in 1997. Further modeling and planning is still underway.

3.7 Plant and Equipment


3.7.1 Solvent Extraction Plant

PLS flows by gravity from the feed pond to four independent stainless steel tank trains. Each train has a mixer, extractor and stripper thus allowing one train to be shut down without effecting the other three. All four trains combined have a capacity of 16,000 gallons per minute of PLS feed. Flow from the trains goes either to the electrowinning plant or to the raffinate pond.

3.7.2 Electrowinning Plant

The electrowinning tank house has 188 concrete cells each containing 61 lead anodes and 60 stainless steel mother blanks. With a plating cycle of seven days, the tank house is capable of producing 50,000 tons per year of cathode copper.

All SX-EW functions are fully instrumented for automatic operations and are directed from the control room located in the tank house. All staff and technical offices are located in the tank house.

3.7.3 In Situ Leaching

Magma Copper Company began limited scale in situ (in place) leaching of copper mineral occurrences above and adjacent to the San Manuel underground mine in 1986. The in-situ leaching project at San Manuel was initially designed to utilize gravity flow leaching to recover acid soluble copper from partially rubblized rock that was spatially situated adjacent to an abandoned portion of the block cave underground mine. During the construction of this in-situ leaching system, an underground drainage gallery collection facility was adapted by utilizing existing haulage and panel drifts. An underground pumping system capable of lifting about 10,000 gallons per minute of PLS to the surface was also constructed. Due to structurally complex geologic conditions, a relatively competent and unbroken rock mass, and requirements of concurrent open pit mine plans, the opportunity to economically expand production from the underground collection facility was not achievable. The development and design of the well-to-well leaching system was initiated as a production replacement for the underground collection facility.

By 1989, in-situ leaching had become a viable and cost effective method of SXEW cathode copper production. The viability of the in-situ leaching method evolved with the technical development of well-to-well leaching utilizing dilute sulfuric acid solution circulating within the hydraulic influence of a specially designed well pattern comprised of specially constructed injection and extraction wells. The average depths of these in-situ wells are between 500 and 600 feet with a maximum depth of 1100 feet. The current well pattern design incorporates a universal well construction (uni-well) design for both injection and production wells in hydrogeologically defined patterns coupled with optimized well spacing so that the pattern geometrically fits on an open pit wall catch bench. The purpose of a uni-well design is to have the flexibility to rearrange injection and production wells during their lifetime. The final


wall in-situ catch benches are designed to be about 50 ft. wide from crest to toe. Along the length of the bench, the uni-well pattern is linked or coupled in a manner that allows design modifications to be made to optimize the position of the linked patterns to fit the localized structural geology. The well pattern design of the bench must also correlate to and interact with the well pattern on the benches above and below it to provide optimum sweep efficiency of the rock mass.

Residual vertical leakage solution collection is achieved utilizing the existing 2375 level underground collection facility. In a hydrologic environment like that of the San Manuel Mine, existing shaft facilities and the associated hydrologic cone of depression around the collection area and the shafts have captured in the past and will capture and recover in the future all planned pregnant leach solutions for SX-EW processing. Barren leach solution for injection is derived from SX raffinate and may or may not be acidified to about 20 grams per liter free acid depending upon the residual free acid remaining after electrowinning. All pregnant leach solution is pumped to the SX plant utilizing a multiple booster pump station system.

The booster pump system allows PLS from the pit bottom to be pumped to the 2460 in-pit lift station. PLS is then pumped to the 2800 booster pump station which lifts the PLS to the 3100 booster pump station. This 3100 pump station can lift the PLS to the SX-EW plant feed pond or the PLS can be diverted to the heap leach PLS pond for pumping to the SX-EW plant feed pond. Injection solution is delivered to the well pattern manifolds through a complex system that dissipates fluid pressure through the use of pressure reducing valves and by dynamically choking the flow in restricted diameter pipelines. The installation of a MacGyver bypass to reduce fluid pressure while generating electricity was installed in 1995. The leach solution distribution system allows a roughly 900 foot drop in elevation (390 psi.) at about 3000 gallons per minute flow rate to be reduced to a potential zero pressure (and flow) at the bottom of the pit.

The power distribution system originates from the main mine power grid and is fed to a main substation located on the pit perimeter. Power is sequentially transformed to appropriate voltages at the various booster pump stations. Power transmission in the pit area is by shielded ground cable and outside the pit is by overhead lines. Final transformation to 460-volt power is made at individual transformers near the production well locations. All production wells extract PLS with fully stainless steel submersible pump/motor units. All down-hole and surface construction materials are required to be either stainless steel, polyvinylchloride (PVC), or high density polyethylene plastics due to the acidic copper-rich nature of the barren leach and PLS solutions.


4. 20F Statement

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BHP COPPER - ORE RESERVE DECLARATION AS OF 31 MAY 1998Copper Page 1 of 3

1 Deposit/mine name: San Manuel Mine BHP Interest (%): 100

2 Brief description of the type of mine and processing facilities:

Two independent operations at minesite. Sulfide operation is block caving method.

Oxide operation is in-situ leaching and residual heap leaching.

3 Resource/Ore Reserve:

Please report all copper grades and recoveries in terms of Total Copper (including leach projects). Report Au and Ag in grams/tonne.

Please report the Identified Mineral Resources as the tonnage remaining after removing the Ore Reserves.

IN-SITU LEACHING Ore Reserves Identified Mineral Resources

Proved Probable Total (a) Measured Indicated Inferred Total (b) Comments

Tonnes (000,000) 107.0 88.2 195.2 26.9 14.8 15.6 57.3

TCu Grade 0.612 0.550 0.584 0.642 0.550 0.561 0.596

ASCu Grade 0.401 0.353 0.379 0.436 0.353 0.378 0.399

TCu Cutoff ~0.30 ~0.30 ~0.30 ~0.30 ~0.30 ~0.30 ~0.30 0.20% Acid Soluble Copper Used

RESIDUAL HEAP LEACHING

Proved Probable Total (a) Measured Indicated Inferred Total (b) Comments

Tonnes (000,000) 84.4 84.4

TCu Grade 0.617 0.617

ASCu Grade 0.468 0.468

TCu Cutoff ~0.20 ~0.20 0.10% Acid Soluble Copper Used

Copper and other metals: Copper in tonnes, Au in ounces (Accounting for milling and smelting/refining recoveries)

Proved Probable Total (c) Assigned Unassigned

For Sulfide / Millable

- as Concentrate Conversion Factors Table

1 million metric tonnes = 1.1023 million short tons

For Leachable / SX/EW - as Cathode 1 pound = 0.454 kilogram

In-Situ Leaching 138,900 156,200 295,100 295,100 1 troy ounce = 0.0311 kilogram

Residual Heap Leaching 10,000 10,000 10,000

Total Oxide Operation 148,900 156,200 305,100 305,100

11

5. Current Recalculation


6. Geology

The San Manuel Oxide pit was mapped as a part of the San Manuel In Situ Commissioning effort17. Although geological mapping had been conducted throughout the life of the open pit operations, the mapping had not been compiled to show the distribution of geological features over the pit surface. Lithology, structure, hydrothermal alteration, and distribution of oxide mineralization all affect solution flow within the leach field; thus, the locations and character of these features need to be documented in order to interpret hydrological and geochemical data collected from the in situ well fields. This mapping program was intended to provide a geological framework to the San Manuel in situ facilities, and should not be considered to be the only mapping needed to support on-going leaching operations.

The mapping was done at a scale of 1:2400 and conducted from late May to early July, 1996 by: F. Bain, Consulting Geologist; C. Hoag, Sr. Geologist, Growth and Technology, Florence Project; R. Moulton, Consulting Geologist, Florence Project; R. Parker, SMURM Geologist, San Manuel Sulfide; and R. Preece, Sr. Geologist, Growth and Technology, Resource Development and Technology Group. Logistics, supplies, and general support to the mapping effort were provided by the San Manuel Oxide Technical Work Group. A map showing pit topography and in situ well locations was used as a base, with control outside the leach fields provided by surveyed ground stakes. An overview of the San Manuel geology was given by L. Hobbs, Geologist, San Manuel Sulfide, through a geological tour of the Lower Kalamazoo. The mapping was presented in a geological tour conducted for all interested parties on July 12, 1996. This document is modified from the tour guide prepared for and distributed at that time (Preece, et al, 1996).

6.1 Regional Geology (Within Sulfide Report)

6.2 Geologic History (Excerpt from Sulfide Report)

The San Manuel and Kalamazoo Ore bodies are situated in the Black Hills, an area of block-faulted mountains consisting of Precambrian granite and Upper Cretaceous intrusive rock covered by Middle Tertiary volcanic and sedimentary rocks. Figure 5 is a generalized geologic map of the district bounded in the north by the Tortilla Mountains and in the south by the Santa Catalina and Rincon Mountains. To the west is the Tortolita Mountains and to the east are the Galiuro Mountains. Cross section A-A’ of Figure 5 shows in greater detail the result of the structure and tectonism of the Middle Tertiary, and later basin and range faulting in the ore body area.

Figure 6 is a generalized stratigraphic column of the rocks found in the San Manuel-Kalamazoo area. The host rock for the San Manuel and Kalamazoo ore bodies is a 1.4 billion-year-old quartz monzonite, referred to locally as the Oracle Granite, a coarse-grained porphyritic biotite and two mica monzogranite. Scattered fine-grained dikes of aplite and diabase occurs throughout the Oracle Granite. 1.1 billion year old diabase dikes were intruded into the Oracle Granite. These Precambrian rocks were intruded by a Laramide monzonite (Schwartz, 1953) or granodiorite porphyry (Creasey, 1965) in the form of a dike swarm. Geothermometric data from fluid inclusion studies indicate a depth of emplacement of the Laramide dike swarms at


approximately one mile (Davis, 1974). The idea of an orthomagmatic model to explain the transport of hydrothermal fluids and copper mineralization from the Laramide porphyries into the host Pre-Cambrian quartz monzonite is supported by all the people who have studied the ore geneses at San Manuel and Kalamazoo including Lowell and Guilbert (1970), Davis (1974), Chaffee (1975), Farmer and De Paolo (1987). The dacite porphyry, though very close in age to the other porphyries, is believed to be post-ore because of its low grade and weak alteration. The age of the porphyries is estimated at 67-69 million years old by Hail (1968).

A few post-ore dikes cut all of the older rocks. The older of the post-ore dikes are andesite or andesite porphyries that are probably 26 to 29 million years old. They typically form small dikes from 1 to 10 feet and up to 20 feet maximum thickness. The andesite usually forms along fault zones such as the Vent Raise Fault Zone located in the San Manuel ore body. Schwartz (1953) suggests the andesite is an intrusive equivalent of some of the thick andesitic tuffs of the Cloudburst Formation.

The youngest rock to intrude the San Manuel and Kalamazoo ore bodies is rhyolite. Rhyolite cuts all the older rock types including the Cloudburst andesites and conglomerates. It forms large pod-like masses and dikes in both the San Manuel and Kalamazoo ore bodies. The rhyolites in the mine area are approximately 22 million years old and can be correlated to those exposed in the Tiger area located just to the north of the mine.

Igneous breccia is exposed in both the shaft pillar and footwall portions of the San Manuel Fault, usually near the quartz monzonite-granodiorite porphyry contacts. The igneous breccia is a very hard rock consisting of mostly quartz monzonite with rock fragments of granodiorite porphyry, quartz monzonite and other porphyries in a matrix of potassic feldspar veins and calcite. The breccia is mostly low in copper grade (<0.4% total copper) suggesting a post-ore origin.

Two conglomerates cover most of the ore bodies. The older is the Cloudburst Formation, which is described by Heindal (1963), Creasey (1965) and Weibel (1981). It is composed of up to 6,000 feet of inter-layered conglomerates, sedimentary breccias, and volcanic rocks. It is estimated to be from 23 to 28 million years old and is intruded by the previously mentioned rhyolites. Disconformably overlying the Cloudburst Formation is the younger conglomerate, the San Manuel Formation which was named by Heindl (1963). It is very similar to the Cloudburst and is at least 22 million years old at the base. It reaches a thickness of up to 4,000 feet and contains boulders of quartz monzonite, rhyolite, diabase, Laramide porphyries, and other rocks. The lower unit, the Kanally Member, consists of fragments of volcanic and fanglomeritic rocks derived from the Cloudburst.

Most of the surface area above the San Manuel and Kalamazoo ore bodies is covered by conglomerate. As a result, the older faults in the area are not recognized on the surface. These faults tend to trend roughly parallel to the axis of the ore bodies. A good example in the San Manuel ore body is the Vent Raise Fault, which is a post-ore, but pre-conglomerate fault that bisects the ore body along the longitudinal axis. An example of a similar fault in the Kalamazoo is the Virgin Fault.

J. David Lowell (1968) suggested that the Laramide monzonite dike swarm was emplaced in the quartz monzonite, and the copper ore shells formed as a near vertical cylindrical or pipe-


shaped body near the contacts. In his interpretation (Figure 7), Mr. Lowell indicates the sequence that took place following the intrusion. He estimates that the ore body rotated approximately 70° before it was cut by the San Manuel Fault. Paleomagnetic surveys done in the area around the mine (Force, 1993) indicate that the post ore rotation may have been 33±12° instead of the 70° proposed by Lowell. This would make the orientation of the dike swarm closer to 50 or 60° rather than vertical. Regardless, the dike swarm and incipient San Manuel Fault was rotated to approximately 20°. The San Manuel Fault, the most significant fault in the area, is a low angle normal fault that strikes northwest-southeast and dips 10 to 45° to the southwest. The fault displaced the upper half of the Kalamazoo ore body 8,000 feet down dip, and is interpreted to be of at least early Miocene in age. Figure 8 is a cross-section looking northwest that shows the relationship of the two ore bodies. The San Manuel segment resembles a distorted U or canoe while the Kalamazoo is a near mirror image.

The oxidation deposition in the San Manuel is interpreted to have occurred in at least three distinct steps, based on the main erosional cycles. The main erosional cycles are pre-Cloudburst Formation, pre-San Manuel Formation, and the present erosional cycle. The first stage of supergene enrichment of primary chalcocite occurred between the intrusion of the porphyry and the deposition of the Cloudburst Formation. The second stage of supergene enrichment of widespread oxidation of chalcocite to chrysocolla may also have occurred before major tilting and San Manuel faulting. Minor chalcocite blankets and oxidation have occurred in the more recent post-San Manuel formation erosional cycle. Basin and range faulting have displaced the oxide and sulfide zones, and established oxidation and leaching deeper in the San Manuel segment of the system. A sequence of high angle normal faulting cut the San Manuel ore body and the San Manuel fault. The largest of these faults are the Cholla Fault, East Fault, West Fault, and the Hangover Fault. The Hangover Fault forms a natural protection boundary for the shaft pillar in the San Manuel ore body. These basin and range faults trend northwest-southeast and dip to the east toward the San Pedro basin.

