TECHNICAL REPORT ON THE VOLCAN GOLD PROJECT …APPENDIX I Glossary of Terms At end of Report...

SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2 Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763

ANDINA MINERALS INC.

TECHNICAL REPORT ON THE VOLCAN GOLD PROJECT REGION III, CHILE

AND UPDATED MINERAL RESOURCE ESTIMATE

FOR THE DORADO GOLD DEPOSITS

OCTOBER 15, 2010

William J. Lewis, BSc., P.Geo. Ing. Alan J. San Martin., MAusIMM

Richard Gowans, P.Eng. Sam Shoemaker, B.Sc., MAusIMM

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Table of Contents Page

1.0 SUMMARY ....................................................................................................................1 1.1 INTRODUCTION .......................................................................................................1 1.2 PROPERTY DESCRIPTION AND OWNERSHIP....................................................1 1.3 HISTORY ....................................................................................................................2 1.4 GEOLOGICAL SETTING AND MINERALIZATION.............................................3 1.5 EXPLORATION PROGRAM (PHASE VI) ...............................................................3

1.5.1 Dorado Oeste (DW) .............................................................................................3 1.5.2 Ojo de Agua Este (ODAE) ..................................................................................4

1.6 METALLURGICAL TESTWORK.............................................................................4 1.7 2010 MINERAL RESOURCE ESTIMATE................................................................4 1.8 CONCLUSIONS AND RECOMMENDATIONS ......................................................9

1.8.1 Budget for Further Work .....................................................................................9 1.8.2 Further Recommendations ...................................................................................9

2.0 INTRODUCTION........................................................................................................11

3.0 RELIANCE ON OTHER EXPERTS ........................................................................14

4.0 PROPERTY DESCRIPTION AND LOCATION ....................................................16 4.1 LOCATION...............................................................................................................16 4.2 DESCRIPTION OF THE PROPERTY .....................................................................16

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY.......................................................21

5.1 ACCESS ....................................................................................................................21 5.2 CLIMATE AND PHYSIOGRAPHY ........................................................................21 5.3 LOCAL RESOURCES AND INFRASTRUCTURE................................................23

6.0 HISTORY .....................................................................................................................27 6.1 GENERAL.................................................................................................................27 6.2 EXPLORATION PROGRAMS ................................................................................27

6.2.1 2007 to 2008 Exploration Program....................................................................29 6.2.2 2008 to 2009 Exploration Program....................................................................29 6.2.3 2009 to 2010 Exploration Program....................................................................30

6.3 DRILLING PROGRAMS..........................................................................................30 6.3.1 2004 to 2005 Drilling.........................................................................................31 6.3.2 2005 to 2006 Drilling.........................................................................................31 6.3.3 2006 to 2007 Drilling.........................................................................................31 6.3.4 2007 to 2008 Drilling.........................................................................................31 6.3.5 2008 to 2009 Drilling.........................................................................................32 6.3.6 2009 to 2010 Drilling.........................................................................................33

6.4 RESOURCE ESTIMATES........................................................................................33 6.5 PRODUCTION..........................................................................................................33

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7.0 GEOLOGICAL SETTING.........................................................................................34 7.1 REGIONAL GEOLOGY...........................................................................................34 7.2 PROPERTY GEOLOGY...........................................................................................35

8.0 DEPOSIT TYPES ........................................................................................................39

9.0 MINERALIZATION...................................................................................................43 9.1 MINERAL ZONES ...................................................................................................44

9.1.1 Dorado Este........................................................................................................44 9.1.2 Dorado Central...................................................................................................44 9.1.3 Dorado Oeste .....................................................................................................44 9.1.4 Ojo de Agua .......................................................................................................44

10.0 EXPLORATION..........................................................................................................46 10.1 GENERAL.................................................................................................................46 10.2 2009-2010 EXPLORATION PROGRAM (PHASE VI) DORADO

OESTE AND OJO DE AGUA ESTE........................................................................46 10.2.1 Dorado Oeste (DW) ...........................................................................................46 10.2.2 Ojo de Agua Este (ODAE) ................................................................................46

10.3 INTERPRETATION OF RESULTS.........................................................................50

11.0 DRILLING ...................................................................................................................51 11.1 SUMMARY...............................................................................................................51 11.2 2009 TO 2010 DRILLING PROGRAM (PHASE VI)..............................................51 11.3 2009 TO 2010 GENERAL DRILLING RESULTS ..................................................54

11.3.1 Dorado Oeste .....................................................................................................54 11.3.2 Ojo de Agua Este (ODAE) ................................................................................57

12.0 SAMPLING METHOD AND APPROACH .............................................................60 12.1 DESCRIPTIONS OF METHOD AND APPROACH...............................................60 12.2 MICON COMMENTS ..............................................................................................61 12.3 SIGNIFICANT OR RELAVENT SAMPLES...........................................................62

13.0 SAMPLE PREPARATION AND SECURITY .........................................................63 13.1 DESCRIPTION OF SAMPLE PREPARATION AND SECURITY........................63 13.2 2009 TO 2010 (PHASE VI) EXPLORATION PROGRAM.....................................66 13.3 MICON COMMENTS ..............................................................................................71

14.0 DATA VERIFICATION .............................................................................................72 14.1 SITE VISIT................................................................................................................72 14.2 MINERAL RESOURCE ESTIMATE.......................................................................73

15.0 ADJACENT PROPERTIES .......................................................................................74 15.1 MARICUNGA MINE (KINROSS)...........................................................................74 15.2 LA COIPA MINE (KINROSS) .................................................................................74

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15.3 LA PEPA PROJECT AND OLD MINE WORKINGS (YAMANA GOLD CORPORATION)..........................................................................................76

15.4 LOBO-MARTE MINE (KINROSS) .........................................................................76 15.5 CERRO CASALE DEPOSIT (KINROSS/BARRICK) ............................................76 15.6 CASPICHE DEPOSIT (EXETER RESOURCE CORPORATION) ........................77

16.0 MINERAL PROCESSING AND METALLURGICAL TESTING........................79 16.1 AMTEL PROGRESS REPORT SUMMARY AS OF MAY 27, 2010.....................79

16.1.1 Composites Tested .............................................................................................79 16.1.2 General Testwork Quality Control and Quality Assurance ...............................80 16.1.3 Historical Grade Variability and Cyanicides .....................................................80 16.1.4 Historical Mineralogical Composition...............................................................80 16.1.5 Column Leach Tests of 2008-09........................................................................81 16.1.6 Comparison of BRT and Column Leach Recoveries.........................................81 16.1.7 BRT Results on Coarse Milled (>150 μm) Composites ....................................82 16.1.8 Copper Extraction from Coarse Milled HG Mineralized

Composites ........................................................................................................82 16.1.9 BRT Results on Fine Milled (<150 μm) Composites ........................................82 16.1.10 Report Conclusions............................................................................................83

16.2 AMTEL PROGRESS REPORT SUMMARY AS OF SEPTEMBER, 2010 ...........................................................................................................................83

16.2.1 KHD Grinding and Air Sweeping Tests ............................................................84 16.2.2 Short Column Stability Tests .............................................................................84

16.3 AMTEL PROGRESS REPORT SUMMARY AS OF OCTOBER, 2010 ...........................................................................................................................85

16.3.1 Metallurgical Composite Samples Tested .........................................................86 16.3.2 Composite Grade Variability and Cyanicides....................................................86 16.3.3 BRT Results on Coarse Milled (>300 μm) Composites ....................................86 16.3.4 BRT Results on Fine Milled (<200 μm) Composites ........................................87 16.3.5 Report Conclusions............................................................................................88

16.4 METALLURGICAL RECOVERY ESTIMATES....................................................88 16.5 ON-GOING WORK ..................................................................................................89

17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES...................90 17.1 DESCRIPTION OF THE DATABASE ....................................................................90 17.2 GEOLOGICAL DOMAIN INTERPRETATIONS...................................................90 17.3 COMPOSITING METHODS....................................................................................94 17.4 CONTACT ANALYSIS............................................................................................96 17.5 GRADE CAPPING AND RESTRICTION.............................................................100 17.6 BULK DENSITY DETERMINATION ..................................................................101

17.6.1 Density Estimation In Block Model ................................................................104 17.6.2 Results..............................................................................................................104

17.7 VARIOGRAPHY ....................................................................................................105 17.8 BLOCK MODEL CONSTRUCTION.....................................................................108 17.9 BLOCK MODEL VALIDATION...........................................................................111

17.9.1 Visual Review..................................................................................................111

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17.9.2 Drift Analysis...................................................................................................116 17.9.3 Dispersion Analysis .........................................................................................117

17.10 OPEN PIT OPTIMIZATION ..................................................................................120 17.11 CUT-OFF GRADE ESTIMATE .............................................................................124 17.12 MINERAL RESOURCE CLASSIFICATION CRITERIA ....................................124 17.13 RESPONSIBILITY FOR ESTIMATION ...............................................................125 17.14 MINERAL RESOURCE ESTIMATE.....................................................................125

18.0 OTHER RELEVANT DATA AND INFORMATION ...........................................129

19.0 INTERPRETATIONS AND CONCLUSIONS.......................................................130

20.0 RECOMMENDATIONS...........................................................................................133 20.1 BUDGET FOR FURTHER WORK........................................................................133 20.2 FURTHER RECOMMENDATIONS......................................................................134

21.0 REFERENCES...........................................................................................................137

APPENDIXES APPENDIX I Glossary of Terms At end of Report APPENDIX II VARIOGRAMS (CORRELOGRAMS) At end of Report APPENDIX III MINERAL RESOURCE CLASSIFICATION CRITERIA

(Excerpted from Magri, 2009) At end of Report APPENDIX IV OTHER BLOCK MODEL VALIDATIONS At end of Report

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List of Tables Page

Table 1.1 Estimated Mineral Resources for the Dorado Sector Deposits (Total

Volcan In-Pit Whittle Resource)........................................................................8

Table 2.1 List of Abbreviations .......................................................................................13

Table 4.1 List of Mining and Exploration Concessions...................................................18

Table 6.1 Volcan Project Drill Hole Summary 2004 to 2009 (Phases I through V) .....................................................................................................................28

Table 6.2 Summary of Significant Results, Phase V (2008-2009) Drilling Campaign .........................................................................................................33

Table 10.1 Summary of the Exploration Work Undertaken in the Ojo de Agua Este Area during 2009-2010 ............................................................................48

Table 10.2 Summary of the Drill Statistics for the Ojo de Agua Este Area, 2009-2010..................................................................................................................49

Table 11.1 Drill Hole Summary for the 2009 to 2010 Drilling Program (Phase VI) ....................................................................................................................52

Table 11.2 Drill Hole Summary for the 2009 to 2010 Dorado Oeste Drilling Program (Phase VI)..........................................................................................54

Table 11.3 Summary of the Aborted Drill Holes for the Dorado Oeste Area....................55

Table 11.4 Drill Hole Summary for the 2009 to 2010 Ojo de Agua Este Drilling Program (Phase VI)..........................................................................................58

Table 16.1 Gold Recovery Variation with Grind Size .......................................................82

Table 16.2 Grade versus Grind Fineness Matrix for Au Recovery....................................85

Table 16.3 Gold Recovery Variation with Grind Size .......................................................87

Table 16.4 Comparison of Gold Recovery with Depth at Selected Grind Fineness - P80 1.0 mm and 0.5 mm .................................................................................87

Table 16.5 Gold Recovery Variation for Grind Fineness from P80 of 200 μm to 53 μm ....................................................................................................................87

Table 16.6 Comparison of Gold Recovery with Depth at Selected Grind Fineness P80 0.2 mm and 75 μm .....................................................................................88

Table 17.1 Summary of the Volcan Drill Hole Database ..................................................90

Table 17.2 Description of the Dorado Deposit Domains ...................................................93

Table 17.3 Boundary Definition between Geological Units (GU) (H = hard, S = soft) ..................................................................................................................99

Table 17.4 Cu Grade Capping and Au Threshold Limits Applied in Dorado Oeste (Sur) Deposit..................................................................................................101

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Table 17.5 Density Estimation Plan.................................................................................104

Table 17.6 Density Comparison – Estimated Block vs Declustered Samples .................105

Table 17.7 Summary of the Variographic Parameters, Volcan Project ...........................109

Table 17.8 Summary of the Estimation Plan Used in the Estimation of Gold Grades, Volcan Project ..................................................................................110

Table 17.9 Summary of the Estimation Plan Used in the Estimation of Copper Grades, Volcan Project ..................................................................................111

Table 17.10 Comparison of Average Grades of the Drill Hole Samples Dataset vs. Estimated Block Grades by Domain, Volcan Project....................................118

Table 17.11 Summary of Input Parameters, Volcan Project..............................................121

Table 17.12 Summary of Cut-off Grades for the Dorado Sector Deposits, Volcan Project ............................................................................................................124

Table 17.13 Summary of the Classification Criteria for the Dorado Sector Deposits, Volcan Project................................................................................125

Table 17.14 Tabulation of Mineral Resources for the Dorado Sector Deposits, Summarized by Deposit.................................................................................127

Table 17.15 Tabulation of the Global Mineral Resources for the Dorado Sector Deposits, Summarized by Category and Cut-off Grade ................................128

Table 17.16 Estimated Mineral Resources for the Dorado Sector Deposits (Total Volcan In-Pit Whittle Resource)....................................................................128

Table 19.1 Summary of the Mineral Resource Parameters used for the Volcan Project ............................................................................................................130

Table 19.2 Estimated Mineral Resources for the Dorado Sector Deposits (Total Volcan In-Pit Whittle Resource)....................................................................132

Table 20.1 Volcan Property, 2010 to 2011 (Phase VII) Exploration Program ................133

Table 20.2 Volcan Property, 2010 to 2011 (Phase VII) Exploration Budget ..................134

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List of Figures

Page Figure 4.1 Location Map ...................................................................................................17

Figure 4.2 Mineral Tenure Map of the Volcan Property, Chile ........................................19

Figure 5.1 A View of the Manto Volcan Sulphur Deposit................................................22

Figure 5.2 Andina Campsite..............................................................................................22

Figure 5.3 Volcán Copiapo (Cerro del Azufre).................................................................24

Figure 5.4 Laguna del Negro Francisco as viewed from the Dorado Deposits.................24

Figure 5.5 Property Map Showing Locations of Water Wells and Camp.........................25

Figure 6.1 Plan View of the Drill Hole Coverage and Gold Deposits of the Dorado Sector, Volcan Property ......................................................................30

Figure 7.1 Generalized Map of Regional Geology and Location of Maricunga Metallogenic Belt.............................................................................................36

Figure 7.2 Simplified Geological Map of the Dorado to Ojo de Agua Sector of the Volcan Property .........................................................................................37

Figure 8.1 Schematic Cross-Section Showing Reconstruction of a Typical Refugio Hydrothermal System ........................................................................39

Figure 8.2 Examples of Styles of Quartz Veining at the Verde West and Pancho Deposits, Refugio District................................................................................41

Figure 10.1 Location Map for the Dorado and Ojo de Agua Areas on the Volcan Property............................................................................................................47

Figure 11.1 Diamond Drilling Rig Operating during the 2010 Site Visit ...........................51

Figure 11.2 Plan showing the Collar Locations for the 2009 to 2010 Drilling Campaign (In Black)........................................................................................53

Figure 11.3 Cross-Section through Section Line DW-1200 Illustrating the Drill Holes and Gold Grade in Grams per Tonne.....................................................56



Figure 11.6 Ojo de Agua Este Drill Hole and Trench Results and Inferred Limits of Mineralization..............................................................................................59

Figure 13.1 Results for the RC Field Duplicate Samples....................................................67

Figure 13.2 Results for the Diamond Drill Field Duplicate Samples..................................68

Figure 13.3 Results for the Pulp Duplicate Samples ...........................................................68

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Figure 13.4 Cumulative Sum Plot for the Standard Reference Samples (Relative to the Observed Means) .......................................................................................69

Figure 13.5 Cumulative Sum Plot for the Standard Reference Samples (Relative to Nominal Values) ..............................................................................................70

Figure 13.6 Scatter Plot of Laboratory and Nominal (known) Values for the Standard Reference Samples............................................................................70

Figure 14.1 Interior View of One of the Andina Core Storage Buildings in Copiapo ............................................................................................................72

Figure 14.2 Interior View of the Geoanalitica Sample Preparation Facilities in Copiapo ............................................................................................................73

Figure 15.1 Location the Volcan Project Relative to Selected Adjacent Properties ...........75

Figure 16.1 Heap Leach Gold Recovery Algorithm, Dorado Este and Oeste Areas ..........89

Figure 16.2 Grinding/Agitation Leach Gold Recovery Algorithm, Dorado Este and Oeste Areas ...............................................................................................89

Figure 17.1 Example of Maricunga-style Veining and Stockworks, Volcan Project..........91

Figure 17.2 Example of Disseminated and Stringer Sulphide Mineralization, Volcan Project..................................................................................................91

Figure 17.3 Dorado Oeste Deposit Domains - Graphical Representation...........................92

Figure 17.4 Statistical Comparison Between Gold and Copper Values, Dorado Oeste Deposit ...................................................................................................93

Figure 17.5 Plan View of the 4705 Bench Showing the Various Domain Outlines, Volcan Project..................................................................................................94

Figure 17.6 Histogram of Raw Sample Lengths, Volcan Project .......................................95

Figure 17.7 Box-and-Whisker Plot of Gold Assays Contained Within the Geological Domains (Columns), Excluding Ungrouped Weights (Gold grades in ppb) ........................................................................................95

Figure 17.8 Box-and-Whisker Plot of Gold Assays Contained Within the Geological Domains (Columns), Including Ungrouped Weights (Samples ≥ 1m) (Gold grades in ppb)..............................................................96

Figure 17.9 Contact Analysis, Dorado Oeste (North) Deposit, Domain 100/101 – 110/111 ............................................................................................................97

Figure 17.10 Contact Analysis, Dorado Oeste (South) Deposit, Domain 100/101 – 120....................................................................................................................97

Figure 17.11 Contact Analysis, Dorado Oeste (South) Deposit, Domain 100/101 – 121....................................................................................................................98

Figure 17.12 Contact Analysis, Dorado Oeste (South) Deposit, Domain 120 – 121............98

Figure 17.13 Contact Analysis, Dorado Oeste (South) Deposit, Domain 10 – 11..............100

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Figure 17.14 Frequency Log-normal Histogram of the Gold Values Contained Within the Dorado Oeste (Sur) Domain 121 .................................................101

Figure 17.15 Density Statistics – All Data ..........................................................................102

Figure 17.16 Final Density Statistics...................................................................................103

Figure 17.17 Statistics – Declustered Density Samples ......................................................104

Figure 17.18 Graphical Comparison of Density – Block Model Estimates and Samples ..........................................................................................................105

Figure 17.19 Variographic Map for the Veinlet Domain (Code 110-111), Dorado Oeste (Norte) Deposit ....................................................................................106

Figure 17.20 Variographic Map for the Veinlet Domain (Code 120-121), Dorado Oeste (Sur) Deposit........................................................................................106

Figure 17.21 Variographic Map for the Veinlet Domain (Code 2002), Dorado Central Deposit ..............................................................................................107

Figure 17.22 Variographic Map for the Veinlet Domain (Code 3003), Dorado Este Deposit ...........................................................................................................107

Figure 17.23 Bench Plan 4505 ............................................................................................112




Figure 17.27 Dorado Oeste - Main Body – South End – Vertical Section..........................114

Figure 17.28 Dorado Oeste - Main Body – Central Zone – Vertical Section .....................114

Figure 17.29 Dorado Oeste - Main Body – North End – Vertical Section..........................115

Figure 17.30 Dorado Oeste - Northern Body – GU 110 – 111 – Vertical Section..............115

Figure 17.31 Drift Analysis for the Dorado Oeste (North) Domain (Code 100/101) .........116

Figure 17.32 Drift Analysis for the Dorado Oeste (South) Domain (Code 121) ................117

Figure 17.33 Drift Analysis for the Dorado Oeste Domain (Code 100/101) ......................117

Figure 17.34 Dispersion Graph for Dorado Oeste (Norte 110/111), All Samples ..............118

Figure 17.35 Dispersion Graph for Dorado Oeste (Sur, 120), All Samples........................119

Figure 17.36 Dispersion Graph for Dorado Oeste (Sur, 121), All Samples........................119

Figure 17.37 Preliminary Overall Wall Slope Sectors, Dorado Area Open Pits, Volcan Project................................................................................................120

Figure 17.38 Andina VolcanWhittle Pit Shell Gold Price Sensitivity ................................122

Figure 17.39 Isometric View of the Dorado Area Block Model and Base Case Optimized Pit Shell ........................................................................................122

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Figure 17.40 Heap Leach Gold Recoveries for the Volcan Gold Deposit, Dorado Este and Oeste Areas .....................................................................................123

Figure 17.41 Mill Gold Recoveries for the Volcan Gold Deposit, Dorado Este and Oeste Areas ....................................................................................................123

Figure 17.42 Volcan Whittle Pit by Pit Analysis ................................................................124

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1.0 SUMMARY 1.1 INTRODUCTION Andina Minerals Inc. (Andina) has retained Micon International Limited (Micon) to assist with and audit Andina’s updated mineral resource estimate for the Dorado deposits located on its Volcan property in Chile, and to prepare a Technical Report in accordance with Canadian National Instrument 43-101 (NI 43-101) to support its release to the public. The updated mineral resource estimate has been prepared to support the preparation of a pre-feasibility study for the potential production of gold from the Dorado deposits. This Technical Report includes data and analysis from various contractors, consultants, certified laboratories and Micon’s own work. It discloses the exploration results obtained from the Dorado deposits as at June 17, 2010 and includes drilling and assay results up to and including drill hole ROA-837. A site visit to the Volcan property was conducted by William J. Lewis, P.Geo., of Micon during the period April 17 and 19, 2010. During this time, Micon examined outcrops and the locations of drill holes and surface samples, observed drilling of diamond drill holes, reviewed logging and sampling procedures, discussed Quality Assurance/Quality Control methodology, examined selected drill core from the three deposits and reviewed the overall project details with Andina’s staff and external consultants. The history of exploration on the Volcan property has been described in previous Technical Reports (2004 to 2009) prepared on behalf of Andina. These reports have been filed by Andina with the Canadian Securities Administrators (CSA) on the System for Electronic Document Analysis and Retrieval (SEDAR). The last audit and update prior to this report was published on October 23, 2009 and authored by Messrs. Pressacco, Gowans and Shoemaker of Micon. 1.2 PROPERTY DESCRIPTION AND OWNERSHIP The Volcan property is situated approximately 700 km north of Santiago, the capital of Chile, approximately 170 km by road east of the mining and agricultural city of Copiapo and approximately 40 km west of the border with Argentina. The property is located in Region III of northern Chile and lies along the western flanks of the Chilean Andes at a mean elevation of some 4,800 m, approximately centred on 27° 20’ south latitude and 69° 8.5’ west longitude. The Volcan property originally was comprised of four contiguous mining concessions (also referred to as exploitation concessions) covering an area totalling 5,455 ha. These include the Volcan 1-30 and Maria Eliana 1-10 mining concessions in the northern portion of the property, and the Demanda 1-20 and America del Sur 1-50 mining concessions in the southern part. Andina entered into an option to purchase the four mining concessions in May, 2004. The final option payment under the agreement was made in June, 2007. In June, 2009, Andina acquired from Barrick Gold Corporation (Barrick) the exploration rights

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to certain properties and a number of exploration concessions surrounding the Volcan property. The land acquired from Barrick totalled approximately 15,040 ha. The total area controlled by Andina is 45,289 ha, corresponding to the actual property boundaries. However, a title and claim search will indicate that Andina holds 60,165 ha because several areas have duplicate (overlapping) registered concessions under the various Chilean categories of mineral rights holdings. The 60,165 ha mentioned above is 14,876 ha greater than the actual area of 45,289 ha controlled by Andina. The discrepancy of 14,876 ha is due duplicate concessions under different categories which do not eliminate the overlapping titles from the concession record. Property payments, as made to date, will maintain the Volcan property in good standing until April, 2011. Apart from minor secondary roads, there is only limited infrastructure in close proximity to the Volcan project area. Exploration personnel are housed in camps, and all food supplies and potable water must be brought in from Copiapo. Experienced mine and plant personnel are readily available in the region, especially in Copiapo. Non-potable, artesian water is available on the property. Electric power from the national grid is presently not available and must be generated at the camp site. 1.3 HISTORY The first formal evaluation of the gold potential of the Volcan area was carried out by Zentilli (1990) who recognized that sulphur mineralization and the surrounding alteration were the result of high-level, high sulphidation hydrothermal systems related to deeper intrusive activity and established that the sulphur carried anomalous arsenic, antimony, mercury and gold. The property was optioned by the Chilean subsidiary of Homestake Mining Company (Homestake) in 1990, which identified a gold geochemical anomaly and then conducted mapping and an RC drill program. Further work, including a 15 line-km IP geophysical survey, resulted in identification of three target areas that are equivalent to the Dorado Central, Oeste and Norte nomenclature adopted later by Cameco. The property was returned to the owners by Homestake in 1993 as not meeting corporate objectives. In 1994, the property was optioned to Compañia Minera Cameco (Chile) Ltda., the Chilean subsidiary of Cameco Corp. (Cameco) which carried out exploration work until 1997. This work included mapping, re-logging of some drill material, additional assaying and metallurgical and petrographic studies. The option was dropped for reasons including the then perceived low tonnage and grade potential and unfavourable metallurgical results.

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The Maricunga gold belt has received increased exploration attention from 2003 to the present due to strengthening gold prices. As noted previously, Andina entered into an option to purchase the four mining concessions from the owners in 2004. Following its option to purchase the property in 2004, Andina has carried out six phases of exploration at the Volcan property, starting with the 2004 to 2005 field season and continuing with the latest 2009-2010 season. 1.4 GEOLOGICAL SETTING AND MINERALIZATION The Volcan property is situated within the Maricunga mineral belt which extends over a distance of approximately 150 km from north to south and is approximately 30 km wide, close to the border with Argentina. Mineralization is related to the emplacement of Miocene age calc-alkaline volcanic and sub-volcanic units over basement rocks of Paleozoic to Cenozoic age. The Maricunga belt hosts a number of gold and gold-copper (silver) deposits including La Coipa, Maricunga, Aldebaran, La Pepa, Soledad, Pantanillo, Lobo, Escondido and Marte. The structural setting of the Volcan property is related to, and associated with, the formation of the Copiapo stratovolcano (Volcán Copiapo) and may also be related to regional northerly-trending high angle reverse faulting. The Volcan property covers the Dorado gold deposits (Dorado Este (East), Central and Oeste (West) zones, the latter of which has been sub-divided into the Oeste Norte and Oeste Sur zones), and these are the subject of this Technical Report. The Ojo de Agua sector lies to the northeast of Dorado. 1.5 EXPLORATION PROGRAM (PHASE VI) The 2009 to 2010 exploration program (Phase VI) was conducted between November 16, 2009 and May 4, 2010. 1.5.1 Dorado Oeste (DW) The main objective of the drilling program on the Dorado Oeste area was to achieve a 50 x 50 m grid in the zones containing gold grades above 1.0 g/t. In addition, one hole was scheduled to explore the possibility of porphyry copper style mineralization at depth (DOA 835; Section 1150), and three were programmed to detect potential lateral extensions of gold mineralization (ROA 821, DOA 843 and ROA 845; Sections 1250, 1200 and 1300, respectively). A total of 52 holes were drilled (21 diamond and 31 reverse circulation drill holes) totalling 8,719.40 and 8,998.00 m, respectively. Five holes were aborted due to poor ground conditions, including DOA 835 which did not reach its target to test porphyry copper style mineralization at depth.

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1.5.2 Ojo de Agua Este (ODAE) The ODAE prospect is located 6.5 km northeast of the Dorado deposits and 3 km due east of theAndrea and Florencia prospects. Together with the latter two, it is a significantly mineralized sector within the Ojo de Agua area on the Volcan property. Geological mapping, trenching, a ground magnetic survey and drilling, together with corresponding surface, chip-channel, drill chip and core sampling, were carried out in the exploration program. Stereoscopic Ikonos satellite imagery of the whole district was taken during the field season and used as a base for mapping. The area of principal interest in which all the drill holes and most of the trenches are located covers 1.5 km2. The exploration undertaken by Andina warrants the 2010 update of the previous mineral resource estimates for the Dorado deposits and the update is the subject of this current Technical Report. The ODAE prospect and adjoining areas require further exploration before a mineral resource estimate for them can be made. 1.6 METALLURGICAL TESTWORK Andina has conducted a number of metallurgical testwork phases in order to optimize the potential recovery of gold.. Andina’s previous metallurgical testwork programs have been summarized in the previous Technical Reports which have been filed on SEDAR. The metallurgical testwork is on-going. The review of the metallurgical testwork contained in this report was conducted by Richard Gowans, P. Eng, who is a Qualified Person as defined in NI 43-101, and is independent of Andina. 1.7 2010 MINERAL RESOURCE ESTIMATE The mineral resource estimate for the Dorado sector of the Volcan project was prepared as a collaborative effort involving representatives of Andina, SRK South America (SRK), Dr. Eduardo Magri (consultant retained by Andina), and Micon, with Micon completing an audit and taking responsibility for the estimate. The mineral resources presented in this report were estimated in accordance with the definitions contained in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines that were prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council on December 11, 2005. The estimate of the mineral resources for the gold deposits found in the Dorado sector of the Volcan project, as presented in this report, was prepared by William Lewis, B.Sc., P.Geo., Ing. Alan San Martin, MAusIMM, and Sam Shoemaker, B.Sc., MAusIMM, all of whom are Qualified Persons as defined in NI 43-101, and are independent of Andina.

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For the purposes of this mineral resource estimate, domain models of elevated concentrations of Maricunga-style veinlets were constructed for each of the four deposits in the Dorado area of the Volcan project (Dorado Este, Central and Oeste (Norte and Sur)). Domain models which encompass the lower grade halo surrounding the veinlet swarms and models which encompass areas containing late-stage intrusive bodies for each of these four deposits were prepared. Domain models of the barren porphyry bodies were created and were used as hard-code barren areas within the veinlet domain model. Given the virtual absence of any significant quantities of overburden at Volcan, the domain models were extended and trimmed to the topographic surface. An analysis of the lengths for all samples contained within the drill hole database was conducted. This analysis revealed that the majority of the samples were 2 m in length. Consequently, no compositing was carried out on this data set and the raw samples were used for the preparation of the mineral resource estimate. Grade capping (or top cutting) was investigated for the gold assay values. A log-normal histogram was generated from this an extraction file for gold assays and the descriptive statistics of the sample data set were generated. The grade cap value was selected by examining the histogram for the grade at which outlier assays begin to occur. A capping value of 5 g/t Au was indicated, resulting in the gold grades of only 15 samples being reduced. Only a minimal impact on the average grade is observed as a result of the application of a grade cap to the data for the Dorado Oeste (Sur) deposit. The bulk density measurements were performed in the Geomechanical and Geotechnical Laboratories of the Department of Mines at the University of Chile, using either the method described in the American Society for Testing Materials (ASTM) procedure 1998, the Asociación Española de Normalización (AENOR) 1999 or the International Society of Rock Mechanics (ISRM) 1986. Correlograms were used for modeling and describing the spatial variability of the gold mineralization found at each of the deposits in the Dorado area of the Volcan property. These correlograms were prepared based on the 2-m raw sample data. This study consisted of calculating experimental correlograms that validated the observed trends in the three orthogonal directions. These correlogram models consisted of a nugget effect (C0) and either two or three nested structures that contribute to the total variance. The model type is spherical for all the domains and for all of the three principal directions. Based on the information obtained from the variographic maps and the determination of the nuggets for the different domains, experimental directional correlograms were prepared. These correlograms were interpreted in order to obtain the models of the theoretical variograms which, in turn, provide three-dimensional correlograms to calculate the weights used in the Ordinary Kriging methodology of grade estimation. The preferential directions were re-aligned to correspond with veinlet geological attitudes. A simple, upright, whole-block model was created using the Vulcan software package. Block model validation began with visual comparisons (which are qualitative in nature) of

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the resulting block grades against the informing drill hole samples on cross-sections. Additional visual evaluations were conducted whereby the contoured gold grades from the drill hole data were compared against the corresponding estimated block grades for selected benches. Good general agreement is present between the drill hole samples and the estimated block grades in the cross-sectional images. Similarly, good overall agreement between the contoured gold grades and the estimated block grades can be seen in plan (bench) view. It is expected that the level of agreement between the drill hole sample data and the estimated block grades will improve as the level of data density increases. Validation continued with the preparation of drift analyses where the average block grades (for a given bench or a given cross-section slice) were quantitatively compared against the informing sample data for each of the veinlet domains and surrounding low-grade envelopes. The average block estimated grades for both bench and cross-sectional views reasonably reflect the average informing sample data. In general terms, it appears that the average block model grades slightly underestimate relative to the sample average grades in the high grade areas. Conversely, in general terms, the average block model grades slightly overestimate relative to the sample average grades in the low grade areas. These estimation errors are considered to be a result of the smoothing effect that is inherent with the application of interpolation algorithms such as the Ordinary Kriging system to delineation-stage drill hole data. It is expected that the correlation between the estimated block grades and the informing sample grades will improve with increased sample density. Validation was completed with the preparation of a dispersion analysis, which began with a comparison of the average grades of the drill hole data against the average of the estimated block grades for each of the modeled domains. Good agreement exists between the average estimated block grades and the informing samples. Open pit optimization was completed using the Gemcom Software Whittle 4X (version 4.3) open pit optimization program. This program uses the Lerchs-Grossmann algorithm to determine the optimal economic open pit footprint for a given mineral resource. Once this footprint has been established, the software allows the development of a simple resource based production schedule. Tthe resource block model was used as a basis for the pit optimization. The block model was supplied in a Surpac format which was converted into a Vulcan block model for preparation of the Whittle block model and resulting optimization runs. Resource classifications and mineralized domains were used to develop a Whittle rock code which determined the possible routing of an individual block during optimization (process feed or waste). Because a variable metallurgical recovery was used for the Dorado Oeste and Este deposits, a recovered gold grade was also calculated. Pit slopes recommended by Vector were used to flag each block by its individual slope sector. Bench heights of 10 m were used for all optimization runs in all types of material.

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Processing and general administration costs were based on preliminary estimates appropriate to a leach facility with an annual capacity of 21.9 Mt. Pit optimization runs were completed on measured plus indicated resources only (M & I) and measured plus indicated plus inferred resources (M, I & I) for gold prices ranging from US$500/oz up to US$1,500/oz in US$50/oz increments. Mine operating costs were supplied by Andina based on similar-sized operations in the area. For the Whittle block models, mining dilution and mining recovery factors were not applied in the determination of the pit shell resource. Capital expenditures were not considered during pit optimization. Whittle optimization was performed on the block model for each scenario (M & I and M, I & I) at the various gold prices. For the purposes of preparation of the mineral resource estimate, a gold price of US$950/oz was selected and resource results were reported for pit shells derived from measured and indicated resources only, with contained inferred material within these shapes reported separately. As a result of the concepts and processes described above, the mineral resources are defined as all potentially profitable blocks, using the base case input parameters, that are contained within the US$950/oz Au optimized open pit shell and below the topographic surface. The mineral resources are stated using the gold grades as estimated using the Ordinary Kriging interpolation method and using the capped metal grades. The estimated mineral resources for the Dorado sector deposits of the Volcan project are presented in Table 1.1. There is a degree of uncertainty associated with the estimation of mineral resources and mineral reserves and their corresponding metal grades. The estimation of mineralization is a somewhat subjective process and the accuracy is a function of the accuracy, quantity and quality of available data, the accuracy of statistical computations, and the assumptions used and judgments made in interpreting engineering and geological information. Until mineral reserves or mineral resources are actually mined and processed, and the characteristics of the deposit assessed, their quantity and grade should be considered as estimates only. In addition, the quantity of mineral reserves and mineral resources may vary depending on many factors such as exchange rates, energy costs and metal prices. Fluctuation in metal or commodity prices, results of additional drilling, metallurgical testing, receipt of new information and production and the evaluation of mine plans subsequent to the date of any mineral resource estimate may require revision of such an estimate. Micon has considered the mineral resource estimates in light of known environmental, permitting, legal, title, taxation, socio-economic, marketing, political and other relevant issues and has no reason to believe at this time that the mineral resources will be materially affected by these items. Given the relatively early stage of exploration and delineation of the Dorado area deposits, few studies have yet been completed that examine whether the mineral resources may be materially affected by mining, infrastructure or other relevant factors. Metallurgical testing has been performed on samples taken from the Dorado deposits and testwork is on-going, but work remains inconclusive, awaiting final reporting of results.

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Table 1.1 Estimated Mineral Resources for the Dorado Sector Deposits (Total Volcan In-Pit Whittle Resource)

Heap Leach Mill Feed Total In-Pit Resource

Gold Ounces Gold Ounces Gold Ounces Classification Tonnes

Gold Grade Au (g/t) Contained Recovered

Tonnes Gold Grade

Au (g/t) Contained Recovered Tonnes

Gold Grade Au (g/t) Contained Recovered

Measured 91,079,000 0.615 1,802,000 1,064,200 14,839,000 1.487 709,000 571,500 105,918,000 0.738 2,511,000 1,635,700

Indicated 247,350,000 0.584 4,644,000 2,741,500 36,413,000 1.471 1,723,000 1,385,600 283,763,000 0.698 6,367,000 4,127,100

Measured Plus Indicated

338,429,000 0.592 6,446,000 3,805,700 51,252,000 1.476 2,432,000 1,957,100 389,681,000 0.709 8,878,000 5,762,800

Inferred 40,117,000 0.468 603,000 328,200 1,436,000 1.464 68,000 54,400 41,553,000 0.502 671,000 382,600

1. All quantities are rounded to the appropriate number of significant figures, consequently sums may not add due to rounding. 2. Mineral resources include mill incremental material. 3. Mineral resources which are not mineral reserves do not have demonstrated economic viability. There are currently no mineral reserves on the Volcan property. 4. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. 5. The quantity and grade of reported Inferred Resources in this estimation are conceptual in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or

Measured Mineral Resource. It is uncertain if further exploration will result in the upgrading of the Inferred Resources into an Indicated or Measured Mineral Resource category. 6. The Volcan mineral resource estimate is effective as of September 16, 2010.

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All relevant data and information in regard to the exploration activities at, and required to support the disclosure of a mineral resource estimate for, the Dorado area deposits of Andina’s Volcan project are included in other sections of this report. 1.8 CONCLUSIONS AND RECOMMENDATIONS 1.8.1 Budget for Further Work Following upon the general success of its 2009 to 2010 (Phase VI) exploration program, Andina will continue to explore the various mineralized zones located on the Volcan property in the next exploration campaign (Phase VII), which will consist of geotechnical, condemnation and exploration drilling. Geotechnical drilling is required for pit design purposes at Dorado Oeste. Approximately 5,000 m of diamond drilling will be conducted in the area in order to confirm the rock quality parameters within the potential future pit that have been assessed through investigations and assessment of stored drill core, to date. Condemnation drilling will be carried out in those areas were the leach pad (3.5 km2), tailings dam (1 km2), and waste dump (3 km2) will potentially be installed. The holes will be conducted via reverse circulation and will generally not exceed 100 m in length. The assay results obtained in the Ojo de Agua Este area during the 2009 to 2010 drilling program were encouraging, and 10,000 m will be drilled in strategic locations, that will be defined by the geologists as the program is being conducted. In this way, the geologists can take every opportunity to alter the drilling program as it progresses. The total expenditure for the 2010 to 2011 (Phase VII) exploration and drilling program is estimated to be approximately US $12,800,000. Micon has reviewed Andina’s proposal for further exploration and studies on its Volcan property and considers that the budget for the proposed program is reasonable. Micon recommends that Andina implements the program as proposed, subject to either funding and other matters which may cause the proposed program to be altered in the normal course its business activities or alterations which may affect the program as a result of exploration activities themselves. 1.8.2 Further Recommendations The exploration activities completed to date have focused on the mineralization found at the Dorado area deposits, with limited exploration being completed over other portions of the land holdings. This exploration has effectively delineated the gold mineralization for the Dorado Oeste, Central and Este deposits, although the limits of the mineralization at those deposits remain open. Micon considers that exploration activities oriented towards the location of additional mineralization in the immediate area of the Dorado deposits, as well as elsewhere on the property, should continue.

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In Micon’s opinion, Andina is justified in proceeding with a preliminary feasibility study of the economic potential of the Dorado area deposits on its Volcan project. To that end, the following types of work are recommended:

Continuation of detailed metallurgical testing in order to determine the optimum processing criteria to maximize the gold recovery from the mineralization.

Collection of detailed geotechnical data in support of the determination of stable

open pit wall slope criteria, specifically for the Dorado Oeste deposit.

Selection of preliminary sites for major mine and processing infrastructure, such as the main crushing facility and leach pads.

Completion of condemnation drilling in these areas to ensure a low probability of the

presence of significant quantities of additional mineralization.

Completion of additional in-fill drilling in the three deposit areas with the goal of upgrading the classification of the mineralization from Inferred to Indicated and to provide additional drill hole information that will allow an improvement in the accuracy of the block model estimate on a local scale. Such an improvement in the accuracy of the local estimate will increase the confidence of the projected tonnages and grades during the detailed mine planning and economic evaluation stages.

Continued collection of baseline environmental data and conducting characterization

studies of the known mineralization in support of possible future permitting activities.

Permitting, characterization, and extraction planning associated with the company’s

water rights (340 L/s in Cienega Redonda, a sub-basin within the Maricunga water basin). The evaluation of sufficient sources of water in support of the contemplated project scope, project expansion and for future opportunities is an important and strategic element of Andina’s strategy going forward.

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2.0 INTRODUCTION At the request of Mr. George M. Bee, President and CEO of Andina Minerals Inc. (Andina), Micon International Limited (Micon) has been retained to assist with and audit Andina’s updated mineral resource estimate for the Dorado deposits located on its Volcan property in Chile, and to prepare a Technical Report in accordance with Canadian National Instrument 43-101 (NI 43-101) to support its release to the public. The updated mineral resource estimate has been prepared to support the preparation of a pre-feasibility study for the potential production of gold from the Dorado deposits. The term “Volcan property” refers to the concessions on which Andina has conducted its exploration program and resource estimate. The term “Volcan project” refers to the entire land package acquired or held by Andina or its Chilean subsidiary Andina Chile Ltda., in Region III, Chile. Data contained in this report are drawn from original work by Andina, certain original work by Micon to check Andina’s findings, and unpublished data from former owners and explorers of the property. Exploration activities through the 2009-2010 field season have been successful in completing in-fill drilling of selected areas of the three deposits. As a result of this drilling program, Andina now wishes to update the previous mineral resource estimate for the Dorado deposits. The Volcan property has been the subject of a number of independent Technical Reports prepared since 2004. The most recent of these, titled “Technical Report on Volcan Gold Project, Region III, Chile and Updated Mineral Resource Estimate for the Dorado Gold Deposits”, by Reno Pressacco et al., dated October 23, 2009 (Pressacco, 2009), presents the prior mineral resource estimate for the Dorado deposits. The Pressacco report was filed on the System for Electronic Document Analysis and Retrieval (SEDAR) on October 23, 2009. This Technical Report includes data and analysis from various contractors, consultants, certified laboratories and Micon’s own work. It discloses the exploration results obtained from the Dorado area deposits as at June 17, 2010 and includes drilling and assay results up to and including drill hole ROA-837. The Qualified Persons employed by Micon who prepared this report are:

William J. Lewis, B.Sc., P.Geo., a senior geologist. Ing. Alan J. San Martin, MAusIMM, mineral resource modeller. Richard Gowans, P. Eng., president and senior metallurgist. Sam Shoemaker, B.Sc., MAusIMM, senior mining engineer

Micon’s direct knowledge of the property is based on the site visit conducted by William J. Lewis, during the period April 17 and 19, 2010. During this time, Micon examined outcrops and the locations of drill holes and surface samples, observed drilling of diamond drill holes (DDH), reviewed logging and sampling procedures, discussed Quality Assurance/Quality Control (QA/QC) methodology, examined selected drill core from the three deposits and reviewed the overall project details with Andina’s staff and external consultants. The site

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visit was conducted in the presence, and with the assistance of Mr. Alonso Cepeda and Mr. Leonardo Ruz, both of whom are employed by Andina. Micon is pleased to acknowledge the helpful cooperation of Andina’s management and field staff, each of whom made any and all data requested available and responded fully to all questions, queries and requests for material. A number of visits were conducted by Alan J. San Martin and one by William J Lewis to the Andina offices in Santiago, to review, audit and discuss the resource model and the parameters used to conduct the resource estimate. In this regard, the mineral resource estimates for the Dorado sector of the Volcan project were prepared as a collaborative effort involving representatives of Andina, SRK South America (SRK), Dr. Eduardo Magri (consultant retained by Andina), and Micon, with Micon completing an audit and taking responsibility for the estimate. This report is intended to be used by Andina subject to the terms and conditions of its agreement with Micon. That agreement permits Andina to file this report as an NI 43-101 Technical Report with the Canadian Securities Administrators (CSA) pursuant to provincial securities legislation. Except for the purposes legislated under provincial securities laws, any other use of this report, by any third party, is at that party’s sole risk. The conclusions and recommendations in this report reflect the authors’ best judgment in light of the information available to them at the time of writing. The authors and Micon reserve the right, but will not be obliged, to revise this report and conclusions if additional information becomes known to them subsequent to the date of this report. Use of this report acknowledges acceptance of the foregoing conditions. All currency amounts are stated in US dollars or Chilean pesos, as specified, with costs and commodity prices typically expressed in US dollars. Quantities are generally stated in metric (SI) units, the standard Canadian and international practice, including metric tons (tonnes, t) and kilograms (kg) for weight, kilometres (km) or metres (m) for distance, hectares (ha) for area, grams (g) and grams per metric tonne (g/t) for gold and silver grades (g/t Au, g/t Ag). Precious metal grades may be expressed in parts per million (ppm) or parts per billion (ppb) and their quantities may also be reported in troy ounces (ounces, oz), a common practice in the mining industry. Table 2.1 is a list of some of the abbreviations used throughout this report. Appendix 1 contains a glossary of mining terms.

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Table 2.1 List of Abbreviations

Term Abbreviation Term Abbreviation

Acme Analytical Laboratories Ltd. Acme Metre(s) m Advanced Mineral Technology Laboratory Ltd. AMTEL Metres above sea level masl American Society for Testing of Materials ASTM Metres per second m/s Andina Chile Ltda. Andina Micon International Limited Micon Andina Minerals Inc. Andina Milligrams mg Asociación Española de Normalización AENOR Milligrams per litre mg/L Barrick Gold Corporation Barrick Millimetre(s) mm Cameco Corp. Cameco Millimetres per year mm/y Canadian Institute of Mining, Metallurgy and Petroleum CIM Million M Canadian Securities Administrators CSA Million tonnes Mt Centimetre(s) cm Million tonnes per year Mt/y Chilean peso CLP Million years old Ma Compañia Minera Cameco (Chile) Ltda. Cameco Minute(s) min Cubic metre(s) m3 National Instrument 43-101 NI 43-101 Cubic metres per year m3/y Net smelter return NSR Degree(s) o Not applicable n.a. Degrees Celsius oC Ounce(s) (troy ounce) oz Diamond drill hole DDH Parts per million ppm Foot(feet) ft Parts per billion ppb General and Administration G&A Pound lb Gram(s) g Reverse circulation RC Grams per litre g/L Second(s) s Hectare(s) ha SGS Chile Limitada SGS Homestake Mining Company Homestake Square metre(s) m2

Induced Polarization IP Square kilometre(s) km2 Inductively Coupled Plasma ICP System for Electronic Document Analysis and Retrieval SEDAR International Society of Rock Mechanics ISRM Tonne(s) t Kappes, Cassiday & Associates KCA Tonnes per day t/d Kilogram(s) kg Tonnes per hour t/h Kilograms per tonne kg/t Tonnes per year t/y Kilometre(s) km United States dollar(s) US$ Litre(s) L Weak acid dissociable WAD Litres per second L/s Weight percent wt% McClelland Laboratories Inc. McClelland

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3.0 RELIANCE ON OTHER EXPERTS Micon has reviewed and evaluated the data pertaining to the Dorado area deposits, which were provided by Andina, its consultants, and the remaining records of previous operators and has drawn its own conclusions therefrom. Micon has not carried out any independent exploration work, drilled any holes or carried out any sampling and assaying of material from the property. However, Micon did conduct check sampling to confirm the presence of gold mineralization, the details of which were discussed in Micon’s previous Technical Report dated October 23, 2009. While exercising all reasonable diligence in checking, confirming and testing it, in the preparation of this report Micon has relied upon the data provided by Andina and that found in the public domain. The status of the mining claims or mineral tenements under which Andina holds title to the mineral rights for the Volcan property has not been investigated or confirmed by Micon, and Micon offers no opinion as to the validity of the title claimed by Andina. The description of the property, and ownership thereof, as set out in this report, is provided for general information purposes only. Comments on the state of environmental conditions, liability and remediation have been made where required by NI 43-101. Micon offers no opinion on the state of the environment on the property and the statements are provided for information purposes only. The descriptions of geology, mineralization and exploration used in this report are taken from reports prepared by various companies or their contracted consultants. The conclusions of this report rely on data available in published and unpublished reports supplied by the various companies which have conducted exploration on the property, and information supplied by Andina. The information provided to Andina was supplied by reputable companies or government agencies and Micon has no reason to doubt its validity. The geologists and engineers who worked on the resource interpretation and block model for the Andina resource estimate, in addition to those employed by Micon, were as follows:

Leonardo Ruz (Andina Minerals). Francisco Bravo (Andina Minerals). Eduardo Magri (Magri Consultores Limitada). Antoni Magri (Magri Consultores Limitada). Joled Nur (SRK). Natasha Tschischow (NTK Consultores Limitada).

Micon assisted with and audited the updated mineral resource estimate work conducted by the above individuals and has no reason not to rely upon it. Some of the figures and tables for this report were reproduced or derived from reports written on the property by various individuals and supplied to Micon by Andina. The majority of the photographs were taken by the authors of this report during the Micon site

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visits. In the cases where photographs, figures or tables were supplied by other individuals or Andina they are referenced below the inserted item.

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4.0 PROPERTY DESCRIPTION AND LOCATION The following description of the Volcan property is based principally on the 2008 Technical Report by Easdon entitled “Technical Report on the Phase IV – Volcan Gold Project, Dorado West Deposit and Ojo de Agua Zones, Region III, Chile”, to which the reader is referred for more detail. 4.1 LOCATION The Volcan property is located approximately 700 km north of Santiago, the capital of Chile, approximately 170 km by road east of the mining and agricultural city of Copiapo and approximately 40 km west of the border with Argentina. The property is located in Region III of northern Chile in the Province of Copiapo and political subdivision of Comuna Tierra Amarilla. See Figure 4.1. The Volcan property is located east of the headwaters of Quebrada de Paipote and lies between Laguna Santa Rosa and Laguna del Negro Francisco along the western flanks of the Chilean Andes at a mean elevation of approximately 4,800 m. Andina’s exploration and exploitation concessions are approximately centred on 27° 20’ south latitude and 69° 8.5’ west longitude and at UTM coordinates N6,972,500 and E486,500. The property is situated within the Maricunga (gold, silver, copper) mineral belt and is located 23 km northeast of the Maricunga gold mine (previously known as Refugio) and 20 km southwest of the Marte gold mine, both of which are owned by Kinross Gold Corporation (Kinross). 4.2 DESCRIPTION OF THE PROPERTY The Volcan property originally comprised four contiguous mining concessions (also referred to as exploitation concessions) covering an area totalling 5,455 ha. These include the Volcan 1-30 and Maria Eliana 1-10 mining concessions in the northern portion of the property, and the Demanda 1-20 and America del Sur 1-50 mining concessions in the southern part. Andina entered into an option to purchase the four mining concessions in May, 2004 (revised in May, 2005). The final option payment under the agreement was made in June, 2007, as described in Andina’s press release dated 19 June, 2007. During the first half of 2006, Andina, acting through an agent, acquired an additional 41 exploration concessions totalling approximately 9,800 ha. These exploration concessions and the underlying mining concessions were overlain by exploration concessions acquired in early 2008. The prior exploration concessions were allowed to lapse. On May 20, 2009, Andina announced that, through its Chilean subsidiary it would acquire the exploration rights to certain properties held by Barrick Gold Corporation (Barrick) and a number of exploration concessions surrounding the Volcan property. Andina issued 2.0 million shares,

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Figure 4.1 Location Map

Figure supplied by Andina Minerals Inc.

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valued at US$2.66 million to Barrick on transference of ownership of the concessions, to be followed by a second instalment of Andina common shares with a value of US$1.5 million one year after closing of the transaction. Barrick retained an NSR royalty of 1.5% on all metals produced from the lands acquired from Barrick, should they be developed. The property acquired from Barrick totalled approximately 15,040 ha, bringing the area held by Andina to 24,840 ha. The total area controlled by Andina is 45,289 ha, corresponding to the actual property boundaries. However, a title and claim search will indicate that Andina holds 60,165 ha because several areas have duplicate (overlapping) registered concessions under the various Chilean categories of mineral rights holdings. The 60,165 ha mentioned above is 1,710 ha greater than the total contained in Table 4.1 and 14,876 greater than the actual area of 45,289 ha controlled by Andina. The discrepancy of 1,710 ha is due to the concessions changing from exploration to exploitation concessions and the elimination of the overlapping portions. The remaining difference is due to duplicate concessions under different categories which do not eliminate the overlapping titles from the concession record. See Table 4.1 for a list of the principal mining and exploration concessions which make up the Volcan property around the resource estimate.

Table 4.1 List of Mining and Exploration Concessions

Mining Concessions Area (ha) Year Constituted

Volcan 1-30 1,500 1937 Maria Eliana 1-10 455 1955 Demanda 1-20 1,000 1977

America del Sur 1-50 2,500 1977

Total 5,455

Exploration Concessions Area (ha) Year Constituted

America Central 2,800 2008

America del Norte 3,100 2008

America del Sur 1,700 2008 America del Sur Segunda 1,700 2009 Azufre 1,700 2008 Crater 7,900 2008 Demanda Segunda 3,400 2008-2009 Flamenco 1,800 2009 Ojo de Agua 4,300 2009 Pilas + Pila Segunda 7,500 2009

Andes 2,400 2010-2011

Tronco 3,400 2009

Troncoso 3,300 2008 Volcan Segunda 8,000 2008-2009 Total 53,000 Total Concessions 58,455

Table supplied by Andina Minerals Inc.

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Figure 4.2 is a property map showing the location of the four mining concessions, the exploration concessions acquired originally in 2004, those concessions acquired from Barrick in 2009 and the location of the known mineralized areas relative to the property boundaries.

Figure 4.2 Mineral Tenure Map of the Volcan Property, Chile


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The Volcan property was surveyed and filed in accordance with Chilean mining regulations on two occasions in 2009, the first relating to the transaction with Barrick in May, 2009 and the second in connection with an equity financing which closed on 16 June, 2009. Micon has not independently verified that the mining concessions have been properly surveyed but has been provided with supporting documentation from Andina. Under the mining laws of Chile, mining concessions can be held in perpetuity provided that the appropriate annual payments have been made. There is no requirement that the property be put into production within a specified time frame and there is no requirement to reduce concession sizes as the exploration process advances. Payments to maintain concessions are made annually in March. The property payments, as made to date, will maintain the Volcan property in good standing until April, 2011. The total cost to maintain the mining and exploration concessions as they are currently constituted for the period 2010 to 2011 is estimated to be approximately US$135,800. Micon understands that Andina has the permits necessary to conduct the next phase of its exploration activities, planned to start on November 2, 2010.

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5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

The general information presented in this section is based on information contained in the 2008 Technical Report by Easdon, to which the reader is referred for more detail. 5.1 ACCESS The nearest major city to the Volcan project is Copiapo, located some 170 km by road to the west. Copiapo lies on the Pan American Highway (Ruta 5 Norte), approximately 800 km north of Santiago. Copiapo has daily air service from Santiago and other Chilean cities. Experienced exploration and operating personnel may be sourced from Copiapo or elsewhere in Chile, where a generally well trained and experienced workforce exists. Copiapo is a well-established support and logistics centre for mining activities in the region. The northern and southern ends of the Volcan property are equidistant from Copiapo and can be accessed from there. The principal access to the property is via paved Highway 31 which leads towards the La Coipa mine of Kinross. The highway is accessed by taking the turn-off to the ENAMI Paipote smelter northward out of Copiapo and links Copiapo with the villages of Inca del Oro and Diego de Almagro. A turning to the east at 23 km along Highway 31, onto the maintained Quebrada de Paipote hard-surfaced (oiled) gravel road, leads to the border with Argentina. The village of Puquios is reached after a distance of 54 km, from where a graded dirt road continues for 84 km. The right fork proceeds up the valleys of Quebrada del Hielo, Quebrada Paton and Quebrada Salitral to the Manto Volcan sulphur deposit (Figure 5.1) which is located within the northern portion of the concessions. The balance of the property to the south of the sulphur mine is accessed by poorly maintained, single-lane dirt roads. The journey to the Andina campsite (Figure 5.2), located approximately 20 km west-northwest of the property at an elevation of about 3,800 m, takes approximately 2.5 hours from Copiapo. From the exploration camp to the Dorado property, travel time is approximately 30 to 45 minutes via gravel road. The southern Volcan mining concessions (America del Sur and Demanda) are also accessible by private, well-maintained, graded-gravel roads that access the Maricunga mine. The entry to this road network is located south of the town of Tierra Amarillo. Permission must be first obtained from the Maricunga mine personnel in order to access this road system. 5.2 CLIMATE AND PHYSIOGRAPHY The Volcan property is located in the high Andes at an elevation of between 4,500 and 5,300 masl.

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Figure 5.1 A View of the Manto Volcan Sulphur Deposit

Figure 5.2 Andina Campsite

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Precipitation in the area is reported to be on the order of 100 mm/y (Geoexploraciones, 2003) and consists largely of snow during the South American winter months of June through September, with sporadic, but intense, rain storms of short duration occurring during the summer months (January to May). Precipitation in the Andes averages 200 mm/y to 300 mm/y at an elevation of 4,000 m, while evaporation from surface water and soils varies between 1,500 to 2,000 mm/y, resulting in the extremely arid conditions observed in this area. Vegetation is virtually non-existent except in spring-fed marshes found along the valley floors. Local wildlife is sparse, although small herds of guanaco are occasionally encountered. At these high altitudes, extremely strong winds frequently develop in the afternoons and evenings. Heavy precipitation and white-outs, which can create hazardous conditions, occur most commonly during the winter months, or what is termed the “Bolivian Winter”. The average annual temperature is on the order of 11oC and ranges between -30oC at night in the winter to 20oC during the summer. The topography is dominated by the Miocene-aged stratovolcano, Volcán Copiapo (Cerro del Azufre) (Figure 5.3), which attains an elevation of 6,052 m. The main drainage in the area is to the south and into the Laguna del Negro Francisco (Figure 5.4), located at an elevation of 4,130 m. The northern slopes of the volcano drain northward into the Laguna de Santa Rosa and the Salar de Maricunga. The principal topographic features of the region are the result of a combination of horst and graben block tectonics in the Cordillera Occidental and the Cenozoic to Recent volcanism that produced the Volcán Copiapo. 5.3 LOCAL RESOURCES AND INFRASTRUCTURE Apart from minor secondary roads, there is only limited infrastructure in close proximity to the Volcan project area. Exploration personnel are housed in camps, and all food supplies and potable water must be brought in from Copiapo. Experienced mine and plant personnel are readily available in the region, especially in Copiapo. Non-potable, artesian water is available on the property and feeds two small lagoons with an inflow of approximately 2 L/s during the period February-May. Electric power from the national grid is presently not available and must be generated at the camp site. There is an adequate water supply available within the Volcan concessions for drilling purposes, but not in the amounts required to support a mining operation. However, Andina has acquired water rights which have been developed in two wells located at approximately UTM N6,985,635/E500,315, or approximately 21 km from the Dorado deposits and 10.4 km east of the northern end corner of the Volcan concessions (Figure 5.5 5). The rights, as authorized by the Dirección General de Aguas (DGA), are for 3,894,696 m3/y per well, for a total of 7,789,392 m3/y at an average pumping rate of 123.5 L/s per well, with a permitted maximum pumping rate of 170 L/s. Golder Associates (Golder) was contracted in June, 2008 to prepare a preliminary evaluation of the characteristics of the wells and concluded that the wells could last for 30 years if water was produced at a rate of not more than 124 L/s (Golder, 2008). The evaluation recommended additional hydrological studies in order to confirm this initial estimate.

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Figure 5.3 Volcán Copiapo (Cerro del Azufre)

Figure 5.4 Laguna del Negro Francisco as viewed from the Dorado Deposits

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Figure 5.5 Property Map Showing Locations of Water Wells and Camp


Golder considered that the use of these water rights might result in certain environmental impacts in the vicinity of the wells, including on flora and fauna. Andina will be required to file an environmental impact declaration as the project proceeds. Based on water rights that have been granted to other mining companies which utilize portions of the same artesian basin, Andina does not anticipate that it will encounter obstacles to the use of the granted water rights to the extent needed for the development of the Volcan project.

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Andina has budgeted for continuing the programs proposed by Golder with regard to the acquired water sources, and for the exploration, definition and acquisition of additional sources of water. In January, 2009, the DGA granted Andina additional exploration rights to the Rio Astaburuaga aquifer located 15 km southeast of the Volcan project and 20 km south of Andina’s existing water concession. Andina completed 21 km of geophysical surveys, identifying a favourable horizon of sands and gravels representing a high priority aquifer target. A series of eight exploratory water wells targeting underground aquifers were drilled into this horizon. All of the eight wells encountered water and three of the more promising wells were tested by larger diameter test wells so that pump tests could be conducted. The results from two holes suggest that the wells tap into a structurally-fed water resource that will support a limited but consistent water supply of 18 L/s and 21 L/s, respectively. While the flow rates were relatively modest, Andina will continue with the process to secure the water rights for Rio Astaburuaga. Andina holds sufficient water rights to develop the Volcan project but the Rio Astaburuaga water would be of strategic value as Andina continues with its exploration and development program. During its site visit, Micon ascertained that there is sufficient area for the siting of facilities required for mineral processing, and waste rock storage. Locations of all such facilities will be assessed in more detail as Andina prepares its potential development plans for the property.

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6.0 HISTORY 6.1 GENERAL The history of exploration on the Volcan property has been described in previous Technical Reports prepared for Andina, to which the reader is referred for more detail:

Bartlett, S.C., November 12, 2004; Technical Report – Review of Gold and Copper Exploration Potential of Mineral Properties in Chile.

Easdon, M., November, 2005; Technical Report on the Volcan Gold Project, Region III,

Chile.

Easdon, M., April 6, 2006; Technical Report on the Volcan Gold Project, Region III, Chile.

Easdon, M., September 18, 2006; Technical Report on the Volcan Gold Project, Region III, Chile.

Gonzalez, R. A. and Easdon, M., April 4, 2007; Technical Report on the Volcan Gold

Project, Region III, Chile.

Gonzalez, R., November 28, 2007, Technical Report on the Volcan Gold Project, Region III, Chile.

Easdon, M., September 2, 2008, Technical Report on the Phase IV – Volcan Gold Project,

Dorado West Deposit and Ojo de Agua Zones, Region III, Chile.

Pressacco, R., Gowans, R. and Shoemaker, S., October 23, 2009, Technical Report on the Volcan Gold Project, Region III, Chile and Updated Mineral Resource Estimate for the Dorado Gold Deposits.

Each of these reports has been filed on SEDAR (www.sedar.com) by Andina. 6.2 EXPLORATION PROGRAMS The more recent history has been summarized from Gonzalez (2007) and Pressaco et al. (2009). The first formal evaluation of the gold potential of the Volcan area was carried out by Zentilli (1990) who recognized that sulphur mineralization and the surrounding alteration were the result of high-level, high sulphidation hydrothermal systems related to deeper intrusive activity and established that the sulphur carried anomalous arsenic, antimony, mercury and gold.