6.3 Deposit Geology

6.3.1 Rock Types

Numerous authors have described the rock types found in the San Manuel area so only a brief overview will be given, with selected articles listed in the bibliography. Maps are included as Figures 1 and 2, representing the base geology and mineralization/alteration overlay, respectively. The rock types at San Manuel essentially consist of Precambrian, Cretaceous, and minor Tertiary intrusive rocks overlain by a thin sequence of Oligocene to Pliocene unconsolidated sediments. The coarse-grained Precambrian quartz monzonite (Oracle granite) (1.44 + 0.02 Ga) and minor Precambrian diabase dikes (1.04-1.1 Ga) were intruded in Laramide time (67-69 Ma) by dike swarms and irregular masses of porphyry variously described as quartz monzonite porphyry, monzonite porphyry, granite porphyry, granodiorite porphyry, and (biotite) dacite porphyry (e.g. Hausen, 1975). These units are intruded by minor volumes of Tertiary subvolcanics and unconformably overlain by consolidated and unconsolidated Tertiary sediments.


The oldest unit in the San Manuel open pit is the Proterozoic Oracle granite, known locally as the quartz monzonite. The unit is a coarse-grained equigranular granite to quartz monzonite. Eastoe (1996) described the samples collected in the mine as being highly deformed, as undulatory extinction in quartz and highly irregular mineral grain boundaries are commonly observed in thin section. The rock is composed of 8-10 mm quartz, orthoclase, and plagioclase grains, with porphyritic and aplitic phases present. Accessory minerals include biotite, muscovite, zircon, and apatite. The Oracle granite lies predominantly in the western portion of the pit, with only minor amounts present in the northwest portion.

The Laramide San Manuel porphyry was divided into two mapping units on the basis of hand specimen descriptions. These varieties were characterized by grain size differences of the groundmass, and were labeled granodiorite and dacite porphyry for phaneritic and aphanitic textures, respectively. Similar differences had been noted by previous workers, with between two (e.g. Lowell and Guilbert, 1970) and five (Hausen, 1975) textural and/or compositional varieties noted. In addition to the mapped textural variations, differences in phenocryst size and abundance were also noted, but unmapped.

In the San Manuel open pit, unaltered granodiorite porphyry is medium to light gray, and contains zoned oligoclase to andesine plagioclase and biotite phenocrysts as the prominent mineral phases in a fine-grained granular to mosaic matrix of quartz and orthoclase. Only rare quartz phenocrysts are noted in hand specimens, although quartz can be relatively abundant in the matrix. Phenocrysts make up 15 to 50 percent of the rock, and are generally less than 4 mm in diameter, although feldspar phenocrysts up to 8 mm may occur. Two textural varieties of the granodiorite porphyry were noted in hand specimen. One of the varieties contains 40 to 50 percent 3-4 mm phenocrysts that generally are in contact with each other in a crowded texture. The other variety is characterized by lesser amounts of up to 5-8 mm phenocrysts that are typically supported by a fine-grained granular matrix.

Dacite porphyry was mapped in the bottom of the San Manuel pit and elsewhere as isolated dikes. Except for a phenocryst population that has a slightly greater abundance of biotite and only rare quartz, the dacite porphyry has almost identical mineral composition as the granodiorite porphyry. In general, dacite porphyry has an aphanitic dark gray to black matrix with zoned plagioclase and biotite phenocrysts. The dacite porphyry also was observed in two textural varieties. Both types are comprised of matrix-supported plagioclase and biotite phenocrysts, with one variety characterized by 2-4 mm phenocrysts, and the other containing 4-6 mm phenocrysts, with occasional phenocrysts up to 10 mm long. The dacite porphyry is thought to be very close in age to the granodiorite porphyry, although it is usually unmineralized and weakly altered.

Both the dacite and granodiorite porphyries were mapped in the lower portions of the pit, although in a relatively simplified manner. The porphyries were often observed to alternate, and were generally lumped as to the dominant porphyry over a particular bench face exposure. The ability to distinguish between the granodiorite and dacite porphyries was very difficult above the 2100 to 2160 levels as textures are partially obliterated by the intensity of argillic alteration that increases toward the base of Tertiary sediments. In addition, thin section analyses (Eastoe, 1996; Hausen, 1975) indicate that groundmass texture is not a significant criteria for subdividing the San Manuel porphyry. Both workers believed that groundmass grain size and mineralogy are


modified by hypogene alteration. The mapped distinctions, therefore, may not be due to different intrusions, but instead be only a reflection of supergene and hypogene alteration. The eastern portion of the mine area consists predominantly of the two porphyries, with northeastern-trending dikes present in the western half of the pit. Only one intrusive contact was measured; it was found to dip at a low angle to the south.

Mid-Tertiary andesite dikes visible in the upper benches of the San Manuel pit crosscut Laramide granodiorite porphyry and Precambrian quartz monzonite. The olive gray to dark greenish gray intrusive rocks are aphanitic to fine-grained with minute interlocking plagioclase and pyroxene grains; these dikes may correlate to Late Cretaceous/Tertiary diabase dikes reported by Thomas (1966). Occasional phenocrysts and calcite-filled vesicles were noted, especially at higher elevations. Thin section analysis by Eastoe (1996) reported compositions and ferromagnesian contents that bordered andesite and basalt. On the 2580, 2520, and 2460 benches, especially within the failure zones on the north wall, high-grade exotic chrysocolla and copper wad mineralization is hosted by an andesite dike sub-parallel to the bench wall. Above the 2520 bench in the northeast corner of the pit, the same andesite dike was intruded along the Mafic fault, but it is not mineralized in the upper benches. On the 2880 bench, the dike is present on the hanging wall of the fault, pinching out just above the Cloudburst/San Manuel contact. One bench higher, the andesite appears to be capped with a layer of caliche and overlain by Recent (?) stream sediments. A dike of apparently the same composition is present in the northwestern portion of the pit.

Tertiary rhyolite and rhyolite breccia crosscuts all of the older igneous host rocks and the Tertiary Cloudburst Formation, but not the Tertiary San Manuel Formation; thus the rhyolite has an approximate date of 22 Ma. White, pinkish gray and light brownish gray rhyolite occurs as 10-50 foot-wide dikes, brecciated often along both borders. The rhyolite is a microcrystalline mixture of quartz and feldspar; with minor 1 to 2 mm quartz, plagioclase, and biotite phenocrysts. Devitrification textures and lithic fragments were observed in thin section, and contained foliation textures resembling a felsic lava or ash-flow tuff. In the oxide zone, rhyolite fracture surfaces are commonly coated with copper wad and chrysocolla, and are coated with iron oxides in the leached cap. A white, 50-foot wide dike with distinctive tabular and columnar jointing patterns is visible on the 2160 and 2220 benches in the west bottom corner of the pit. On the south wall of the pit on the 2280 and 2340 benches, fragments of granodiorite porphyry were noted within the rhyolite breccia dike; the breccia matrix and rims around the fragments are stained an intense brick red or moderate reddish brown by hematite and goethite.

The Tertiary (upper Oligocene to lower Miocene) Cloudburst Formation is the oldest of the tilted conglomerate units in the mine area. Basaltic lava near the base of the type section of the Cloudburst Formation in Cloudburst wash has a whole rock date of 28.3 +0.6 Ma (Dickinson and Shafiqullah, 1989). A rhyolite clast from rhyolitic breccia and tuff-breccia from the uppermost Cloudburst Formation has a K-Ar date of 22.5 + 0.5 Ma. Regionally, this formation is reported to be more than 10,000 feet thick, but within the open pit the Cloudburst Formation is less than 100 feet thick due to erosion before deposition of the San Manuel Formation. Regionally, the lower member consists of interbedded intermediate-composition volcanic rocks and volcaniclastic conglomerates up to 4,900 feet thick. The upper member comprises conglomeratic units containing clasts of all the older units in the area, as well as muddy, arkosic and volcaniclastic redbeds. Within the open pit, the Cloudburst Formation consists of pyroclastic


flows and maroon-colored conglomerate beds that dip 40 degrees to the east. The present mean strike and dip of the Cloudburst Formation in the structural blocks containing the San Manuel porphyry system is N20W, 30NE (Force and Dickinson, 1994).

Locally termed the Gila Formation, the Tertiary (lower Miocene) San Manuel Formation is in depositional contact with the Cloudburst Formation and San Manuel porphyry along the northeast and eastern edges of the San Manuel pit, and in fault contact with the underlying igneous rocks on the north, northwest, west and south sides of the pit. The unit consists of loosely to moderately consolidated conglomerate cemented by a red to gray, calcareous arkosic and silty matrix. The poorly sorted, subangular to subrounded conglomerate clasts include all of the older rock types including Oracle granite, diabase, granodiorite porphyry, andesite, and rhyolite. In the Mammoth area, the lower Kanally member of the formation is nearly 1,200 m thick. The upper Tucson Wash member consists of fragments of the Cloudburst Formation and older rocks and is approximately 300 m thick (Sandbak and Alexander, 1995). The present mean strike and dip of the San Manuel Formation in the structural blocks containing the San Manuel porphyry system is N35W, 30NE (Force and Dickinson, 1994). Within the open pit, the San Manuel Formation dips 25 to 35 degrees to the southeast and northeast, although dips as low as 11 degrees to the northeast were recorded. Bedding trends in all of the overburden units have been affected by ground subsidence related to the underground block caving. Thin rhyolitic ash-fall (?) tuffs are present locally, generally less than 1 m in thickness, and rarely exposed for more than 10 m in strike.

The youngest unit, visible around the periphery of the San Manuel pit, is the mid-Miocene to Pliocene (Dickinson, 1993) Quiburis Formation. The Quiburis consists of relatively flat-lying fluvial deposits of pale yellowish brown, well-sorted silt, sand, and gravel lenses in nonconformable contact with the tilted San Manuel Formation. Within the open pit, the Quiburis dips 11-25 degrees to the southeast. The Quiburis Formation is one of the most extensively exposed valley fill units within the San Pedro River trough (Agenbroad, 1967).

6.3.2 Structure

The structure of the San Manuel area involves a complex history of extension evidenced by post-ore tilting and normal faulting. Following emplacement of the San Manuel porphyry, the San Manuel/Kalamazoo ore body was tilted approximately 35 degrees to the east during the mid-Tertiary (Force et al, 1995) through a series of extensional events that followed, or was coeval with, the deposition of each of the conglomerate units. After tilting, the ore body was cut by the San Manuel fault that displaced the Kalamazoo segment 8000-ft. (2400m) to the southwest. The San Manuel ore body was then cut by a series of northwest trending, northeast dipping faults associated with regional Basin and Range extension. Several northeast trending, southwest dipping structures have been mapped within the San Manuel ore body, but the timing of these structures has had various interpretations. The crosscutting relationships of these structures as observed during the recent mapping project is discussed below. The following is a list of the major, through-going faults observed during the mapping project with their corresponding orientations and descriptions:


Cholla fault: N30ºW, 70ºNE; separates Quiburis Fm and San Manuel Fm in the northeastern side of the pit. The fault typically consists of 2 to 4 inches of brecciation and shearing, with calcite present in the most northern exposures. The fault appears to shallow and horsetail as it encountered the Cloudburst and underlying granodiorite porphyry, and could not be traced below the 2640 level.

Cactus fault: N25ºW, 63ºNE; cuts San Manuel Fm and defines part of San Manuel Fm/ Cloudburst contact along the northeastern side of the pit. The fault is very similar in appearance to the Cholla fault, being a breccia and shear zone several inches to as much as one foot wide. Calcite is locally present.

East (Mammoth) fault: N20ºW, 58-80ºNE; cuts several lithologies within northeast central portion of pit, and consists of multiple faults planes within a 100’ zone; characterized by failure zones where it is cut by the Mafic fault on the 2460 and 2520 benches. The individual fault strands are generally 1- to 3-foot wide argillized breccia zones that vary in width along strike. The most dramatic variation can be seen from a 6-foot wide breccia located on the 2280 that pinches down to 2 inches 300 feet along strike on the 2460 bench. The fault zone was traced to the haul road on the 2280, at which point bench face exposures are subparallel to the fault. Several faults were mapped that are similar in orientation, but none that were along strike.

Mafic fault: N20-50ºE, 70ºSE; cuts northeast wall of pit from 2880 down to 2520(?); intruded in part by andesite dike. The fault is an argillized breccia zone normally a few feet in thickness, but can be up to 8 feet wide. The fault appears to be truncated by the San Manuel Formation, with an apparent erosional surface and caliche layer

Marty fault: N65ºE, 65ºSE; cuts northeast side of pit; it was not identified during the recent mapping project, but fault segments on the following benches are possible candidates: 2100-2160, 2220, 2400-2460. The Marty fault has been interpreted as a major control on the distribution of oxide mineralization and fluid flow (Burt, et al, 1994), and needs to be systematically located from projected drill hole intercepts and traced on the surface.

San Manuel fault: pre-mining orientation was N66ºW, 26ºSW (Creasey, 1965), block caving has rotated the fault from N5ºW, 35ºSW to N45ºE, 35ºSE from north to south (Fig. 1); the fault defines contact between conglomerates and crystalline rocks in western half of pit; within the pit, the structure is defined by a 6 to 12 inch red clay gouge zone; locally with 5 to 15 feet of gouge and shearing in the crystalline footwall. In contrast, the San Manuel fault consists of 75 to 100-foot wide shear and breccia zone where both the hanging wall and footwall are crystalline (Thomas, 1966)

Vent Raise fault: N59ºE, 80-90ºSE; cuts granodiorite in southeastern portion of the pit; located between north and south ore body in the upper portions of the underground workings. Because the fault is parallel to the bench faces, projections from drill hole intercepts and underground workings are required to extend the fault trace east along strike.

West fault: N34ºW, 61ºNE; cuts north wall from surface to bottom of pit; fault zone dimensions vary from <1 to 30 feet; usually contains several inches to several feet of clay gouge zones that occur in en echelon fashion within a larger brecciated and fractured


zone. Although the West fault is easily traced along the northern pit wall, it appears to have undergone right-lateral displacement along a north-dipping fault traversing the bottom of the pit. It is believed that the high-angle fault that places San Manuel Formation against granodiorite porphyry in the south pit wall is the southern extension of the West fault.

Previous interpretations of the timing of the Vent Raise and Marty faults have been varied. Both of these structures have been interpreted as “post-ore, pre-conglomerate faults” (Sandbak and Alexander, 1995). The Marty fault has been mapped previously within the open pit as cutting the San Manuel Formation (M. Rex, pers. comm.). The Vent Raise fault may cut the San Manuel Formation along the east wall of the pit, however relationships are unclear due to failures and runoff material covering the bench faces. These timing relationships are further complicated by subsidence due to block caving within the underground operations. Where not intruded by andesite, the Mafic fault has a similar orientation to the Marty fault and is mapped as cutting the East fault on the 2340-2400 benches. The intrusion of an andesite dike within part of the Mafic fault suggests a pre- or syn-Cloudburst structure. The Mafic fault places Cloudburst and unconsolidated gravels against Oracle granite on the 2820 and 2880 benches, and was not traced into San Manuel Formation on the 2940 which also indicates pre-San Manuel Formation movement. However, the East fault cuts the San Manuel Formation (Creasey, 1965), which should make it younger than the Mafic fault. Clearly any interpretation of timing of particular structures must incorporate the various phases of the complex structural history of the area together with any recent subsidence due to block caving

Fault breccia and gouge zones observed during the geological mapping are generally less than 3 feet in width, and are frequently cross cut by small-scale fractures. Only the West fault appeared to be significant in width and strike length to have a large-scale influence on fluid flow. Although small-scale heterogeneties are certainly related to the mapped faults, there are numerous short-strike length faults that were unmapped that may also provide equally important small-scale discontinuities to fluid flow. These can be easily observed by the numerous seeps present in the in situ well field that occurred along small fractures equally as often as along major faults.

6.3.3 Alteration and Mineralization

This report includes a color copy of the 1:2400 scale alteration and mineralization map completed in July 1996. Alteration assemblages mapped in the San Manuel pit followed the nomenclature of Lowell and Guilbert (1968), although the presence of supergene argillization often masks the nature of hydrothermal alteration.

Hydrothermal alteration and vein assemblages observed during mapping included:

Potassic; consisting largely of quartz + K-feldspar veinlets, occasionally accompanied with biotite veinlets.

Phyllic; characterized by quartz + sericite veinlets and 5-7 vol. % sulfides. Propylitic; chlorite + minor epidote, mostly as pervasive alteration.


In general, quartz + K-feldspar veins were observed in rocks with relatively low intensity of supergene argillic alteration, so that hypogene assemblages were not obliterated. Although not always observed in hand specimen, it is assumed that potassic alteration occurs throughout the remainder of the mineralized zones. The alteration overlay map shows that phyllic alteration occurs in the northern portion of the pit. San Manuel porphyry that is essentially unmineralized and weakly altered (containing only minor chlorite after biotite and sericite after plagioclase) is present in a NNE-trending zone in the southern portion of the mine. Although not large enough to map, local areas of propylitic alteration were observed on the southern margin of the pit.

Supergene alteration consists largely of clay minerals that pervasively alter mineralized rocks. Where oxide mineralization occurs, the supergene alteration tends to be moderately developed as pervasive replacements of plagioclase and biotite. Near the eastern edge of the deposit, intense argillic alteration underlies the Cloudburst and San Manuel formations, resulting in a very low-strength rock. It is believed on the basis of map patterns that this intense argillization is related to the Cloudburst-aged topographic surface, and may be a 100- to 150-foot thick leached capping zone that is underlain by typical oxide mineralization.

The hypogene sulfide mineralization consists of chalcopyrite, pyrite, and molybdenite in veinlets, disseminated blebs, and fracture coatings. Larger veins of pyrite + chalcopyrite + magnetite are occasionally visible, and tend to be northeast trending and moderate to low dips. In the sulfide ore body, total sulfide contents are approximately 2 to 4 percent and pyrite to chalcopyrite ratios are approximately 1:1 to 1:3 (Lowell and Guilbert, 1970, Sandbak and Alexander, 1995). Molybdenite is associated with the higher-grade chalcopyrite ore and occurs as fracture coatings and in quartz-molybdenite + chalcopyrite veinlets. Within the San Manuel Oxide pit, the only exposed sulfides are located within the phyllic alteration boundary (Fig. 2). Here, the Oracle granite contains 3 to 15 percent total sulfides on fractures and veinlets, with pyrite to chalcopyrite ratios of 10:1 to 30:1. Molybdenite within quartz veinlets is common, but nowhere abundant. Chalcocite coats pyrite and chalcopyrite and is especially visible on the 2520 to 2220 benches on the northwest walls of the pit.

The dominant supergene oxide minerals include chrysocolla and copper wad with minor cuprite, malachite, and traces of native copper. Goethite dominates the limonite mineralogy in the oxide and leached capping areas, and jarosite in the areas where sulfides still remain. Transported limonites are generally more abundant than indigenous, and sulfide boxworks are completely filled. Most of the leached capping appears to be poorly developed, and does not indicate that significant enrichment was developed. A small area of well developed leach cap was noted in the uppermost northern pit wall on the hanging wall of the West fault that is within the phyllic alteration zone. This area may be underlain by significant grades of chalcocite mineralization, although due to the lack of surface area containing attractive capping characteristics, the tonnage is likely to be low.

Alteration and mineral precipitation related to the in situ leaching operations were also noted, as mining and in situ leaching had been conducted simultaneously since 1985, and the current mining levels are now within volumes that had been previously leached. The major affects observed in the field include:


partial dissolution of chrysocolla, varying from a greenish yellow discoloration of the chrysocolla to visible reaction fronts that have removed portions of chrysocolla from individual fracture plane leaving a core of residual chrysocolla; and

mineral precipitation products that certainly include gypsum and may include other phases such as goethite, clays, and aluminum sulfates.

Gypsum was observed to be in two major forms, thin coats that tended to form on chrysocolla, and acicular sprays of crystals that generally formed on barren portions of fractures and open spaces. Both types of gypsum could often be observed on a single fracture. Both the goethite content of the iron oxides and the clay alteration intensity appeared to be higher in the in situ leach fields, compared to oxide mineralization that have not been leached in situ. These differences may be due to slightly different geological histories, as these areas occur on opposite sides of the West fault, or may be due to the effects of in situ leaching.


7. Database

The San Manuel Oxide Resource Model database includes a combination of churn, core, and reverse circulation drill holes. The drilling is divided into two distinct groups based on the drilling target. The first group consists of drilling to define the sulfide ore body and the second group contains drilling to define the oxide ore body.

The San Manuel Resource Definition Project began in late 1996. This study is exploring the possibility of reopening the oxide pit. The early result of this study was to provide a better and more comprehensive drill hole database that included all of the drilling ever done on the property. From an excess of 2,000 drill holes, many were removed that existed within the block cave area. However, a few hundred still remained and these holes indicated that more oxide orebody existed at depth. They project has then gone onto drilling over 100 additional holes to better define the orebody. Modeling and planning are still underway.

7.1 Components

7.1.1 Sulfide

The sulfide drilling is a subset of the database for the San Manuel Sulfide. The early drilling consisted of churn drilling from 1944 to 1953 by the Bureau of Mines, San Manuel Copper Corporation, and the Houghton group. This drilling includes 131 holes representing 223,720 feet of drilling.

Underground diamond drilling started in 1949 and continued through 1980. A total of 1,000 diamond drill holes were included in the database. These holes were identified as either partially or entirely outside of the underground mining panels. Some of these holes are no longer valid due to the block caving.

The churn and diamond drilling was assayed on five foot intervals. Assays for total copper and acid soluble copper as well as the rock type and the alteration type were included in the database.

7.1.2 Reverse Circulation

The oxide drilling occurred generally after block caving to confirm the geologic resource of the supergene enriched zone and better define the moving (caving) oxide ore body. This drilling was started in 1983 and continues to date as part of various drilling campaigns. A total of 224 reverse circulation holes, assayed on 10 foot intervals, were drilled through 1995.

7.1.3 1990 Drilling Campaign


Ten diamond drill holes were drilled in June of 1990 and assayed on five-foot intervals into the oxide resource. These holes include 5 surface core holes totaling 2,904 feet and 5 UGIP (Underground Injection Program) core holes totaling 3,420 feet. The Oxide drilling campaign assayed for total copper, acid soluble copper, iron, sulfur, aluminum, calcium, magnesium, and manganese.


During this period, 16 core holes were drilled13 to investigate the possibilities of increasing the acid soluble copper resources of this operation and to study the nature of specific geological structures as they relate to the In situ mining process. Both of these objectives were achieved. The eastern and southeastern limits of the orebody have been extended, and we have a better understanding of the West and Vent Raise faults. The geological block model has now being updated.

Two major rock types are present in the area: the Precambrian quartz monzonite and the Tertiary monzonite porphyry. The major host for the acid soluble copper mineralization in the area currently in production is the monzonite porphyry. The orebody is intensely fractured and faulted. Major structural trends are northwest and northeast. Several, sub-parallel, northwest-trending faults have sliced the orebody into large blocks which were then down-dropped relative to each other in an northeasterly direction. One of these is the West fault which is a major structure that separates zones with good oxide copper mineralization to the east from poorly mineralized rocks to the west. This fault is a potential barrier to flow. Fluids originating in the In situ fields on the east side of the fault have a high probability to be blocked by the West fault. Based on pre- and post-In situ geologic mapping, fracture and fault sets with a northeasterly trend and with dips paralleling the northern wall of the pit exist in the pit area. Structures falling in this category need to be better understood, however. In a wide sense, the general attitude of these structures appears to correlate with the orientation of the Vent Raise fault complex.

The dominant alteration effects are evident as pervasive argillization. In the leach field areas, supergene processes and underground block caving have had additional effects on the amount of clays primarily by increasing their abundance. Quartz-sericitic alteration effects are evident in the sulfide-rich zones west of the West fault and on the northern edges of the pit.

Most of the leachable copper mineralization occurs as fracture-filling chrysocolla. Only very minor amounts of acid soluble copper are tied up to the rock matrix as copper compounds staining feldspar phenocrysts.

The principal structure that will have drastic effects on fluid migration is the West fault. It is interpreted as being a potential barrier to flow. Structures of the Basin and Range type, which parallel the West fault, are most likely conduits to fluid flow. These structures are not as powerful as the West fault. In the leach field areas, they occur within a single, well-fractured rock type (monzonite porphyry). The Vent Raise fault complex, because of its spatial location above the mineralized zones, will not be an issue to gravity-controlled fluid flow originating in the deeper mineralized portions of Zone 11. However, structures parallel or sub-parallel to the Vent Raise, including those paralleling the north wall of the pit, are conductive to fluid flow.


Although intense fracturing and faulting in the mineralized area promote and support gravity-controlled fluid flow, the major problem that the underground recovery process will be facing is fluid (PLS) loss. It is an issue that deserves further and detailed investigation.

One of the critical elements in this operation that needs additional detailed attention is the structural control of the distribution of acid soluble copper mineralization. Fractures and faults affect fluid flow either by promoting it (open fractures), or by obstructing it (gouge-rich faults). We have learned much about the West and the Vent Raise faults, and about how they affect the leaching operations, but we have not investigated the behavior of other important faults. The East fault was intersected at depth by the vertical hole SMO9607 between 400 and 600 feet, but the structure could not be identified exactly since numerous fault structures were encountered throughout this zone. An angle hole through the East fault at a shallower depth would be helpful, but there is a lack of a suitable drill site on the narrow and crowded benches. In order to learn more about these structures, it is recommended that the possibilities of implementing a detailed mapping program be discussed and evaluated by the geology team. The original fracturing of the rocks in the pit area has been affected by subsequent blasting and mining, making it difficult to discern the original fracturing from the fracture patterns now evident in the pit. We must discuss and surpass this structural complexity by deciding on the type of pertinent observations the geologist must record in the field. This mapping program must also include the West Block area (to the west of the West fault) since this will be the future copper sources of this operation. Furthermore, this detailed mapping will help establish the continuity of known structures, notably the Marty fault and other structures parallel or sub-parallel to it, and will help us understand more clearly the age relationships among major structures. Much of the area has been mapped on several occasions, but perhaps not at the degree of detail needed for an operation of this type.


7.2 Verification and Manipulation

The current drillhole database was created by double entry of historic hand written logs. The double entry allowed for checking of the data entry and the reduction of errors within it. This work was outsourced to Geo-Temps of Tucson during 1996. This includes all drillholes up to 1995.

The 16 diamond drillholes that were cored during 1996 were logged into Excel worksheets. Assay data was brought in from Ascii files that the San Manuel Metallurgical Laboratory provided. As a control, all logging included an estimate of the acid soluble copper grade to compare with the assay result. This methodology found approximately 20-25 assays that were incorrect. For these assays the core was rechecked to check for plausibility and either the reject or the pulp was re-assayed. The re-assay always closely matched the expected the value and the first analysis was discarded.


Statistical analysis of all values in the database was performed to identify outlying points and check them for accuracy. Less than a dozen were found to be in error from probable typographic errors.

7.3 Sampling

Sampling techniques have changed numerous times over the 50-year life of the deposit. Older techniques are no longer known with any certainty. The current practice in the sulfide operation is to whole sample the bulk of the core and retain only a small representative sample from each logging interval (skeletonizing). Most of the DD series of holes are done by this method although very few are used for modeling the oxide portion of the orebody.

ARM series holes which are primarily reverse circulation make up the bulk of the database that is used for modeling the oxide orebody. The pulps from these holes are stored in the old coreshed.

Starting with the 1996 diamond drilling campaign all core was split and the unsampled half is stored in the Tiger coreshed.

7.4 Quality Process Control

The 1996 drilling campaign was the first time that a set of check assays was performed.

7.5 Copper Assays

Nearly all assaying of recent times has been done by the San Manuel Metallurgical Laboratory. Older assaying was only done for total copper and acid soluble copper. Recently this now includes a multi-element analysis of Iron, Sulfur, Aluminum, Calcium, Magnesium, and Manganese.*Acid Soluble Copper is determined by San Manuel Metallurgical standard test number AP-101.


8. Block Model

8.1 Geologic Model

Items in the Model

Holename - The name of the hole.From - The beginning of each logged interval.To - The end of each logged interval.AI - The length of the logged interval.Rock Type - Code for the rock type.

0 = Unknown1 = Gila Conglomerate (San Manuel Formation)2 = Cloudburst Formation3 = Rhyolite4 = Andesite5 = Diabase Dikes6 = Monzonite Porphyry (San Manuel Porphyry)7 = Quartz Monzonite (Oracle Granite)8 = Quartz Monzonite Breccia (Intrusive Breccia)9 = Unnamed Faults10 = San Manuel Fault11 = Dacite Porphyry Dike12 = Aplite Dikes13 = Syenite14 = Latite Porphyry15 = Fault Zones16 = Shear Zones

Alteration Type - Code for the alteration type.