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The property was optioned by the Chilean subsidiary of Homestake Mining Company (Homestake) in 1990, which identified a gold geochemical anomaly and then conducted mapping and an RC drill program. Further work, including a 15 line-km IP geophysical survey, resulted in identification of three target areas that are equivalent to the Dorado Central, Oeste and Norte nomenclature adopted later by Cameco Corp. (Cameco). The property was returned to the owners by Homestake in 1993 as not meeting corporate objectives. In 1994, the property was optioned to Compañia Minera Cameco (Chile) Ltda., the Chilean subsidiary of Cameco, which carried out exploration work until 1997. This work included mapping, re-logging of some drill material, additional assaying and metallurgical and petrographic studies. The option was dropped for reasons including the then perceived low tonnage and grade potential and unfavourable metallurgical results. The Maricunga gold belt received increased exploration attention from 2003 due to strengthening gold prices. As noted in Section 4.0, Andina entered into an option to purchase the four mining concessions, Volcan 1-30, Maria Eliana 1-10, Demanda 1-20 and America del Sur 1-50, from the owners in 2004. Andina has carried out six phases of exploration at the Volcan property, starting with the 2004 to 2005 field season. The exploration programs up to the 2008 to 2009 campaign are summarized in Table 6.1. Drilling carried out by Homestake and Cameco is also shown for reference. Exploration completed by Andina prior to 2007 is presented in the Technical Reports listed previously.

Table 6.1 Volcan Project Drill Hole Summary 2004 to 2009 (Phases I through V)

Andina Homestake/

Cameco 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Total Total Drilling

Dorado Oeste No. of holes 29 0.00 22 65 54 9 150 179 RC holes (m) 3,724.00 0.00 1,796.00 11,490.00 5,602.00 2,200.00 21,088.00 24,812.00 DD holes (m) 1,008.00 0.00 4,158.07 14,042.90 22,735.30 1,955.15 42,891.42 43,899.42 Mixed (m) 0.00 0.00 0.00 1,204.30 0.00 0.00 1,204.30 1,204.30 Total m 4,732.00 0 5,954.07 26,737.20 28,337.30 4,155.15 65,183.72 69,915.72

Dorado Este No. of holes 27 1 16 8 2 2 29 56 RC holes (m) 2,260.00 0.00 2,316.00 1,476.00 800.00 0.00 4,592.00 6,852.00 DD holes (m) 2,288.85 359.60 1,647.70 0.00 0 534.30 2,541.60 4,830.45 Mixed (m) 0.00 0.00 589.45 1,038.85 0.00 0.00 1,628.30 1,628.30 Total m 4,548.85 359.60 4,553.15 2,514.85 800.00 534.30 8,761.90 13,310.75

Dorado Central No. of holes 6 0 31 6 0 4 41 47 RC holes (m) 928.00 0 7,118.00 1,492.00 0 0 8,610.00 9,538.00 DD holes (m) 0.00 0 1,766.45 420.00 0 1,372.40 3,558.85 3,558.85 Total m 928.00 0 8,884.45 1,912.00 0 1,372.40 12,168.85 13,096.85

Ojo de Agua No. of holes 10 29 0 39 39 RC holes (m) 1,754.00 6,262.00 0 8,016.00 8,016.00 DD holes (m) 892.85 6,467.65 0 7,360.50 7,360.50 Total m 2,646.85 12,729.65 0 15,376.50 15,376.50

Total drilling No. of holes 62 1 69 89 85 15 259 321 RC holes (m) 6,912.00 0 11,230.00 15,432.00 12,664.00 2,200.00 42,306.00 49,218.00 DD holes (m) 3,296.85 359.60 7,572.22 18,378.90 29,202.95 3,861.85 56,352.37 59,649.22 Mixed 0.00 0.00 589.45 2,243.15 0.00 0.00 2,832.60 2,832.60 Total m 10,208.85 359.60 19,391.67 33,810.90 41,866.95 6,061.85 101,490.97 111,699.82

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Andina has carried out its exploration programs with its own staff supported by SBX Asesorias e Inversiones Ltda. and related company, SBX Consultores Ltda. (collectively SBX). 6.2.1 2007 to 2008 Exploration Program The exploration program carried out in 2007 to 2008 (Phase IV) was focused on the Dorado Oeste and Ojo de Agua sectors, as described by Easdon (2008). In the Dorado Oeste zone, the Phase IV program was designed to increase the level of confidence in the mineral resource estimate by infill drilling, and to extend the northwesterly limits of the mineralization that had been previously indicated by the geophysical surveying. Drilling on the Ojo de Agua sector was designed to further advance the development of the resource potential that was considered to exist in this sector. 6.2.2 2008 to 2009 Exploration Program The following Phase V surface-based exploration activities were undertaken on the Volcan project between October, 2008 and May, 2009:

Azufrera sector (sulphur): Recognition, sampling and evaluation of native sulphur occurrences. A total of 365 samples (trenches and chips samples) were taken, with maximum assays of 43% S and an average of 17% S found at the sector Torre Corfo. Three RC drill holes were completed (total 192 m) that suggested a thickness of 20 m for this sulphur deposit, with an average of 20% sulphur in the native state and a peak value of 38% sulphur. A weakly anomalous of gold value of 38 ppb was detected.

Paton Creek sector (limestone): Recognition and evaluation of the calcium carbonate

content of the limestone deposits in the area. The work included sampling of five profiles in a vertical wall and completion of 6 diamond drill holes (total 250 m). The purpose of the drill holes was to define the grade and continuity of the limestone beds at Quebrada Paton (Echaurren). Target limestone resources are on the order of 10 to 20 Mt averaging 70 to 82% CaO3.

Dorado, Florencia and Andrea sectors: Geological mapping completed at a scale of

1:5,000. Selective sampling was undertaken on narrow veins of varying compositions, as well as detailed geological/alteration/structural mapping of trenches and outcrops, refinement of geological unit definitions and stratigraphic relationships.

A district-scale geological map at a scale of 1:25,000 was prepared, focusing on structures, narrow veins/veinlet distribution and composition, alteration styles, and intensity of silicification of portions of the property.

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Between the district-scale and detailed exploration, a total of 251 selective samples (chips of narrow veins of varying compositions) were collected and described, and were analyzed for gold, copper and molybdenum. The gold content was found to reach up to 336 ppb Au. 6.2.3 2009 to 2010 Exploration Program The 2009 to 2010 exploration program (Phase VI) was conducted between November 16, 2009 and May 4, 2010. In Dorado Oeste (DW) the main focus of this phase was to conduct further in-fill drilling as well as to explore the possibility of porphyry copper style mineralization at depth and detect lateral extensions of gold mineralization on Sections 1250, 1200 and 1300. In addition, detailed exploration was started at the Ojo de Agua Este (ODAE) prospect located 6.5 km northeast of the Dorado deposits. The details of the Phase VI exploration program are described in Section 10 of this Technical Report. 6.3 DRILLING PROGRAMS Figure 6.1 provides an overview of the drilling that has been completed on the Dorado sector since 1991.

Figure 6.1 Plan View of the Drill Hole Coverage and Gold Deposits of the Dorado Sector, Volcan Property


Andina has no knowledge of the drilling contractor(s) which executed the drilling program for Homestake. On behalf of Cameco, Harris y Compañia Ltda. of Antofagasta performed the RC drilling and GeoOperaciones SA of Copiapo performed the diamond drilling.

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6.3.1 2004 to 2005 Drilling In its 2004 to 2005 season, Andina drilled one 359.60 m diamond drill hole (DVA-001) in the Dorado Este sector. Easdon (2005) reported:

“The bulk of the gold intersected in this hole (1.26 g/t Au in 148 m) is contained within the hydrothermal breccias previously recognized by Cameco as being the core of the Dorado Este zone.”

The drilling was performed by Major Drilling of Santiago. Easdon (2005) also reported that Andina had contracted GeoVectra Surveying of Copiapo to resurvey all prior Homestake and Cameco drill hole locations and to survey the locations of new holes. A Total Station digital survey unit was used. Metson of Copiapo was retained to conduct down-hole surveys of all new holes drilled. 6.3.2 2005 to 2006 Drilling Drilling in the 2005 to 2006 season was completed by TerraServices Drilling of Santiago. Geomensura of Santiago carried out the surveying of drill collars. This survey program was considered accurate to 10 to 15 cm horizontally and 30 cm vertically and utilized Total Station digital surveying equipment. Metson of Copiapo and Comprobe of Santiago were retained to complete down-hole surveying of the drill hole deviation and they used either Maxibor Reflex or Giroscopion D29 equipment (Easdon 2008). 6.3.3 2006 to 2007 Drilling Easdon (2008) reported:

“Andina’s Phase III drilling program, which started in October, 2006 and ended in May 2007, was largely directed at drill testing the strike and dip extensions of the mineralization in the three Dorado Zones and to increase the level of confidence in the resource calculations. Ten holes were also drilled to initiate testing in the Ojo de Agua Sector. Andina completed 89 drill holes in the three Dorado Zones and 10 holes in the Ojo de Agua Zone for a total of 33,810 metres.”

6.3.4 2007 to 2008 Drilling As summarized in Table 6.1, a total of 12,664.00 m of RC and 29,202.95 m of diamond drilling were completed at the Volcan project during the 2007 to 2008 field season: 5,602.00 m of RC and 22,735.30 m of diamond drilling were completed at the Dorado Oeste sector; 800.00 m of RC was completed at the Dorado Este sector and, 6,262.00 m of RC and 6,467.65 m of diamond drilling were completed at the Ojo de Agua sector. Two of the holes that are attributed to the Dorado Oeste zone were drilled between the Dorado Oeste and the Dorado Este zones to test the potential for joining the two deposits.

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At the time of Easdon’s site visit on January 15, 2008, there were five diamond drill rigs and one RC rig operating at the Volcan project. Andina contracted a surveyor from Copiapo to survey all drill hole collars, as well as carry out a detailed topographic survey for the entire Dorado Oeste zone. The surveying, which is considered to be accurate to 10 to 15 cm horizontally and 30 cm vertically, utilized Total Station digital surveying equipment. The surveying has been integrated with the Quickbird and Google Earth satellite imagery. Andina contracted Comprobe, also from Copiapo, to complete down-hole surveying of all of the holes drilled by Andina in the 2007 to 2008 season. Comprobe utilized a gyroscope survey tool, model Giroscopio DG 29. Readings were taken at intervals of 10 m over the length of the holes. On the completion of each hole, PVC pipe was inserted into the collar, and cemented in place in such a way as to indicate the direction and inclination of the hole. A metal reinforcing rod was driven into the ground which had a metal plate, approximately 10 cm by 20 cm, welded to the top of it. The drill hole identification number was arc-weld inscribed so that the hole can be permanently identified in the field. All holes numbers were prefixed with a “D” indicating a diamond drill hole and an “R” for a reverse circulation drill hole. All holes were numbered in sequence beginning at number 690. Diamond drill core and RC recovery was excellent with recovery averaging 98%, or better, for both the diamond drill and the RC drill holes. The core runs were routinely measured by tape and the recovery calculated. The 2 m RC sample runs were weighed and the sample recovery for each sample was calculated using the theoretical volume extracted multiplied by the specific gravity of the rock. 6.3.5 2008 to 2009 Drilling The objective of the Phase V drilling campaign was to complete in-fill drilling on those sections where the existing information was believed to be incomplete. Some of the Phase V drill holes were completed as twin holes, the purpose of which was to validate the results of holes completed by previous operators for the Dorado Central and Dorado Este deposits. The Phase V drilling campaign began on December 15, 2008 and was completed on April 14, 2009. A total of 6,061.85 m (2,200 m RC and 3,861.85 m DDH ) was completed for the Dorado Oeste, Central and Este areas, bringing the aggregate total of drilling for the three sectors to 96,323.32 m (41,202.0 m RC, 52,288.72 m DDH and 2,832.6 m mixed), plus an additional 15,376.5 m completed in the Ojo de Agua area. The grand total of drilling completed on the Volcan property to the end of the Phase V campaign was 111,699.82 m. A summary of the best intercepts from the Phase V drilling campaign are shown in Table 6.2 .

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Table 6.2 Summary of Significant Results, Phase V (2008-2009) Drilling Campaign

Mineralized Intersection Assay Results Drill Hole ID

Sector Section

From (m)

To (m)

Length (m)

Au (g/t)

Cu (ppm)

Best Intercept

DOA-775 DW DW-1400 344 386 42 0.70 746

DOA-776 DW DW-1100 0 156 156 0.93 741 40 m @ 1.3 g/t Au, 0.10% Cu

644 730 86 1.40 0.13% 50 m @ 1.9 g/t Au, 0.16% Cu

ROA-777 DW DW-1450 234 270 36 0.60

ROA-778 DW DW-1050 174 206 32 0.58

DOA-779 DW DW-400 120 278 158 0.55

DW DW-400 328 408 80 0.96 824 46 m @ 1.1 g/t Au

ROA-780 DW DW-1700 146 172 26 0.82 605

DW DW-1700 230 250 20 0.83 625

ROA-781 DW DW-1700 210 254 44 0.73

ROA-782 DW DW-1300 314 378 64 0.36

ROA-783 DW DW-550 236 392 156 0.53 218

DCA-784 DC NE-6 62 232 170 0.52 485 24 m @ 1.1 g/tAu, 0.08 %Cu

DCA-785 DC NE-8 34 104 70 1.10 942 40 m @ 1.5 g/tAu

DC NE-8 178 200 22 1.22 848

DCA-786 DC NE-9 10 166 156 0.87 0.15% 48 m @ 1.2 g/tAu

DCA-787 DC NE-7 0 232 232 0.39 4 m @ 2.5 g/tAu

DEA-788 DE VC_8 0 158 158 1.37 636 124 m @ 1.6 g/t Au, high grade of 7.8 g/tAu

DEA-789 DE VC_6 92 188 96 1.13 469 46 m @ 1.5 g/t Au Note: All lengths are core lengths and the relationship to true width is not known.

6.3.6 2009 to 2010 Drilling The details of the Phase VI exploration drilling programs for the Dorado Oeste (DW) deposit and the Ojo de Agua Este (ODAE) prospect are described in Section 10 of this Technical Report. 6.4 RESOURCE ESTIMATES Previously published resource estimates are included in the Technical Reports posted by Andina on the SEDAR website. The most recent resource estimate for the Volcan project was included in Pressacco et al., dated October 23, 2009. 6.5 PRODUCTION There has been no mineral production from the Volcan property.

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7.0 GEOLOGICAL SETTING This section has been taken in its entirety from the previous October, 2009 Micon Technical Report (Pressacco et al.), which drew upon the descriptions contained in Bartlett (2004), Easdon (2005) and Gonzalez (2007). 7.1 REGIONAL GEOLOGY The Maricunga gold belt extends over a distance of approximately 150 km from north to south and is approximately 30 km wide, close to the border with Argentina. Mineralization is related to the emplacement of Miocene age calc-alkaline volcanic and sub-volcanic units over basement rocks of Paleozoic to Cenozoic age. The Maricunga belt hosts a number of gold and gold-copper (silver) deposits including La Coipa, Maricunga, Aldebaran, La Pepa, Soledad, Pantanillo, Lobo, Escondido and Marte. Bartlett (2004) describes the geological setting of the Volcan property as follows:

“At the latitude of the Volcán Copiapo the Andean Cordillera is characterized by a series of volcanic plutonic arcs of Mesozoic-Cenozoic age associated with the subduction of the Pacific Plate beneath the western edge of the South American Plate. A large volcanic caldera complex developed over a basement of Paleozoic to Mesozoic aged rocks, beginning with the formation of large andesitic cones in the Oligocene-Miocene (23-14 Ma) on the western flank of Lake Maricunga. Several important hydrothermal systems developed at that time, leading to the formation of the La Coipa silver-mercury-gold-sulphur deposit and the La Pepa gold deposit. On the eastern side of the Copiapo caldera complex, the hydrothermal activity responsible for the formation of the Marte deposit may have persisted to about 12 Ma. Oxidation and perhaps residual concentration of gold-sulphide-sulphosalt mineralization led to enrichment zones in permeable, 345o-trending structures at La Pepa, locally producing high-grade bonanza veins. “Ignimbritic flows covered and truncated hydrothermally altered rocks in many localities, including La Pepa, and form a volcanic plateau east of the mine. Some of the craters and caldera-like circular structures on Andina’s Southern Claim Bock appear to be related to this phase of explosive volcanism. Hydrothermal and solfataric activity led to the formation of sulphur deposits above many strongly argillitized and silicified alteration zones. Cinnabar, vuggy quartz and enriched levels of arsenic and other elements generally associated with gold are present in one hydrothermal explosion vent in Quebrada Azufre Sur, possibly indicating that gold might have been concentrated at depth. “Resurgence of the caldera floor may have elevated some of the older volcanic strata, and magmatism culminated with the formation of the 6,052 metre high Volcán Copiapo summit, probably as late as 5 Ma or 4 Ma ago. Late, dark coloured andesitic lavas covered much of the altered zones, including some of the sulphur accumulations. Erosion has incised abrupt ravines into the volcano flanks exposing alteration zones and sulphur deposits.”

Figure 7.1 depicts the regional geology and relates the location of the Volcan project to other gold-silver (copper) deposits of the Maricunga metallogenic belt.

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7.2 PROPERTY GEOLOGY The structural setting of the Volcan property is related to, and associated with, the formation of the Copiapo stratovolcano (Volcán Copiapo) and may also be related to regional northerly-trending high angle reverse faulting. (Figure 7.2). Cameco identified three generally moderate to steeply dipping fault systems, trending northwest-southeast, northeast-southwest and east-west, and considered the northeast-southwest and east-west trending systems to be the more important structural controls on alteration and mineralization. The principal rock types identified on the Volcan property are:

Dacite, rhyodacite and andesite lavas. Volcanic flow and dome complex rocks. Pyroclastic flows. Hydrothermal breccias. Sub-volcanic porphyry.

Each of these rock types has a number of sub-units. Alteration is prevalent and has been divided into the following principal categories:

Acid leaching with silica, alunite, gypsum, pyrophyllite and sulphur.

Intermediate to advanced argillic alteration represented by a quartz-alunite-illite-smectite-kaolinite-chlorite assemblage.

Moderate to intense silicification resulting in cryptocrystalline silica with lesser

alunite and clay minerals.

Transitional alteration between potassic, chloritic and argillic alteration most commonly visible affecting feldspars hosted in dacite and andesite.

Potassic alteration, the presence of remnant secondary biotite and potassium feldspar

as halos around quartz veinlets.

Propylitic alteration which is only present in volcanic flows surrounding the principal alteration zones.

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Figure 7.1 Generalized Map of Regional Geology and Location of Maricunga Metallogenic Belt


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Figure 7.2 Simplified Geological Map of the Dorado to Ojo de Agua Sector of the Volcan Property

(Dorado deposits outlined at bottom left, Ojo de Agua outlined at top right)


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Bartlett (2004) states:

“Gold-copper mineralization at Volcan is related to the intensely developed hydrothermal alteration that gave rise to the native sulphur deposits. The hydrothermal system was a consequence of the sub-volcanic intrusion of dacitic to microdioritic porphyry into a complex of domes and lava flows of dacitic composition.”

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8.0 DEPOSIT TYPES This section has been taken in its entirety from the previous October, 2009 Micon Technical Report (Pressacco et al., 2009), which draws upon the work on Muntean and Einaudi (2000). A description of the style of mineralization found in the Refugio district of the Maricunga belt is provided by Muntean and Einaudi (2000) as summarized below, and is illustrated in Figure 8.1.

Figure 8.1 Schematic Cross-Section Showing Reconstruction of a Typical Refugio Hydrothermal System


“Over the past several decades, field studies of porphyry copper deposits have led to summaries of their common features, but surprisingly few papers have focused on their differences. The 1990s have seen several additions of new subtypes to the class of porphyry-type deposits, including the porphyry gold deposits of the Maricunga belt, Chile. The porphyry gold deposits at Refugio in the Maricunga belt contain the lowest known copper:gold ratios of any porphyry-type deposit, and previous studies have established their similarities to gold-rich porphyry copper deposits. One of the orebodies at Refugio, Pancho, does share many characteristics of porphyry copper deposits. However, the most copper-

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poor gold orebody at Refugio, Verde, lacks many of the features that are commonly used to classify the deposits as porphyry copper deposits. “The Maricunga belt is a region of numerous gold-silver-copper prospects and deposits in the high Andes of northern Chile. Zones of hydrothermally altered rocks give rise to strong colour anomalies detectable by satellite imagery and aerial photography. Several of the altered zones host significant metal concentrations including high-sulphidation epithermal gold-(silver) deposits (La Coipa, La Pepa) and porphyry gold-(copper) deposits (Refugio, Aldebaran, Marte, Lobo). Since 1980, an aggregate geologic resource of approximately 40 Moz of gold has been defined. “Three main structural trends are present in the Maricunga belt. First, north to northeast-trending high-angle reverse faults that bound basement rocks are probably coincident with the onset of flattening of the subduction zone. A second structural trend consists of northwest-striking normal faults, dikes and veins, suggesting southwest-northeast extension. A third structural trend is defined by east-northeast satellite lineaments interpreted as dexteral shear zones that mark the southern boundary of the Altiplano-Puna plateau. “Gold ore at the Verde deposit is associated with a zone of quartz-veinlets trending N80°W that is about 1,500 m long and 600 m wide. The Verde deposit is composed of two separate coalescing annular-shaped orebodies referred to as Verde West and Verde East. The orebodies have diameters of about 500 m, low-grade cores with diameters of about 100 to 150 m. “Gold mineralization at Verde is hosted by a composite intrusive center consisting of massive dacite porphyry emplaced before mineralization, intrusive breccia bodies emplaced during mineralization, and small stocks of quartz diorite porphyry emplaced during the final stages of mineralization. The main host rock at Verde West is a body of intrusive breccia, 800 m in diameter, with contacts dipping within 10° of vertical. The breccia body cuts dacite porphyry and volcaniclastic breccias of the andesite flow and breccia unit. Quartz veinlets hosted by intrusive breccia and dacite porphyry are commonly truncated at steep contacts with late quartz diorite porphyry. Vein abundance in the quartz diorite porphyry at Verde West decreases from 2.5 vol percent along its margins to mostly less than 0.25 percent in its interior. Quartz diorite porphyry in the center of the Verde East orebody contains no quartz veinlets. “Gold grades of surface samples correlate closely with the mapped abundance of banded quartz veinlets. Gold grades at Verde West form a structurally controlled, starburst pattern that reflects the radial and concentric distribution patterns of the veinlets. A similar pattern is present in the exposed part of Verde East, although zones containing >1 ppm gold at Verde East are larger and more continuous because of the higher abundance of banded veinlets. Gold is centred in the late stocks of quartz diorite porphyry, which sharply truncate ore zones (>0.5 ppm gold) at Verde East and Verde West. At Verde West ore zones locally extend into quartz diorite porphyry along fault zones or in sheeted sets of banded quartz veinlets along the margins of the stock. Pyrite-albite-clay alternation forms a narrow (10-50 m) halo to the Verde East orebody, whereas it forms an incomplete, broader halo on the western, northern and eastern margins of the Verde West orebody, overlapping considerably with ore zones along the northeastern and eastern margins. Zones with >0.05 ppm gold extend about 100 m beyond the outer limits of banded veinlets at both Verde West and Verde East.

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“In addition to containing hydrothermal features similar to those at Verde, the Pancho deposit also contains alteration and veinlet styles that are similar to those observed in porphyry copper and porphyry gold deposits.” (Figure 8.2).

Figure 8.2 Examples of Styles of Quartz Veining at the Verde West and Pancho Deposits, Refugio District


“Sets of early quartz-magnetite-sulfide veinlets, here termed A-veinlets, are associated spatially with potassically altered rocks and are restricted to intrusive rocks. A-veinlets, mostly constituting less than 2 vol percent of the rock, range in character from generally older, discontinuous, and irregular hairline streaks with variable amounts of magnetite, biotite, quartz, and minor chalcopyrite, to generally younger, more continuous, wider veinlets with magnetite and/or chalcopyrite. The younger, more continuous veinlets contain more quartz and chalcopyrite than older, discontinuous veinlets. The older, discontinuous A-veinlets commonly have alteration envelopes of K feldspar or biotite, whereas younger A-veinlets lack megascopic alteration halos. Quartz is pale gray and has a distinct sugary texture in hand sample. Pyrite occurs in some A-veinlets on the outer margins of the deposit. Where pyrite and magnetite are present together, textures indicated replacement of magnetite by pyrite. The progression from discontinuous hairline streaks to more continuous, wider veinlets suggests more sustained brittle behavior with time. However, discontinuous varieties locally crosscut the more continuous, wider veinlets, suggesting A-veinlets could have formed in a cyclical fashion as noted at El Salvador. “Banded quartz veinlets that are similar to those at Verde are more abundant than A-veinlets at Pancho. Banded veinlets constitute around 2 to 5 vol percent of the rock, culminate at 10 vol percent in the upper levels of the quartz diorite porphyry stock, and are widespread in the overlying volcanic rocks where A-veinlets are absent. Banded veinlets cut and offset A-veinlets. Although the reverse relationship has not been found, the distinction between banded veinlets and the wider, more continuous, quartz-rich A-veinlets is locally difficult to make. “Gold was not directly observed at Pancho. However, its paragenesis can be deduced from the pattern of surface gold grades. A fairly continuous zone of gold grades between 0.5 and 1 ppm coincides closely with pervasive potassic alteration and A-veinlets in the intrusive rocks. Gold grades of >1 ppm occur where there are sets of sheeted banded quartz veinlets.

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The highest grades in the intrusive rock also coincide with pervasive magnetite-K feldspar-oligoclase alteration. Zones with gold contents greater than 0.5 ppm in the overlying volcanic rocks are mostly less than 10 m wide and are associated directly with sets of sheeted, banded quartz veinlets that decrease in abundance with increasing distance from the intrusion. Zones of >0.05 ppm gold extend to about 150 m beyond the outer limits of banded quartz veinlets. “The gold deposits at Refugio are hosted by andesitic to dacitic subvolcanic intrusive centers. There is a close spatial and temporal association between gold and stocks of quartz diorite porphyry with microaplitic groundmass and irregular bodies of intrusive breccia. Gold mineralization is genetically related to a specific type of quartz veinlet, consisting of banded quartz-magnetite. Because other types of quartz veinlets are present at Refugio, recognition of veinlet types is crucial in determining the location of highest gold and copper grades. The deepest zone, as exemplified by Pancho, is similar to gold-rich porphyry copper deposits. It is characterized by sugary, irregular quartz veinlets (A-veinlets) in pervasive potassic alteration. The magnetite content approaches 5 vol percent and the total sulphide content is less than 2 vol percent with chalcopyrite as the main sulphide mineral. Zones of A-veinlets without banded quartz veinlets contain the highest hypogene copper grades at 0.1 wt percent and gold grades range from 0.5 to 1 ppm. Thus, ratios of copper to gold (% Cu/ppm Au = ~0.1) in zones of highest copper grade are lower than those in gold-rich porphyry copper deposits (% Cu/ppm Au = 0.39-1.5). “The porphyry copper-like environment at Pancho is overlain and locally superimposed by an intermediate zone of banded quartz veinlets that appear to be unique to porphyry gold deposits. At Verde, the zone of banded quartz veinlets constitutes the ore zone and is associated spatially with albitic alteration of plagioclase. The banded veinlets, which lack alteration halos, locally occur in sheeted sets with distinct structural orientations, as seen in the radial-concentric patterns at Verde. Gold occurs paragenetically early in dark bands with micron-sized magnetite and rare copper-iron sulphides and paragenetically late with pyrite and gangue minerals in vuggy vein centers, in fractures that cut the dark bands and along the vein margins. In zones of abundant banded veinlets without early A-veinlets, gold grades are commonly 1 ppm and copper grades are <0.05 wt percent. Ratios of copper to gold achieve their lowest values (% Cu/ppm Au = ~0.03) in these zones.”

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9.0 MINERALIZATION This section has been taken in its entirety from the previous October, 2009 Micon Technical Report (Pressacco et al., 2009), which draws upon Easdon (2005). Easdon (2005) describes the gold mineralization as follows:

“The generation of this sulphur [i.e., the native sulphur], with associated and anomalous mercury, arsenic, antimony and gold, was recognized (Zentilli, 1990) to be related to near-surface, but deeper seated multiple hydrothermal high-sulphidation epithemal systems which are developed in a complex of domes and lava flows of dacitic composition. The hydrothermal system(s) are considered to be related to sub-volcanic intrusion of dacitic to (micro)-dioritic porphyries into the volcanic dome complex. These systems have resulted in (probably) several episodes of very high level acid leaching of the host rocks (with the resultant advanced argillic and argillic-silicic style of alteration) and the development of quartz-alunite-gypsum, as well as silicified vents with hydrothermal explosion breccias which may be impregnated with sulphur. Gold-(copper) mineralization, which occurs at some depth (dependent on the degree of telescoping of the system) below the surface manifestation of the solfataric systems, is “often identified in “swarms” of banded quartz veinlets” and which may occur “within transitional potassic-argillic altered rock” (Bartlett, 2004). Magnetite (partially to totally martite-altered) and secondary biotite are also described as alteration products (Geoexploraciones, 2003). Lower grade gold mineralization appears to be related to a phase of disseminated sulphide (primarily pyrite) mineralization which is typically associated with an argillic-silicic alteration.” “The mineral occurrences in the Dorado Sector of the Volcan Property comprise a combination of primarily gold bearing quartz-sulphide (predominantly pyrite) veinlets with peripheral lower (< 0.5 g/t Au) grade gold associated with disseminated pyrite developed in largely advanced argillic-silica altered fragmental tuffaceous and porphyritic dacitic volcanic, as well as in dacitic dome complex rocks. Similar style mineralization is encountered in the Ojo de Agua sector in which exploration was initiated in 2006. The mineralization is variously hosted in (or intimately related to) silicified hydrothermal breccias, in the permeable tuffs and otherwise previously prepared and permeable altered volcanics, and in dacitic dome breccias which may have formed peripheral to the dome cores. These occurrences are associated with the + 8-10 Ma Miocene formation and subsequent partial destruction of the Volcan Copiapo stratovolcano and related subvolcanic intrusive events which are responsible for the extensive and widespread high level hydrothermal (high sulphidation epithermal style) alteration and mineralization. The mineralization is contained within the altered dacitic rocks and is associated with faults, hydrothermal breccias and brecciated dome boundaries. The location of the mineralization in part appears to be controlled by the dilational (jog) structures and in part by the permeability/porosity of the dacitic tuffs, including previous alteration events. Andina geologists have constructed graphs of the available drill hole geochemistry and have determined that the metal correlations are more characteristic of Au-Cu-Mo porphyry type mineralization than the metal correlations are for an epithermal type of mineralization for the Dorado Sector. Although Au and As at shallow depths are closely correlative, this correlation appears to fall off/dissipate with depth; mercury has a weak correlation with both Au and As.”

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9.1 MINERAL ZONES The Volcan property covers the Dorado sector (Dorado Este, Central and Oeste zones, of which the latter has been sub-divided into the Oeste Norte and Oeste Sur zones) and the Ojo de Agua sector which lies to the northeast of Dorado (see Figure 7.2). The following sections have been excerpted in part from Easdon (2005) to which the reader is referred for more detail. 9.1.1 Dorado Este

“The Dorado Este mineralization and deposit is contained within dacitic tuffs and dacite porphyries which show extensive advanced argillic and argillic-silica alteration and with the development of a generally centrally located irregularly shaped, hydrothermal breccia pipe. Initial geological mapping indicates that the mineralization is grossly banded in an east-west sense and that the mineralization dips steeply to sub-vertically. The emplacement of the mineralization may be in part controlled by the intersection of WNW and NNW steeply dipping structures; the NNW structures may be terminating, or down dropping, the mineralization on both the east and west sides of the >0.2 g/t Au geochemical anomaly which defines the Dorado Este area. The western extension of the mineralization may also be partially limited by a post-mineral intrusive which is located approximately 200 m to the west of currently [i.e., in 2005] defined western limit of the deposit.”

9.1.2 Dorado Central

“The Dorado Central zone is hosted by the same rocks and has undergone similar alteration to that seen in the Dorado Este zone. Host rocks to the mineralization comprise dacitic domes and dacitic tuffs and dacitic porphyry flows with the accompanying and localized development of hydrothermal breccias. The geochemical sampling that has been done in this zone [i.e., to 2005] indicates that this zone is apparently part of the roughly east-west dilational jog zone as seen at Dorado Este but which is offset approximately 600 m to the SW of the Dorado Este zone and is located approximately 200-300 m west of Dorado Este.”