0 = Fresh1 = Argillic2 = Phyllic3 = Potassic4 = Propylitic5 = Silicic6 = Structural Clay7 = Hydrothermal Clay8 = Iron Oxidation9 = Cupric Oxidation10 = Aplitic11 = Aphanitic


%TCu - Total copper assay.%ASCu - Acid soluble assay done by San Manuel method.%Fe - Iron assay.%S - Sulfur assay.%Al - Aluminum assay.%Ca - Calcium assay.%Mg - Magnesium assay.%Mn - Manganese assay.Recov - % Recovery of core for each run. Frac - The number of fractures counted in a 1 foot interval.Leach - Code for estimation of the % chrysocolla dissolved, gypsum present, etc.Gypsm - Code for percentage of gypsum.Clay - Code for percentage of clay.Flag - Tag for hole accuracy (1=bad, 0=good)Zone - Zone assay is in (oxide/sulfide)

VBMS

SMOX25.SEC - This VBM contains features on the standard set of cross-sections.

The sections match the geology grid with an azimuth of 150 and a vertical dip. Section numbers -2200 to 4000 are included.

VBM Feature Table

101 - Oxide Ore Contour (0.20% ASCu) 102 - International Zone (0.20% ASCu)301 - Gila Conglomerate (San Manuel Formation)306 - San Manuel Porphyry307 - Quartz Monzonite (Oracle Granite)501 - Fourier Fault502 - Seep Fault503 - Uzle Fault504 - West Fault505 - Vent Raise Fault506 - East Fault507 - Marty Fault508 - Inferred Fault509 - Harry Fault510 - Magma Fault511 - Mox Fault512 - Mafic Fault513 - West End Fault514 - West Fault Zone515 - West Boundary Fault516 - Cactus Fault


517 - Oxide Fault518 - Cholla Fault520 - Unnamed Faults801 - Underground Drifts

SMOX25.TOP - This VBM contains the original and current topography.

Feature Table

901 - Current Topography910 - Original Topography

SMOX25.PL3 - This VBM contains plan slices of the solid of the orebody built in Minesight.

Feature Table

101 - Main Orebody102 - International Zone

The slices were cleaned up to remove stray points.

Cross-Section Plots

Cross-sections are run with the custom procedure gsplt.dat. This procedure was created by modifying secplt.dat and adding the ability to bring in the old topography. This new procedure can be found in the custom menu, gary.mnu. The standard set of cross-sections are -2,200 to 4,000 E every 200 feet. Each section has northings of -1,500 to 2,500 N, which are put on the section with userf north.geo. The elevation range is 750 to 3,500 feet asl. A legend is added with the userf legend.gs.

Plot.geo is a file that sets colors for geology feature plotsLegend.gs is a userf that plots a legend on the bottom of the cross-sections.North.geo is a userf that plots northing lines every 500 feet on standard cross-sections.Color.tab is a file that allows screen colors to match plot colors.Plot.inf is the plotting initialization file.Digit.inf is the digitizing initialization file.*.F2 are userf files that contain overlays with ore contours, faults, etc.*.HP are plot files of sections

Collar Plot

Two collar plots were made of holes drilled from surface by selecting collar elevations between 2,070 and 3,500 feet with z-col variable in file 12. Eastern collar plot covers 9,000-12,250 E and 7,500-13,000 N. Western collar plot covers 12,250-15,500 E and 7,500-13,000 N.


Block Model

Variable Minimum Maximum Precision Description

TOPO 0 100 1 % Block Below TopographyROCK 0 20 1 Rock Type CodeTCU 0 20 0.001 Total CopperASCU 0 15 0.001 Acid Soluble CopperORE 0 100 1 % Block is OreAL 0 10 0.1 AluminumFE 0 20 0.01 IronS 0 10 0.01 SulfurTNFAC 10 20 0.01 Tonnage FactorKVAR 0 1 0.001 Kriging VarianceREC% 0 100 0.1 % RecoveryALTER 0 20 1 Alteration CodeZONE 0 10 1 Main or InternationalDIST 0 500 1 Dist to Closest CompositeCOMPS 0 20 1 # Composites UsedASCU2 0 15 0.001 Remaining ASCu GradeCULBS 0 200,000 1 Copper Pounds in Block

Add TOPO% to Block Model

The variable TOPO is set by running procedure P63301.DAT. This procedure uses the variable TOPOG from File 13 to calculate the percent of the block in File 15 that is below the surface.

Calculating Ore (%)

Minesight was used to calculate the percent of the block within a solid model of the main orebody and of the International zone.

Coding item Zone

Minesight was used to code the zone variable with a 1 for inside the main orebody and a 2 within the International zone.Coding item Rock

Minesight was used to code the item Rock. The Rock item was initially set to 6 for the San Manuel Porphyry. Then two solids were built. Solid one is for the San Manuel Formation. Solid two is for the Quartz Monzonite. These two solids were used to code the Rock item in the block model.


Coding item Tnfac

The model has 3 rock types set. Rock type 1 is the San Manuel Formation, which has a tonnage factor of 14.2. Rock type 6 is the San Manuel Porphyry, which has a tonnage factor of 12.7. Rock type 7 is the Quartz Monzonite, which has a tonnage factor of 13.15.

International Zone

The International Zone was coded by using a solid model in Minesight. The procedure for building a solid and updating the model is as follows.

Ascii out feature 102 from SMOX25.SEC with plane orientation to file 102.VBM Create VBM set International Import Medsystem VBM (Ascii) file - 102.VBM Redefine Endpoints to common point Create Geometry set International Build solid with Link Editor Update model - code item only for item Zone in block model Update model - percent item only for item Ore in block model

Fluid Surface Models

Given a file of x, y, z points this procedure will build you a nice surface file for MineSight.

1. Contour Survey Data (P60791) - FLDLVL.VBM2. Initialize File 25 - SMOX25.FLD3. Ascii in FLDLVL.VBM4. Topo Grid, VBM-DTM (P65702) - GRID.DTM5. Import Medsystem DTM to 3D Geometry member

A basic surface with lower resolution can also be built for MineSight as follows

1. Create DTM (P63501) - FLDLVL.DTM2. Import Medsystem DTM to 3D Geometry member

8.2 Model Database

Adjusted SMURM Database

The SMURM project had all prior drilling entered into a database. This database was then used by the Growth and Technology group (Todd Carstensen, Ken Schuler) and Gary Sutton to model the effects of block caving and build a resource model. This entailed shifting and deleting drillholes. This new adjusted drillhole database is now included in the 1997 In-Situ model. The SMURM database includes variables for: MOS2, AU, AG, FLAG that are not used in older models.


8.3 Assay Data

SMOX11.NEW

The total number of holes in the database is 1406.

Series Total Deleted Remaining Year DescriptionARM 172 5 167 1984-94 Open PitCD-# 126 45 81 1945-73 ChurnCD-X 29 0 29 1944-46 ChurnCR 9 0 9DD 1001 343 658 1950-80 Diamond DrillDDHADD 5 0 5 1990H 31 0 31 HoutonIC 23 0 23 1945-53 InternationalK 214 202 12 KalamazooLIH 39 0 39 1983-91 Leach InjectionLIHECHO 8 0 8 1989-90 Leach InjectionLIHEXP 11 1 10 1990-91 Leach InjectionMM 103 0 103 TigerPH 243 78 165 1951-80PHK 24 11 13 PilotR 2 0 2 1984SHAFT 8 0 8SMO 16 0 16 1996 1996 pit holesUGIP 5 0 5 1991 UG InjectionZ 22 0 22 1996 Created Holes

2091 685 1406

The items carried are:

Variable Minimum Maximum Precision Actual-Min. Actual-Max.

REF# 0 5,000 1FROM 0 6,000 0.1 0.0 3,130.0-TO- 0 6,000 0.1 1.0 3,740.0-AI- 0 6,000 0.1 0.1 2,029.0ROCK 0 20 1 0 15TCU 0 20 0.001 0.000 16.381ASCU 0 15 0.001 0.000 13.160FE 0 20 0.01 0.00 10.00S 0 10 0.01 0.03 7.00AL 0 20 0.1 0.0 9.8CA 0 10 0.1 0.0 5.8


MG 0 10 0.01 0.00 3.40MN 0 10 0.01 0.00 0.20MOS2 0 1 0.001 0.00 0.38AU 0 10 0.001 0.00 1.021AG 0 10 0.001 No Data No DataALTER 0 20 1 0 11FLAG 0 10 1 0 1RECOV 0 100 1 0 100FRAC 0 100 1 1 50LEACH 0 10 1 0 7GYPSM 0 10 1 1 6CLAY 0 10 1 0 7ZONE 0 10 1 No Data No DataXTRA1 0 100 1 No Data No DataXTRA2 0 10 0.1 No Data No DataXTRA3 0 1 0.01 No Data No Data

8.4 Topography

The topography file SMOX25.TOP contains the 1995 flyover topography and the original topography.

The original topography comes from a digitizing effort done in November 1996. The original Fairchild maps were digitized for each 10-foot contour. The area of coverage is 7,000 to 19000 E and 5,000 to 16,000 N. The precision of the data is 0.1 feet. The data will be loaded to the topography vbm with a feature code of 910. Feature 910 has a minimum of 2,820 and a maximum of 3,490.

The current topography comes from the flyover performed in early 1995 after the closure of the pit activities. The area of coverage is 9,000 to 16,000 E and 8,000 to 13,000 N. The precision of the data is 0.1 feet. The contour interval is 5 feet. The data is loaded in the topography vbm with a feature code of 901. Feature 901 has a minimum of 2,080 and a maximum of 3,480.

The topography file contains 2,258 features and 347,031 points.

Surface File 13

File 13 was initialized with the variable TOPOG.Procedure P65701.DAT (TOPO GRID from VBM) was run.Input parameters were SMOX25.TOP, Feature 901.Minimum = 2,080 elev. Maximum = 3,409 elev.

8.5 Composite Data

Composites


Composites are every 10 feet down the hole with respect to rock type, Flag range set to 1. The items interpolated are TCu, ASCu, MOS2, Fe, S, Al, Ca, and Mg. Items coded are Flag and Zone.

Variable Minimum Maximum Precision Description

REF# 0 5,000 1 Reference NumberEAST 8,000 16,000 0.1 EastingNORTH 7,000 13,500 0.1 NorthingELEV. 150 3,450 0.1 Elevation-TO- 0 4,000 0.1 Downhole DistanceLENGTH 0 10 0.1 Length of CompositeROCK 0 20 1 Rock Type CodeTCU 0 20 0.001 Total CopperASCU 0 15 0.001 Acid Soluble CopperFE 0 20 0.01 IronS 0 10 0.01 SulfurAL 0 10 0.1 AluminumCA 0 10 0.1 CalciumMG 0 10 0.01 MagnesiumMN 0 1 0.01 ManganeseMOS2 0 1 0.001 MolybdenumAU 0 2 0.001 GoldALTER 0 20 1 Alteration CodeFLAG 0 10 1 Assay Reliability TagZONE 0 10 1 Interpolation Tag

8.6 Model Statistics

8.6.1 Assays

Statistics were run for both total copper and acid soluble copper for the 5 main rock types that make up over 95% of the assigned rock types for assay intervals. From this population the two main rock types (San Manuel Porphyry and Quartz Monzonite) make up over 96% of the assigned rock types for assay intervals within the model area. Therefore for modeling purposes only these two main rock types will be assigned to the model and interpolation will be done honoring the two rock types.


San Manuel Porphyry

A total of 17,056 acid soluble copper assays are available. The maximum value is 3.71%. A total of 8,604 assays were above 0.20%. From this population, the mean is 0.458% with a variance of 0.545. The distribution is almost log normal.

A total of 17,420 total copper assays are available. The maximum value is 7.76%. A total of 10,883 assays were above 0.30%. From this population the mean is 0.608% with a variance of 0.528. The distribution is almost log normal.

Quartz Monzonite

A total of 7,329 acid soluble copper assays are available. The maximum value is 2.66%. A total of 2,613 assays were above 0.20%. From this population the mean is 0.545 with a variance of 0.568. The distribution is almost log normal.

A total of 7,338 total copper assays are available. The maximum value is 5.18%. A total of 4,581 assays were above 0.30%. From this population the mean is 0.732 with a variance of 0.552. The distribution is almost log normal.

Other Rock Types

From all other assays that have rock types assigned to them and are not San Manuel Formation or Cloudburst Formation add up to 915 assays. This makes up a little over 3% of the assays. At the same time, modeling of these lithologic units is difficult with the limited number of drilling intersections and their wide spacing.

The minor units were discarded from modeling and interpolation runs. Lithologic units will be restricted to the San Manuel Porphyry, Quartz Monzonite (Oracle Granite), and overburden (San Manuel Formation and Cloudburst Formation).


Assay statistics for each rock type:Total Usable 101 Avg. 102 Avg.

Rock Rock Type Tnfac Assays Assays Assays Grade Assays Grade

0 Unknown 13.00 859 0 0 0.000 0 0.000

1 Gila Conglomerate 14.20 2,578 1,184 21 0.240 2 0.130

2 Cloudburst 14.20 1,024 95 0 0.000 0 0.000

3 Rhyolite 13.30 2,820 572 339 0.239 0 0.000

4 Andesite 13.00 230 73 25 0.494 0 0.000

5 Diabase 13.00 75 59 34 0.541 0 0.000

6 San Manuel Porphyry 12.70 21,306 17,924 8,277 0.377 353 0.367

7 Quartz Monzonite 13.15 9,640 8,957 3,799 0.440 0 0.000

8 Quartz Monzonite Breccia 13.15 1,178 37 28 0.280 0 0.000

9 Unnamed Faults 15.00 4 0 0 0.000 0 0.000

10 San Manuel Fault 15.00 0 0 0 0.000 0 0.000

11 Dacite Porphyry 13.00 321 251 19 0.664 0 0.000

12 Aplite 13.00 30 32 21 0.338 0 0.000

13 Syenite 13.00 51 0 0 0.000 0 0.000

14 Latite Porphyry 13.00 0 0 0 0.000 0 0.000

15 Fault Zones 15.00 455 431 180 0.410 0 0.000

16 Shear Zones 15.00 0 0 0 0.000 0 0.000

Subtotal 40,571 29,615 12,743 0.393 355 0.365

-1 Undefined 78,090 1,182 0.368 0 0.000

Outside Elevation 622 0 0.000 0 0.000

Total Assays 119,283 13,925 0.391 355 0.365


Composite statistics around ore zone:101 Avg. 102 Avg.

Rock Code Rock Type Comps Grade Comps Grade0 Unknown 0 0.000 0 0.0001 Gila Conglomerate 21 0.240 1 0.1302 Cloudburst 0 0.000 0 0.0003 Rhyolite 273 0.204 0 0.0004 Andesite 21 0.486 0 0.0005 Diabase 20 0.523 0 0.0006 San Manuel Porphyry 6,028 0.392 227 0.3467 Quartz Monzonite 2,622 0.458 0 0.0008 Quartz Monzonite Breccia 25 0.251 0 0.0009 Unnamed Faults 0 0.000 0 0.000

10 San Manuel Fault 0 0.000 0 0.00011 Dacite Porphyry 19 0.664 0 0.00012 Aplite 15 0.344 0 0.00013 Syenite 0 0.000 0 0.00014 Latite Porphyry 0 0.000 0 0.00015 Fault Zones 171 0.417 0 0.00016 Shear Zones 0 0.000 0 0.000

Subtotal 9,215 0.406 228 0.345

-1 Undefined 797 0.406 0 0.000Total Comps 10,012 0.406 228 0.345

Model Statistics

International zone solid has a volume of 5,225,945 cubic yards.

Below topography:

ZONE = 1, ROCK = 1 259 BlocksZONE = 1, ROCK = 6 16,444 BlocksZONE = 1, ROCK = 7 6,769 BlocksZONE = 1 23,472 BlocksZONE = 2, ROCK = 6 1,470 BlocksTOTAL 24,942 Blocks


8.7 Geostatistics

Variograms

Variograms were tested for rock type 6 and 7. For each one different windowing angles were used. A wide window was first used to approximate the primary directions then successive narrowing was done. Overall a small amount of anisotropy could be found for either rock type.

San Manuel Porphyry

Numerous variograms were created to get a feel for the anisotropy. The final set of variograms were run with windowing angles of 7.5 and lags of 100 or 200 feet. The expected direction would be along one of the major fault axis. The greatest range was generated when an azimuth of 150 to 165 was used. A contour plot of the variances indicates a trend of 145. The best azimuth was chosen as 150. Variograms run at 175 with changing dip found that the best range was achieved with a dip of -75. The range at this plunge or primary direction is 300 feet.

The nugget and sill were determined from the 3D global variogram to represent the average for the whole system. These are close to the ones found in the plunge and is in between other variograms with similar plunges. The nugget is 0.015 and the sill is 0.045.

The minor axis was found by generating variograms perpendicular to the plunge. This showed that the secondary axis should follow the 150-azimuth plane and the tertiary axis should follow the 060 azimuth plane. The DIPE variable needs to be set to -90. The respective ranges are 250 and 200 feet respectively.

Quartz Monzonite

Numerous variograms were created to get a feel for the anisotropy. The final set of variograms were run with windowing angles of 7.5° and lags of 100 feet. A contour plot of the variances showed a trend along an azimuth of 130°. Variograms also indicated the longest range along this azimuth. The best dip was found to be -90°. The DIPE variable should be set to 0. Ranges are 275, 225, and 175 feet. The nugget is 0.039 and the sill is 0.082.

International Zone

Variograms showed a highly irregular pattern in all directions due to the discontinuity of the ore zone. No best direction could be found. Variogram modeling based on 3d global curve. A spherical method will be used with a nugget of 0.017, sill of 0.077, and range of 150 feet.


8.8 Interpolation

International Zone

For interpolating the International Zone the same criteria were used as above with respect to the International Zone. The list of drillholes used can be found in the appendix. In summary the San Manuel Porphyry has 353 assays averaging 0.367% ASCu and no other rock types are present.

Their are 227 composites of San Manuel Porphyry averaging 0.346% ASCu.

Main Oxide Zone

For interpolation purposes, the drillhole assays were hand picked to reflect the original grade of the orebody. Assays needed to be reliable for their grade and their location. This screened out a number of drillholes. The list of drillholes used can be found in the appendix. In summary the San Manuel Porphyry has 8,277 assays averaging 0.377% ASCu and the Quartz Monzonite has 3,799 assays averaging 0.440% ASCu.

The composites being used for interpolation include 6,028 composites averaging 0.392% ASCu of San Manuel Porphyry and 2,622 composites averaging 0.458% ASCu of Quartz Monzonite. These two rock types comprise 96% of the rock types within the modeling area.

Interpolation

For each of the three zones the Kriging runs were done in three stages. The first run has broad enough parameters to fill in every block in the zone. The second run has more restrictions than the first and fills approximately 90% of the blocks. The third run has the parameters determined from variogram analysis and fills approximately 80% of the blocks. Only 1% of the blocks were filled manually and these blocks are relatively unimportant.

San Manuel Formation - 259 Blocks

Same run as San Manuel Porphyry.

60 blocks filled at 0.239% ASCu, 0.290% TCu.Rest filled with average.

San Manuel Porphyry - 16,444 Blocks

Nugget = 0.015Sill = 0.030Azm = 150 Range1 = 300Dip = -75 Range2 = 250Dipe = -90 Range3 = 200

16,444 blocks filled at 0.393% ASCu, 0.554% TCu.


Quartz Monzonite - 6,769 Blocks

Nugget = 0.039Sill = 0.043Azm = 130 Range1 = 275Dip = -90 Range2 = 225Dipe = 0 Range3 = 175

6,683 blocks filled at 0.435% ASCu, 0.791% TCu.Rest filled with average.

International Zone - 1,470 Blocks

Nugget = 0.017Sill = 0.060Range1 = 150

1,470 blocks filled at 0.377% ASCu, 0.560% TCu.

8.9 Minesight

The following is a list of Minesight features in the model as of June 11, 1997.

8.9.1 Drillholes

Create-Attach MEDS files : SMOX10.DAT, SMOX11.NEW, SMOX12.NEW

SET - AllWellsMembers: Screens

Screens contains the wells showing the screened interval.

SET - AssaysMembers: Cu, ASCu

Cu cutoffs at 0.2, 0.4, 0.6, 0.8, 1.0, 1.2, 1.4, 1.6, 1.8, 2.0ASCu cutoffs at 0.2, 0.5, 1.0

SET - RockMembers: Geology

Geology cutoffs at 1, 3, 6, 7, 8, 9, 11, 151 lumps together Gila Conglomerate and Cloudburst both as overburden.3 lumps together Rhyolite, Andesite, and Diabase as dikes.


6 shows the San Manuel Porphyry7 shows the Quartz Monzonite (Oracle Granite)8 shows the Quartz Monzonite Breccia9 lumps together all faults11 lumps together Dacite Porphyry, Aplite, Syenite, and Latite Porphyry as dikes.15 lumps together all fault and shear zones.

SET - ScreensMembers: Scr

Scr shows the screens in the automatic valve test area.

8.9.2 Grids

SET - ContoursMembers: -1800 - 3600 (200’)

Correspond to cross-sections

SET - E-WMembers: 8,000 - 12,500 (50’)

SET - FluidLevelMembers: 1,930 - 2,780 (10’)

SET - HorizontalMembers: 150 - 3,450 (60’)

SET - HorOffsetMembers: 180 - 3,420 (60’)

SET - InternationalMembers: 2,600 - 3,600 (200’)

SET - LongitudinalsMembers: 1-21

Correspond to longitudinal sections

SET - N-SMembers: 9,000 - 15,000 (50’)

8.9.3 3D Geometry


SET - FluidLevelMembers: Level, Level2

Level has the fluid level surface with minimum data points.Level2 has a more detailed and smoothed fluid level surface.

SET - LevelsMembers: Numerous underground panels, drifts, lines and shafts.

SET - SurfaceMembers: TOPOG

Import Medsystem model surface.

SET - OreMembers: Zone (Solid of orebody)

Orebody closed with 200’ dissipation to a point.Total volume calculated to be 144,409,164 cubic yards.

SET - GilaMembers: 301, 301solid

301 is the Gila contact.301solid is the solid of the Gila

SET - OreBelowSurfaceMembers: Slice

Slice shows a solid of the orebody below topography.

SET - QMMembers: 307, 307solid, 301307

307 is the Quartz Monzonite contact307solid is the solid of the Quartz Monzonite301307 is the QM-Gila contact

Update Model - using this solid the file 15 item zone was set to 1 if any part of the block falls within the solid.

SET - RockMembers: 301306

The contact between San Manuel Formation and San Manuel Porphyry


SET - InternationalMembers: 102 are the International contours and solid.


8.9.4 Models

Attach Medsystem model.Create a model view.

SET - SMOX15Members: TOPO, ASCu, Zone

TOPO is the % block above topographyASCu is the ASCu gradeZone is for main and international zones

8.9.5 VBM

SET - 101OffsetMembers: 101

101 is the ore contours at the HorOffset Grid.

SET - 102PlanMembers: 102

102 is the ore contours of the international zone.

SET - 102PlanOffsetMembers: 102

102 is the international zone contours at the HorOffset Grid.

SET - FluidLevelMembers: 911

911 is the contours of the fluid level surface.

SET - LongitudinalsMembers: 101

101 is the longitudinal ore contours of the main orebody.

SET - LongIntMembers: 102

102 is the longitudinal ore contours of the International Zone.


SET - ContoursMembers: all vbm features on cross-sections.

SET - PlanMembers: 101

With the solid selected, slice view was used with the Horizontal Grid Set to generate the plan contours. 101 is the plan contours generated by slicing the 3D Geometry set-ore member-zone. 101 was exported to ASCII into the file 101.PLN which will be used to load to SMOX25.PLN.

SET - InternationalMembers: 102

102 is the International Zone contours.

8.10 Previous Modeling

8.10.1 Early Modeling

The first computer model of the San Manuel oxide resource was developed for the original construction AFE in 1984 using Newmont software. A modified drillhole database was created using the churn holes adjusted vertically for block cave mining and the early reverse circulation drilling. The assays were composited on a 30-foot bench height. The acid soluble copper was modeled utilizing an inverse distance cubed method.

The first Medsystem model was created in 1991. This model was used to optimize and design the final pit. The block model was updated in 1992 using the Medsystem EMPC software. The model uses a block size of 50 foot by 50 foot with a 30-foot bench height extending down to roughly the 2615 underground level.

The modeling process in 1992 was much more detailed than the models generated utilizing the Newmont software. The raw data was composited on 30-foot lengths. The composites were then plotted on geologic sections at 200-foot intervals across the ore body, increased to 400-foot intervals on the fringe of the deposit. These sections are roughly S30E looking in a northeasterly direction. The current surface topography and underground draw are also plotted on the section.

The open pit uses a set of prisms to record slope movement. The data has shown surface movement and subsidence due-to underground draw of up to nine feet per month on the southeast side of the pit. This is a result of panel draw of around 50 feet per month. Figure 3 shows the final pit with an outline of the underground panels.

The drill holes affected by the underground draw are noted and the appropriate adjustments are determined. The conglomerate/rock contact as noted in recent drilling or from actual blast hole data was used as much as possible to help guide the adjustments. These adjustments to the original drilling account for up to an estimated maximum 1,786 feet of sulfide


draw. A modified drillhole file was created from this data. This drillhole file contains 130,198 feet of assays averaging 0.342% soluble copper excluding conglomerate and sulfide drilling.

The deposit was then manually zoned in section and subsequently in plan for grade zones. The identified faults, rock type contacts, and structural zones were used as appropriate to help define grade zone boundaries.

The manual grade zoning process is a major time consuming task. The zoning from a previous modeling effort is affected by the normal changes resulting from additional drilling or a re-interpolation based on field mapping. However, the major effect on the San Manuel oxide resource is a result of the underground draw/subsidence since the last model. An attempt was made to reduce the task through the use of solid modeling in section. The solid modeling process was unsuccessful, due to software and documentation problems, and manual zoning for the 91 benches in plan was required.

Distinct total copper grade contour zones were evident on some of the sections, however, they were not apparent on other sections. The grade contour zones could not be reconciled between sections and they were combined in plan. The discontinuity of the grade zones within the post subsidence oxide zone was confirmed by contoured blast hole maps throughout the deposit. No attempt was made to determine if this was true of the original deposit or strictly a result of mixing and/or displacement due to subsidence. A variogram distance of 300 feet was used as a search limit for the composites. Short composites, those less than 15 feet, were not used in the interpolation. The length of the composite was used as a factor for the interpolation. An octant search was used with a limit of two composites per octant. A minimum of two composites was required for the interpolation.

The rock type was not zoned throughout the deposit. The decision not to zone the rock type and the alteration zones was based on the difficulty of determining the continuity of the geology after subsidence. A second factor in the decision was the time and effort to update the zoning based on ongoing underground draw. The polygonal method was chosen to assign the model a rock type and a alteration zone.

The tonnage factor in the first Medsystem model was fixed based on the mineral zone. This was later changed to a tonnage factor based on the relative effect of subsidence on the area. These tonnage factors were already in effect for the planning models on the Harris System.

The tonnage factor was set to 13.5 cubic feet per ton for intact rock on the north west side in the red hill and four-shaft area. The factor was increased to the south east up to a maximum of 17 cubic feet per ton for the rubblized material approximately over the 2615 level. The average tonnage factor is approximately 15 cubic feet or about 5,000 tons per block.

8.10.2 Fault Zone Model

The fault zone model was constructed as a culmination of the hydrogeologic interpretation of the San Manuel mineralized resource. This geologic interpretation was essential


to the detailed design of the current in-situ leaching program and to the understanding of fluid flow paths in relation to their potential effects on the adjacent open pit and block rave mines. This interpretation also afforded the opportunity to interpret and define the different structural, mineralogical, and textural features of the oxidized zone of the Sari Manuel deposit. The first step in the design of the fault zone model is the development of a detailed three dimensional hydrogeologic interpretation of the rock mass in question by utilizing all available hydrogeologic information including pit wall mapping, historical churn and reverse circulation drill logs, previous sectional interpretations of the oxide zone, logging of drillhole cuttings from current resource development drilling, logging of in-situ production and injection well drill hole cuttings, hydrogeologic interpretations of in-situ drilled benches, interference pump testing of production wells, and review of the composite geologic models created during previous geologic investigations.

Once a structural (fault) interpretation is refined and its validity is positively tested within the context of the information available at the time of the interpretation, fault zones are defined, These fault zones are compiled and grouped by characterizing rock type, mineralogical, rock mass properties, and geostatistical characteristics to be able to assign similar fault-bounded blocks to one another to create a fault zone. This fault zone, which is usually a composite of several fault blocks, is projected onto sections and level maps and tested for continuity and accuracy. Once the zonation is considered acceptable, the fault zones are projected onto block model level intervals for digitizer input to merge with the grade block model.

8.10.3 1995 Model

The creation of the 1995 Oxide Medsystem Model was built from drill hole data files from the previous model. The previous model was completed in 1991 with little or no updating taking place during the last four years. Since the completion of the last model we have acquired new drill hole information. Fault delineation was left incomplete in the old model. Fault structures have been better defined now. Better constraints and better interpolation techniques are used on the new model.