9.1.3 Dorado Oeste

“The Dorado Oeste zone is defined by what is an essentially northerly (NNE) trending somewhat discontinuous geochemical anomaly (>0.2 g/t Au) which is approximately 1.75 km long (N-S) and up to 500 m wide. Dorado Oeste is predominantly underlain by dacticic tuffs and porphyries and has apparently been intruded by at least two variably continuous NE trending dacitic dikes.”

9.1.4 Ojo de Agua

“The Ojo de Agua area is located approximately 4 kms northeast of the Dorado Este area. Czollack (1996) states that this mineral zone corresponds to a “maar” formed as a result of a phreato-magmatic explosive occurrence which occurred at the intersection of 2 structures (the more important of which trends at 010o). These structures were also important in providing the solution channel ways for the development of a widespread zone of intense and advanced argillic epithermal alteration (quartz-alunite-kaolin). An extensive zone of

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explosive tuff breccias is located on the western side of the maar and locally dark amphibole dacite flows are also mapped.”

The Ojo de Agua sector has been divided into the Florencia and Andrea zones. Easdon (2008) considers that:

“The mineralization in the Andrea Zone has some similarities to that seen in the Dorado Sector (i.e., there is some degree of association with sheeted quartz-pyrite veinlets). The mineralization, as logged, appears to be occurring more commonly in porphyritic dacites, as opposed to being hosted by dacite breccias. The gold values are associated with intervals of greater pyrite content – possibly as very fine grained disseminations, and in part associated with silica veinlets, fine stockworks, and grey and black banded “sheeted” quartz veinlets. The author considers that the mineralization at Andrea is probably intermediate between the high level, high-sulphidation epithermal system seen at the Dorado Sector and that seen in the Florencia Zone. “The mineralization at Florencia is more characteristic of that seen in a porphyry Au-Cu system, with the mineralization, which largely occurs in porphyritic dacite, being associated with disseminated pyrite and stockworks with increased values of Cu (up to 1% Cu locally) and locally averaging + 0.1% Cu over +200 m with 900 ppb Au. Furthermore the gold appears to be associated with intervals which show increased smectite and chloritic alteration. These associations suggest to the author that the mineralization/alteration at Florencia Zone has developed in a telescoped system.

“In a general sense, the Ojo de Agua Sector rocks are more strongly silicified than the Dorado Sector rocks, and appear to carry lesser amounts, or swarms, of black banded silica-pyrite veinlets. Quartz-alunite veinlets are also noticeably less common than at the Dorado Sector. The Andrea Zone carries significantly more banded black veinlets than the Florencia Zone, while the Florencia Zone appears to generally be more siliceous than the Andrea Zone.”

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10.0 EXPLORATION 10.1 GENERAL The exploration history prior to the 2009 to 2010 exploration program by Andina is contained in a number of Technical Reports which are filed on SEDAR. The exploration histories from these reports were summarized previously in Section 6. This section will focus on the exploration program conducted in the 2009 to 2010 period (Phase VI). 10.2 2009-2010 EXPLORATION PROGRAM (PHASE VI) DORADO OESTE AND

OJO DE AGUA ESTE The 2009 to 2010 exploration program was conducted between November 16, 2009 and May 4, 2010. 10.2.1 Dorado Oeste (DW) The main objective of the drilling program on the Dorado Oeste area was to achieve a 50 x 50 m grid in the zones containing gold grades above 1.0 g/t. In addition, one hole was scheduled to explore the possibility of porphyry copper style mineralization at depth (DOA 835; Section 1150), and three were programmed to detect lateral extensions of gold mineralization (ROA 821, DOA 843, and ROA 845; Sections 1250, 1200, and 1300, respectively). A total of 52 holes were drilled (21 diamond and 31 reverse circulation drill holes) totalling 8,719.40 and 8,998.00 m, respectively. Five holes were aborted due to poor ground conditions. 10.2.2 Ojo de Agua Este (ODAE) The ODAE prospect is located 6.5 km northeast of the Dorado deposits and 3 km due east of Andrea and Florencia prospects (Figure 10.1). Together with the latter two, it is a significantly mineralized area on the Volcan property. Geological mapping, trenching, a ground magnetic survey and drilling, together with corresponding surface, chip-channel, drill chip and core sampling, were carried out in the exploration program (Table 10.1). Stereoscopic Ikonos satellite imagery of the whole district was taken during the field season and used as a base for mapping. The area of principal interest in which all the drill holes and most of the trenches are located covers 1.5 km2.

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Figure 10.1 Location Map for the Dorado and Ojo de Agua Areas on the Volcan Property


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Table 10.1 Summary of the Exploration Work Undertaken in the Ojo de Agua Este Area during 2009-2010

Work Program Number Metres Number of

Samples Taken Assay Analysis

Drill Holes 10 2,375.45 1,158 Au, Cu, Mo Trenches in ODAE 23 7,405.00 1,765 Au, Cu, Mo Surface Samples 132 Na 132 Au, ICP (48 elements) Ground Magnetic Survey 14.4 km2 Na


All assays were performed by Geoanalítica Ltda, in Coquimbo (Au, Cu, Mo) and Acme Analytical Laboratories S.A., in Pudahuel (ICP), with the geophysics conducted by Argali Geofísica E.I.R.L. 10.2.2.1 Geological Mapping Geological mapping at scales of 1:25,000 and 1:5,000 was carried out over the area and its surrounds. In addition, geological mapping at a scale of 1:1,000 was done over the prospect area and the trenches. Mapping was annotated onto paper copies of the Ikonos image, using a handheld GPS to mark the location. This information was then scanned and transferred to the ArcGis mapping program for digitizing. Data on the geological structures were entered into Excel spreadsheets for incorporation onto the mapping. 10.2.2.2 Trenching and Channel Sampling A total of 7.4 km of trenches were cut to bed rock where possible using a bulldozer and, to a lesser extent, a back-hoe and subsequently chip/channel sampled over 5 m continuous intervals. The chip/channel samples consist of one or more continuous samples of mineralized or altered rock collected with hammer and chisel over a measured interval and were from areas of outcrop and/or from trenches. The sample locations were determined during the sample collection using a handheld GPS and subsequently confirmed by surveying the points. 10.2.2.3 Surface Rock Sampling A total of 132 rock chip samples were taken over the prospect area. The vast majority of these are selected samples of geological features of special interest (principally veining, alteration and brecciation) taken to establish the presence or lack of gold mineralization. 10.2.2.4 Drill Program Major Drilling Chile S.A., located in La Serena, carried out 2,375 m of drilling in 10 holes (2,242 m of reverse circulation and 133.5 m of diamond drilling) (Table 10.2). Both methods were beset by problems with ground conditions, particularly faulting and high water pressures and, as a result, the planned depths of most holes were not attained. The early onset of winter finally curtailed the diamond drill program in May, 2010.

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Table 10.2 Summary of the Drill Statistics for the Ojo de Agua Este Area, 2009-2010

UTM Coordinates Drill Hole Length

(m) Drill Hole Number

Easting Northing

Collar Elevation

(m asl) Planned Actual

Azimuth (°)

Inclination (°)

Drill Hole Type

RODAE-806 489,822 6,974,727 4,782 400 162.00 340 -60 RC RODAE-807 489,883 6,974,965 4,771 400 318.00 10 -59 RC RODAE-812 489,882 6,974,962 4,771 400 336.00 331 -58 RC RODAE-814 489,955 6,974,888 4,759 500 500.00 330 -60 RC RODAE-816 489,886 6,975,127 4,776 400 414.00 359 -59 RC RODAE-838 489,929 6,975,165 4,782 500 21.95 225 -60 DHH RODAE-841 489,927 6,975,163 4,782 500 46.20 224 -59 DHH RODAE-849 489,931 6,975,166 4,782 500 40.00 223 -60 RC RODAE-850D 489,881 6,975,118 4,772 400 167.30 227 -64 RC/DDH RODAE-851 489,768 6,974,869 4,772 400 370.00 44 -59 RC Total 3,400 2,375.45


The drill holes were situated on the basis of information obtained from the geological mapping and trench and drill sample geochemistry, as these became progressively more available. All holes were surveyed “down-the-hole” by Servicios Geofísicos Comprobe Limitada from Santiago. The holes were nominally surveyed every 10 m. The core cuttings and drill core were logged at the camp. Assay samples were taken every 2 m and sent to the company’s facilities in Copiapo for the insertion of blanks and standards. In addition, the diamond core was cut using a saw, and sent for preparation and analysis to the laboratory of Geoanalítica Limitada. The drill data were processed and modeled using GEMS 6.2 (Gemcom software). 10.2.2.5 Ground Magnetic Survey Argali Geofísica E.I.R.L. undertook a ground magnetic survey of the ODAE prospect and adjoining areas using a GSM-19W v70 magnetometer. Lines were oriented north-south and spaced at 50 m intervals with readings about every metre. The following products were prepared: Total Field, Pole Reduced, Horizontal and Vertical Derivatives (dX, dY, dZ), Tilt Derivative, Analytic Signal (J. Jordan 2010). 10.2.2.6 Sample Preparation and Analysis All of the samples were delivered by the Andina personnel to Geoanalítica Limitada’s sample preparation facility in Copiapo, where they were crushed and then shipped by Geoanalítica to its assay facility located in Coquimbo. Geoanalítica analyzed the drill and trench samples for gold, copper and molybdenum. The gold assays were performed utilizing 50 g fire assay with an Atomic Absorption Spectroscopy (AAS) or gravimetric finish; the Cu and Mo were assayed using standard wet analytical techniques. Sample pulp splits of chip and drill hole samples were subsequently sent by Geoanalítica to the ALS-

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Chemex laboratory (also in Coquimbo) for multi-element Inductively Coupled Plasma (ICP) analysis on 48 elements. 10.3 INTERPRETATION OF RESULTS The exploration undertaken by Andina in 2009 – 2010 warrants the update of the previous mineral resource estimates for the Dorado deposits, as discussed in Section 17.0 of this report. The ODAE prospect and adjoining areas require further exploration before a mineral resource estimate can be made for them.

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11.0 DRILLING 11.1 SUMMARY A summary of the previous drilling programs on the Volcan project is located in Section 6. A complete description of the previous drilling programs is provided in the prior Technical Reports posted on SEDAR. Therefore, this section will only comment on the 2009 to 2010 drilling program. 11.2 2009 TO 2010 DRILLING PROGRAM (PHASE VI) The objective of the Phase VI drilling campaign was to conduct further infill drilling in the Dorado Oeste zone to determine the continuity of and identify any trends in the higher grade mineralization. Figure 11.1 is a view of one of the diamond drills operating on site during the 2010 Micon site visit.

Figure 11.1 Diamond Drilling Rig Operating during the 2010 Site Visit

The 2009 to 2010 drilling program (Phase VI) was conducted between November 16, 2009 and May 4, 2010. During this period a total of 8,719.40 m of diamond drilling was conducted in 21 holes and 8,998.00 m of reverse circulation drilling was conducted in 31 holes. Table 11.1 summarizes the metres drilled on the Volcan property in each of the Dorado gold deposits (Dorado Este, Central and Oeste zones), during the Phase VI program.

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Table 11.1 Drill Hole Summary for the 2009 to 2010 Drilling Program (Phase VI)

Diamond Drilling Reverse Circulation Total

Zone Number of Holes

Metres Number of Holes

Metres Number of Holes

Metres

Dorado Oeste 21 8,719.40 31 8,998.00 52 17,717.40 Dorado Este 0 0 0 0 0 0 Dorado Central 0 0 0 0 0 0 Dorado Total 21 8,719.40 31 8,998.00 52 17,717.40


The locations of drill collars corresponding to Phase VI and earlier campaigns are depicted in Figure 11.2. Collars corresponding to Phase VI holes are shown with black dots. At the end of Andina’s Phase VI drilling campaign, a total of 82,901.12 m in 202 holes had been completed on the Dorado Oeste deposit since 2004. The diamond drilling consists of a totals 51,610.82 m, RC drilling totals 30,086 m and mixed drilling is comprised of 1,204.30 m. During the 2009 to 2010 season, drilling was completed by Major Drilling Chile S.A. while the down-hole surveying was conducted by Servicios Geofísicos Comprobe Limitada, located in Santiago. The survey was conducted nominally at intervals equating to every 10 m using a digital gyroscope. Collars may vary ±5 m from the proposed collar locations. Azimuth and dip measurements may vary up to ± 2°. On the completion of each hole, PVC pipe was inserted into the collar, and cemented in place in such a way as to indicate the direction and inclination of the hole. A metal reinforcing rod was driven into the ground which had a metal plate, approximately 10 cm by 20 cm, welded to the top of it. The drill hole identification number was arc-weld inscribed so that the hole can be permanently identified in the field. All holes numbers were prefixed with a “D” indicating a diamond drill hole and an “R” for a reverse circulation drill hole. All holes were numbered in sequence beginning at number 790. Diamond drill core and RC recovery was excellent, with recovery averaging 98%, or better, for both the diamond drill and the RC drill holes. The core runs were routinely measured by tape and the recovery calculated. The 2 m RC sample runs were weighed and the sample recovery for each sample was calculated using the theoretical volume extracted multiplied by the specific gravity of the rock.

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Figure 11.2 Plan showing the Collar Locations for the 2009 to 2010 Drilling Campaign (In Black)


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11.3 2009 TO 2010 GENERAL DRILLING RESULTS 11.3.1 Dorado Oeste Drilling results for Phase VI are shown in Table 11.2. Main intercepts are shown in columns “First Intercept” and “Second/Third Intercept”.

Table 11.2 Drill Hole Summary for the 2009 to 2010 Dorado Oeste Drilling Program (Phase VI)

First Intersection Second/Third Intersection

Section Drill Hole Number

Drill Hole Length From

(m) To (m)

Length (m)

Gold Assay (g/t)

From (m)

To (m) Length

(m)

Gold Assay (g/t)

DW-400 DOA 839 500.20 274 320 46 0.744 456 494 38 0.542 ROA 802 210.00 0 192 192 0.923

DW-450 ROA 820 300.00 118 268 150 0.491

DW-500 DOA 846 548.40 326 420 94 1.18 456 524 68 0.462 ROA 811 300.00 102 238 136 0.512

DW-550 DOA 840 500.00 452 500 48 0.650 ROA 832 200.00 6 268 172 0.578 DOA 842 84.70 40 40 ppm Mo DW-650 DOA 844 581.45 202 360 158 0.643 426 520 96 0.674 ROA 833 440.00 26 188 162 0.489 298 440 142 0.524

DW-700 ROA 823 130.00 0 120 120 0.532 ROA 803 394.00 332 392 60 0.470

DW-750 DOA 819 420.00 0 336 336 0.434 DOA 790 450.00 0 450 450 0.853 DOA 801 581.45 328 424 156 1.00 526 564 38 1.20 DW-800 ROA 805 318.00 50 220 170 0.870 ROA 804 396.00 268 374 86 1.20

DW-850 ROA 805 420.00 80 178 1.10 98

DW-900 ROA 837 400 28 170 142 0.418 206 354 148 0.321 ROA 797 420.00 60 420 360 0.840

DW-950 DOA 808 500.00 214 464 250 1.05 DOA 810 488.40 8 184 176 0.510 322 450 128 0.738 DOA 828 455.35 264 338 74 0.843 DW-1000 ROA 830 290.00 64 178 114 0.799 DOA 799 450.10 94 198 104 1.04 264 420 154 1.19 DOA 822 563.15 102 316 214 0.670 434 476 42 1.20 ROA 824 220.00 114 212 98 0.754

DW-1050

ROA 827 200.00 0 28 28 0.655 70 154 84 0.478 ROA 795 330.00 8 146 138 0.443 182 230 48 0.841 ROA 796 500.00 26 384 360 0.701

172 242 70 1.10 DOA 791 496.55 120 150 30 0.440

334 494 162 1.18 ROA 825 290.00 100 258 158 0.676

DW-1100

ROA 836 140.00 2 110 108 0.411 ROA 792 320.00 0 182 182 0.800 ROA 763 400 40 366 326 0.840 ROA 794 400 0 400 400 0.663 DOA 835 1,145.65 346 394 48 0.304 772 776 4 3.32

DW-1150

DOA 852 32.40 0 32 32 0.471 DOA 813 300.00 0 300 300 0.533 ROA 829 276.00 96 190 94 0.617 DW-1200 DOA 843 432.20 0 138 138 1.52 ROA 821 344.00 132 310 236 1.40

DW-1250 ROA 817 320.00 0 156 156 0.433 250 320 70 0.608 ROA 815 250.00 144 172 28 0.422

DW-1300 DOA 845 430.25 346 430 84 0.416

DW-1400 ROA 800 200.00 10 166 156 0.776 DW-1450 ROA 834 230.00 122 140 18 0.407

Total 47 Holes 17,598.25


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Five holes were aborted due to poor ground conditions and these are summarized in Table 11.3. The samples derived from the drill holes which were abandoned were not assayed.

Table 11.3 Summary of the Aborted Drill Holes for the Dorado Oeste Area

Drill Hole Number Depth of Abandonment (m) Type of Drill Hole

ROA 798 6.85 Reverse circulation ROA 809 30.00 Reverse circulation DOA 818 11.15 Diamond drill ROA 831 30.00 Reverse circulation DOA 848 41.15 Diamond drill

Total 119.15 Table supplied by Andina Minerals Inc.

The deep exploration hole, DOA 835 which was proposed to explore the possibility of porphyry copper style mineralization at depth, was budgeted to be 1,400 m long. However, due to bad ground conditions, DOA 835 only reached a depth of 1,145.65 m. The results, from a mineralization point of view were poor, although the potassic alteration assemblage observed starting at a depth of 960 m is typical in porphyry copper-type alteration assemblages. Drill hole ROA 821, drilled on Section 1250 (Figure 11.2), was proposed to examine the lateral extension of the mineralization previously identified in DOA 741 (Phase V). The results from this drilling were excellent, with an intersection averaging 1.40 g/t of gold over 236 m from 132 m to 310 m. On-going drilling was conducted on Sections 1200 (DOA 843) and 1300 (DOA 845) (Figures 11.3, and 11.4), in a continuing effort to examine the lateral extent of the mineralization. The assay results obtained for drill hole DOA 843 were also considered to be excellent, with the first 138 m of the hole averaging 1.52 g/t gold. The assay results obtained for Section 1300 were not as positive, although the last 84 m contained the highest grade interval, which averaged 0.416 g/t gold. Andina’s geologists suspect that higher grades may be located at depth, beyond the bottom of the current designed pit. Figures 11.3 through 11.5 illustrate the drilling intersections on Sections 1200 through 1300. The 2009-2010 drilling program (Phase VI) for the Dorado Oeste area has been incorporated into Andina’s electronic database and the results have been used in the updated mineral resource estimate contained in Section 17 of this report.

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Figure 11.3 Cross-Section through Section Line DW-1200 Illustrating the Drill Holes and Gold Grade in Grams per

Tonne


Figure 11.4

Cross-Section through Section Line DW-1250 Illustrating the Drill Holes and Gold Grade in Grams per Tonne


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Figure 11.5 Cross-Section through Section Line DW-1300 Illustrating the Drill Holes and Gold Grade in Grams per

Tonne


11.3.2 Ojo de Agua Este (ODAE) The 2009-2010 drill campaign established that the ODAE area contains higher grade gold mineralization within an envelope of lower grade mineralization, covering an irregular oval area 800 m by 400 m. The best intersections in holes RODAE 851, RODAE-850D and RODAE-812 (which terminated prematurely in higher grade mineralization) suggest the potential for a resource of higher grade than that obtained in the Dorado targets. Preliminary analysis of the geometry of the higher grade intersections (over 1.0 g/t gold), incorporating trench results, postulates a main north trending mineralized structure at least 350 m long with a width of about 30 m. Mineralization extends to at least 300 m vertically. This model is currently based primarily on only two drill holes; therefore, it is speculative and alternative hypotheses exist. Testing these will be the objective of the early drilling to be conducted in the summer campaign of 2010 to 2011 (Phase VII). Table 11.4 summarizes the best intersections, slightly modified from that disclosed in previous press releases. Figure 11.6 illustrates the location of the holes in plan view.

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Table 11.4 Drill Hole Summary for the 2009 to 2010 Ojo de Agua Este Drilling Program (Phase VI)

Mineralized Intersection Drill Hole

Number Drill Hole

Length From (m)

To (m)

Length (m)

Gold Assay (g/t)

Including

RODAE 806 162.00 126 128 2 3.99 RODAE 807 318.00 4 64 60 0.50

0 84 84 0.56 RODAE 812 336.00

176 246 70 1.20 18 m @1.71 g/t Au at end of hole RODAE 814 500.00 0 18 18 0.25

128 160 32 0.27 RODAE 816 414.00

370 414+ >44 0.25 RODAE 838 Not analyzed RODAE 841 21.95 18 30 12 0.39 2-24 averaging 552 ppm Mo RODAE 849 46.20 Not analyzed

RODAE 850D 167.30 100 167+ >67 0.74 >18 m @1.71 g/t Au RODAE 851 370.00 166 288 122 1.45 32 m @3.25 g/t Au

Total 2,375.45 Table supplied by Andina Minerals Inc.

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Figure 11.6 Ojo de Agua Este Drill Hole and Trench Results and Inferred Limits of Mineralization


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12.0 SAMPLING METHOD AND APPROACH 12.1 DESCRIPTIONS OF METHOD AND APPROACH The first portion of this section has been taken in its entirety from the previous October, 2009 Micon Technical Report (Pressacco et al., 2009). The sampling method and approach used by Andina at the Volcan property have been described in prior technical reports by Easdon (2008, 2006a, 2006b, 2005), Gonzalez (2007), Easdon and Gonzalez (2007) and Bartlett (2004). The conclusions contained in these reports on the sampling method and approach, are summarized as follows: Bartlett (2004) reviewed summary reports prepared by Homestake and Cameco and examined drill core. Cameco’s work was focused on the Dorado Este area. Pertinent observations were:

RC cuttings were sampled at 2 m intervals and the samples sent to Geolab.

Diamond drill core was split using a manual guillotine and sampled at 2-m intervals. Fifty percent of the core was sent to Geolab, with the remainder stored in core boxes for reference.

Core was stored at the estate of the Cousiño family [Hacienda Castilla] north of

Santiago. It was in good condition, and labelled and maintained to industry standards.

Easdon (2005) commented on the Andina sampling method and approach as follows:

Andina had initiated a carefully controlled and designed QA/QC system.

Drill core and cuttings were handled by SBX Consultores on behalf of Andina from the moment they exited the drill.

Andina personnel were present at all times the drills were in operation.

Core/cuttings were boxed/split and bagged under the supervision and control of

Andina personnel.

Core was taken to the facilities at Hacienda Castilla where it was pre-logged and marked for splitting by a senior geologist. The 2-m intervals were split with a diamond saw. One half of the core was returned to the core box for final logging and storage on site; the other half was properly bagged and labelled and retained under lock and key for pick up by the laboratory.

Cuttings were taken to the camp site and stored under cover until handed over to the

laboratory on pick-up.

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Prior to October, 2005, samples were analyzed at the ALS Chemex laboratory in La

Serena. From October, 2005, the Geoanalitica laboratory in La Serena was used. Andina had re-opened and deepened a number of the trenches excavated by Cameco and re-sampled them at 5-m intervals. The work confirmed that Cameco had properly sampled and identified anomalous zones at Dorado Este and other zones. Easdon (2005) also reported that Andina was surveying in detail all prior and newly spotted drill hole collars. This work demonstrated that the Homestake and Cameco UTM data were off by an approximate and consistent 50 m in the northing and 20 m in the easting. The following has been extracted from Easdon (2008):

“The sampling methods employed by Andina were industry-standard methods for handling drill core and cuttings. Intervals of 2 m were selected for both the diamond drill core and RC cuttings. However, at the discretion of the geologist logging the diamond drill core, the core sample interval could be reduced. It was Easdon’s opinion that the sampling intervals that have been selected for the drill core and cuttings were appropriate to test the style of mineralization being developed. “Effective November, 2007, all of the samples, core, rejects, etc., from prior operations were transferred to the new Andina facility located in Copiapo, and the facility was utilized for the RC sample preparation, final core and cuttings logging, and storage. As reported in prior Technical Reports, the Volcan samples had been sent to the SBX facilities at Hacienda Castilla, one hour’s drive south of Copiapo. Geoanalitica, (Asesoria Minera Geoanalitica Ltda.) the assay laboratory used by Andina, established a sample preparation facility at Paipote on the outskirts of Copiapo. Geoanalitica shipped the prepared samples to its principal laboratory in La Serena for assay. “Diamond drill core and RC drill cuttings were regularly shipped by private contractor to the preparation facilities at Copiapo.”

12.2 MICON COMMENTS Micon conducted a previous data verification process during a site visit between March 10 to 13, 2009, where the field procedures for the drilling program were examined, examples of the host rock types, alteration and veining were observed in outcrop and representative sections of drill core were reviewed. During the 2009 visit, Micon found that the field procedures that were being used to set up the diamond drill, recover the core, transport the core to the logging facilities and the logging and sampling procedures were all being carried out to the best practices currently in use by the mining industry. Micon conducted another site visit to Andina’s Volcan project, between April 17 and 19, 2010. During this site visit to both the project and Andina’s facilities in Copiapo, the procedures for conducting the drilling program were discussed, including drilling set-up, surveying of the drill collars and down-hole surveying, preliminary logging at the base camp, final logging, sampling and core storage procedures at the Copiapo facilities, submission of

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assay standard, blank and duplicate samples, as well as data gathering and recording procedures for the electronic database. Micon found that the field procedures being used during the 2010 site visit were all in accordance with the best practices currently in use by the mining industry and that they are well documented. Micon concludes that the results produced by the procedures are reliable enough to form the basis for a mineral resource estimate. 12.3 SIGNIFICANT OR RELAVENT SAMPLES The significant 2009-2010 drilling intersections for the Volcan property were previously summarized in Section 11. The significant drilling intersections prior to the ones tabulated in Section 11 are contained in the previous Technical reports posted by Andina on SEDAR.

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13.0 SAMPLE PREPARATION AND SECURITY 13.1 DESCRIPTION OF SAMPLE PREPARATION AND SECURITY The first portion of this section has been taken in its entirety from the previous October, 2009 Micon Technical Report (Pressacco et al., 2009). Sample preparation and security at the Volcan property has been described in prior Technical Reports by Easdon (2008, 2006a, 2006b, 2005), Gonzalez (2007), Easdon and Gonzalez (2007) and Bartlett (2004). The conclusions contained in these reports on sample preparation and security are summarized as follows: Bartlett (2004) reported:

Given the passage of time, from 1997, it was not possible verify the appropriateness of the sample preparation protocol of the historical sampling completed by previous operators.

50-g sample charges were assayed using the fire assay method.

Internal quality control assay data held by Geolab were reviewed. Duplicate 50-g

fire assays were undertaken at a rate of one in every five samples and showed excellent correlation between sample pairs.

Data derived from re-assaying Geolab pulps at the SGS Chile Limitada (SGS)

laboratory in Santiago were examined. Excellent correlation was demonstrated between sample pairs above 0.1 g/t Au with the exception of two pairs. In both of those pairs, the Geolab assays appeared consistent with adjacent sample results

A precision plot of the SGS and Geolab data showed that approximately 95% of the

sample pairs differed by less than 50%. It was concluded that the Geolab assay data were of high standard.

The assays for the drill core reviewed were consistent with the mineralization

observed in the core. Easdon (2005) reported the following for the February-April, 2005 program:

Lag, trench and drill core samples were transported by Andina personnel to Copiapo for shipment/delivery to the ALS Chemex laboratory in Coquimbo.

Andina provided 16 duplicate channel samples and 7 duplicate samples of diamond

drill hole DVA-001 as a check against the ALS Chemex analyses.

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Easdon considered that the results of both sets of duplicate sample assays were not consistently reproducible, and recommended that the DVA-001 sample rejects be reanalyzed at the Geoanalitica laboratory.

The ALS Chemex laboratory used the following sample preparation sequence: Samples were dried at 60o C for 6 hours.

Crushed in a jaw crusher with 95% passing 10 mesh.

Crushed material passed through a ring pulverizer with 95% passing 40 mesh.

Pulverized material passed through a Jones splitter with 500 g processed further

and the balance retained for reference.

250 g of the pulverized material ring pulverized to 85% passing 200 mesh.

Sample fire assayed using standard 50-g fire assay procedures.

ICP analysis performed on 1 g of ground material as required, e.g., for copper.

ALS Chemex had ISO 9001:2000 accreditation and checked 12% of results using a combination of standards, blanks and duplicates.

The Geoanalitica laboratory used similar sample preparation procedures: Samples were dried as necessary.

Sample was crushed to +95% at -10 mesh.

Crushed material was homogenized and split to a 1,000-g portion.

The 1,000-g portion was pulverized to -150 mesh and rotary split into one 750-g

sample to be plastic bagged and returned to the client and one 250-g sample to be paper bagged and submitted for analysis.

50 g of material analyzed by standard fire assay with atomic absorption finish (results over 3 g/t Au have gravimetric finish).

Samples for ICP analysis were sent by Geoanalitica to ALS Chemex.

Geoanalitica was in the process of obtaining ISO 9001:2000 certification and inserted controls equivalent to 17% of the sample batch using standards, blanks and duplicates.

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Easdon (2006a) reported the following sample preparation and analytical procedures used for work carried out between October, 2005 and February, 2006. By that time, Andina had implemented a well-defined QA/QC system in order to ensure the integrity of the sample preparation and shipping to the Geoanalitica laboratory in La Serena, which Andina elected to use from October, 2005. Analyses for gold, total copper and molybdenum were carried out for all drill hole, trench and talus samples. Easdon (2006a) reported the following additional details for analyses carried out by Geoanalitica:

Samples for gold analysis were ground to 95% passing 150 mesh, and for copper analysis were ground to 90% passing 150 mesh.

Batches of 48 samples included 7 internal control samples: 4 duplicates, 2 standards and 1 blank.

1 in 30 samples was checked to confirm that 95% of the sample was less than 10

mesh and 95% was 150 mesh for gold analysis.

One blank quartz control per 40 samples was assayed for gold and then subject to multi-element ICP to check for contamination.

Spectrographic atomic absorption was conducted on: 50-g fire assay with atomic absorption finish for gold, sensitive to 5 ppb Au.

Acid digestion (nitric, hydrochloric, perchloric and hydrofluoric) with atomic

absorption analysis for copper, sensitive to 3 ppm Cu.

Acid digestion (as for copper) with atomic absorption analysis for molybdenum, sensitive to 3 ppm Mo.

Easdon (2006b) reported no change in sample preparation and analytical procedures. He reported that statistical analyses undertaken by Andina of the combination of standards, blanks and duplicates inserted into the drill sample stream for samples from Dorado Oeste demonstrated that the Geoanalitica laboratory was producing repeatable and reliable assay results. The company planned to send 196 drill hole sample pulps and 133 drill hole rejects to ALS Chemex in La Serena for check assays. Easdon (2006b) also reported that Andina planned to install a sample preparation facility at the Hacienda Castilla. Gonzalez and Easdon (2007) reported on the sample preparation facility installed at Hacienda Castilla and operated by Geoanalitica. The equipment was housed in two 20-ft steel shipping containers and comprised jaw crushers, concentric Rock Lab pulverizer and mechanical splitter.