The first step in building the model was gathering all the drill hole information. Many files containing drill hole information were located including a set of modified and unmodified data. The modified data reflects the effect of caving. Additionally, new drill hole data has been collected during the last four years. A drill hole file was created from unmodified data from a combination of; an ASCII output of the old model assay file, other DAT201 files found, new drillhole information. This file contains all drillhole data compiled to March 1995 up to and including the ARM series hole number 166. For the most part the unmodified data files were used except where known and measurable caving has taken place.

Initialization of the Medsystem files was done. Several maps were found containing fault structures. This included a set of plans for each bench elevation. A solid was built from the set of plans and then sliced by Cross-Section. Drillhole cross-sections were plotted with this fault information and from the pit contours. These maps were overlain with all the structural maps found and combined into one master set of maps. These were then redigitized into OXID25.FAL which contains all fault information and ore contours on Cross-Section. Ore contours are


structurally controlled and coincide with faults in many instances. Pit contours were produced from a MEDS ready file from the 1995 flyover data and put into OXID25.TOP.

Drillhole cross-sections contain three userf overlays. The userf overlays are only for 1”=100’ scale cross-sections. The first overlay is LEGEND.GS which contains the legend information of color coding, fault naming and rock codes. The second overlay is NORTH.GEO which contains the geologic northing lines. The third overlay is SECTION#.F2 which contains the fault structures, ore contours and underground drifts. This information in OXID25.FAL is run through M654V1 to make a userf out of them. If changes are made to OXID25.FAL then M654V1 must be used again. The procedure for M654V1 was edited to produce the right color codes for each feature.

Downhole composites are done at a ten-foot length. M501V1 was run to composite the assays for TCu, ASCu, Al, Fe, S and TNFAC. M505V1 was run to composite the code for ROCK, ZONE and LEACH. M506V1 was run to sort the composites.

Several holes were drilled for the resource recovery test and a few other drill holes which are not used for grade interpolation but do show up on cross sections. These holes are marked as deleted in the assay file to prevent their use in other operations or plots. Additionally, the holes have the LEACH variable set to 0.

Upon the completion of the cross sections, a set of plans every 60 feet in elevation were plotted that match bench elevations and extend well below the bottom of the pit.

At this time, interpolation will be based on ore/waste boundary but not by rock code. Variograms are similar for the two major rock types monzonite porphyry and quartz monzonite. Statistically they have similar characteristics. The contact between the two rock units is also very difficult to contour due to faulting. Ordinary Kriging was the interpolation method used. Variograms indicate a primary plunge at 160 azimuth, -50 dip, -90 dipn (MEDS). Nugget of 0.013, Sill of 0.065, Ranges of 250, 250, and 200 feet.

A new Medsystem model was created during the first half of 1995. The new Medsystem model was created of the oxide portion of the ore-body. This was done to reflect new structural and grade information obtained during the last 3 years. The figures assume a recovery of 50% of all acid soluble copper. The old geological resource has a lower grade due to the use of drill holes drilled in areas where leaching had already taken place. The new geological resource uses only drill hole grades from areas where leaching has not taken place or from areas before leaching began. The following table shows the differences in the pre-leach geological resource.

Tons TCu ASCu PoundsNEW 195,614,000 0.588% 0.386% 1508 MOLD 196,824,000 0.556% 0.345% 1359 M

Resources were then calculated for individual blocks that are separated by bench and by zone. Zones are expected to be somewhat independent of each other due to fluid controlling faults. To calculate a mining reserve from a geological resource requires several steps. The following will explain this process which is unique to any other mining reserve method.


The first and most important factor in determining the mining reserve is the confidence level of the geological resource. Only blocks with high confidence will be included in the mining reserve. This eliminates some blocks around the margins of the geological resource.

The top 100 feet of each block is not included in the reserve since it is assumed that the fluid level will be maintained below that elevation. If at some point in time Unsaturated Zone Leaching can prove to be viable, it will impact the mining reserve favorably.

The mining reserve also takes into account the accessibility of the blocks. Those blocks deemed not accessible due to factors such as; well depth constraints, pumping performance, and surface or underground access, are removed or reduced proportionately. The above factors reduce the available copper pounds from 1508 M to 1336 M.

Interstitial copper pounds are removed from the reserve since the leaching fluid can not access these pounds. It is assumed that the amount of interstitial copper in any block is comprised of the first 0.12% acid soluble copper. This figure was arrived at from the Resource Recovery Test performed in 1994. This further reduces the copper lbs from 1336M to 918M.

Since the new Medsystem model was built with drillhole grades from pre-leaching time the effect of historical leaching is removed from the reserve as the leaching effect depletes the reserves. Some of the leaching done prior to the last phase of the open pit operation was done on material that was removed for the open pit operation. The copper pounds leached but removed by mining are not subtracted from the reserve since the geological resource and mining reserve are calculated below the level of the last phase of the open pit.


9. Geologic Resources

The tonnage factor was calculated by rock type. San Manuel Porphyry was given 12.70 and Quartz Monzonite was given 13.15. Cave breccia areas were set with a tonnage factor of 17.00. This was done for Zone 11-2220, 11-2280, 11-2340, 11-2400, 11-2460, 11-2520, 11-2580, 11-2640, 6DEEP-2700, 6DEEP-2760, 6DEEP-2820, 12-2220, 12-2280, 12-2340, 12-2400, 12-2460, 13-2460E, 13-2520E, and 14-2640.

The resources were run using UG1RES and UG1SUM. A multi-run was setup called GEORES that runs both programs. Three response files were created to handle the 120 separate geological resource blocks. The response files are RES50, RES100, and RES120. The blocks correspond with zone-benches. The creation of 120 separate resources is handled by ADD1.BAT which combines them into a single file. This file is imported into excel and is called B120.XLS.

The reserves were run using UG1RES and UG1SUM. A multi-run was setup called RESERVES that runs both programs. Three response files were created to handle the 120 separate reserve blocks. The response files are RESV, RES100, and RES120. The blocks correspond with zone-benches. The top 100 feet of each block is deemed waste since saturation must be kept below this level. The creation of 120 separate reserves is handled by ADD2.BAT which combines them into a single file. This file is imported into excel and is called BBB120.XLS.

The reserves are also based on preleached conditions therefore the amount of in-situ leaching must be subtracted from the total to arrive at the current ore reserves. The block grades for total copper and acid soluble copper was reduced by 5% to remain conservative and fall in line with past modeling.

Geological Resource - Preleach

236,900,000 Tonnes0.588 % TCu, 0.384 % ASCu910.3 million Contained ASCu Kgs

International Zone Resource

15,600,000 Tonnes0.561 % TCu, 0.378 % ASCu59.0 million Contained ASCu Kilograms

Mining Reserve - Preleach

195,200,000 Tonnes0.584 % TCu, 0.380 % ASCu741.5 million Contained ASCu Kgs385.4 million Recoverable Kilograms

Mining Reserve - May 31, 1998

385.4 million Original Kilograms 90.3 million Leached Kilograms295.1 million Reserve Kilograms


10. Metallurgy

10.1 Residual Heap Leaching

The Heap Leach Production estimate is continuously updated based on historical production data. This involves updating the decay curve to fit recent production data and using this to predict production in the future. The ultimate recovery is now forecasted to reach 87.5% of the acid soluble copper in the heaps. This should occur in 3-4 years.

10.2 In Situ Leaching

The dominant supergene oxide minerals include chrysocolla and copper wad with minor cuprite, malachite, and traces of native copper17. Goethite dominates the limonite mineralogy in the oxide and leached capping areas, and jarosite in the areas where sulfides still remain. Transported limonites are generally more abundant than indigenous, and sulfide boxworks are completely filled. Most of the leached capping appears to be poorly developed, and does not indicate that significant enrichment was developed. A small area of well developed leach cap was noted in the uppermost northern pit wall on the hanging wall of the West fault that is within the phyllic alteration zone. This area may be underlain by significant grades of chalcocite mineralization, although due to the lack of surface area containing attractive capping characteristics, the tonnage is likely to be low.

Using the subtraction of the first 0.12% ASCu and the 76% recovery of the remaining copper, the resulting overall hydrometallurgical recovery is assumed to be approximately 52.2 percent. This is an overall average and actually varies depending on the starting grade of the material. Although this recovery value is a reasonable estimate, further testing is necessary to determine a more accurate recovery percentage.


11. Hydrology


12. Mine Planning

12.1 Optimization

Mine planning has occurred in several phases. From 1985 to 1994 all in-situ wellfields had to be designed around the open pit operation. Bench availability was commonly on the order of 6 to 9 months. Targets were oxide material that was not going to be part of the open pit plan but close enough to surface to allow wells to penetrate it and underground collection areas needed to available for the solution.

The second phase of mine planning was during 1995 and 1996 when the entire pit surface was available for in-situ leaching. Constraints during this time were the West Fault and the Vent Raise Fault. Planning had to be east of the West Fault and North of the Vent Raise Fault to prevent leach solutions entering the active block caving area. With these two boundaries the entire ore zone was planned to be developed. Planning then looked at sequencing of individual wellfields. Sequencing generally followed an incremental plan where new wellfields were always adjacent to old wellfields to allow complete saturation of the area. Sequencing was also generally upslope so that drilling would encounter a minimum of leach solution.

The third phase of mine planning was started in 1996 and continues to date. This is infill drilling around the margins of the orebody with the primary constraints of the West Fault and Vent Raise Fault still governing.

All mine planning done to date attempts to minimize the amount solutions outside of the orebody by setting screened intervals within it. This allows flow to the orebody but not to the leach cap or near surface.


13. Mine Design

13.1 Mineable Resource

13.1.1 Final Pit Design

A slope stability evaluation was performed for the final phase of mining. The fieldwork for the evaluation was performed by Magma personnel and was reviewed by personnel of Independent Mining Consultants, Inc. (IMC). The following is taken from the report from IMC, Slope Stability Review for San Manuel Oxide Open Pit Phase 6, dated September 1991.

The pit was divided into four design sectors. Design sectors are areas of similar geology, structure and pit wall orientation.

East End - The west-facing pit walls east of the 12,750 east coordinate.

Northeast Wall - The south facing pit walls between the 11,750 east and 12,750 east coordinates. This is generally the area that is east of the West Fault.

West End - The southeast facing pit walls that lie west of the 11,750 east coordinate. This is the area that is generally west of the West Fault.

South Walls - The north facing walls on the south side of the pit.

The stability analysis, production experience and planned in-situ leaching have all been considered in making the slope angle recommendations. Slope angles in the areas of in-situ leaching will be a function of required access roads into the leach fields and from stability requirements. In making the slope angle recommendations, it is assumed that the leach plans and open pit plans will be executed as perceived on July 1, 1991. The recommended inter-ramp slope angles for each sector are as follows:

East end - 36 degrees - lnter-ramp slopes should be broken with roads or wide catchments approximately every 300 feet vertically. The resulting overall slope should be in the range of 30 to 32 degrees.

Northeast Wall - 36 degrees and transition to 40 degrees - The northeast wall will transition from the east end slope angles (36 degrees) to the west end angles (40 degrees). The transition should occur between the West Fault and the West Boundary Fault.

West End - Variable, decreasing with height - 3000 bench to the road at the 2460 elevation should equal 40 to 42 degrees. Below the road, from the 2460 to the pit bottom the slope angle should equal 36 degrees. The upper portion of phase 6 from the 3000 bench down as deep as 300 feet can be cut at 45 to 48 degrees. The average angle between the 3000 elevation and the 2460 road should still be 40 degrees.


South Walls - 40 degrees - The 40-degree slopes have worked well in this area and continued block caving will reduce the slope angle with time.

The pit wall is double benched leaving 60 vertical feet between catch benches. Within the Northeast Wall and East End sectors, the catch benches are 52 feet wide for future in-situ production. The angles would also have to insure stable catch benches for adequate access for the projected 20-year life of the in-situ activity planned for the pit area. Each catch bench has level access from the 80-foot wide permanent haul road. The catch bench access is 30 feet wide.

13.1.2 In Situ Leaching Design

The in-situ well field design process at San Manuel was initiated in 1989 when the first pattern was drilled as a feasibility study for well-to-well leaching. The first design was based on an intuitive estimate of what the rock formation would yield and was closely monitored during its operation. An analysis of the monitoring information indicated that the initial design was successful at recovering pregnant leach solution. The recovery of copper showed predictable characteristics that could be hydrometallurgically modeled. During the first four years, a concerted effort was made to construct the tools to design and implement well-to-well leaching techniques within the in-place and relatively undisturbed supergene mineralized rock mass at the San Manuel mine.

The well pattern presently utilized at San Manuel is an evolving design as operational experience is gained through continued efficiency performance monitoring and economic evaluation. The design incorporates a spatially modified universal well pattern consisting of a common well design for both injection and production well construction. This universal well design is coupled with optimized well spacing so that the desired pattern geometrically fits on an open pit wall catch bench. The most common design is corner-to-corner well spacing of roughly 40 feet. To minimize well losses from slope failures a new well pattern was initiated in 1996. A single row of wells is drilled down the center of the bench every 25 feet. Ever second well is angled approximately 3° towards the toe of the bench. This pattern allows a 50-foot grid spacing within the orebody even with limited access on the surface.

The present in-situ catch benches are about 50 feet wide from toe to crest excluding spill at the toe. Along the length of the bench, the uni-well pattern is linked or coupled in a manner that allows design modifications to be made to optimize the position of the linked pattern to fit the localized structural geology. The well pattern design of one bench must also correlate to and interact with the well pattern on the benches above and below it to provide optimum sweep efficiency of the rock mass. Sweep efficiency is defined as the percentage of rock volume that can be influenced by leach solution. Thus, the well pattern design process incorporates structural geology derived from drillhole interpretation and surface mapping, rock mass characterization joint/fracture fabric), leachable mineralogy, and hydrologic characteristics of the targeted rock zone.


The first step in the design of in-situ leaching well patterns is the development of a detailed geologic model of the rock mass under a pit wall bench. This is accomplished by utilizing all available hydrogeologic information including pit wall mapping, logging of drillhole cuttings from resource development drilling, logging of in-situ production and injection well drill hole cuttings, hydrogeologic interpretations of previously drilled benches and pumping tests using production wells. An initial geologic interpretation is made with this information that allows the formation of a feasible well pattern design. This initial design is developed to allow maximum sweep efficiency of the hydrogeologic environment in the target-leaching zone.

It is beneficial to drill and log portions of the injection well array very early in the construction phase to confirm the initial geologic interpretation of the well pattern design. This is done so that the design can be modified and re-developed depending upon actual encountered hydrogeologic conditions. Although major changes are usually not required, all designs are continually checked and adjusted as new drilling information is acquired from the last drilled hole. The cuttings from most injection and production drill holes are logged and some selected drill holes are assayed to supplement the mine model database or to further the knowledge of the acid soluble mineralogy.