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Andina inserted approximately 15% additional samples into the sample stream, including standards, blanks and duplicates. All samples were analyzed for gold by fire assay and for total copper and molybdenum by atomic absorption. If additional elements were requested for analysis, the sample pulps were forwarded to Acme Analytical Laboratories (Acme) in Santiago for standard ICP analysis. The following has been extracted from Easdon (2008):

“On July 26, 2008, the author reviewed the new sample preparation and storage facilities that Andina had set up in Copiapo. At the same time the author reviewed the Geoanalitica facility which was set up in Paipote (located immediately outside of Copiapo and on the road to the Project) under a 3 year exclusive contract with Andina. This contract is effective during the active field season. The Andina facility is equipped with an office, change quarters, and a kitchen. The core trays, duplicate cuttings, pulps and laboratory rejects are very well organized, are easily retrievable as needed, and are stored under a waterproof tarp covered installation. Typically there is a crew of people working at the facility during the day shift, and at night there is a watchman, such that a person is always present and the facility is secure 24 hour a day. Andina has set up a core sawing facility next door to the Geoanalitica preparation laboratory and the sawed core is directly transferred to Geoanalitica for preparation in Paipote, while the remaining half is sent to the Andina storage facility. “At the time of the author’s visit to the facility in Copiapo, the sample preparation had terminated for the 2007-2008 field season and the author was unable to witness first hand the procedures being used. However per prior reports by the author and by Gonzalez, R. [(April and November, 2007) and Easdon, M. (November, 2005 and September, 2006) “Technical Reports on the Volcan Gold Project, Region III, Chile” all filed on SEDAR (www.sedar.com) under the heading “Technical Reports”], Andina has consistently maintained a rigorous Quality Control and Quality Assurance (“QC/QA”) program. “At no time, or in any aspect, is an officer, director or associate of the issuer involved in the sample preparation. “Geoanalitica has set up a sample preparation facility which is essentially identical to their facility in La Serena. The procedure for preparing the samples has not varied since the 2006-2007 field season (refer to Gonzalez, R. Nov. 2007 Technical Report). Andina typically analyzed all of the samples for Au, Cu and Mo. “It is the author’s opinion that the sample preparation methods being employed are appropriate and to industry accepted standard practices. Sample security at the new facility in Copiapo is adequate and acceptable.”

13.2 2009 TO 2010 (PHASE VI) EXPLORATION PROGRAM The following is in part summarized from the June, 2010 review of the 2010 QA/QC report by Magri Consultores. The Phase VI drilling program comprised a total of 52 drill holes (21 diamond drill and 31 RC), for which Andina continued to follow its established QA/QC protocols. A total of 270 duplicate samples were prepared from the 31 RC drill holes completed during this program

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and the results are presented in Figure 13.1. Sample preparation was undertaken as described above by Easdon (2008) and analysis was undertaken by Geoanalitica. It can be seen that the correlation coefficients are high (very close to 1), intercepts are low and slopes close to 1.

Figure 13.1 Results for the RC Field Duplicate Samples

ANDINA VOLCAN RCD FIELD DUPLICATES Au SCATTER PLOT

0

600

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0 600 1200 1800 2400 3000 3600 4200

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ANDINA VOLCAN RCD FIELD DUPLICATES Au Q-Q PLOT

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ANDINA VOLCAN RCD FIELD DUPLICATES Au |REL. DIFF.| PLOT

0102030405060708090

100

0 6 11 17 23 28 34 39 45 50 56 61 67 73 78 84 89 95

%DATA|R

EL

AT

IVE

DIF

FE

RE

NC

E %

ANDINA VOLCAN RCD FIELD DUPLICATES Au REL. DIFF. PLOT

-140-120-100-80-60-40-20

020406080

0 600 1200 1800 2400 3000 3600 4200

MEAN Au VALUE %

RE

LA

TIV

E D

IFF

ER

EN

CE

%

Figure taken from the June, 2010 report by Magri Consultores Ltda.

A total of 230 duplicate samples were prepared from the coarse rejects of the 21 diamond drill holes completed during this program and the results are presented in Figure 13.2. It can be seen that a good correlation is present between the original and the duplicate sample results. It is concluded that the protocols for sample preparation and analysis produce very good results and that the sample processing was carefully performed. A total of 500 sample pulps from the 52 drill holes completed during the Phase VI, 2009-2010 field season were submitted for duplicate assaying, and the results are presented in Figure 13.3.

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Figure 13.2 Results for the Diamond Drill Field Duplicate Samples

ANDINA VOLCAN DDH COARSE DUPLICATES

Au SCATTER PLOT

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ANDINA VOLCAN DDH COARSE DUPLICATESAu Q-Q PLOT

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ANDINA VOLCAN DDH COARSE DUPLICATESAu |REL. DIFF.| PLOT

05

101520253035404550

0 7 13 20 27 33 40 46 53 59 66 72 79 85 92 98

%DATA

|RE

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ANDINA VOLCAN DDH COARSE DUPLICATESAu REL. DIFF. PLOT

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MEAN Au VALUE %

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%


Figure 13.3

Results for the Pulp Duplicate Samples

ANDINA VOLCAN RCD AND DDH PULP DUPLICATES - Au SCATTER PLOT

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ANDINA VOLCAN RCD AND DDH PULP DUPLICATES - Au |REL. DIFF.| PLOT

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ANDINA VOLCAN RCD AND DDH PULP DUPLICATES - Au REL. DIFF. PLOT

-60

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As a control on accuracy, Andina inserted standards at a rate of 5% of the total samples taken, for a total of 492 standard reference and 169 blank samples. The results for the standard samples are presented in Figure 13.4, Figure 13.5 and Figure 13.6. Cumulative sum plots relative to the observed mean (i.e. the mean of the gold ppb values reported by the laboratory) (Figure 13.4) show that standard reference samples G301-1 and G303-8 had relatively small (less than 30%) fluctuations around a cumulative sum value of 0. Standard reference sample G303-6 shows the largest deviations from the mean laboratory value (-68.4%), with an initial period (from 12/17/2009 to 3/9/2010) where the standard reference was underestimated, followed by a period (from 3/9/2010 to 6/1/2010) where the standard reference value was overestimated.

Figure 13.4 Cumulative Sum Plot for the Standard Reference Samples (Relative to the Observed Means)

CUMULATIVE SUMS RELATIVE TO LAB MEAN VALUES

-1600

-1400

-1200

-1000

-800

-600

-400

-200

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/2009

1/6/20

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010

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010

5/6/20

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5/26/2

010

DATE

CU

MU

LA

TIV

E S

UM

G301-1G303-6G303-8


However, when the analysis is repeated relative to the known mean (nominal value) of the standards (Figure 13.5), only standards G303-6 and G303-8 are close to a cumulative sum of 0, whereas standard G301-1 shows large relative deviations from the nominal values, indicating that this standard was generally underestimated by the laboratory. A scatter plot for all three standard reference samples is shown in Figure 13.6.

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Figure 13.5 Cumulative Sum Plot for the Standard Reference Samples (Relative to Nominal Values)

CUMULATIVE SUMS RELATIVE TO NOMINAL VALUES

-8000

-7000

-6000

-5000

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12/17

/2009

1/6/201

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DATE

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ES

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G301-1

G303-6G303-8


Figure 13.6

Scatter Plot of Laboratory and Nominal (known) Values for the Standard Reference Samples

STANDARDS

y = 0.9895xR2 = 0.9971

0

500

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1500

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2500

0 500 1000 1500 2000 2500

NOMINAL VALUE (Au ppb)

LA

B V

AL

UE

(A

u p

pb

)

G301-1

G303-6

G303-8


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The regression line has a slope of 0.9895, which indicates that there is no significant overall bias in the analysis of these standard reference samples. As previously mentioned, it is evident that standard reference sample G301-1 was generally underestimated by the laboratory. This was also noted by Magri Consultores in the 2009 QA/QC analyses for exploration Phases III, through V. These results indicate that, in general, the standard reference sample analyses for the Phase VI exploration campaign were acceptable. Analysis of the results for blank samples indicated that only 9 of the 169 blank samples (5.3%) returned values outside the 95% confidence intervals for each batch of blanks. However, analysis of blanks by means of confidence intervals based on the assays of the blanks, rather than on the nominal (certified) values for the batch of blanks, is of limited value as one would expect 5% of the data to fall outside the 95% confidence intervals. It would be better to evaluate laboratory contamination by analyzing blanks which followed high valued samples in the laboratory’s processing order. In particular for the Andina Volcan project, it would be better to obtain blanks which are truly blank, instead of using rejects from low valued samples, as these contain small but variable amounts of gold. 13.3 MICON COMMENTS Micon observed the sample preparation and security procedures followed by Andina and its contractors and has confirmed that at no time is an officer or director of Andina involved in sample preparation. Geoanalitica states on its website that it has achieved ISO 9001:2000 certification. SGS reports on its website that analytical work is performed in accordance with the standards of ASTM, ISO, JIS and other industry standards. Acme states on its website that its laboratories in Santiago achieved ISO 9001:2000 certification in 2005. The certification status of the laboratories has not been confirmed by Micon. As noted previously, Micon conducted a site visit between April 17 and 19, 2010, and concluded that the field procedures that were being used to set up the diamond drill, recover the core, transport the core to the logging facilities and the logging and sampling procedures were all being carried out in accordance with the best practices currently in use by the mining industry.

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14.0 DATA VERIFICATION 14.1 SITE VISIT Micon conducted a preliminary site visit and data gathering trip from March 29 to 30, 2010. During this visit field procedures were explained, drill hole database and QAQC procedures were reviewed and geology of the deposit was discussed with the field geologist team. Micon conducted a second site visit to the Volcan project, as well as to the core logging and Geoanalitica assay preparation facilities in Copiapo, between April 17 and 19, 2010. During this period the field procedures for the drilling program were examined, examples of the host rock types, alteration and veining were observed in outcrop and representative sections of drill core were reviewed. In addition, the QA/QC program, incorporation of data into the electronic database and backup of the database were discussed. The April site visit was conducted by Mr. William J. Lewis, B.Sc., P.Geo. Figure 14.1 is an interior view of one of Andina’s core storage buildings at its facilities located in Copiapo. Figure 14.2 is a view of the interior of the Geoanalitica sample preparation facilities used by Andina.

Figure 14.1 Interior View of One of the Andina Core Storage Buildings in Copiapo

During the April, 2010 site visit, Micon did not take any check samples of the mineralization located on the Volcan project as a number of samples were taken during the previous site visit in March, 2009. The results of the March, 2009 sampling were reported in the October, 2009 Technical Report (Pressacco et al., 2009).

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Figure 14.2 Interior View of the Geoanalitica Sample Preparation Facilities in Copiapo

14.2 MINERAL RESOURCE ESTIMATE For the current 2010 mineral resource update, Micon continued to visit the both the project site and Andina’s Santiago office, to work with Andina’s Chilean team and consultants. On March 29-30, 2010, Micon conducted a site visit, where field procedures were explained, the drill hole database and QA/QC procedures were reviewed and the geology of the deposit was discussed with the field geologist team. The subsequent visits to the Santiago office in 2010 were to discuss the modelling approaches of the Dorado mineralized zones and are as follows:

On May 18-19, Micon reviewef the database cleanup process and discussed with the Chilean team the manner in which the Dorado deposit was to be modeled, as well as estimation parameters.

On June 21-25, Micon had discussions with the Chilean team to establish the key

geological controls associated with the gold high grade mineralization; assay investigations and statistics were performed. This was a critical visit where Micon was seeking agreement with the Chilean team on the parameters to be used in the resource estimation; agreement was achieved on June 24, 2010.

On July 12-15, Micon reviewed the progress of the resource estimation and worked

closely with SRK Consulting Chile.

On August 18-20, Micon returned to Chile for a final review of the resource estimation prepared by SRK, in order to complete the audit of the mineral resource estimate contained in this Technical Report, and to gather information for the remaining sections of the report.

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15.0 ADJACENT PROPERTIES This Section has been taken partially from the previous October, 2009 Micon Technical Report (Pressacco et al., 2009) and has been updated where necessary to reflect the changes in the status of the adjacent properties since the October, 2009 report was published. The Andina property hosting the Volcan project and the Dorado deposits is surrounded by a number of active mines, development projects and exploration-stage properties. Several companies have published mineable reserves and/or mineral resources for these properties and project development and exploration activities are on-going in the area. The combined published reserves and resources for these properties exceed 87 million ounces of gold. A selection of such properties in the immediate area of the Volcan project are illustrated in Figure 15.1, and brief summaries are provided below. It is to be noted that Micon was unable to verify the following information and that the information is not necessarily indicative of the mineralization found on Andina’s Volcan property that is the subject of this Technical Report. 15.1 MARICUNGA MINE (KINROSS) The Maricunga open pit mine is located in the Maricunga mining district in central Chile, approximately 120 km east of Copiapo and is situated between 4,200 masl and 4,500 masl. The mine, constructed and commissioned in the early 1990s, achieved its first full year of production in 1996 and, despite a suspension of mining operations between 2002 and 2004, has produced gold continuously since that time. Commercial production restarted in October, 2005 after the completion of a re-opening project. The mine is an open pit operation with mine production delivered by front-end loaders and conventional off-road haul trucks delivering a nameplate capacity of 40,000 t/d to a heap leach process facility. Mined ore undergoes three stages of conventional crushing and screening prior to placement on dedicated leach pads. 15.2 LA COIPA MINE (KINROSS) The La Coipa open pit mine and its 15,000 t/d mill began operation in October, 1991. A new crushing system was installed in October, 1999, increasing throughput to 17,000 t/d. Conventional open pit mining methods and equipment are used to mine all ore and waste. Bench heights in the open pit mine are laid out at 10-m intervals, with berms installed every two benches. This configuration yields overall open pit wall slopes varying from 45o to 52o. Mining is carried out with one hydraulic shovel, assorted front-end loaders, diesel rotary drills, and 154-t capacity haulage trucks. Situated some 60 km to the north of Volcan and less than 40 km from the northerly limit of the Volcan property, the mine is located to the northwest of Parque Nacional Nevado Tres Cruces. The La Coipa mine sits at altitudes ranging from 4,390 m at the highest point of the open pit mine to the plant located at an elevation of 3,815 m. (Source: Kinross Gold Corporation website, visited on October 6, 2009, URL: http://www.kinross.com/operations/chile-cerro.html).

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Figure 15.1 Location the Volcan Project Relative to Selected Adjacent Properties


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15.3 LA PEPA PROJECT AND OLD MINE WORKINGS (YAMANA GOLD CORPORATION)

The project is comprised of several deposits and areas in the Maricunga district. Yamana Gold Corporation has now completed its first resource estimate of the Cavancha area of the project. This resource estimate was prepared based on reverse circulation and diamond drilling, with a total of 107 drill holes (92 RC and 15 diamond drill) having been completed. The La Pepa project is situated to the northwest of Volcan on immediately adjacent mineral claims. 15.4 LOBO-MARTE MINE (KINROSS) Kinross acquired the Lobo-Marte gold project in northern Chile on January 8, 2009 from Teck Cominco Limited and certain subsidiaries of Anglo American plc. Close to 30,000 hectares in size, Lobo-Marte is located in the Maricunga mining district, roughly midway between Kinross' Maricunga and La Coipa mines. Lobo-Marte allows Kinross to further increase its presence in the Maricunga district and offers potential cost savings by using existing administration and operations at neighbouring Kinross operations to help develop the project. As well, Kinross' experience in cold-weather, heap leach mining at high altitudes will be relied on. Kinross has completed a pre-feasibility study on Lobo-Marte based on drill hole information obtained at the time of acquisition and the metallurgical drill program completed in 2009. The pre-feasibility study confirms the viability of a 47,000 t/d open pit heap leach operation incorporating SART (Sulphidization, Acidification, Recycling and Thickening) technology, and identifies proven and probable mineral reserves of approximately 5.6 million ounces (Moz) of gold at an average grade of 1.22 grams per tonne (g/t) of gold. Annual gold production is estimated to be approximately 350,000 to 400,000 gold equivalent ounces for the first five years of full production. An updated pre-feasibility study is expected to be completed in the fourth quarter of 2010, followed by a feasibility study in the first quarter of 2011 Lobo-Marte is situated immediately adjacent to Andina’s Volcan project to the east, and in a similar geographic setting. 15.5 CERRO CASALE DEPOSIT (KINROSS/BARRICK) Cerro Casale is one of the world’s largest undeveloped gold-copper deposits, with gold reserves of 23.2 Moz (100% basis). The project is located in the Maricunga district of Region III in Chile, 130 km north of the Pascua–Lama project. Its proximity to Pascua–Lama is expected to provide opportunities for construction and operating synergies. Pre-production capital is expected to be about $4.2 billion (100% basis) with a construction period of approximately 3 years following the receipt of key permits.

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On March 31, 2010, Barrick acquired an additional 25% interest in the Cerro Casale project in Chile from Kinross Gold Corporation for consideration of $474 million comprised of $454 million cash and the elimination of a $20 million contingent obligation which was payable by Kinross to Barrick on a production decision, thereby increasing the company’s interest in the Cerro Casale to 75%. The review of any additional permitting requirements before considering a construction decision is progressing. Engineering contractors have been selected and basic engineering has commenced. Barrick’s 75% share of average annual production is anticipated to be about 750,000 to 825,000 oz of gold and 170 to 190 M/lbs of copper in the first five full years of operation at total cash costs of about $240 to $260/oz assuming a copper price of $2.50/lb. A $0.25/lb change in the copper price would result in an approximate $50/oz impact on the expected total cash cost per ounce over this period. (Source: Barrick Gold Corporation website, visited on October 20, 2010 (URL: http://www.barrick.com/ GlobalOperations/Projects/CerroCasale/default.aspx). 15.6 CASPICHE DEPOSIT (EXETER RESOURCE CORPORATION) In October, 2005, Exeter signed an option agreement with Anglo American Chile Limitada and Mantos Blancos S.A. (collectively, Anglo American) over a number of prospective gold projects in the Maricunga metallogenic belt of Chile, including the Caspiche project comprising an area of over 12.6 km2. The terms of the agreement provide for increasing annual drilling and exploration commitments over five years. Following discovery of the Caspiche central porphyry style gold-copper mineralisation in May, 2007, Exeter has drilled over 45,000 m on the property including a number of widely spaced deep drill holes which have intersected potentially ore grade mineralization to depths of over 1,000 vertical metres (3,300 feet). During September, 2010 an updated NI 43-101 compliant resource statement was released using all available drilling results to the end of the 2009/2010 season. The major milestone for this resource was the maiden announcement of both measured and indicated resources at the project. This new measured and indicated resources now stand at 21.3 Moz of gold, 48.4 Moz of silver and 5.3 G (billion) pounds of copper. In addition to the indicated mineral resource, an updated inferred mineral resource was published of 458 Mt at a grade of 0.35 g/t gold and 0.98 g/t silver, including 449 Mt at a grade of 0.15% copper. This equates to in-situ inferred resources of 5.1 Moz of gold, 14.5 Moz of silver and 1.4 G pounds of copper. The new gold equivalent endowment of Caspiche using only gold and copper now stands at a total of 35.9 Moz in the Measured and Indicated categories and a further 9.0 Moz in the Inferred category. Exeter has now fulfilled the total expenditure and drilling requirements for the full term of the option agreement. It currently proposes to exercise the option for 100% ownership

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within 60 days from January 31, 2011 which will trigger advance annual payments of $250,000 deductible from future royalties. Anglo American will be entitled to a 3% net smelter return from production. A drilling program is scheduled to recommence in October, 2010 to further upgrade the resource. Concurrent infrastructure, metallurgical, engineering and environmental studies are also planned. The source for the above information was the Exeter Resource Corporation website, visited on October 20, 2010, (URL: http://www.exeterresource.com/projects.php).

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16.0 MINERAL PROCESSING AND METALLURGICAL TESTING Andina has conducted a number of metallurgical testwork phases in order to optimize the potential recovery of gold from the Volcan project. Andina’s earlier metallurgical testwork programs have been summarized in the previous Technical Reports which have been filed on SEDAR. Only the testwork that has been conducted during the 2009 to 2010 exploration period will be discussed in this report. The following sections summarize three metallurgical progress reports dated May 27, September 12, and October 4, 2010, by Advanced Mineral Technology Laboratory Ltd. (AMTEL), located in London, Ontario, Canada. Richard Gowans P.Eng., president and principal metallurgist of Micon has reviewed all the metallurgical testwork reports completed on mineralized samples from the Volcan deposit. Mr. Gowans is the Qualified Person for this section of the Technical Report. 16.1 AMTEL PROGRESS REPORT SUMMARY AS OF MAY 27, 2010 The May, 2010, AMTEL report analyzes, evaluates and discusses the historical column leach testwork completed by McClelland Laboratories Inc. (McClelland) and compares the bottle roll tests (BRT) and column leach recoveries for the same high grade composites (K-O). The report discusses Kappes Cassity and Associates’ (KCA) and AMTEL’s BRT results on six new composites (P, S, U-V) milled to a coarse grind (80% passing (P80)

coarser than 150 μm). The purpose of the latest testwork was to explore the potential of SAG milling (P80 coarser than 200 μm) and SAG/ball milling for the separate processing of higher grade mineralization. As opposed to heap leaching (HL) all of the mineralized material, the envisaged alternative flowsheet involves HL of the lower and medium grade mineralization with milling of the higher grade material to maximize recovery. Fine milling opens the possibility for copper and pyrite flotation, which is being tested using the higher copper grade composite W. 16.1.1 Composites Tested The recent composite samples were made up of broad drill core intervals; selection was based on either grade, or mineralized zone or zone/depth. They originated from three drill core sampling campaigns:

Composites K-O of high grade (HG) mineralization (>1 .0 g/t Au) acquired in May, 2009.

Composites P-T of low and medium grade mineralization (0.4 and 0.6 g/t Au)

collected in October, 2009.

Composites U-W of HG mineralization acquired in March, 2010.

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In general there was good agreement between site analyses and metallurgical laboratory calculated head grades. 16.1.2 General Testwork Quality Control and Quality Assurance The accuracy of gold assaying was checked with hidden standards intermingled with the head, tailings (and solution) samples, which covered the concentration range of head/tails samples: 2.0 to 0.2 g/t Au. The accuracy of the coarse milled BRTs ranged from 0 to 7%, averaging +3%. The accuracy of gold assaying of the head and tails of the column leach tests was not determined, but the precision is +/-4.4%. The quality assurance was determined from the deviation between direct and calculated head grades to be in the +/-7% range. The Round Robin test involving BRT leaching of six composites (J, P-T) in 4 laboratories yielded a reproducibility of +/-5%. 16.1.3 Historical Grade Variability and Cyanicides The metallurgical composites tested to date ranged in grade from 0.32 to 2.0 g/t Au, which compares to the average gold grade for the Volcan mineral resources of 0.62 g/t Au. The average deviation for work completed so far between site and calculated head assays is 5.9% with three outliers. The total copper concentration ranges from 300 up to 3,800 ppm. The proportion of oxide copper found in 11 composites is relatively low, representing on average 11% of the total copper. The total sulphur content ranged between 1.2 and 4.8%. Sulphide sulphur ranged from 0.75 to 2.5%, averaging 1.6%. Native sulphur found in 15 composites ranged from <0.01 to 0.16%. In only 4 out of the 15 composites was the elemental sulphur concentration higher than 0.05% (500 ppm). The arsenic content of 11 composites ranged from 90 to 205 ppm, averaging 150 ppm. 16.1.4 Historical Mineralogical Composition The mineralogical composition of 13 composites has been determined. The principal rock minerals are quartz (9-25%), feldspars (38-63%) and clays (15-31%). Gypsum and alunite content ranges from 1.5 to 11.0%, with alunite being more abundant in Dorado Oeste top zone (composite M = 6.8%). The carbonate (dolomite) content is low, typically not exceeding 2.0%. This implies that the Volcan mineralization has limited acid neutralization potential. The principal sulphide mineral is pyrite (py). The pyrite concentration varies from 1.2 to 4.6%. Chalcopyrite (cpy) is the main copper carrier. The py to cpy ratio averages 15:1 and

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ranges from 3:1 (composite K) to 20:1 (composites M&O). Other copper sulphides (bornite, chalcocite, and covellite) are relatively insignificant, except in composites J and L. The principal carrier of arsenic in the Volcan mineralization is pyrite. 16.1.5 Column Leach Tests of 2008-09 A total of 21 column leach tests were completed by McClelland using composites K-O plus composite I. Recoveries ranged as follows:

55 to 65% for conventional crush at P80 ~9 mm. 56 to 68% for conventional crush at P80 ~ 6 mm. 64 to 72% for high pressure grinding roll (HPGR) crush at P80 ~ 6 mm.

These recoveries were generally lower than predicted from previous test programs. Key differences in test conditions compared to previous column tests were:

The coarser size (P80) of 6 mm vs 3 mm (HPGR). The use of 50% of the original NaCN concentration, i.e. 0.5 g NaCN/L. The addition of lime together with cement in agglomeration. The inadvertently low pH regime (<9) in most tests for the first 30 days.

The most obvious effects of these changes were the lower recoveries and the significantly slower leach kinetics, whereby gold extraction reached a maximum (not necessarily the optimum) in 2-3 times longer time than predicted (up to 214 days). A review of the testwork procedures suggested that these column tests were not properly agglomerated, thus failing in terms of both pH stabilization and permeability. 16.1.6 Comparison of BRT and Column Leach Recoveries Bench scale 72-hour long BRT were run to predict column leach recoveries. It was noted that, due to the inadvertent autogenous grinding effect during the BRT, leach residues have a finer size distribution which results in higher recoveries. Also, gold extraction at 0.5 g NaCN/L and 33% solids was not complete after 72 hour leaching, indicating that higher BRT recoveries should have been obtained. The recovery differential between 72-hour bottle roll tests and the column tests ranged between 0.5-8.2%, averaging 4.3%. The composites which showed the largest differential were K and M (Dorado Oeste low and top respectively).

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Although statistically not significant at the 95% significance level, all gold recoveries from the minus 75 μm fraction from the column tests were lower by ~2%, compared to those from the BRTs. Dissolved Cu consumes significant NaCN, reduces free cyanide and could be reducing the rate of gold extraction and, in the case of composite W, lowering gold extraction. 16.1.7 BRT Results on Coarse Milled (>150 μm) Composites A total of 24 BRT were run on six composites ranging in grade between 0.4 and 2.0 g/t Au. The leach conditions involved preconditioning with lime to stabilize pH at 10.5 before leaching, 33% solids and 1 g NaCN/L (maintained). Leach time varied between 4 and 18 days. Calculated heads were within 8% of site assay data. Gold recovery variation with grind size was relatively flat, as can be seen in Table 16.1.

Table 16.1 Gold Recovery Variation with Grind Size

Grind Size

P80 (μm) Au % Recovery Range

500 64 - 80 300 65 - 81 200 67 - 81 150 67 - 82

Leach kinetics curves indicate that recovery was not maximized even after 10 days of bottle roll leaching. These results suggest that there is little to be gained with coarse milling in the 150-500 μm range. This instigated the fine milling BRT leaching. 16.1.8 Copper Extraction from Coarse Milled HG Mineralized Composites Copper extraction was determined from the head and leach tailing assays. Copper extraction varied between 21% and 56%, increasing more with leach time than grind fineness. Oxidizing chalcopyrite was the principal source of dissolved Cu (not secondary Cu sulphides or “oxide copper”). Copper in solution accounts for at least 50% of the NaCN consumption. 16.1.9 BRT Results on Fine Milled (<150 μm) Composites Gold recovery at a P80 of 100 μm ranged from 66 to 81% , averaging 73%. At a P80 of 75 μm the average Au recovery was 75%, ranging from 69 to 83%. Gold recovery at 53 μm ranged from 75 to 85%, averaging 80%. At 53 μm the leach kinetics were fast, with Au extraction complete in ~12 hours.

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16.1.10 Report Conclusions The conclusions from the work reported in the May, 2010, AMTEL report were as follows:

Gold recovery by conventional grinding at P80~9 mm ranged between 55 and 65%, with HPGR to P80 ~6 mm improving recovery from 64 to 72%, depending on the composite.

Gold recovery from coarse milled composites ranged between 64 and 80% at

P80 ~500 μm. Finer milling (P80 150 μm) increased recovery to between 67 and 82%, depending on the composite. Leach kinetics curves indicate room for improvement.

Oxidizing chalcopyrite, yielding cyanidable Cu, appears to be the main factor

limiting gold extraction, followed by elemental sulphur in a couple of the mineralized composites.

16.2 AMTEL PROGRESS REPORT SUMMARY AS OF SEPTEMBER, 2010 The following material is summarized from the September 12, 2010, AMTEL report entitled “Progress Report on Volcan Ore Leach Testwork”. The September, 2010, AMTEL report evaluates short column testwork results on three new mineralized composites, labelled Y, Z and AA, that represent low, medium, and high grade fresh Volcan mineralization. The composites were assembled from fresh drill core selected from the 2010 drilling campaign. The composites (~400 kg each) were shipped to KHD in Cologne, Germany, where they were split into three aliquots for conventional and HPGR crushing. The conventionally crushed material had a P80 of 9.5 mm. The HPGR crushed mineralization was passed once in open circuit at two pressures of 3.2 and 2.0 N/mm2, producing 9.5 and 12.5 mm (P80) products, respectively. For the cyanide leach tests, the centre and edge HPGR products were combined. As the edge product is always coarser, the P80 of the leach feed was coarser than the nominal 9.5 and 12.5 mm. The HPGR product of the high grade (composite AA) was air swept using a static V-shaped air classifier to remove fines (~10%). This was undertaken for two reasons: firstly to reduce fines in the heap leach feed thereby lowering reagent consumptions and improving heap percolation characteristics, and secondly to improve overall gold extraction by diverting the separated fines to a conventional SAG/ball milling circuit. The following tests were run on composites Y, Z and AA: bond index, BRT, short column geotechnical stability and regular size column percolation leach tests.

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16.2.1 KHD Grinding and Air Sweeping Tests High airflow (2,150 m3/h) separation removed more (20%) and coarser (P80 ~400 μm) fines compared to the lower airflow (1,550 m3/h) separation test, which removed fewer fines (14%) with a finer P80 (230 μm). 16.2.2 Short Column Stability Tests A total of 32 short column tests were run to investigate heap stability and cement and lime additions. During these tests the NaCN concentration was maintained at 1 g/L and the tests lasted from 33 up to 48 days. Three cement plus lime dosages were tested: 4+1, 7+0 and 11+0 kg/t. The results from these tests showed the following:

At 4+1 kg/t cement + lime dosage, all three composites (Y, Z and AA) passed for estimated heap leach heights of 100 m. This will be confirmed by geotechnical testing on residues from the decommissioned regular height columns when they become available.

During the tests, the pH remained well buffered in the 10 to 11 range.

Au recoveries ranged from 55 to 70% and tended to increase with grade, HPGR

grinding and grind fineness.

Au recoveries increased with grade from 57% at 0.4 g/t Au to 66% at 1.3 g/t Au.

In general, the HPGR tests yielded 3 to 5% better recoveries compared to conventional crushing at a P80 of ~9.5 mm.

Au recovery decreased by 3 to 4% for composites Y and Z when grind coarsened

from P80 of 9.5 to 12.5 mm. Comparison with recoveries for historic tests (see Table 16.2) using comparable grade composites at the same grind fineness (conventional and HPGR) showed an improvement in recovery of between 2 to 5%, most likely due to aging of the earlier (2009) samples tested.

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Table 16.2

Grade versus Grind Fineness Matrix for Au Recovery

Coarser than 1mm results are from column leach tests (in larger bold font) and finer from BRTs. Arrows indicate that Au extraction was not complete, suggestive that higher recovery than indicated should be attainable.

16.3 AMTEL PROGRESS REPORT SUMMARY AS OF OCTOBER, 2010 The following material is summarized from the October 4, 2010, AMTEL report entitled “Progress Report on Volcan Ore Leach Testwork”. The October, 2010, AMTEL report summarizes KCA and AMTEL bottle roll test results from nine fine ground Volcan mineralized composites. The composites were labelled P through X. The aim of this testwork was to determine the potential of SAG milling (>200 μm) and SAG/ball milling for processing the higher grade mineralization (>1 g/t Au), with the air-swept fines from HPGR ground medium and low grade material destined for heap leaching. Each sample (500 g) was ground in a stainless steel rod mill to the designated grind fineness, brought to 33% solids by weight, pre-conditioned with lime for 2 hours to stabilize pH at ~10.5, before adding 1 g/L NaCN. This cyanide concentration level was maintained throughout the test. The tests lasted until no incremental gold extraction could be detected. The grind finenesses (P80s) targeted were 500, 300, 200, 100, 75 and 53 μm. A few tests were run at 2 g/L NaCN concentration level (which was not maintained) to determine if additional gold could be extracted during a 72 hour leach.

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16.3.1 Metallurgical Composite Samples Tested The following composites were used for this program of testing:

High grade (>1 g/t Au): U, V, W and X. Composite W is also high in Cu (0.38%). Medium grade (0.6 and 0.8 g/t Au): P, S and T. Low grade (~0.4 g/t Au): Q and R.