As the drilling of a well approaches its targeted completion depth, drillhole cuttings are logged and checked to ensure that screen placement is in the intended zone and that the well borehole does not penetrate into fault blocks that are not targeted for production. Any required adjustments made to the designed completion depth and screen set are promptly conveyed to the drill crew. Typically this decision occurs at the drill site with the drill crew. The drill crew is always kept abreast of nuances involved in the drilling of any well pattern such as expected fault zone locations below collar. This allows maximum communicative interaction between the well pattern design and the lead driller and minimizes mistakes that compromise the efficiency and economics of the intended design. On occasion a fault zone offset detected in drilling can lead to redesigning the remainder of the well pattern. In this case, the design is adjusted and the new design information is promptly given to all the appropriate technical people, including the drill crews. These situations necessitate prompt design capabilities and good communication skills by the designing hydrogeologist and operating flexibility by the drill crew.

The current well drilling methods utilized at San Manuel are the product of empirical experimentation with different well drilling techniques. Some of the more significant errors in experimentation involved the implementation of drag bits as cuffing tools. These bit trials failed due to the clogging up of the blades by clay and silt contained in the fractures of the relatively hard and brittle granite rocks at San Manuel. The most successful drilling trials are represented by the current construction methods now employed. Drilling methods are always evolving and being modified as new ways of drilling more productively are developed. The current drilling methods at San Manuel are summarized below.

Well construction is primarily a uni-well design, which allows a well to be used for injection or production. The wells are drilled vertically with mud rotary techniques. Mud composition is bentonite based with polymer added for viscosity. Unitized mud mixing and delivery systems are utilized for mud rotary drilling and take the place of mud pits and auxiliary pumping units. These units have proven to provide qualify mud, decrease total drilling costs,


and increase productivity. Mud loss and dilution is minimal in the granitic rock which is indicative of an in-place undisturbed rock mass. The well diameter is about 11 inches with the cased diameter being 6 inch PVC. The pit bottom has two 8-inch wells cased with PVC. The casing is schedule 80 PVC with 0.20-inch slots in the screen. Gravel pack that is installed in the screened target interval is high silica washed Monterey sand screened to plus 20 mesh and minus 10 mesh. Development procedures for these wells consist of air lifting with drilling compressed air, utilizing one-inch stainless steel drop pipe with a nozzled end. The development procedure is designed to thoroughly clean the borehole annulus and the well screen slots and is pursued until the discharge is clear (blue) and the well's hydraulic performance has stabilized. This procedure takes from four to six hours depending upon the gangue and clay mineralogy of the targeted zone and the hydraulic conductivity of the rock.

Assessment wells (“PC-wells”) utilized for leach solution monitoring and hydrogeological exploration/confirmation are drilled vertically with mud rotary techniques. The holes are then cased with 3 inch PVC casing screened in the appropriate section of the drill hole. These wells are used for monitoring the fluid level in the leach fields.

The submersible pumps utilized for excavating PLS from the production wells are constructed of 304 stainless steel. The pump sizes that are utilized are of varying flow rate designs and are powered by 316 stainless steel 10 and 15 horsepower motors. Well hydraulic requirements are such that pump capacities range from 20 to 200 gallons per minute. The pump units with ten horsepower motors are 4 inch O.D. and are installed in 6 and 8 inch diameter production wells. The placement of the pump unit within the cased well is governed by the static solution level, expected drawdown characteristics, location of well screens within the well, and the clay content of joints and fractures in the screened interval. The pump is commonly set just above the top of the well screen so that solution flow to the pump passes across the motor for cooling purposes. All pump drop-pipe is either 2.0 or 3.0 inch diameter schedule 80 PVC with threaded ends attached with 304 stainless steel couples. Sounding tubes are installed in every production well and are 3.8 centimeter ID PVC with the open end set close to the pump inlet screen. The size of this sounding tube allows the use of either an electric well sounder or a pressure transducer to be utilized to measure solution level response.

The methodology utilized to estimate the type of pump/motor to be installed in a particular well is based upon previous knowledge of the hydrologic characteristics of the rock and the expected discharge rate from the well. This information is formulated to determine the pump and motor size. After a decision is made regarding the pump/motor type and size, the unit is installed in the well and connected to an electrical feeder and a discharge manifold. When the unit is operational the well is tested to determine hydrologic material properties so that this information can be added to the hydrology database and the pump/motor unit can be checked to test its compatibility with the well hydraulics. Also, anisotropy determinations can be made if multiple wells in the pump test are monitored for pressure response and this monitoring array is changed after each successive pump test. During this testing if a discrepancy is found between the pump capacity and the well hydraulics, the pump is exchanged for a more suitable unit before the well pattern is put into production.


Solution management as it relates to the operation of the San Manuel in-situ leaching system encompasses the optimization and maximization of the sweep efficiency of the most favorable mineralized zones. This optimization influences the highest volume of rock and produces quality PLS while maintaining solution flow directional control. Directional control of the solution is accomplished by maintaining solution balances and appropriate pressure gradients between well patterns within discrete hydraulically isolated fault blocks by adjusting the solution injection and production flow rates. The control of solution is critical in maintaining fluid levels at a position where maximum extraction will occur, but where solution will not seep out of the open pit benches causing flooding or slope stability problems. This solution-balancing situation is a daily task and requires the effort and diligence of the entire in-situ leaching staff.


14. Ore Reserves

The reserves reported to the Securities and Exchange Commission in Form 20F for the in-situ operations are tabulated below. Years prior to 1996 were reported on the 10K form for the United States Securities and Exchange. The new format is in metric units.

The most recent 5 years of reserves of in-situ operations are tabulated below:

(Tons/Tonnes and lbs/kgs in 000's)

Oxide Ore 01-01-94 01-01-95 01-01-96 05-31-97 05-31-98Metric Metric

Tons/Tonnes 196,824 196,824 174,312 195,262 195.565

%TCu Grade 0.556 0.556 0.589 0.584 0.584

%ASCu Grade 0.345 0.345 0.383 0.380 0.380

Contained lbs/kg 1,359,486 1,359,486 1,336,735 741,494 741,494

Recoverable lbs/kg 667,993 657,070 563,986 306,567 295,100

Technique ID2 MEDS ID2 MEDS KRIG MEDS KRIG MEDS KRIG MEDS

Reason for change Production Production New model New Model ProductionProduction Production

The total copper grade and the acid soluble copper grade is for the original copper grade of the deposit. The contained copper lbs/kgs is the total acid soluble copper in the geological resource. The recoverable copper lbs/kgs factors in the recovery and shows the depletion of the copper from the ore body.

The old reserve was 306.6 million kgs. The new reserve is 295.1 million kgs. Production from June 1, 1997 to May 31, 1998 was 11.5 million kgs.

The San Manuel Oxide ore reserves are calculated from the drillhole-verified and geostatistically projected mineral inventory block model compiled utilizing Medsystem software and maintained by the San Manuel Oxide Engineering Department. The in-situ reserves assume that only acid soluble copper is recoverable. This reserve estimate incorporates a geologic structural model and the division of Oracle Granite and San Manuel Porphyry in the block model.


14.1 Resource Recovery Test

The resource recovery test22 indicated that the first 0.12% acid soluble copper of the assay grade is not extractable. This acid soluble copper is tied up in copper clays and other unleachable copper oxides that the acidic solution cannot contact. Therefore, all reserve calculations start by subtracting 0.12 from the assay grade. The test went further to state that 74% of the remaining copper is economically extractable. This figure has been updated with new curve fitting.

14.2 Economic Cutoff

A grade curve based on the best-fit curve of historical leaching records is used to predict the future grade of the Pregnant Leach Solution (PLS). At this time a single grade curve is used based on a composite of the data collected. In the future individual fields may have different grade curves. The formula produces only an estimate of the predicted grade and is not valid beyond approximately 1200 days.

1 / Y = a + b * sqrt(x) * ln (x) + c * ln (x)

a = 0.37955b = 0.008863c = -0.007415x = number days under leachY = PLS Grade

A lower economic limit of the PLS copper grade has been estimated to be 0.20 g/l above raffinate. This figure was determined as part of the Resource Recovery Test. A more detailed examination will be done in the future to arrive at a more accurate economic grade cutoff. Given the grade curve and the lower economic limit, the recovery percent of the leachable copper can be determined. Calculation of the area under the curve before and after gives a recovery of 76% at this time.

Historical leaching until May 31, 1998 has been 94.6 million kilograms of copper. Of this, 90.4 million kilograms were leached below the final pit outline. Therefore 90.4 million kilograms need to be subtracted from the mining reserve. This is divided into individual blocks and apportioned by several factors. Primarily, the current bench grade was used to estimate how much copper has been leached. Secondarily, historical records of old leach field production was used, however, fluid migration prevents the use of these records directly. Underground production was estimated by a percentage of total production at the time. Overall the original mining reserve was 385 million kilograms with 90.4 million kilograms leached leaving 295.1 million kilograms in the reserve.


15. Reconciliation


16. Updates

The model was rebuilt for 1997 but not for 1998. There were 3 sources of new information during the last year the required the rebuilding of the entire model.

The San Manuel Resource Definition Project was started which resulted in a more complete drillhole database being created. Old block cave records were used to approximate the amount of downdrop. The database was modified to allow for the block caving effect. Ideas were generated on how the oxide orebody had been distorted.

During the summer of 1996 the current pit surface was completely remapped. This mapping showed and delineated the major fault structures in more detail. It also mapped out more accurately where the sulfide block of material occurs on surface.

During 1996 a 16-hole diamond drilling campaign was completed which identified and delineated major structures and closed off the southeast corner of the orebody.


17. Opportunities

17.1 Increasing Saturation

In-Situ leaching production is derived almost wholly from variably saturated and saturated, gradient flow, well to well leaching of fracture-hosted, oxidized, supergene precipitated, mineralization within relatively impermeable fault bounded structural blocks. An opportunity for enhancing in-situ production is from the recovery of copper from very near surface unsaturated zones, positioned above the saturated zones, in the oxidized zone of the San Manuel oxide resource.

Unsaturated Zone Leaching Experiment (UZLE) is a possible technique to inject (or emit) acid recover leach solutions in defined geometric units of unsaturated mineralized rock, with minimal vertical or horizontal loss of leach solution. Also, the leaching process must not appreciably increase rock mass pore pressure to the point of contributing to rock mass failure. Some concepts such as changing hydraulic conductivity and capillary pressures as moisture content and saturation increases in an unsaturated environment are considerably different than in a saturated environment. Therefore, modification of current practices and development of new techniques are an essential component of the project. The possible success of this planned program has a considerable potential economic impact on San Manuel leaching program (and other properties) especially after the heap leach dump is no longer producing viable PLS.

Areas like the pit bottom can safely be saturated to near surface. The potential saturation of this area could enhance copper production and will be studied shortly.

17.2 San Manuel Resource Definition Project

The San Manuel Resource Definition Project is studying the possibility of re-opening the pit.


18. Risks

Pit slope failures are a concern during the operational life of in-situ leaching. These failures are due in part to; overall rock mass strength being exceeded, block cave tensional effects, high pore fluid pressures, or mismanagement of surface water drainage. All failures will have a detrimental effect on the ultimate production capability of the in-situ leaching system due to loss of available platform area to drill and leach hydrogeologically favorable rock. Pit slope analysis is being done of the pit wall integrity by engineering staff to help assure a safe and practical pit wall for successful in-situ leach mining. Moving well collars to the center of the bench was initiated to minimize well losses due to slope failures.

No description of hydrology was available by this date. Extensive hydrology work has been underway for the past year and reports and conclusions are due shortly.

No determination of costs has been reported for assigning a cutoff grade to ore contours.

Recovery


19. Conclusions and Recommendations

19.1 Geology

The geological map that was produced during the commissioning project should be viewed only as the framework to support geomechanical, hydrogeological, and geochemical studies of a broad nature. Detailed studies that target individual wells, seeps, fracture sets, etc. will require on going mapping at the appropriate scale. In addition, faults that were believed to provide important controls on fluid flow and mineralization were not adequately located during this campaign. Additional work is required to determine the nature, location, and continuity of these faults. It is strongly recommended that a competent field-based geologist be placed in the Technical Work Group to assist in performing these functions. Finally, the surface mapping indicated several specific areas that require additional knowledge of the three-dimensional geology. In the following areas, it is recommended that further investigations into the subsurface lithology, alteration, and mineralization be conducted.

Low-flow wells located along the southeastern flank of Zone 6 had been believed to be drilled into high-angle, highly argillized structures that limited injection and production rates because of inherently low transmissivity. The interpretation presented here, however, is that the argillized low-strength material observed in the pit walls in this area has a low-angle geometry, and should be underlain by rocks that do support in situ leaching. The low-flow characteristics may thus be due to drilling techniques that allowed the low-strength, high-clay content of the surface to adversely affect the remainder of the drill holes.

Two areas were identified from the surface characteristics to be at risk of not supporting sustained production. These include the southern portion of Zone 2, and future activities east of the West fault in the sulfide zone outlined in Figure 2. The rocks exposed in the southern 2070 through 2160 bench faces are essentially unmineralized, unaltered, and poorly fractured. Based on the surface characteristics, the wells in this area should not be producing copper. This area should be investigated to determine the mineralization characteristics at depth. It is possible that the unmineralized zone dips at a shallow angle to the south, and thus be underlain by oxide mineralization. Modifying injection levels so that fluids are not traversing unmineralized rocks may increase PLS copper grades in this area. A similar argument can be made for those wells collared in the San Manuel and Cloudburst Formations above the 2460 level in Zone 6.

An additional area that requires study is Zone 4 where sulfides are exposed in the pit walls east of the West fault.


20. References

1Agenbroad, L.D, 1967, Cenozoic stratigraphy and paleo-hydrology of the Reddington-San Manuel area, San Pedro Valley, Arizona: Unpublished Ph.D. dissertation, Tucson, University of Arizona, 119 p.

2Burt, C.W., Wiley, K.L., and Rex, M.J., 1994, Successful in situ production at San Manuel: in Swan, S.A. and Coyne, K.R., eds, In situ recovery of Minerals II: TMS, p.381-404.

3Creasey, S.C., 1965, Geology of the San Manuel area, Pinal County, Arizona: U.S. Geological Survey Professional Paper 471, 64 p.

4Davis, J.R., 1974, Geothermometry, geochemistry and alteration of the San Manuel porphyry copper orebody, San Manuel, Arizona: Unpublished Ph.D. dissertation, Tucson, University of Arizona, 259 p.