All composites originated from the Dorado Oeste mineralized zone, except composite P which came from Dorado Este. 16.3.2 Composite Grade Variability and Cyanicides The mineralized composites tested ranged in grade from 0.42 to 2.0 g/t Au. The average grade for the Volcan mineral resources is ~0.62 g/t Au. The deviation between site and calculated head assays ranged from 0 to 7% with an average of 1%. Total copper in 8 of the 9 composites ranged from 440 to 1,520 ppm, averaging 830 ppm. The specifically assembled high Cu composite W assayed 3,800 ppm Cu. Between 20 and 58% of the Cu in the samples dissolved during cyanide leaching. Copper dissolution was higher from higher level composites and tended to increase with grind fineness and leach time. There was no apparent correlation with Cu grade. The Dorado East composite P gave the highest Cu dissolution (58%) although it had a relatively low Cu content (410 ppm). The total sulphur in the 9 composites ranged from 1.7 to 3.3%. Sulphide sulphur analyses ranged from 0.94 to 1.65 wt, averaging 1.38%. Native sulphur ranged from <0.01% to 0.10%, with 5 of the 9 composites having no detectable elemental sulphur. With dissolved Cu consuming NaCN at approximately 2.5 times its weight and elemental S 1.5 times, copper is the most significant cyanicide. The calculated consumption of NaCN by dissolving Cu is in the 0.6 to 1.2 kg/t range (excluding composite W). For comparison purposes, the total NaCN consumed in the leach tests ranged from 0.8 to 2.0 kg/t. 16.3.3 BRT Results on Coarse Milled (>300 μm) Composites A total of 14 BRT were run on 6 coarse ground composites. The leach conditions involved conditioning with lime to stabilize pH at ~10.5 before leaching at 33% solids by weight, with 1 g/L NaCN maintained throughout. Tests lasted for 18 days Gold recovery variation with grind size was relatively flat, as can be seen in Table 16.3.

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Table 16.3 Gold Recovery Variation with Grind Size

Grind Size P80 (mm)

Au % Recovery

~1.0 62-78 ~0.5 64-79 ~0.3 65-81

1.0 – 0.3 difference ~3

Gold recovery at equivalent grind fineness tended to increase with depth (Table 16.4).

Table 16.4 Comparison of Gold Recovery with Depth at Selected Grind Fineness - P80 1.0 mm and 0.5 mm

Au % Recovery Grind Size

P80 (mm) Top Middle Low ~ 1.0 64 67 60 64 78 0.5 65 68 66 69 80

Leach kinetics indicated that Au recovery was rapid in the first 24 hours, followed by a slow increase in recovery which plateaued after 15 days. The test results suggest that the intermediate level mineralization is more grind sensitive compared to top and low level material. 16.3.4 BRT Results on Fine Milled (<200 μm) Composites A total of 28 BRT were run on composites that were ground fine (<200 μm). The leach conditions were basically the same as for the coarser ground tests (<300 μm). Gold recovery variation with grind size was relatively flat, increasing 4% on average with increasing grind fineness from P80 of 200 μm to 53 μm (Table 16.5).

Table 16.5 Gold Recovery Variation for Grind Fineness from P80 of 200 μm to 53 μm


P80 (μm) Low High Average. ~200 65 81 73 ~100 67 81 73 ~75 70 83 75 ~53 73 85 77

200 to 53 difference 8 4 4

As suggested by the coarser grind tests (-300 μm), gold recovery, at the same grind fineness, tended to increase with depth, as shown in Table 16.6.

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Table 16.6 Comparison of Gold Recovery with Depth at Selected Grind Fineness P80 0.2 mm and 75 μm


P80 (mm) Top Middle Low ~ 0.2 69 70 70 70 81

~ 0.075 71 72 72 80 83

16.3.5 Report Conclusions The conclusions from the work reported in the October, 2010, AMTEL report were as follows:

Higher level mineralized composites (P, S and U) tended not to be grind sensitive down to a size of ~0.2 mm. This is also true for the low level higher grade composite (X).

Intermediate level mineralized composites (V and W) were grind sensitive at coarse

grinds: recovery increased by 11% with P80 grind size reducing from 1.2 to 0.2 mm.

All mineralization, irrespective of depth within the mineral resource, tended to become grind sensitive at P80s less than 150 μm. The gold recovery increase between a grind fineness of 200 and 75 μm was on average 6%.

The gold recovery range for mineralized samples ground to 300 μm was 64 to 81%

and at 75 μm was 69 to 83%. 16.4 METALLURGICAL RECOVERY ESTIMATES Gold recovery versus grade algorithms were developed for the mineral resource estimate update using the metallurgical results available. The recovery relationships for heap leach and grinding/agitation leaching are presented in the Figure 16.1 and Figure 16.2.

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Figure 16.1 Heap Leach Gold Recovery Algorithm, Dorado Este and Oeste Areas

*Maximum gold grade of 1.1 g/t, maximum recovery of 69%, minimum of 45%

Figure 16.2

Grinding/Agitation Leach Gold Recovery Algorithm, Dorado Este and Oeste Areas

*Minimum gold grade of 1.1 g/t, maximum gold recovery of 83%

16.5 ON-GOING WORK Additional testwork is currently on-going in order to optimize the metallurgical recoveries for further economic studies.

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17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES The mineral resource estimate for the Dorado deposits (Dorado Oeste (DW), Dorado Central (DC) and Dorado Este (DE)) of the Volcan project were prepared as a collaborative effort involving representatives of Andina, SRK Consulting Chile S.A. (SRK), Magri Consultores Ltda. (consultant retained by Andina), Vector S.A. (Vector) and Micon. A description of the procedures followed in the preparation of this estimate is provided below. 17.1 DESCRIPTION OF THE DATABASE After finalizing an exhaustive validation of the database in Chile, a MS-Access database file was provided to Micon by Andina, wherein such drill hole information as collar location, down-hole surveys, and assays with veinlet intensity was stored. The cut-off date for the drill hole database was the end of the Phase VI drilling program (May, 2010) and it included all drill hole information up to and including hole ROA837, received up to June 17, 2010. This drill hole information was exported to CSV so as to be compatible with the format requirements for importation to Gemcom-Surpac v6.3.1 mine planning software. This procedure was employed by Micon for the purpose of having a parallel resource estimation to compare with the SRK’s for the auditing process. SRK has worked using Vulcan Sofware. A description of the revised database is provided in Table 17.1. A summary of the drill hole collar information and a plan view showing the drill hole locations were provided in Section 11.

Table 17.1 Summary of the Volcan Drill Hole Database

(as of July, 2010)

Table Name Data Type Table Type Records assay_raw interval time-independent 65,345 collar 382 density interval time-independent 1,092 survey 12,723

17.2 GEOLOGICAL DOMAIN INTERPRETATIONS The gold mineralization at the Volcan project is an example of a Maricunga-style deposit, a brief description of which was provided in Section 8. This style of deposit is typified by the presence of a system of quartz veinlets and stockworks that are typically formed at relatively shallow levels in a porphyry-style environment. The veinlets are associated with a number of different styles of porphyry-associated alteration, including argillic, potassic and propylitic, and can also be associated with minor amounts of disseminated, patchy and stringer sulphide minerals (Figure 17.1 and Figure 17.2). Field observations at Volcan have shown that the gold contents do not have a consistent relationship with either the primary rock type or alteration style.

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Figure 17.1 Example of Maricunga-style Veining and Stockworks, Volcan Project

(Interval from 318.0-320.0 m grades 1.08 g/t Au, 0.10% Cu)

Figure 17.2 Example of Disseminated and Stringer Sulphide Mineralization, Volcan Project

(Interval from 310.0-312.0 m grades 1.32 g/t Au, 0.15% Cu)

However, analysis of the data gathered from the various exploration programs has shown that, while gold grades do not show any consistent relationships with many of the different types of veinlet compositions (i.e. pyrite, magnetite, alunite, gypsum and the like), a distinct

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association can be seen between the intensity of veinlets/stockworks of Black Banded Veins (BBV), Grey Banded Veins (GBV) and Quartz-Rich Veins (QV). Due to the complexity of these individual gold/veinlets intensity associations, the BBV, GBV and QV were combined into one and were expressed as 0, Tr (trace), 1, 2, and 3 intensity levels related to every sample of the assay table in the database. Then, an assay investigation was conducted on the entire assay table to determine whether or not this association could be demonstrated statistically. Encouraging results were obtained indicating that gold, in the majority of the cases, is directly associated with the combined veinlet intensity throughout the Dorado Oeste deposit. This finding led the team to create a new model in three-dimensions, in which if veinlet intensity was equal to 1, 2, or 3 it was labelled “Mineralization with Veins”. The resulting solid or domain was later constrained with the 100 ppb Au grade envelope and the 300 ppb Au envelope, in Dorado Este. Dorado Central and Dorado Este. If veinlet intensity was equal to 0 or Tr, those intervals were labelled “Mineralization No Veins”, representing mineralized material outside of the veinlet zone solid. Figure 17.3 shows a schematic representation of the different established domains. Table 17.2 identifies the mineralized zones for which these domains were created.

Figure 17.3 Dorado Oeste Deposit Domains - Graphical Representation

Figure supplied by SRK Consulting.

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Table 17.2 Description of the Dorado Deposit Domains

Domain Description Domain

Code

100 ppb Au DW

300 ppb Au

DW-North

300 ppb Au

DW-South

Veinlets Solid

300 ppb Au

Dorado Central

300 ppb Au

Dorado Este

DW 100ppb Envelope – No Veins 100 X DW 100ppb Envelope – With Veins 101 X X DWN 300ppb Envelope – No Veins 110 X DWN 300ppb Envelope – With Veins

111 X X

DWS 300ppb Envelope – No Veins 120 X DWS 300ppb Envelope – With Veins

121 X X

DC 300ppb Envelope – No Veins 2000 X DC 300ppb Envelope – With Veins 2002 X DE 300ppb Envelope – No Veins 3000 X DE 300ppb Envelope – With Veins 3003 X

Table supplied by SRK Consulting.

Field work at Volcan has also shown that copper and, to a lesser extent, molybdenum values are present. Elevated molybdenum values are most often noted in the Dorado Central deposit. For the most part, molybdenum in the remainder of the deposits is present in trace amounts. While elevated copper values are at times directly associated with elevated gold values, no direct statistical correlation can be demonstrated between gold and copper values for the Dorado Oeste deposit (Figure 17.4). Also, while elevated gold and copper values co-exist on occasion in space, no consistent spatial correlation can be observed between gold and copper values for the Dorado Oeste deposit.

Figure 17.4 Statistical Comparison Between Gold and Copper Values, Dorado Oeste Deposit

94

A number of essentially barren porphyry bodies are found throughout the Dorado deposit, some of which are seen to cross cut the gold mineralization. Figure 17.5 is a plan view of the domain outlines in the Dorado deposits, at the 4705 bench elevation.

Figure 17.5 Plan View of the 4705 Bench Showing the Various Domain Outlines, Volcan Project


17.3 COMPOSITING METHODS An analysis of the lengths for all samples contained within the drill hole database was conducted. This analysis revealed that the majority of the samples were 2 m in length (Figure 17.6). No compositing was required on this data set, and the raw samples were used for the preparation of the mineral resource estimate. Statistical analyses were prepared for the gold assays for each of the different domain models. The results are presented as box-and-whisker plots without the ungrouped weights (Figure 17.7) and with the ungrouped weights (Figure 17.8). Ungrouped weights refer to the length of the samples (composite) which varies from a minimum sample length up to 2 m, SRK decided to use samples ≥ 1m length and they group

95

samples by this criteria. Thus, ungrouped means the statistics are based on all the existing samples and grouped weights means the statistics are based on samples ≥ 1m length only. However the differences between ungrouped and grouped are minimal.

Figure 17.6 Histogram of Raw Sample Lengths, Volcan Project

0.04 0.05 0.06 0.03

99.82

0

20

40

60

80

100

120

Per

cent

age

of T

otal

Sam

ples

volvol2010.com:LENGTH

Length of the original samples

Number of samples: 65405Samples off graph: 0

Average: 1.998Minimum: 0.05Maximum: 2

Variance: 0.002515Geo mean: 1.996

Q1: 2Median: 2

Q3: 2


Figure 17.7

Box-and-Whisker Plot of Gold Assays Contained Within the Geological Domains (Columns), Excluding Ungrouped Weights (Gold grades in ppb)

100 101 110 111 120 121

Q1 33 41 223 276 236 288

Min 5 3 8 9 9 5

Median 75 90 342 544 364 496

Mean 102.2 113.1 435.0 730.5 474.2 691.3

Max 3791 5368 3804 7708 6615 13832

Q3 140 159 540 921 560 881

NSamples 15,474 4,807 1,390 502 6,344 13,464

1

10

100

1000

10000

100000

Au (ppb)

UG_Au


96

Figure 17.8

Box-and-Whisker Plot of Gold Assays Contained Within the Geological Domains (Columns), Including Ungrouped Weights (Samples ≥ 1m) (Gold grades in ppb)

100 101 110 111 120 121

Q1 33 41 223 276 236 289

Min 5 3 8 9 9 5

Median 75 90 342 544 364 496

Mean 102.2 113.2 435.2 730.5 474.4 691.5

Max 3791 5368 3804 7708 6615 13832

Q3 140 159 540 921 560 881

NSamples 15,454 4,804 1,389 502 6,339 13,458

1

10

100

1000

10000

100000Au (ppb)

UG_Au


17.4 CONTACT ANALYSIS To study the changes in gold grade at the limits of the geological domains, contact profiles or average grade plots were prepared at incremental distances from the geological domain boundary. For these plots, if the grade averages remain relatively constant within the same range near the limit and then diverge when the distance from the contact increases, it is likely that the limit does not represent a natural constraint for the grades. If a limit is established and grades gradually change, there could be an overestimate on one side of the limit and an underestimate on the opposite side. If there is a clear difference in the grade average on both sides of the limit, then this is a sign that the limit could be important in constraining the grade estimates. The contact profiles for the various geological domains are shown in Figure 17.9 through 17.12.

97

Figure 17.9 Contact Analysis, Dorado Oeste (North) Deposit, Domain 100/101 – 110/111


Figure 17.10

Contact Analysis, Dorado Oeste (South) Deposit, Domain 100/101 – 120


0

100

200

300

400

500

600

700

800

-100 - 80 -60 - 40 -20 0 20 40 60 80 100

Au (ppb)

Distance from contact

Contact Profile100-101 110-111

0

100

200

300

400

500

600

700

-100 -80 -60 -40 -20 0 20 40 60 80 100

Au (ppb)


Contact Profile100-101 120

98

Figure 17.11 Contact Analysis, Dorado Oeste (South) Deposit, Domain 100/101 – 121


Figure 17.12

Contact Analysis, Dorado Oeste (South) Deposit, Domain 120 – 121

0

100

200

300

400

500

600

700

800

900

-100 -80 -60 -40 -20 0 20 40 60 80 100

Au (ppb

)


Contact Profile120 121


0

100

200

300

400

500

600

700

800

900

-100 -80 - 60 -40 -20 0 20 40 60 80 100

Au (ppb)


Contact Profile100-101 121

99

The contact graphs suggest the following:

At Dorado Oeste, a small influence is observed between the data gathered outside and toward the veins, i.e., there is a slight interaction between the veins inside and outside the limit. To model this transition in values, an 8-m soft boundary was applied in the block model estimate in order to avoid an overestimate of the gold grades in the vein and an underestimate of the gold grades in the envelope at the vein limit.

At Dorado Central, limits are better demarcated and no soft boundaries were used in

preparation of the block model estimate for this domain.

At Dorado Este, the border is clearly rigid; a strong change occurs the between the units exactly at the limit. No soft boundaries were used in preparation of the block model estimate for this domain.

The behaviour of the gold grades along the contact between Dorado Oeste and

Dorado Central envelopes (Domain codes 120 and 2000) is similar. A 50-m soft boundary was applied to prevent a barrier from developing between these envelopes.

Table 17.3 summarizes the boundary definition criteria applied to the block model.

Table 17.3 Boundary Definition between Geological Units (GU)

(H = hard, S = soft)

GU - Au 100-101 110-111 120 121

100-101 H H H

110-111 H H H

120 H H S (10 m)

121 H H S (10 m)


A reciprocal, 10-metre soft boundary was set between GUs 120 – 121. Contact analysis between Dorado Oeste copper domains 10 and 11 indicates that a hard boundary should be set between both units (Figure 17.13).

100

Figure 17.13 Contact Analysis, Dorado Oeste (South) Deposit, Domain 10 – 11

0

200

400

600

800

1000

1200

-100 -80 -60 -40 -20 0 20 40 60 80 100

Cu (ppm)


Contact Profile10 11


17.5 GRADE CAPPING AND RESTRICTION Grade capping (or top cutting) was investigated for the gold and copper assay values contained within the Dorado Oeste domain model in order to ensure that the possible influence of erratic high values do not unduly bias the grade estimate. In the current resource estimation, grade capping was applied for copper and a threshold restriction was applied for the gold interpolation routine. In both cases (grade capping and threshold restriction) the limit values were established through statistical analysis. All samples contained within the three-dimensional domain model of the Dorado Oeste (South) deposit were coded in the database and extracted for analysis. A probability plot was created for each of the domains for both gold and copper, in order to determine the threshold and capping values to be applied. Log-normal histograms were generated from the sample data, gold assays for each domain within Dorado Oeste Sur were extracted and the descriptive statistics of the data sets were generated, the most representative plot corresponds to Domain 121 (Figure 17.14). The grade cap values were selected by examining the probability plots for the grade at which outlier assays begin to occur, these are generally identified by breaks in the slope line. A capping values varies for each domain for gold and copper. It can be seen in the percentiles that the threshold limit and grade capping have a minimal impact in the overall data populations of the domains for the Dorado Oeste deposit. Variable grade capping values were applied to the Dorado Central and Dorado Este deposits, and the copper grades in all domains, as shown in Table 17.4.

101

Figure 17.14 Frequency Log-normal Histogram of the Gold Values Contained Within the Dorado Oeste (Sur)

Domain 121

Table 17.4 Cu Grade Capping and Au Threshold Limits Applied in Dorado Oeste (Sur) Deposit

Element Domain Au (ppb) – Cu (ppm) Percentile

100-101 1,200 99.90 110-111 3,000 99.44

120 4,200 99.90 Au

121 6,000 99.90 10 2,900 99.98 11 6,350 99.97 20 4,350 99.94

Cu

30 3,200 99.95 Table supplied by SRK Consulting.

17.6 BULK DENSITY DETERMINATION Intervals of drill core for specific gravity determinations were selected by the project geologist at a sample frequency of every 50 m along the length of the core. Samples were chosen from ½-HQ and predominantly whole HQ core samples measuring at least 4 cm long which were sufficiently robust so as not to break up or crumble during the measurement process. The bulk density measurements were performed in the Geomechanical and Geotechnical Laboratories in the Department of Mines at the University of Chile using either the method described in the American Society of Testing Materials (ASTM)

102

procedure 1998, the Asociación Española de Normalización (AENOR) 1999 or the International Society of Rock Mechanics (ISRM) 1986. A total of 1,092 samples were used to estimate the density of the three Dorado deposits. For each selected core sample, the dry weight was measured and the core was dipped into liquid paraffin to give a thin coating. The sample was then weighed again. The sample was then submerged in water and its weight when fully submerged was recorded. The relevant lithology, mineralization type and oxidized state were noted for each core piece. The specific gravity of each core sample was defined using the following equation:

Specific gravity = weight dry (unwaxed)/(weight dry (unwaxed)–weight submerged) Density statisticsfor each modeled domain (GU) are shown inFigure 17.15.

Figure 17.15 Density Statistics – All Data

Total 100 101 110 111 120 121 2000 2002 3000 3003

Q1 2.38 2.38 2.41 2.36 2.43 2.38 2.41 2.23 2.19 2.28

Min 1.37 2.07 1.90 2.23 2.17 2.17 2.17 1.89 2.17 2.07

Median 2.47 2.48 2.49 2.44 2.48 2.46 2.49 2.35 2.49 2.38

Mean 2.46 2.47 2.48 2.42 2.43 2.46 2.48 2.32 2.43 2.39

Max 3.99 3.99 2.71 2.53 2.56 2.66 2.74 2.58 2.65 2.98

Q3 2.55 2.56 2.56 2.50 2.49 2.53 2.55 2.44 2.59 2.44

NSamples 1,092 336 125 16 10 127 273 0 16 10 35

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Densidad

UG_Au


As can be seen, there is an anomalous value in GU 100 (3.99 g/cm3). This value was removed from the final database and the final statistics are shown in Figure 17.16.

103

Figure 17.16 Final Density Statistics

Total 100 101 110 111 120 121 2000 2002 3000 3003

Q1 2.38 2.38 2.41 2.36 2.43 2.38 2.41 2.23 2.19 2.28

Min 1.37 2.07 1.90 2.23 2.17 2.17 2.17 1.89 2.17 2.07

Median 2.47 2.48 2.49 2.44 2.48 2.46 2.49 2.36 2.49 2.38

Mean 2.45 2.47 2.48 2.42 2.43 2.46 2.48 2.32 2.43 2.39

Max 2.98 2.81 2.71 2.53 2.56 2.66 2.74 2.58 2.65 2.98

Q3 2.55 2.56 2.56 2.50 2.49 2.53 2.55 2.44 2.59 2.44

NSamples 1,091 335 125 16 10 127 273 0 16 10 35

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

Densidad

UG_Au


Based on statistics shown in Figure 17.16 it was decided that Dorado Oeste North (110 – 111) and Dorado Oeste South-Central (120 – 121) would be estimated separately, with average densities are 2.42 g/cm3 and 2.47 g/cm3, respectively. A total of 947 samples were used in the density estimation. The remaining samples (145) fell outside the Au-100 ppb contour. Samples representative of GU 2000 of Dorado Central were not available; therefore densities at Dorado Central were estimated using specific gravity data from the veinlet model (GU 2002). Also, it should be noted that the samples selected for specific gravity determinations are not distributed in a regular pattern. This was dealt with by assigning a specific weighting to each sample by inverse distance squared interpolation. Results are shown in Figure 17.17.

104

Figure 17.17 Statistics – Declustered Density Samples

Total 100 101 110 111 120 121 2000 2002 3000 3003

Q1 2.40 2.38 2.45 2.33 2.43 2.39 2.43 2.19 2.41 2.28

Min 1.89 2.07 1.90 2.23 2.17 2.17 2.17 1.89 2.17 2.07

Median 2.49 2.49 2.50 2.44 2.46 2.47 2.52 2.34 2.58 2.38

Mean 2.47 2.46 2.50 2.41 2.44 2.47 2.50 2.31 2.51 2.39

Max 2.98 2.81 2.71 2.53 2.56 2.66 2.74 2.58 2.65 2.98

Q3 2.57 2.57 2.58 2.51 2.49 2.56 2.58 2.43 2.59 2.44

NSamples 947 335 125 16 10 127 273 0 16 10 35

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Density

UG Au


17.6.1 Density Estimation In Block Model Density was estimated by inverse distance squared interpolation in all domains. The interpolation criteria are shown in Table 17.5.

Table 17.5 Density Estimation Plan

Search Angles Search Radii SamplesUG Pass Type of Estimation

Block Variabl Bearing Plunge Dip Major Semi Minor

DiscretizationMin Max

Power DataBas SamplesVariable

UG DataBase

1 INVERSE DISTANCE DENSIDA 0 0 0 200 200 100 4 4 3 1 12 2 volden.cof.isis DENSI 100-101 100-101

2 INVERSE DISTANCE DENSIDA 0 0 0 1000 1000 1000 4 4 3 1 8 2 volden.cof.isis DENSI 100-101 1 INVERSE DISTANCE DENSIDA 0 0 0 200 200 100 4 4 3 1 12 2 volden.cof.isis DENSI 110-111

110-111 2 INVERSE DISTANCE DENSIDA 0 0 0 1000 1000 1000 4 4 3 1 8 2 volden.cof.isis DENSI 110-111 1 INVERSE DISTANCE DENSIDA 0 0 0 200 200 100 4 4 3 1 12 2 volden.cof.isis DENSI 120-121

120-121 2 INVERSE DISTANCE DENSIDA 0 0 0 1000 1000 1000 4 4 3 1 8 2 volden.cof.isis DENSI 120-121 1 INVERSE DISTANCE DENSIDA 0 0 0 200 200 100 4 4 3 1 12 2 volden.cof.isis DENSI 2000-2002

2000-2002 2 INVERSE DISTANCE DENSIDA 0 0 0 1000 1000 1000 4 4 3 1 8 2 volden.cof.isis DENSI 2000-20021 INVERSE DISTANCE DENSIDA 0 0 0 200 200 100 4 4 3 1 12 2 volden.cof.isis DENSI 3000-3003

3000-3003 2 INVERSE DISTANCE DENSIDA 0 0 0 1000 1000 1000 4 4 3 1 8 2 volden.cof.isis DENSI 3000-3003


17.6.2 Results Final estimated densities are compared to declusterized sample densities in Table 17.6 and Figure 17.18. The results compare well.

105

Table 17.6 Density Comparison – Estimated Block vs Declustered Samples

Density Number UG_AU

DB Declus DB BM Samples Blocks

100-101 2.47 2.47 2.47 460 858,441

110-111 2.43 2.42 2.42 26 38,896

120-121 2.47 2.49 2.49 400 251,520

2000-2002 2.32 2.31 2.32 16 139,535

3000-3003 2.40 2.41 2.42 45 99,080 Table supplied by SRK Consulting.

Figure 17.18

Graphical Comparison of Density – Block Model Estimates and Samples

2.30

2.35

2.40

2.45

2.50

2.55

2.60

100‐101 110‐111 120‐121 2000‐2002 3000‐3003

Density

UG Estimated density

DB

Declus DB

BM


17.7 VARIOGRAPHY The variographic work described in this section was completed by SRK Consulting under the supervision of Dr. Magri. Correlograms were used for modeling and describing the spatial variability of the gold mineralization found at each of the deposits in the Dorado area of the Volcan property. These correlograms were prepared based on the 2-m raw sample data. For the preparation of the gold correlogram models it was first necessary to identify the preferential directions of the gold distribution in each of the defined domains. Variographic maps were then created to identify any structure that could differ from the trends observed in the deposit and that would require further analysis. The variographic maps for the Dorado Oeste deposit clearly show strong orientation in the vertical and along-strike direction (Figure 17.19 and Figure 17.20). However, for the Dorado Central area, these trends are not observed, possibly due to a smaller amount of data and to the bigger

106

separation between the composite samples (Figure 17.21). The variogram maps for the Dorado Este deposit are presented in Figure 17.22.

Figure 17.19 Variographic Map for the Veinlet Domain (Code 110-111), Dorado Oeste (Norte) Deposit


Figure 17.20

Variographic Map for the Veinlet Domain (Code 120-121), Dorado Oeste (Sur) Deposit


107

Figure 17.21 Variographic Map for the Veinlet Domain (Code 2002), Dorado Central Deposit

The plan view is shown in the left image, the plunge view (in the plane of the structure) is shown in the upper right image and the dip view (the cross-sectional view) is shown in the lower right image. Figure supplied by SRK Consulting.

Figure 17.22

Variographic Map for the Veinlet Domain (Code 3003), Dorado Este Deposit

The plan view is shown in the left image, the plunge view (in the plane of the structure) is shown in the upper right image and the dip view (the cross-sectional view) is shown in the lower right image. Figure supplied by SRK Consulting.

The approach applied for this study consisted of calculating experimental correlograms that validated the observed trends in the three orthogonal directions. Using the sample correlograms, the theoretical models were interpreted in each of the three principal

108

directions for each of the domain models. These correlogram models consisted of a nugget effect (C0) and either two or three nested structures that contribute to the total variance. The model type is spherical for all the domains and for all of the three principal directions. The nugget (C0) for each of the domains was determined by constructing down-hole variograms (correlograms) using a 2 m lag spacing. The variograms are presented in Appendix II. Based on the information obtained from the variographic maps and the determination of the nuggets for the different domains, experimental directional correlograms were prepared. These correlograms were interpreted in order to obtain the models of the theoretical correlograms which, in turn, provide three-dimensional correlograms to calculate the weights used in the Ordinary Kriging methodology of grade estimation. The preferential directions were re-aligned to correspond with veinlet geological attitudes. A summary of the interpreted correlogram parameters is presented in Table 17.7 7. The anisotropy models shown by the correlograms are consistent with the mineralization trends observed within the geological units of the domains, exhibiting the strongest correlation in the vertical direction (i.e. down dip). The next best correlation is from the along strike direction. The nugget effect, or the random variation component of the spatial variation, is seen to be approximately 10 to 15% of the total variation. 17.8 BLOCK MODEL CONSTRUCTION A simple, upright, whole-block model was created in the Vulcan software package using the parameters presented below:

Origin: Xo=481700 / Yo=697130 / Zo=3500

Bearing: X’ axis, Azimuth 145° (Vulcan® nomenclature) Block Size: 10 m x 10 m x 10 m Model Distance: X=2,700 m / Y=3,200 m / Z=2,000 m Type: Extended and indexed Spreadsheet Variables:

o au_ppb: Au grade in ppb o cu_ppm: Cu grade in ppm o ug_au: Indicates the GU to which the estimated Au value is assigned o ug_cu: Indicates the GU to which the estimated Cu value is assigned o env: Indicates if the block is within the Au 100 ppb envelope o vein: Indicates if the block is in or out of the Cu 300 ppm envelope o inten: Indicates whether the block is in or out of the Au-veinlet

envelope o env_cu: Indicates whether the block is in or out of the Cu 300 ppm

envelope

109

Table 17.7

Summary of the Variographic Parameters, Volcan Project

Element Domain Nugget (C0)

Bearing Plunge Dip First Structure Second Structure Third Structure

Sill Major Semi Minor Sill Major Semi Minor Sill Major Semi Minor Au 100/101 0.06 30 0 0 0.50 20 30 14 0.12 45 70 190 0.32 200 80 190 Au 110/111 0.06 0 0 0 0.54 45 40 16 0.4 60 50 75 Au 120 0.07 25 0 0.53 35 50 20 0.4 65 60 75 Au 121 0.1 25 0 0 0.43 15 13 35 0.3 25 30 90 0.17 110 45 150 Cu 10 0.09 90 0 0 0.49 50 50 16 0.42 68 55 210 Cu 11 0.06 60 0 0 0.62 30 40 30 0.25 80 63 140 0.07 600 310 500 Cu 20 0.07 30 0 0 0.25 25 25 20 0.52 48 60 78 0.16 80 225 300 Cu 30 0.04 0 0 0 0.50 52 30 12 0.27 75 75 55 0.19 150 120 250

Table supplied by SRK Consulting

110

o flag_au: N° of ellipsoid estimation passes (as calculated) – Au o flag_cu: N° of ellipsoid estimation passes (as calculated) – Cu o ns_au: Number of samples used in the estimate – Au-ppb o ns_cu: Number of samples used in the estimate – Cu-ppm o varkri_au: Kriging variance - Au o varkri_cu: Kriging variance - Cu o nh_au: Number of drill holes used in the estimation – Au o nh_cu: Number of drill holes used in the estimation – Cu o dist_au: Average distance of the samples to the estimated block -Au o dist_cu: Average distance of the samples to the estimated block -Cu o au_nn: Au grade-ppb of nearest neighbour o cu_nn: Cu grade-ppm of nearest neighbour o categ: Resource categorization before smoothing o categ_suave: Resource categorization after smoothing o densidad: Rock density within mineralized envelope o topo: Indicates whether the block is above or below the surface o ug_rec: “Au Recovery Unit” (RU)

In general, the grade estimation plan is divided into four ellipsoids or passes to estimate each block. The first three passes are defined according to the distribution of the variogram function (correlogram) for each preferential bearing. In the fourth pass, all blocks were estimated. In some of the passes, it was necessary to restrict high grades in order to limit their spatial influence. The block discrimination used for Dorado Oeste was 3 m x 3 m x 5 m; for other sectors it was 4 m x 4 m x 3 m. All grade estimates were made using the Ordinary Kriging method. The estimation criteria for gold and copper grades are shown in Tables 17.8 and 17.9 respectively.