5Dickinson, W.R., 1987, General geologic map of Catalina core complex and San Pedro trough: Arizona Geological Survey Miscellaneous Map MM-87-A (1:62,500).

6Dickinson, W.R., and Shafiqullah, M., 1989, K-Ar and F-T ages for syn-tectonic mid-Tertiary volcanosedimentary sequences associated with the Catalina core complex and San Pedro trough in southern Arizona: Isochron/West, no. 52, p.15-27.

7Eastoe, C. J., 1996, Report on petrographic study of specimens from San Manuel: Unpubl. BHP Report, June, 1996, 28 p.

8Force, E.R., and Cox, L.J., 1992, Structural context of mid-Tertiary mineralization in the Mammoth and San Manuel districts, southeastern Arizona: U.S. Geological Survey Bulletin 2042-C, 28 p.

9Force, E.R., and Dickinson, W.R., 1994, Tucson Wash- An introduction to new work in the San Manuel and Mammoth districts, Pinal County, Arizona: U.S. Geological Circular 1103-B, p.103-115.

10Force, E.R., Dickinson, W.R., and Hagstrum, J.T., 1995, Tilting History of the San Manuel-Kalamazoo Porphyry System, Southeastern Arizona: Economic Geology, vol. 90, pp. 67-80.

11Hausen, D.M., 1975, Classification of porphyry types in the San Manuel deposit, San Manuel, Arizona: Unpubl. Newmont Exploration Report No. 240-02, Sept. 22, 1975, 70 p.

12Heindl, L.A., 1963, Cenozoic geology in the Mammoth area, Pinal County, Arizona: U.S. Geological Survey Bulletin 1141-E, 40 p.

13Leon, F.L., 1997, Report on Surface to Underground Structural Relationships - San Manuel In-Situ Evaluation: Unpubl. BHP Report, 7 p.

14Lowell, J. D., 1968, Geology of the Kalamazoo Orebody, San Manuel District, Arizona: Econ. Geol. Vol. 63, pp. 645-654.

15Lowell, J.D., and Guilbert, J.M., 1970, Lateral and vertical alteration-mineralization zoning in porphyry ore deposits: Economic Geology, v. 65, p. 373-407.

16Pelletier, J.D., and Creasey, S.C., 1965, Ore deposits in Creasey, S.C., Geology of the San Manuel area, Pinal County, Arizona: U.S. Geological Survey Professional Paper 471, p. 29-59.


17Preece, R.K., Hoag, C., and Moulton, R., 1996, Geology of the San Manuel Oxide Pit: Unpubl. BHP Report, 10 p.

18Sandbak, L.A., and Alexander, G.H., 1995, Geology and rock mechanics of the Kalamazoo orebody, San Manuel, Arizona, in Pierce, F.W., and Bolm, J.G, eds., Porphyry copper deposits of the American Cordillera, p. 396-423.

19Schwartz, G.M., 1953, Geology of the San Manuel copper deposit, Arizona: U.S. Geological Survey Professional Paper 256, 63 p.

20Thomas, L.A., 1966, Geology of the San Manuel ore body, in Titley, S.R., and Hicks, C.L., eds. Geology of the porphyry copper deposits, southwestern North America: Tucson, University of Arizona Press, p. 133-142.

21Weibel, W.L., 1981, Depositional history and geology of the Cloudburst Formation near Mammoth, Arizona: Unpublished M.S. thesis, Tucson, University of Arizona, 81 p.

22Wiley, K., Ramey, D., Beane, R., Carstensen, T., 1994, Resource Recovery Test Report, Unpubl. Magma Copper Report.

23IMC, Slope Stability Review for San Manuel Oxide Open Pit Phase 6, September 1991.


APPENDIX A


LIST OF MEDS FILES

101.VBM Feature 101 dump for Minesight101.OUT Plan contours dumped from SMOX25.PLN101.XLS Tagging File 11 for Assays for Interpolating Feature 101102.VBM Feature 102 dump for Minesight95VBM.OUT 95 model contoursAxxx Individual Geological Resource BlocksBxxx Individual Mining Resource BlocksCOLLAR.XLS List of hole collars in excelCOLOR.TAB Matching screen colors with plot colorsDAT205.101 Tagging File 11 for Assays for Interpolating Feature 101DAT205.102 Tagging File 11 for Assays for Interpolating Feature 102DAT205.ROK Tagging File 11 for Rock TypeDIGIT.INF Digitizing initialization fileFEATURE.TAB VBM feature lookup tableGEOLOGY.VBM Geologic Contacts dump for MinesightHP.BAT Batch file for sending all section plots to plotterLEGEND.GS Legend for plots of sections and longitudinalsNORTH.GEO North grid for section plotsPLOT.GEO Color code file for plotting geology specs for gsplt.datPLOT.INF Plotting initialization filePLOT.SPC Color code file for plotting geology for P216GS.DATROCK.XLS Tagging file 11 for Rock Types (Output to DAT205.ROK)SMOXHS.DAT History FileSMOX08.DAT Sorted Composite FileSMOX09.DAT Composite FileSMOX10.DAT PCFSMOX11.DAT Old Drillhole FileSMOX11.NEW Current Drillhole FileSMOX11.SCN All WellsSMOX11.SCR Well Screens For automatic valve test areaSMOX12.DAT Old Survey FileSMOX12.NEW Current Survey FileSMOX12.SCN All Wells Survey FileSMOX12.SCR Well Screens Survey FileSMOX13.DAT Topography FileSMOX15.DAT Block Model FileSMOX25.BAK Topography Backup FileSMOX25.SEC Cross-Section VBMSMOX25.TOP Topography VBMSMOX25.DXF Minesight Imported LevelsSMOX25.PLN Plan VBMSMOX25.PL3 New Plans at proper slice elevation (mid-block)SMOX25.LON Longitudinal slices of solid orebody


VBM Feature Codes

101 0.20% ASCu Cutoff102 International Zone301306 Gila/MP Contact301307 Gila/QM Contact306307 MP/QM Contact501 Fourier Fault502 Seep Fault503 Uzle Fault504 West Fault505 Vent Raise Fault506 East Fault507 Marty Fault508 Inferred Fault509 Harry Fault510 Magma Fault511 Mox Fault512 Mafic Fault513 West End Fault514 West Fault Zone515 West Boundary Fault516 Cactus Fault517 Oxide Fault518 Cholla Fault519520 Unnamed Fault801 Underground Drifts901 Current Topography910 Original Topography


Rock Code Rock Type Tnfac #assays0 Unknown 8591 Gila Conglomerate 2,5782 Cloudburst 1,0243 Rhyolite 2,8204 Andesite 2305 Diabase 756 Monzonite Porphyry 21,3067 Quartz Monzonite 9,6408 Quartz Monzonite Breccia 1,1789 Unnamed Faults 4

10 San Manuel Fault 011 Dacite Porphyry 32112 Aplite 3013 Syenite 5114 Latite Porphyry 015 Fault Zones 45516 Shear Zones 0

40,571

-1 Undefined 78,090Outside of Elevation 622Total Assays 119,283


Total Usable 101 Avg. 102 Avg.

Rock Rock Type Tnfac Assays Assays Assays Grade Assays Grade

0 Unknown 13.00 859 0 0 0.000 0 0.000

1 Gila Conglomerate 14.20 2,578 1,184 21 0.240 2 0.130

2 Cloudburst 14.20 1,024 95 0 0.000 0 0.000

3 Rhyolite 13.30 2,820 572 339 0.239 0 0.000

4 Andesite 13.00 230 73 25 0.494 0 0.000

5 Diabase 13.00 75 59 34 0.541 0 0.000

6 San Manuel Porphyry 12.70 21,306 17,924 8,277 0.377 353 0.367

7 Quartz Monzonite 13.15 9,640 8,957 3,799 0.440 0 0.000

8 Quartz Monzonite Breccia 13.15 1,178 37 28 0.280 0 0.000

9 Unnamed Faults 15.00 4 0 0 0.000 0 0.000

10 San Manuel Fault 15.00 0 0 0 0.000 0 0.000

11 Dacite Porphyry 13.00 321 251 19 0.664 0 0.000

12 Aplite 13.00 30 32 21 0.338 0 0.000

13 Syenite 13.00 51 0 0 0.000 0 0.000

14 Latite Porphyry 13.00 0 0 0 0.000 0 0.000

15 Fault Zones 15.00 455 431 180 0.410 0 0.000

16 Shear Zones 15.00 0 0 0 0.000 0 0.000

Subtotal 40,571 29,615 12,743 0.393 355 0.365

-1 Undefined 78,090 1,182 0.368 0 0.000

Outside Elevation 622 0 0.000 0 0.000

Total Assays 119,283 13,925 0.391 355 0.365


101 Avg. 102 Avg.Rock Code Rock Type Comps Grade Comps Grade

0 Unknown 0 0.000 0 0.0001 Gila Conglomerate 21 0.240 1 0.1302 Cloudburst 0 0.000 0 0.0003 Rhyolite 273 0.204 0 0.0004 Andesite 21 0.486 0 0.0005 Diabase 20 0.523 0 0.0006 San Manuel Porphyry 6,028 0.392 227 0.3467 Quartz Monzonite 2,622 0.458 0 0.0008 Quartz Monzonite Breccia 25 0.251 0 0.0009 Unnamed Faults 0 0.000 0 0.000

10 San Manuel Fault 0 0.000 0 0.00011 Dacite Porphyry 19 0.664 0 0.00012 Aplite 15 0.344 0 0.00013 Syenite 0 0.000 0 0.00014 Latite Porphyry 0 0.000 0 0.00015 Fault Zones 171 0.417 0 0.00016 Shear Zones 0 0.000 0 0.000

Subtotal 9,215 0.406 228 0.345

-1 Undefined 797 0.406 0 0.000Total Comps 10,012 0.406 228 0.345


Coordinate Conversion Table

Geological Grid Geological GridSection Northin

gSection Northing Section Northin

gSection Northin

g-2200 1500 8334.10 10988.37 -2200 -2500 10334.10 7524.27-2000 1500 8507.31 11088.37 -2000 -2500 10507.31 7624.27-1800 1500 8680.51 11188.37 -1800 -2500 10680.51 7724.27-1600 1500 8853.72 11288.37 -1600 -2500 10853.72 7824.27-1400 1500 9026.92 11388.37 -1400 -2500 11026.92 7924.27-1200 1500 9200.13 11488.37 -1200 -2500 11200.13 8024.27-1000 1500 9373.33 11588.37 -1000 -2500 11373.33 8124.27-800 1500 9546.54 11688.37 -800 -2500 11546.54 8224.27-600 1500 9719.74 11788.37 -600 -2500 11719.74 8324.27-400 1500 9892.95 11888.37 -400 -2500 11892.95 8424.27-200 1500 10066.15 11988.37 -200 -2500 12066.15 8524.27

0 1500 10239.36 12088.37 0 -2500 12239.36 8624.27200 1500 10412.57 12188.37 200 -2500 12412.57 8724.27400 1500 10585.77 12288.37 400 -2500 12585.77 8824.27600 1500 10758.98 12388.37 600 -2500 12758.98 8924.27800 1500 10932.18 12488.37 800 -2500 12932.18 9024.27

1000 1500 11105.39 12588.37 1000 -2500 13105.39 9124.271200 1500 11278.59 12688.37 1200 -2500 13278.59 9224.271400 1500 11451.80 12788.37 1400 -2500 13451.80 9324.271600 1500 11625.00 12888.37 1600 -2500 13625.00 9424.271800 1500 11798.21 12988.37 1800 -2500 13798.21 9524.272000 1500 11971.41 13088.37 2000 -2500 13971.41 9624.272200 1500 12144.62 13188.37 2200 -2500 14144.62 9724.272400 1500 12317.82 13288.37 2400 -2500 14317.82 9824.272600 1500 12491.03 13388.37 2600 -2500 14491.03 9924.272800 1500 12664.23 13488.37 2800 -2500 14664.23 10024.2

73000 1500 12837.44 13588.37 3000 -2500 14837.44 10124.2

73200 1500 13010.64 13688.37 3200 -2500 15010.64 10224.2

73400 1500 13183.85 13788.37 3400 -2500 15183.85 10324.2

73600 1500 13357.05 13888.37 3600 -2500 15357.05 10424.2

73800 1500 13530.26 13988.37 3800 -2500 15530.26 10524.2

74000 1500 13703.46 14088.37 4000 -2500 15703.46 10624.2


7Section Eastings are PositiveSection Westings are Negative

0 0 10989.36 10789.33

Northings are PositiveSouthings are Negative 3000 1500 12837.44 13588.3

7Plot 600 to 3500 Elevation

Longitudinal Coordinate Conversion Table

Geological Grid Geological GridSection Northin

gSection Northin

gSection Northin

gSection Northin

g0 1500 10239.36 12088.3

74000 1500 13703.4

614088.3

70 1300 10339.36 11915.1

64000 1300 13803.4

613915.1

60 1100 10439.36 11741.9

64000 1100 13903.4

613741.9

60 900 10539.36 11568.7

54000 900 14003.4

613568.7

50 700 10639.36 11395.5

54000 700 14103.4

613395.5

50 500 10739.36 11222.3

44000 500 14203.4

613222.3

40 300 10839.36 11049.1

44000 300 14303.4

613049.1

40 100 10939.36 10875.9

34000 100 14403.4

612875.9

30 -100 11039.36 10702.7

34000 -100 14503.4

612702.7

30 -300 11139.36 10529.5

24000 -300 14603.4

612529.5

20 -500 11239.36 10356.3

24000 -500 14703.4

612356.3

20 -700 11339.36 10183.1

14000 -700 14803.4

612183.1

10 -900 11439.36 10009.9

14000 -900 14903.4

612009.9

10 -1100 11539.36 9836.70 4000 -1100 15003.4

611836.7

00 -1300 11639.36 9663.50 4000 -1300 15103.4

611663.5

00 -1500 11739.36 9490.29 4000 -1500 15203.4 11490.2


6 90 -1700 11839.36 9317.09 4000 -1700 15303.4

611317.0

90 -1900 11939.36 9143.88 4000 -1900 15403.4

611143.8

80 -2100 12039.36 8970.68 4000 -2100 15503.4

610970.6

80 -2300 12139.36 8797.47 4000 -2300 15603.4

610797.4

70 -2500 12239.36 8624.27 4000 -2500 15703.4

610624.2

7

Longitudinal Northings are PositiveLongitudinal Southings are Negative

Plot 600 to 3500 Elevation


San Manuel Porphyry Variogram

The primary kriging values were taken off this variogram.


Oracle Granite Variance Contour

The trend and the degree of the anisotropy can clearly be seen.


San Manuel 1999 Ore Reserves Report (Draft)

Documents

Transcript of San Manuel 1999 Ore Reserves Report (Draft)