Table 17.8 Summary of the Estimation Plan Used in the Estimation of Gold Grades, Volcan Project

UG Pass Type Angle Ratio Discret Min.Samples

Max. Samples

Database Grade

DB UG DB Soft Boun. HighYield

Limits

Max Sample xDrillhole

1 OK 30 0 0 25 6 120 3 3 3 8 16 volvol2010.com.isis AU_PPB 100-101 1200 6 6 6

2 OK 30 0 0 55 40 80 3 3 3 8 16 volvol2010.com.isis AU_PPB 100-101 1200 6 6 6 6

3 OK 30 0 0 130 70 200 3 3 3 8 16 volvol2010.com.isis AU_PPB 100-101 1200 6 6 6 6 100-101

4 OK 30 0 0 310 100 400 3 3 3 16 20 volvol2010.com.isis AU_PPB 100-101 1200 6 6 6 1 OK 0 0 0 25 6 120 3 3 3 8 16 volvol2010.com.isis AU_PPB 110-111 3000 6 6 6 2 OK 0 0 0 55 45 80 3 3 3 8 16 volvol2010.com.isis AU_PPB 110-111 3000 6 6 6 6

3 OK 0 0 0 90 72 120 3 3 3 8 16 volvol2010.com.isis AU_PPB 110-111 3000 6 6 6 6 110-111

4 OK 0 0 0 200 100 300 3 3 3 16 20 volvol2010.com.isis AU_PPB 110-111 3000 6 6 6 1 OK 25 0 0 25 6 120 3 3 3 8 16 volvol2010.com.isis AU_PPB 120 121 (10m) 4200 6 6 6 2 OK 25 0 0 55 45 80 3 3 3 8 16 volvol2010.com.isis AU_PPB 120 121 (10m) 4200 6 6 6 6 3 OK 25 0 0 90 72 120 3 3 3 8 16 volvol2010.com.isis AU_PPB 120 121 (10m) 4200 6 6 6 6

120

4 OK 25 0 0 200 100 300 3 3 3 16 20 volvol2010.com.isis AU_PPB 120 121 (10m) 4200 6 6 6 1 OK 25 0 0 25 6 120 3 3 3 8 16 volvol2010.com.isis AU_PPB 121 120 (10m) 6000 6 6 6 2 OK 25 0 0 55 40 80 3 3 3 8 16 volvol2010.com.isis AU_PPB 121 120 (10m) 6000 6 6 6 6 3 OK 25 0 0 90 60 120 3 3 3 8 16 volvol2010.com.isis AU_PPB 121 120 (10m) 6000 6 6 6 6

121

4 OK 25 0 0 180 75 240 3 3 3 16 20 volvol2010.com.isis AU_PPB 121 120 (10m) 6000 6 6 6


111

Table 17.9 Summary of the Estimation Plan Used in the Estimation of Copper Grades, Volcan Project

UG Pass Type Angles Ratios Discret. Min. Samples

Max.Samples

Database Grade DB UG DB Soft Boun

CappingMax

Sample xDrillhole

1 OK 90 0 0 35 35 75 3 3 3 8 16 volvol2010.com.isis CU PPM 10 - 2900 -


3 OK 90 0 0 75 65 200 3 3 3 4 16 volvol2010.com.isis CU PPM 10 - 2900 - 10















17.9 BLOCK MODEL VALIDATION Global Bias, Log-Probability Plots and Smoothing Effect validations have been performed for the Dorado Block Model. This information can be found in Appendix IV. Other validation procedures are described below. 17.9.1 Visual Review Block model validation began with visual comparisons (which are qualitative in nature) of the resulting block grades against the informing drill hole samples on benches as a (Figure 17.23 through Figure 17.26). Additional visual evaluations were conducted whereby the contoured gold grades from the drill hole data were compared against the corresponding estimated block grades for selected vertical sections (Figure 17.27 through Figure 17.30). It can be seen that good general agreement is present between the drill hole samples and the estimated block grades in the cross-sectional images. Similarly, although some significant differences can be observed on a detailed scale, there is good overall agreement between the contoured gold grades and the estimated block grades in plan (bench) view. It is expected that the level of agreement between the drill hole sample data and the estimated block grades will improve as the level of data density increases.

112

Figure 17.23 Bench Plan 4505


Figure 17.24

Bench Plan 4555


113

Figure 17.25 Bench Plan 4605


Figure 17.26

Bench Plan 4655


114

Figure 17.27 Dorado Oeste - Main Body – South End – Vertical Section


Figure 17.28

Dorado Oeste - Main Body – Central Zone – Vertical Section


115

Figure 17.29 Dorado Oeste - Main Body – North End – Vertical Section


Figure 17.30

Dorado Oeste - Northern Body – GU 110 – 111 – Vertical Section


116

17.9.2 Drift Analysis Validation continued with the preparation of drift analyses where the average block grades (for a given bench or a given cross-section slice) were quantitatively compared against the informing sample data for each of the veinlet domains and surrounding low-grade envelopes. The bench elevations were spaced at 40 m while the north-south cross-sectional slices were prepared at a spacing of 100 m. The results of the drift analyses of the four mineralized domains are presented by means of the scatter plots shown in Figure 17.31 through Figure 17.33. It can be seen that, in general, the average block estimated grades for both bench and cross-sectional views reasonably reflect the average informing sample data. In general terms, it appears that the average block model grades slightly underestimate the sample average grades in the high grade areas. Conversely, in general terms, the average block model grades slightly overestimate the sample average grades in the low grade areas. These estimation errors are considered to be a result of the smoothing effect that is inherent with the application of interpolation algorithms such as the Ordinary Kriging system to delineation-stage drill hole data. It is expected that the correlation between the estimated block grades and the informing sample grades will improve with increased sample density.

Figure 17.31 Drift Analysis for the Dorado Oeste (North) Domain (Code 100/101)

(Bench data are presented on the y-axis while cross-sectional data are presented on the x-axis)

0

500

1,000

1,500

2,000

2,500

0

100

200

300

400

500

600

4230

4270

4310

4350

4390

4430

4470

4510

4550

4590

4630

4670

4710

4750

4790

4830

4870

4910

4950

4990

5030

5070

Number of Blocks

Au (ppb)

Coordinate Au_BM Au_NN NB


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Figure 17.32 Drift Analysis for the Dorado Oeste (South) Domain (Code 121)

(Bench data are presented on the y-axis while cross-sectional data are presented on the x-axis)

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Coordinate Au_ppb Au_nn NB Figure supplied by SRK Consulting.

Figure 17.33

Drift Analysis for the Dorado Oeste Domain (Code 100/101) (Bench data are presented on the y-axis while cross-sectional data are presented on the x-axis)

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Coordinate Au_ppb Au_nn NB Figure supplied by SRK Consulting.

17.9.3 Dispersion Analysis Validation was completed with the preparation of a dispersion analysis, which began with a comparison of the average grades of the drill hole data against the average of the estimated block grades for each of the modeled domains (Table 17.10

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10). It can be seen that good agreement exists between the average estimated block grades and the informing composite samples.

Table 17.10 Comparison of Average Grades of the Drill Hole Samples Dataset vs. Estimated Block Grades by

Domain, Volcan Project

Domain Composite Samples (g/t Au)

Block Estimates (g/t Au)

Dorado Oeste Low Grade Halo (100/101) 0.105 0.103 Dorado Oeste Veinlet (Norte, 110/111) 0.514 0.467 Dorado Oeste Low Grade (Sur, 120) 0.474 0.484 Dorado Oeste Veinlet (Sur, 121) 0.692 0.676 Dorado Central Low Grade Halo (2000) 0.120 0.153 Dorado Central Veinlet (2002) 0.470 0.440 Dorado Este Low Grade Halo (3000) 0.096 0.098 Dorado Este Veinlet (3003) 0.538 0.508


A set of dispersion graphs were then prepared, where the block estimate is compared in detail with the surrounding composite samples. This is achieved by creating larger blocks than were used for the block model estimates (in this case, 50 m x 50 m x 20 m) and by averaging those model blocks and the samples that are found within this larger volume. The resulting information regarding the grades of each large block is then plotted as an ordered pair of estimated block grade versus informing sample grade, and the procedure is carried out for each of the modeled domains separately. The results of the dispersion analysis are presented in Figure 17.34 through Figure 17.36. Good general agreement can be seen to exist for each of the mineralized domains.

Figure 17.34 Dispersion Graph for Dorado Oeste (Norte 110/111), All Samples


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Figure 17.35

Dispersion Graph for Dorado Oeste (Sur, 120), All Samples


Figure 17.36

Dispersion Graph for Dorado Oeste (Sur, 121), All Samples


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17.10 OPEN PIT OPTIMIZATION Open pit optimization was completed using the Gemcom Software Whittle 4X (version 4.3) open pit optimization program and was carried out by Sam Shoemaker, Jr., B.Sc., MAusIMM. This program uses the Lerchs-Grossmann algorithm to determine the optimal economic open pit footprint for a given mineral resource. Once this footprint has been established, the software allows the development of a simple resource-based production schedule. For the pit shell resource, the Volcan resource block model was used as a basis for the pit optimization. The block model was supplied in a Surpac format which was converted into a Vulcan block model for preparation of the Whittle block model and resulting optimization runs. Resource classifications and mineralized domains were used to develop a Whittle rock code which determined the possible routing of an individual block during optimization (process feed or waste). Because a variable metallurgical recovery was used for the Dorado Oeste and Este deposits, a recovered gold grade was also calculated. Lastly, using the Vector recommended pit slopes (Figure 17.37), each block was flagged by its individual slope sector. Bench heights of 10 m were used for all optimization runs in all types of material.

Figure 17.37 Preliminary Overall Wall Slope Sectors, Dorado Area Open Pits, Volcan Project

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A digital topographic map prepared to a 2-m vertical resolution was provided by Andina for the area in the immediate vicinity of the four deposits in the Dorado sector of the Volcan project. This topographic map was supplemented with lower-resolution (10 m vertical resolution) topographic data for the surrounding area so as to provide sufficient coverage to prepare preliminary layouts for such items as waste rock storage areas, mine infrastructure and leach pad areas. Processing and general administration costs were based on preliminary estimates appropriate to a leach and mill facility with an annual capacity of 21.9 Mt (Table 17.11 11).

Table 17.11 Summary of Input Parameters, Volcan Project

Area Units $/Unit

Ore Mining Cost US$/Tonne Ore 1.10

Waste Mining Cost US$/Tonne Waste 1.00

Heap Leach Processing Cost US$/Tonne Ore 4.55

Mill Processing Cost US$/Tonne Ore 5.42

G & A US$/Tonne Ore 0.52

Base Gold Price US$/Troy Ounce 950.00

Heap Leach Annual Production Tonnes 16,060,000

Mill Annual Production Tonnes 4,015,000

Pit optimization runs were completed on measured plus indicated resources only (M & I) and measured plus indicated plus inferred resources (M, I & I) for gold prices ranging from US$500/oz up to US$1,500/oz in US$50/oz increments. Mine operating costs were supplied by Andina based on similar-sized operations in the area. For the Whittle block models, mining dilution and mining recovery factors were not applied in the determination of the pit shell resource. Capital expenditures were not considered during pit optimization. Whittle optimization was performed on the block model for each scenario (M & I and M, I & I) at the various gold prices. The results of these runs are shown in Figure 17.38 and a view of the optimized pit shell for the base case scenario is presented in Figure 17.39. Estimated heap leach and mill metallurgical recoveries for the Dorado Este and Oeste areas are shown in Figures 17.40 and 17.41. For the Dorado Central area potential resource material is only available as heap leach at a fixed gold recovery of 25%. For potential mill feed, a maximum gold recovery of 83% and a minimum gold grade of 1.1 g/t were allowed. For potential heap leach feed, a maximum gold recovery of 69% with a minimum gold recovery of 45% was allowed. Maximum gold grade for potential heap leach feed is less than 1.1 g/t gold. Figure 17.42 provides the Volcan Whittle pit-by-pit analysis.

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Figure 17.38 Andina VolcanWhittle Pit Shell Gold Price Sensitivity

Figure 17.39 Isometric View of the Dorado Area Block Model and Base Case Optimized Pit Shell

(Looking northeast)

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Figure 17.40 Heap Leach Gold Recoveries for the Volcan Gold Deposit, Dorado Este and Oeste Areas

*Maximum gold grade of 1.1 g/t, maximum recovery of 69%, minimum of 45%

Figure 17.41

Mill Gold Recoveries for the Volcan Gold Deposit, Dorado Este and Oeste Areas

*Minimum gold grade of 1.1 g/t, maximum gold recovery of 83%

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Figure 17.42 Volcan Whittle Pit by Pit Analysis

17.11 CUT-OFF GRADE ESTIMATE The estimates of the input parameters presented above were used to establish a gold cut-off grade for reporting purposes. Due to the variable metallurgical recovery used in the determination of the potential profitability of any given block within the model, an iterative approach was required to determine the cut-off grade(s) for each of the deposits. Cut-off grades were determined for each deposit that considered the full operating costs (i.e. mining+processing+G&A) for both milling and heap leach operations. A summary of the estimated cut-off grades by deposit is presented in Table 17.12. For the purposes of preparation of this mineral resource estimate, a gold price of US$950/oz was selected.

Table 17.12 Summary of Cut-off Grades for the Dorado Sector Deposits, Volcan Project

(using US$950/oz Au)

Domain Mill Cut-Off Grade (g/t Au)

Heap Leach Cut-Off Grade (g/t Au)

Dorado Oeste (Norte, 100/101) 1.10 0.34 Dorado Oeste (Sur, 120/121) 1.10 0.34 Dorado Central (2002) --- 0.68 Dorado Este (3003) 1.10 0.34

17.12 MINERAL RESOURCE CLASSIFICATION CRITERIA The mineral resources in this report were estimated in accordance with the definitions contained in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves Definitions and Guidelines that were prepared by the

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CIM Standing Committee on Reserve Definitions and adopted by the CIM Council on December 11, 2005. The mineralized material was classified into either the Measured, Indicated or Inferred mineral resource category on the basis of the statistical analysis as presented in Magri (2010). An excerpt of the relevant section of Magri’s report is presented in Appendix III and the classification criteria are summarized in Table 17.13 13.

Table 17.13 Summary of the Classification Criteria for the Dorado Sector Deposits, Volcan Project

Domain Drill Spacing Classification

Inside the Domain Model Inferred 50 x 100 m Indicated

Dorado Oeste (Norte, Codes 100 and 101)

50 x 50 m Measured Inside the Domain Model Inferred 100 x 100 m Indicated

Dorado Oeste (Sur, Codes 120, 121)

50 x 50 m Measured Inside the Domain Model Inferred 50 x 100 m Indicated

Dorado Central (Codes 2000, 2002)

Less than 50 x 50 m Measured Inside the Domain Model Inferred 50 x 100 m Indicated

Dorado Este (Codes 3000, 3003)

50 x 50 m Measured

In the construction of block model estimates, a lack of information resulting from a slight data gap generated by drill hole deviation is often encountered. This can result in a small number of blocks that are required to have their grades estimated using a larger search ellipse, with a subsequent reduction in their classification. This situation was accounted for in this assignment by application of a smoothing algorithm that was developed by SRK. 17.13 RESPONSIBILITY FOR ESTIMATION The estimate of the mineral resources for the gold deposits in the Dorado sector of the Volcan project as presented in this report was prepared by William Lewis, B.Sc., P.Geo., Sam Shoemaker, B.Sc., MAusIMM, and Ing. Alan J. San Martin, MAusIMM, each of whom is a Qualified Persons as defined in NI 43-101, and is independent of Andina. Sam Shoemaker, B.Sc., MAusIMM estimated the mineral resources tabulated in Table 17.14 and Table 17.16 by optimizing the pit shell using the Whittle optimization program. 17.14 MINERAL RESOURCE ESTIMATE As a result of the concepts and processes described previously, the mineral resources are considered as all potentially profitable blocks using the base case input parameters that are contained within the US$950/oz Au optimized open pit shell and below the topographic surface. The mineral resources are stated using the gold grades estimated by the Ordinary Kriging interpolation method and using the capped metal grades. The tabulated mineral resources for the Dorado sector deposits of the Volcan project are set out in Table 17.14

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14. As a comparison, Table 17.15 summarizes the global mineral resources by cut-off grade, unconstrained by the Whittle economic parameters. Table 17.15 is solely for comparison to the Whittle generated resources and should not be used as the reported mineral resource estimate. The total reportable mineral resources for the entire Dorado Sector are summarized in Table 17.16. The mineral resource estimate is effective as of September 16, 2010. There is a degree of uncertainty associated with the estimation of mineral resources and mineral reserves and their corresponding metal grades. The estimation of mineralization is a somewhat subjective process and the accuracy is a function of the accuracy, quantity and quality of available data, the accuracy of statistical computations, and the assumptions used and judgments made in interpreting engineering and geological information. Until mineral reserves or mineral resources are actually mined and processed, and the characteristics of the deposit assessed, their quantity and grade should be considered as estimates only. In addition, the quantity of mineral reserves and mineral resources may vary depending on many factors such as exchange rates, energy costs and metal prices. Fluctuation in metal or commodity prices, results of additional drilling, metallurgical testing, receipt of new information and production and the evaluation of mine plans subsequent to the date of any mineral resource estimate may require revision of such an estimate. Micon has considered the mineral resource estimates in light of known environmental, permitting, legal, title, taxation, socio-economic, marketing, political and other relevant issues and has no reason to believe at this time that the mineral resources will be materially affected by these items.

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Table 17.14 Tabulation of Mineral Resources for the Dorado Sector Deposits, Summarized by Deposit

Volcan Pit Shell Resource

Dorado Este Area



Gold Grade (g/t) Contained Recovered

Tonnes Gold Grade

(g/t) Contained Recovered Tonnes


Measured 13,145,000 0.612 259,000 155,300 2,316,000 1.478 110,000 88,600 15,461,000 0.742 369,000 243,900

Indicated 3,741,000 0.591 71,000 42,300 654,000 1.407 30,000 23,800 4,395,000 0.713 101,000 66,100


16,886,000 0.608 330,000 197,600 2,970,000 1.462 140,000 112,400 19,856,000 0.736 470,000 310,000

Inferred 135,000 0.535 2,000 1,400 38,000 1.396 2,000 1,400 173,000 0.724 4,000 2,800

Dorado Central Area




Tonnes Gold Grade



Measured 1,333,000 1.036 44,000 11,100 0 0.000 0 0 1,333,000 1.036 44,000 11,100

Indicated 1,025,000 0.924 30,000 7,600 0 0.000 0 0 1,025,000 0.924 30,000 7,600


2,358,000 0.987 74,000 18,700 0 0.000 0 0 2,358,000 0.987 74,000 18,700

Inferred 721,000 0.771 18,000 4,500 0 0.000 0 0 721,000 0.771 18,000 4,500

Dorado Oeste Area




Tonnes Gold Grade



Measured 76,601,000 0.609 1,499,000 897,800 12,523,000 1.489 599,000 482,900 89,124,000 0.732 2,098,000 1,380,700

Indicated 242,584,000 0.582 4,543,000 2,691,600 35,759,000 1.472 1,693,000 1,361,800 278,343,000 0.697 6,236,000 4,053,400


319,185,000 0.589 6,042,000 3,589,400 48,282,000 1.477 2,292,000 1,844,700 367,467,000 0.705 8,334,000 5,434,100

Inferred 39,261,000 0.462 583,000 322,300 1,398,000 1.466 66,000 53,000 40,659,000 0.497 649,000 375,300

Total Volcan In-Pit Whittle Resource




Tonnes Gold Grade



Measured 91,079,000 0.615 1,802,000 1,064,200 14,839,000 1.487 709,000 571,500 105,918,000 0.738 2,511,000 1,635,700

Indicated 247,350,000 0.584 4,644,000 2,741,500 36,413,000 1.471 1,723,000 1,385,600 283,763,000 0.698 6,367,000 4,127,100


338,429,000 0.592 6,446,000 3,805,700 51,252,000 1.476 2,432,000 1,957,100 389,681,000 0.709 8,878,000 5,762,800

Inferred 40,117,000 0.468 603,000 328,200 1,436,000 1.464 68,000 54,400 41,553,000 0.502 671,000 382,600

Sums may not add due to rounding.

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Table 17.15 Tabulation of the Global Mineral Resources for the Dorado Sector Deposits, Summarized by Category and Cut-off Grade

(For comparison purposes only)

Resource Category Gold Cut-off Grade (g/t)

Tonnes (millions)

Gold Grade (g/t)

Gold Ounces (millions)

0.2 151 0.62 3.0 0.4 100 0.78 2.5 0.6 59 0.98 1.8

Measured

0.8 35 1.18 1.3 0.2 489 0.55 8.7 0.4 277 0.75 6.7 0.6 150 0.97 4.7

Indicated

0.8 86 1.18 3.2 0.2 640 0.57 11.7 0.4 377 0.76 9.2 0.6 209 0.97 6.5

Total Measured and Indicated

0.8 121 1.18 4.6

0.2 333 0.40 4.3 0.4 110 0.65 2.3 0.6 44 0.91 1.3

Inferred

0.8 21 1.16 0.8 Sums may not add due to rounding.

Table 17.16

Estimated Mineral Resources for the Dorado Sector Deposits (Total Volcan In-Pit Whittle Resource)




Tonnes Gold Grade



Measured 91,079,000 0.615 1,802,000 1,064,200 14,839,000 1.487 709,000 571,500 105,918,000 0.738 2,511,000 1,635,700

Indicated 247,350,000 0.584 4,644,000 2,741,500 36,413,000 1.471 1,723,000 1,385,600 283,763,000 0.698 6,367,000 4,127,100

Measured Plus Indicated 338,429,000 0.592 6,446,000 3,805,700 51,252,000 1.476 2,432,000 1,957,100 389,681,000 0.709 8,878,000 5,762,800

Inferred 40,117,000 0.468 603,000 328,200 1,436,000 1.464 68,000 54,400 41,553,000 0.502 671,000 382,600

1. All quantities are rounded to the appropriate number of significant figures, consequently sums may not add due to rounding. 2. Mineral resources include mill incremental material. 3. Mineral resources which are not mineral reserves do not have demonstrated economic viability. There are currently no mineral reserves on the Volcan property. 4. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. 5. The quantity and grade of reported Inferred Resources in this estimation are conceptual in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource. It is

uncertain if further exploration will result in the upgrading of the Inferred Resources into an Indicated or Measured Mineral Resource category. 6. The Volcan mineral resource estimate is effective as of September 16, 2010.

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18.0 OTHER RELEVANT DATA AND INFORMATION All relevant data and information in regard to the exploration activities at, and required to support the disclosure of a mineral resource estimate for, the Dorado area deposits of Andina’s Volcan project are included in other sections of this report. In addition to its exploration activities, Andina is progressing with studies into the economic potential of the mineralization located on the Volcan project. To this end, Andina has engaged the services of various consultants, engineers and specialist to investigate aspects of the Volcan project and avenues for development. Hatch Chile was contracted to complete the engineering and cost estimating work associated with a conceptual potential development study started in July, 2009 and completed in October, 2010. Hatch assessed a number of development scenarios encompassing the work of several contributing parties and consultants for an open pit mine and heap leach operation. Emerging from these studies and on-going metallurgical testwork, a new project process flowsheet was identified. KCA, contracted in 2010 to advance metallurgical studies, also have an engineering and project management division. Building on the work by Hatch and others, KCA has been contracted to develop a preliminary feasibility study for development of the Volcan project. In mid-2010, based on results from on-going testwork, KCA developed preliminary economic evaluations on three cases. The cases were based on an open pit mine supplying; a) conventional crushing and heap leaching, b) combined conventional and HPGR crushing with heap leaching, and c) a split flowsheet where low and medium grades are sent to a heap leach pad after conventional and HPGR crushing and higher grades and fines from the heap leach crusher are sent to a milling circuit with carbon-in-leach (CIL) gold recovery. It was concluded that the most compelling and operationally flexible and potentially robust case was that of a split flowsheet and, hence, a program was put in place to develop a preliminary feasibility level study on that scenario. The split flowsheet offers further opportunity to recover a sulphide concentrate, to treat gold contained in sulphides that report in higher proportions to the higher grade feed. Due to the timeframe and the need to advance on-going testwork, the flowsheet was frozen and will not consider separate sulphide recovery in the preliminary feasibility study due in first quarter of 2011. The possibility of separate treatment of sulphide feed will be investigated further during the next sage of project development. The possibility of recovering copper will also be investigated.

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19.0 INTERPRETATIONS AND CONCLUSIONS On-going exploration work during the 2009 to 2010 field season has been successful in providing additional in-fill drilling information for the Dorado Oeste deposit. Geological modeling of the mineralization found at the Dorado Oeste deposit has shown that the gold grades continue to correlate directly with the concentration of Maricunga-style quartz veinlets. Additional analysis of the drill hole information has suggested that the Dorado Oeste deposit is composed of two areas of elevated veinlet concentrations that have been modeled separately. Micon reviewed the drilling and sampling procedures undertaken by Andina at the Volcan property. Micon considers that the samples are representative of the geology encountered in the drilling program and that the samples were taken in such a manner as to minimize any sampling bias. Micon has reviewed Andina’s QA/QC protocols and generally agrees that they are being carried out in accordance with the best practices currently in use by the mining industry and that they are well documented. Micon concludes that the procedures and results obtained during the exploration program are reliable enough to be used as the basis for a mineral resource estimate. The parameters used to determine the 2010 mineral resource estimate are summarized in Table 19.1.

Table 19.1 Summary of the Mineral Resource Parameters used for the Volcan Project

General Parameters

Description Parameter Interpretation method Sectional interpretation used to build solids Resource estimation method Ordinary Kriging Block size 10 m along strike, 10 m across strike, 10 m down dip Block model rotation Approximate azimuth of 30º in strike direction of deposits Specific gravity 2.47 g/cm3 Composite length No composites required, raw samples were 2 metres equal length Minimum mining width n.a. Grade capping Variable, see Table 17.3 Resource cut-off grade ~0.3 g/t gold

Gold Interpretation Parameters (Main Deposit, Dorado Oeste, Domain 121) Description Pass 1 Pass 2 Pass 3 Pass 4

X Range (m) 6 40 60 75 Y Range (m) 25 55 90 180 Z Range (m) 120 80 120 240 Min. samples to interpolate 8 8 8 16 Max. samples to interpolate 16 16 16 20 Max. samples per hole n.a. 6 6 n.a. Bearing (º) 25 25 25 25 Plunge (º) 0 0 0 0 Dip (º) 0 0 0 0

Open pit optimization was completed using the Gemcom Software Whittle 4X (version 4.3) open pit optimization program. This program uses the Lerchs-Grossmann algorithm to determine the optimal economic open pit footprint for a given mineral resource. Processing and general

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administration costs were based on preliminary estimates appropriate to a combined leach and milling operation with an annual capacity of 16,060 Mt leach and 4,015 Mt mill. Pit optimization runs were completed on measured plus indicated resources only (M & I) and for a gold price of US$950 per ounce. Mine operating costs were supplied by Andina based on similar sized operations in the area. Sensitivities to the gold price ranging from US$500 to US$1,500 were conducted in increments of US$50. The estimates of the input parameters discussed with the body of this report were used to establish a gold cut-off grade for reporting purposes. The cut-off grade was determined for each of the deposits and considered the full operating costs (i.e. mining + processing + G&A) as well as the mill-incremental operating costs (i.e. processing + G&A costs only). For the purposes of preparation of the mineral resource estimate, a gold price of US$950/oz was selected. As a result of the concepts and processes described above, the mineral resources are considered as all potentially profitable blocks using the base case input parameters that are contained above the US$950/oz Au optimized open pit shell and below the topographic surface. The mineral resources are stated using the gold grades as estimated by the Ordinary Kriging interpolation method and using the capped metal grades. The total estimated mineral resources for the Dorado sector deposits of the Volcan project are set out in Tables 19.2. The Volcan mineral resource estimate is effective as of September 16, 2010. The mineral resource estimate is compliant with the current CIM standards and definitions, as required by NI 43-101 and is, therefore, reportable as a mineral resource by Andina. The mineral resource estimate presented in this Technical Report is constrained by an optimized pit. Additional mineralization exists beneath the identified mineral resources and this presents an opportunity to increase the mineral resource base of the Volcan project. In addition, Andina has identified a number of other exploration targets on the property and, as exploration continues, it is anticipated that these targets will also present an opportunity to increase the mineral resource base outside of the current study area.

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Table 19.2

Estimated Mineral Resources for the Dorado Sector Deposits (Total Volcan In-Pit Whittle Resource)




Tonnes Gold Grade



Measured 91,079,000 0.615 1,802,000 1,064,200 14,839,000 1.487 709,000 571,500 105,918,000 0.738 2,511,000 1,635,700

Indicated 247,350,000 0.584 4,644,000 2,741,500 36,413,000 1.471 1,723,000 1,385,600 283,763,000 0.698 6,367,000 4,127,100

Measured Plus Indicated 338,429,000 0.592 6,446,000 3,805,700 51,252,000 1.476 2,432,000 1,957,100 389,681,000 0.709 8,878,000 5,762,800

Inferred 40,117,000 0.468 603,000 328,200 1,436,000 1.464 68,000 54,400 41,553,000 0.502 671,000 382,600

1. All quantities are rounded to the appropriate number of significant figures, consequently sums may not add due to rounding. 2. Mineral resources include mill incremental material. 3. Mineral resources which are not mineral reserves do not have demonstrated economic viability. There are currently no mineral reserves on the Volcan property. 4. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. 5. The quantity and grade of reported Inferred Resources in this estimation are conceptual in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured

Mineral Resource. It is uncertain if further exploration will result in the upgrading of the Inferred Resources into an Indicated or Measured Mineral Resource category. 6. The Volcan mineral resource estimate is effective as of September 16, 2010.

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20.0 RECOMMENDATIONS 20.1 BUDGET FOR FURTHER WORK Following upon the general success of its 2009 to 2010 (Phase VI) exploration program, Andina will continue to explore the various mineralized zones located on the Volcan property in the next exploration campaign. The next drilling campaign (Phase VII) will consist of geotechnical, condemnation and exploration drilling (Table 20.1).

Table 20.1 Volcan Property, 2010 to 2011 (Phase VII) Exploration Program

Objective Zone RC (m) DDH (m) Total (m)

Geotechnical DW 0 5,000 5,000 Condemnation Distal 5,000 0 5,000

Exploration ODAE 5,000 5,000 10,000 Total 10,000 10,000 20,000


Geotechnical drilling is required for pit design purposes at Dorado Oeste. A total of 5,000 m of diamond drilling will be conducted in the area in order to confirm the rock quality parameters within the potential future pit that have previously been assessed through investigations and assessment of stored drill core. Condemnation drilling will be carried out in those areas were the leach pad (3.5 km2), tailings dam (1 km2), and waste dump (3 km2) will potentially be installed. The holes will be conducted via reverse circulation and will generally not exceed 100 m in length. The assay results obtained in the Ojo de Agua Este area during the 2009 to 2010 drilling program were encouraging, and 10,000 m will be drilled in strategic locations that will be defined by the geologists as the program is being conducted. The total expenditure for the 2010 to 2011 (Phase VII) exploration and drilling program is estimated to be approximately US$12,800,000. See Table 20.2 for the proposed exploration budget for the next exploration phase. Micon has reviewed Andina’s proposal for further exploration and studies on its Volcan property and considers that the budget for the proposed program is reasonable. Micon recommends that Andina implements the program as proposed, subject to either funding and other matters which may cause the proposed program to be altered in the normal course its business activities or alterations which may affect the program as a result of exploration activities themselves.

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Table 20.2 Volcan Property, 2010 to 2011 (Phase VII) Exploration Budget

Item Quantity (m) Estimated Expenditure ($US)

Property Wide Exploration Exploration drilling (RC) 5,000 $400,000 Exploration drilling (DD) 5,000 $950,000 Indirect exploration drilling (equipment/camp/labour/assays) $2,700,000 Sub-total 10,000 $4,050,000 Preliminary Economic Studies Geotechnical drilling (DD) 5,000 $950,000 Condemnation drilling (RC) 5,000 $400,000 Indirect drilling (equipment/camp/labour) $2,700,000 Sub-total 10,000 $4,050,000 Engineering and planning $3,100,000 Other services and support $1,600,000 Sub-total $4,700,000 Total 2010-2011 Volcan Program 20,000 $12,800,000


20.2 FURTHER RECOMMENDATIONS The exploration activities completed to date have focused on the mineralization found at the Dorado area deposits with limited exploration being completed over other portions of the land holdings. This exploration has effectively delineated the gold mineralization for the Dorado Oeste, Central and Este deposits, although the limits of the mineralization at those deposits remain open. Micon believes that exploration activities oriented towards the location of additional mineralization in the immediate area of the Dorado deposits, as well as elsewhere on the property, should continue. In Micon’s opinion, Andina is justified in proceeding with a preliminary feasibility study of the economic potential of the Dorado area deposits on its Volcan project. To that end, the following types of work are recommended:

Continuation of detailed metallurgical testing in order to determine the optimum processing criteria to maximize the gold recovery from the mineralization.

Collection of detailed geotechnical data in support of the determination of stable open pit

wall slope criteria, specifically for the Dorado Oeste deposit.

Selection of preliminary sites for major mine and processing infrastructure, such as the main crushing facility and leach pads.

Completion of condemnation drilling in these areas to ensure a low probability of the

presence of significant quantities of additional mineralization.

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Completion of additional in-fill drilling in the three deposit areas with the goal of upgrading the classification of the mineralization from Inferred to Indicated and to provide additional drill hole information that will allow an improvement in the accuracy of the block model estimate on a local scale. Such an improvement in the accuracy of the local estimate will increase the confidence of the projected tonnages and grades during the detailed mine planning and economic evaluation stages.

Continued collection of baseline environmental data and conducting characterization

studies of the known mineralization in support of possible future permitting activities.

Permitting, characterization, and extraction planning associated with the company’s water rights (340 L/s in Cienega Redonda, a sub-basin within the Maricunga water basin). The evaluation of sufficient sources of water in support of the contemplated project scope, project expansion and for future opportunities is an important and strategic element of the company’s strategy going forward.

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MICON INTERNATIONAL LIMITED “William J. Lewis” William J. Lewis, B.Sc., P.Geo. Senior Geologist October 15, 2010 “Alan J. San Martin” Ing. Alan J. San Martin, MAusIMM Mineral Resource Modeller October 15, 2010 “Richard Gowans” Richard Gowans, P.Eng. President, Micon International Limited October 15, 2010 “Sam Shoemaker, Jr.” Sam Shoemaker Jr., B.Sc.,MAusIMM. Principal, Shoemaker Mining Services Limited October 15, 2010

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21.0 REFERENCES Aguilar Catalano, A., July, 1992; Proyecto El Volcan – Informe de Avance; Cia Minera Homestake Ltda.: Unpub. Internal Rpt prepared by Minera Homestake Chile S.A. AMEC Earth and Environmental Inc., Load - Hydraulic Conductivity Testing Master Composite Agglomerate A-C, Letter Report, August 2008. AMTEL, Report 09-15, Deportment of Gold in Composite H, April 2009 AMTEL, Report 09-17, Preliminary Final Report on HPGR Evaluation For Heap Leaching of Volcan Gold Ores, April 2009. Arancibia, M., Paredes, J., Jul, 2008; Preliminar Estimación de leyes de Au, El Volcán; MapTek Sudamerica. Bartlett, S.C., November, 2004; Technical Report – Review of Gold and Copper Exploration Potential of Mineral Properties in Chile, prepared for Andina Minerals Inc. Bartlett, M.G., Chapman, D., and Harris, R., 2004; Snow and the Ground Temperature Record of Climate Change: Journal of Geophysical Research, Vol. 109, p 10-29. Brown, A.J., and Rayment, B, 1992; El Proyecto Aurifero de Refugio en Chile; Mining Journal Cuitino, L., July, 1996; Estudio Calcográfico: Unpub Rpt. prepared for Minera Cameco (Chile) Ltda. Czollak, C., May, 1997; Cia. Minera Cameco Chile Ltda.; Proyecto Volcan Copiapo, Informe Exploración Geológica. Diaz, S., March, 2006; Ojo de Agua Target - Volcán Project - Exploration Update: Unpub. Internal Rpt. prepared by SBX Consultores Ltda. Easdon, M., November, 2005; Technical Report on the Volcan Gold Project, Region III, Chile. Easdon, M., 6 April., 2006a; Technical Report on the Volcan Gold Project, Region III, Chile. Easdon, M., 18 September 18, 2006b; Technical Report on the Volcan Gold Project, Region III, Chile. Easdon, M., 2 September, 2008, Technical Report on the Phase IV – Volcan Gold Project, Dorado West Deposit and Ojo de Agua Zones, Region III, Chile. Estimación de Recursos Proyecto Volcan – Informe Final, 2007; Unpub. Internal Rpt. Prepared by NCL Ingenieria y Construcción S. A. for Andina Minerals, Santiago, Chile, 52 pp plus Appendix. Geoestudios Ltda., Oct., 1995; Proyecto Volcan (Volcan Copiapo), III Región, Atacama, Chile: Unpub. Internal Rpt. prepared for Minera Cameco (Chile) Ltda.

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Geoestudios Ltda., April., 1996; Proyecto Volcan, Enero – Abril, 96: Unpub. Internal Rpt. prepared for Cia. Minera Cameco Chile Ltda. Geoexploraciones Ltda, May, 2003; Volcan Copiapo Geology and Mineral Potencial, Maricunga District, Chile: Unpub. Rpt. prepared for Minera Cameco Chile Ltda. Gestiones Ambientales Consultores, Junio, 2008; Declaracion de Impacto Ambiental, Sondajes de Prospeccion, Proyecto Volcan. Golder Associates, June, 2008; Asesoria Hidrogeolgica en Cienaga Redonda, III Region, Atacama, Chile. Gonzalez, R. A. and Easdon, M., 4 April, 2007; Technical Report on the Volcan Gold Project, Region III, Chile. Gonzalez, R., 28 November, 2007, Technical Report on the Volcan Gold Project, Region III, Chile. Hodgkin, Andrew, 2006; Notes to Accompany 1:1000 scale mapping Exercise, Volcan Project, Dorado West Sector: Unpub. Internal report prepared for Andina Minerals. Hodgkin, A. and Cornejo, P, Feb. 2007; Petrographic Study (Estudio Petrografico y Calcografico): Unpub. Internal Rpt. prepared for Andina Minerals. Jordan, J., January 2007; Volcan Project, Ground Magnetic Surveys; Argali Geofisica E.I.R.L. Jordan, J., May 2007; Volcan Project, Induced Polarization and Ground Magnetic Surveys; Argali Geofisica E.I.R.L. Jordan, J., Nov. 2007; Volcan Project, Logistics Report on the Induced Polarization Surveys conducted at the Volcan Project; Argali Geofisica E.I.R.L. KHD Humboldt Wegad GmbH, HPGR Status Summary Report – Volcan Gold Ore, September 2007. Lorca, Jorge, 2007; Informe QA-QC, Proyecto Volcan Noviembre 2006 – Mayo 2007: Unpub. Internal Rpt. prepared for Andina Minerals. Lorca, Jorge, July, 2008; Informe QA-QC, Proyecto Volcan 2007 – 2008: Unpub. Internal Rpt. prepared for Andina Minerals. Magri Consultores Ltda., (2010), Andina Minerals Volcan Project, A Review of the 2010 QA-QC Report (Project Phase VI), Andina Internal Report, 8 p. Magri, Eduardo, 2007; Geological Resource Estimation for the Volcan Project – Executive Summary: Unpub. Internal Rpt. prepared for Andina Minerals, 23 pp.

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Magri, Eduardo, 2009; Volcan Project Geological Resource Model– Executive Summary: Unpub. Internal Rpt. prepared for Andina Minerals, 21 pp. McClelland Laboratories, Inc., Report on Heap Leach Cyanidation Testing - Volcan HPGR Product Samples, April 2009. Mpodozis, C., et al, 1991; La Zona del Nevado Jotabeche, Laguna del Negro Francisco: Evolución teutónica y volcánica de la extremidad meridional del Altiplano Chileno; VI Congreso Geológico de Chile, Actas pp 91-95; Viña del Mar. Mulja, T., March, 1986; Hydrothermal alteration, gold distribution and geochronology of epithermal gold mineralization in the Volcan Copiapo complex: Multinational Publication No. 2; 2001, Metallogenic Map of the Border Region between Argentina, Bolivia, Chile and Peru (14S-28S); 1:1,000,000. Muntean, John L., and Einaudi, M., 2000, Porphyry Gold Deposits of the Refugio District, Maricunga Belt, Northern Chile: Econ. Geol. Vol. 95, pp 1445-1472. NCL Ingeniería y Construcción S.A., Preliminary Metallurgical Study El Volcan Project, III Region, Chile, April 2007. Oviedo, L., et al, 1991; General Geology of the La Coipa Precious Metal Deposit, Atacama, Chile: Economic. Geology, Vol. 86, No. 6 pp 1287-1300. Pincheira, M., Aug., 1996; Estudio Mineralógico Cuantitivo de las Muestras DCV-5-41, 90- 1 y DCV-5-43, 40-1; Unpub Rpt. prepared by Instituto de Geología Económica Aplicada GEA, Universidad de Concepción for Minera Cameco (Chile) Ltd. Pressacco, R., Gowans, R. and Shoemaker, S., October 23, 2009, Technical Report on the Volcan Gold Project, Region III, Chile and Updated Mineral Resource Estimate for the Dorado Gold Deposits, 138 p. Ribba G., Lautaro, January, 2006; Test of Heterogeneity, A Round of Inter-Laboratory Testing in the Preparation, Analysis and Evaluation of the Mineral Grades for Secondary Standards: Unpub Internal Rpt. prepared by Geoanalitica Ltda for Minera Andina Minerals. Ribba, Luis, April, 2006; Informe de Correlación Muestras Andina Elemento Oro: Unpub. Internal RPT prepared for SBX Consultores. Ribba, L., March, 2006; Informe Andina Check Assays_Au; A Statistical Analysis of the Easdon Volcan Cameco/Andina Pulps Check Assays: Unpub. Internal Rpt prepared for SBX Consultores Ltda. Ribba, L., Navarrete, M., and Bravo F., Sept., 2005; Cia. Minera Andina Minerals Chile Ltda, Volcan Project, Phase I Exploration Report, February-May 2005 Campaign: Unpub. Internal Rpt. prepared for SBX Consultores Ltda.

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Ribba, L. Nov., 2005; Cia. Minera Andina Minerals Chile Ltda, Volcan Project, Phase II Basic Monthly Report on the Volcan Project, Spring Season 2005 Campaign: Unpub. Internal Rpt. prepared for SBX Consultores Ltda. Sillitoe, R.H., 1991; Gold Metallogeny of Chile – An Introduction: Economic Geology, Vol. 86, No. 6 p 1187-1205. Sillitoe, R.H., McKee, E.H., and Vila, T., 1991; Reconnaissance K-Ar geochronology of the Maricunga Gold Silver Belt, Northern Chile: Economic Geology, Vol. 86, No. 6 p 1261- 1270. Tobey, Eugene F., Feb. 2006, Activity Report – Volcan Project, Maricunga Belt, Chile: Unpub. Internal Rpt. prepared for Andina Mineral Resources. U. Chile, Aug., 2005; Resultados de los Programa de Ensayes Geomecánicos (Specific Gravity test work). Vila, T., et al, 1991; The Porphyry deposit at Marte, Northern Chile; Economic Geology, Vol. 86, No. 6., pp 1271-1286. Vila, T., et al, 1991; Gold-rich porphyry systems in the Maricunga Belt, Northern Chile; Econ. Geology; A special Issue devoted to the Gold deposits of the Chilean Andes; Vol. 86, No. 6. Wittenbrink, J., May, 2007; Final Report 2006/2007 Campaign; Surface Sampling and Mapping of the Ojo de Agua Sector, Volcan Project. Zentilli, M, April, 1990; The Volcan Copiapo Property Geology and Mineral Potential, Maricunga District, Chile; unpublished report.

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Certificate of Author William J. Lewis

As one of the authors of this report on the Volcan Gold Project of Andina Minerals Inc., located in Region III, Chile, I, William J. Lewis do hereby certify that: 1) I am employed as a Senior Geologist by, and carried out this assignment for, Micon International Limited, Suite 900,

390 Bay Street, Toronto, Ontario M5H 2Y2, tel. (416) 362-5135, fax (416) 362-5763, e-mail [email protected];

2) I hold the following academic qualifications: B.Sc. (Geology) University of British Columbia 1985 3) I am a registered Professional Geoscientist with the Association of Professional Engineers and Geoscientists of

Manitoba (membership # 20480); as well, I am a member in good standing of several other technical associations and societies, including:

Association of Professional Engineers and Geoscientists of British Columbia (Membership # 20333)

Association of Professional Engineers, Geologists and Geophysicists of the Northwest Territories (Membership # 1450)

Association of Professional Geoscientists of Ontario (Member #1522)

The Geological Association of Canada (Associate Member # A5975)

The Canadian Institute of Mining, Metallurgy and Petroleum (Member # 94758)

4) I have worked as a geologist in the minerals industry for 25 years; 5) I am familiar with NI 43-101 and, by reason of education, experience and professional registration, I fulfill the

requirements of a Qualified Person as defined in NI 43-101. My work experience includes 4 years as an exploration geologist looking for gold and base metal deposits, more than 11 years as a mine geologist in underground mines and 5 years as a surficial geologist and consulting geologist on precious and base metals and industrial minerals;

6) I visited the Volcan property between April 17 and 19, 2010 and returned to Chile for discussions regarding the

resource audit from August 17, to 20, 2010; 7) I have not conducted any previous work on the Volcan property; 8) As of the date of this certificate to the best of my knowledge, information and belief, the Technical Report contains all

scientific and technical information that is required to be disclosed to make this report not misleading. I have read the NI 43-101 Instrument and this Technical Report has been prepared in compliance with this Instrument.;

9) I am independent of the parties involved in the Volcan property, other than providing consulting services;

10) I supervised the audit of the resource estimate conducted by Ing. Alan J. San Martin, MAusIMM, and therefore have no reason not to rely upon it;

11) I am responsible for the preparation of portions of Section 1, Sections 2 through 15, 17, with the exception of the pit optimization, 18, portions of 19 and 20 and Section 21 of this Technical Report dated October 15, 2010 and entitled “Technical Report on the Volcan Gold Project, Region III, Chile and Updated Mineral Resource Estimate for the Dorado Gold Deposits”

Dated this 15th day of October, 2010 “William J. Lewis” {signed and sealed} William J. Lewis, B.Sc., P.Geo. Senior Geologist, Micon International Limited

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Certificate of Author Ing. Alan J. San Martin

As one of the authors of this report on the Volcan Gold Project of Andina Minerals Inc., located in Region III, Chile, I, Alan J. San Martin do hereby certify that: 1) I am employed as a Mineral Resource Modeller by Micon International Limited, Suite 900, 390 Bay

Street, Toronto, Ontario M5H 2Y2, tel. (416) 362-5135, fax (416) 362-5763, e-mail [email protected];

2) I hold a Bachelor Degree in Mining Engineering (equivalent to B.Sc.) from the National University of

Piura, Peru, 1999; 3) I am a registered Engineer with the Colegio de Ingenieros del Peru (CIP) Membership # 79184; 4) I am a member of The Australasian Institute of Mining and Metallurgy (Membership #301778) 5) I have worked as a mining engineer in the minerals industry for 11 years;

6) I am familiar with NI 43-101 and, by reason of education, experience and professional registration in

the AusIMM, I fulfill the requirements of a Qualified Person as defined in NI 43-101. My work experience includes 5 years as mining engineer in an exploration project in Peru, 3 years as Resource Modeller and DBA in an exploration project in Ecuador, 1 year as Senior Geological Modeller and Database Manager and 2 years as Mineral Resource Modeller in mining consulting. For the purposes of this report my work on the resource estimate was supervised and approved by William J. Lewis;

7) I visited the Volcan property site from March 29 to 30, 2010 and subsequently conducted a numbers of visits to Santiago from May 18 to 19, from June 21 to 25, from July 12 to 15, and from August 18 to 20, working closely with the Chilean team;

8) I have not conducted any previous work on the Volcan property;

9) As of the date of this certificate to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make this report not misleading;

10) I am independent of the parties involved in the Volcan Property, other than providing consulting services;

11) I conducted the audit which was supervised by William J. Lewis, B.Sc., P.Geo. and therefore have no

reason not to rely upon it;

12) I assisted in the preparation of Sections 14 and 17 of this Technical Report dated October 15, 2010 and entitled “Technical Report on The Volcan Gold Project Region III, Chile and Updated Mineral Resource Estimate for The Dorado Gold Deposits”

Dated this 15th day of October, 2010 “Alan J. San Martin” Ing. Alan J. San Martin, MAusIMM Mineral Resource Modeller, Micon International Limited

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CERTIFICATE OF AUTHOR RICHARD M. GOWANS P.Eng.

As a co-author of this report entitled “Technical Report on the Volcan Gold Project, Region III Chile and Updated Mineral Resource Estimate for the Dorado Gold Deposits”, dated October 15, 2010, I, Richard M. Gowans P. Eng. do hereby certify that:

1. I am employed by, and carried out this assignment for Micon International Limited Suite 900, 390 Bay Street Toronto, Ontario M5H 2Y2 tel. (416) 362-5135 fax (416) 362-5763 e-mail: [email protected]

2. I hold the following academic qualifications: B.Sc. (Hons) Minerals Engineering, The University of Birmingham, U.K. 1980

3. I am a registered Professional Engineer of Ontario (membership number 90529389); as well, I am a member in good standing of the Canadian Institute of Mining, Metallurgy and Petroleum.

4. I have worked as an extractive metallurgist in the minerals industry for over 28 years.

5. I do, by reason of education, experience and professional registration, fulfill the requirements of a

Qualified Person as defined in NI 43-101. My work experience includes the management of technical studies and design of numerous metallurgical testwork programs and metallurgical processing plants.

6. I have not visited the project site.

7. I am responsible for the preparation of Section 16 and portions of Sections 1, 19 and 20 of this report.

8. I am independent of the issuer, Andina Minerals Inc., as defined in Section 1.4 of NI 43-101.

9. I have had no prior involvement with the mineral property in question.

10. I have read NI 43-101 and the portions of this report for which I am responsible have been prepared in

compliance with the instrument.

11. As of the date of this certificate, to the best of my knowledge, information and belief, the sections of this Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make this report not misleading.

Dated this 15th day of October, 2010. “Richard M. Gowans” {signed and sealed} Richard M. Gowans, P.Eng.

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CERTIFICATE OF AUTHOR Sam Shoemaker, Jr.

As a co-author of this report entitled “Technical Report on the Volcan Gold Project, Region III, Chile and Updated Mineral Resource Estimate for the Dorado Gold Deposits”, dated October 15, 2010, I, Sam Shoemaker, Jr. do hereby certify that: 1. I am the Principal of Shoemaker Mining Services Inc., 109 Canberra Street, Gwinn, Michigan 49841, USA,

and carried out this assignment as an Associate of Micon International Limited, Suite 900, 390 Bay Street, Toronto, Ontario M5H 2Y2, tel. (416) 362-5135, fax (416) 362-5763, e-mail [email protected].

2. I hold the following academic qualifications:

B.Sc., Mine Engineering, Montana College of Mineral Science and Technology, 1982

3. I am a member of Australasian Institute of Mining and Metallurgy (Member Number 229733); as well, I am a member in good standing of other technical associations and societies, including the Society for Mining, Metallurgy, and Exploration, Inc.

4. I have worked as a mining engineer in the minerals industry for 28 years. 5. I have read NI 43-101 and Form 43-101F1 and, by reason of education, experience and professional

registration, I fulfill the requirements of a Qualified Person as defined in NI 43-101. My work experience includes 10 years as a mining engineer with Cleveland Cliffs Inc. and 17 years with other mining companies where I was responsible for completing geologic models, reserve estimates, economic analysis, slope designs, pit optimization, pit design, long term scheduling, short term scheduling and reserve validation.

6. In this report I am responsible for parts of Sections 1, 17 (the pit optimization), 19 and 20. 7. This report has been prepared in compliance with the criteria set forth in NI43-101 and Form 43-101F1. 8. I have had no prior involvement with the properties that are the subject of this Technical Report.

9. I have not visited the properties. 10. I am independent of Andina Minerals Inc., as defined in Section 1.4 of NI 43-101, other than providing

consulting services. 11. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report

contains all scientific and technical report that is required to be disclosed to make this report not misleading.

Dated this 15th day of October, 2010 “Sam Shoemaker, Jr.”

Sam Shoemaker, Jr., B.Sc., MAusIMM

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APPENDIX 1

GLOSSARY OF TERMS

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GLOSSARY AND DEFINED TERMS The following is a glossary of certain mining terms that may be used in this Technical Report.

A

Ag Silver.

Assay A chemical test performed on a sample of ores or minerals to determine the amount of valuable metals contained.

Au Gold.

B

Base metal Any non-precious metal (e.g. copper, lead, zinc, nickel, etc.).

Bulk mining Any large-scale, mechanized method of mining involving many thousands of tonnes of ore being brought to surface per day.

Bulk sample A large sample of mineralized rock, frequently hundreds of tonnes, selected in such a manner as to be representative of the potential orebody being sampled. The sample is usually used to determine metallurgical characteristics.

Bullion Precious metal formed into bars or ingots.

By-product A secondary metal or mineral product recovered in the milling process.

C

Channel sample A sample composed of pieces of vein or mineral deposit that have been cut out of a small trench or channel, usually about 10 cm wide and 2 cm deep.

Chip sample A method of sampling a rock exposure whereby a regular series of small chips of rock is broken off along a line across the face.

CIM Standards The CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by CIM Council from time to time.

CIM The Canadian Institute of Mining, Metallurgy and Petroleum.

Concentrate A fine, powdery product of the milling process containing a high percentage of valuable metal.

Contact A geological term used to describe the line or plane along which two different rock formations meet.

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Core The long cylindrical piece of rock, about an inch in diameter, brought to surface by diamond drilling.

Core sample One or several pieces of whole or split parts of core selected as a sample for analysis or assay.

Cross-cut A horizontal opening driven from a shaft and (or near) right angles to the strike of a vein or other orebody. The term is also used to signify that a drill hole is crossing the mineralization at or near right angles to it.

Cut-off grade The lowest grade of mineralized rock that qualifies as ore grade in a given deposit, and is also used as the lowest grade below which the mineralized rock currently cannot be profitably exploited. Cut-off grades vary between deposits depending upon the amenability of ore to gold extraction and upon costs of production.

D

Dacite The extrusive (volcanic) equivalent of quartz diorite.

Deposit An informal term for an accumulation of mineralization or other valuable earth material of any origin.

Development drilling

Drilling to establish accurate estimates of mineral resources or reserves usually in an operating mine or advanced project.

Dilution Rock that is, by necessity, removed along with the ore in the mining process, subsequently lowering the grade of the ore.

Diorite An intrusive igneous rock composed chiefly of sodic plagioclase, hornblende, biotite or pyroxene.

Dip The angle at which a vein, structure or rock bed is inclined from the horizontal as measured at right angles to the strike.

E

Epithermal Hydrothermal mineral deposit formed within one kilometre of the earth’s surface, in the temperature range of 50 to 200°C.

Epithermal deposit

A mineral deposit consisting of veins and replacement bodies, usually in volcanic or sedimentary rocks, containing precious metals or, more rarely, base metals.

Exploration Prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore.

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F

Face The end of a drift, cross-cut or stope in which work is taking place.

Fault A break in the Earth's crust caused by tectonic forces which have moved the rock on one side with respect to the other.

Flotation A milling process in which valuable mineral particles are induced to become attached to bubbles and float as others sink.

Fold Any bending or wrinkling of rock strata.

Footwall The rock on the underside of a vein or mineralized structure or deposit.

Fracture A break in the rock, the opening of which allows mineral-bearing solutions to enter. A "cross-fracture" is a minor break extending at more-or-less right angles to the direction of the principal fractures.

G

g/t Grams per metric tonne.

Galena Lead sulphide, the most common ore mineral of lead.

gpt Grams per tonne.

Golden Minerals Golden Minerals Company, including, unless the context otherwise requires, the Company's subsidiaries.

Grade Term used to indicate the concentration of an economically desirable mineral or element in its host rock as a function of its relative mass. With gold, this term may be expressed as grams per tonne (g/t) or ounces per tonne (opt).

Gram 0.0321507 troy ounces.

H

Hanging wall The rock on the upper side of a vein or mineral deposit.

High grade Rich mineralization or ore. As a verb, it refers to selective mining of the best ore in a deposit.

Host rock The rock surrounding an ore deposit.

Hydrothermal Processes associated with heated or superheated water, especially mineralization or alteration.

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I

Indicated Mineral Resource

An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Inferred Mineral Resource

An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Intrusive A body of igneous rock formed by the consolidation of magma intruded into other

K

km Kilometre(s). Equal to 0.62 miles.

L

Leaching The separation, selective removal or dissolving-out of soluble constituents from a rock or ore body by the natural actions of percolating solutions.

Level The horizontal openings on a working horizon in a mine; it is customary to work mines from a shaft, establishing levels at regular intervals, generally about 50 m or more apart.

Limestone A bedded, sedimentary deposit consisting chiefly of calcium carbonate.

M

m Metre(s). Equal to 3.28 feet.

Marble A metamorphic rock derived from the recrystallization of limestone under intense heat and pressure.

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Measured Mineral Resource

A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Metallurgy The science and art of separating metals and metallic minerals from their ores by mechanical and chemical processes.

Metamorphic Affected by physical, chemical, and structural processes imposed by depth in the earth’s crust.

Mill A plant in which ore is treated and metals are recovered or prepared for smelting; also a revolving drum used for the grinding of ores in preparation for treatment.

Mine An excavation beneath the surface of the ground from which mineral matter of value is extracted.

Mineral A naturally occurring homogeneous substance having definite physical properties and chemical composition and, if formed under favourable conditions, a definite crystal form.

Mineral Claim That portion of public mineral lands which a party has staked or marked out in accordance with federal or state mining laws to acquire the right to explore for and exploit the minerals under the surface.

Mineralization The process or processes by which mineral or minerals are introduced into a rock, resulting in a valuable or potentially valuable deposit.

Mineral Resource

A concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth's crust in such form and quantity and of such grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. The term mineral resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which mineral reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic and governmental factors. The phrase reasonable prospect for economic extraction implies a judgment by the Qualified Person in respect of the technical and economic factors likely to influence the

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prospect of economic extraction. A mineral resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions, might become economically extractable. The term mineral resource used in this report is a Canadian mining term as defined in accordance with NI 43-101 – Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the CIM), Standards on Mineral Resource and Mineral Reserves Definitions and guidelines adopted by the CIM Council on December 11, 2005 (the CIM Standards).

N

Net Smelter Return

A payment made by a producer of metals based on the value of the gross metal production from the property, less deduction of certain limited costs including smelting, refining, transportation and insurance costs.

NI 43-101

National Instrument 43-101is a national instrument for the Standards of Disclosure for Mineral Projects within Canada. The Instrument is a codified set of rules and guidelines for reporting and displaying information related to mineral properties owned by, or explored by, companies which report these results on stock exchanges within Canada. This includes foreign-owned mining entities who trade on stock exchanges overseen by the Canadian Securities Administrators (CSA), even if they only trade on Over The Counter (OTC) derivatives or other instrumented securities.

O

Outcrop An exposure of rock or mineral deposit that can be seen on surface, that is, not covered by soil or water.

Oxidation A chemical reaction caused by exposure to oxygen that results in a change in the chemical composition of a mineral.

Ounce A measure of weight in gold and other precious metals, correctly troy ounces, which weigh 31.2 grams as distinct from an imperial ounce which weigh 28.4 grams.

oz Ounce

P

Plant A building or group of buildings in which a process or function is carried out; at a mine site it will include warehouses, hoisting equipment, compressors, maintenance shops, offices and the mill or concentrator.

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Pyrite A common, pale-bronze or brass-yellow, mineral composed of iron and sulphur. Pyrite has a brilliant metallic luster and has been mistaken for gold. Pyrite is the most wide-spread and abundant of the sulfide minerals and occurs in all kinds of rocks.

Q

Qualified Person Conforms to that definition under NI 43-101 for an individual: (a) to be an engineer or geoscientist with at least five years' experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; (b) to have experience relevant to the subject matter of the mineral project and the technical report; and (c) to be a member in good standing of a professional association that, among other things, is self-regulatory, has been given authority by statute, admits members based on their qualifications and experience, requires compliance with professional standards of competence and ethics and has disciplinary powers to suspend or expel a member.

R

Reclamation The restoration of a site after mining or exploration activity is completed.

S

Shoot A concentration of mineral values; that part of a vein or zone carrying values of ore grade.

Skarn Name for the metamorphic rocks surrounding an igneous intrusive where it comes in contact with a limestone or dolostone formation.

Stockpile Broken ore heaped on surface, pending treatment or shipment.

Strike The direction, or bearing from true north, of a vein or rock formation measure on a horizontal surface.

Stringer A narrow vein or irregular filament of a mineral or minerals traversing a rock mass.

Sulphides A group of minerals which contains sulphur and other metallic elements such as copper and zinc. Gold and silver are usually associated with sulphide enrichment in mineral deposits.

T

Tonne A metric ton of 1,000 kilograms (2,205 pounds).

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V

Vein A fissure, fault or crack in a rock filled by minerals that have travelled upwards from some deep source.

W

Wall rocks Rock units on either side of an orebody. The hangingwall and footwall rocks of a mineral deposit or orebody.

Waste Unmineralized, or sometimes mineralized, rock that is not minable at a profit.

Z

Zone An area of distinct mineralization.

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APPENDIX II

VARIOGRAMS (CORRELOGRAMS)

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DTH Correlogram - Au GU 100-101

DTH Correlogram - Au GU 110-111

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DTH Correlogram - Au GU 120

DTH Correlogram - Au GU 121

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DTH Correlogram - Cu GU 10 DW 100 ppb

DTH Correlogram - Cu GU 11 – DW 300 ppb

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DTH Correlogram - Cu GU 20 – D Central

DTH Correlogram - Cu GU 30 – D East

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Directional Correlogram - Au GU 100101

Directional Correlogram - Au GU 110-111

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Directional Correlogram - Cu GU 10 – DW 100 ppb

Directional Correlogram - Cu GU 11 – DW 300 ppb

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Directional Correlogram - Cu GU 20 – D Central

Directional Correlogram Cu GU 30 – D East

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APPENDIX III

MINERAL RESOURCE CLASSIFICATION CRITERIA (Excerpted from Magri, 2010)

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Mineral Resource Classification Criteria In order to recommend drilling grid configurations for measured and indicated resources, a statistical approach was used:

The annual ore production mean grade should be known 15% with 90% confidence in order for the resource to be classified as indicated.

The trimester ore production mean grade should be known 15% with 90%

confidence in order for the resource to be classified as measured.

Using these guidelines, idealized blocks approximating the trimester and annual production were estimated using ordinary kriging and different sampling grids. Correlograms for gold were used to estimate the ideal blocks. The resulting kriging variances were multiplied by the variance of the geologic unit (GU Variance) and then divided by the mean squared of the geologic unit (GU Mean) in order to obtain relative variances. Two independent working fronts were assumed to obtain the final confidence limits. These are expressed as percentages and are given by the following expression (assuming errors to be normally distributed):

90% Central Limit = 1.646 * 100 * SQRT [(Kriging Variance * GU Variance / GU Mean ^2) / 2] Grid spacing which produced confidence limits less than 15.0 percent were selected as the basis for the classification scheme.

For the Volcán project, trimestral and annual production targets were defined as shown in Table 8.1. It was assumed that two production faces would be in production simultaneously, and that the mean rock density was assumed to be 2.47 g/cm3.

Table 8.1

Summary of the Mineral Resource Parameters used for the Volcan Project

Case 1 High Grade Ore, Recovery by Flotation Period Tonnes m3 Faces No. Banks Bank Height Year 3,650,000 1,477,773 2 2 10

Trimester 900,000 364,372 2 2 10 Case 2 Low Grade Ore, Recovery by Leaching

Period Tonnes m3 Faces No. Banks Bank Height Year 14,600,000 5,910,931 2 2 10

Trimester 3,600,000 1,457,490 2 2 10

These production values are equivalent to production targets of 10,000 tons/day for the high grade ore (flotation) and of 40,000 tons/day for the lower grade ore (leaching). These production targets were set by Andina Minerals.

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Sample coordinates spaced 2m apart down-the-hole were generated for the annual and trimestral production blocks. Drill holes were orientated at a dip angle of 65 so as to match the configuration of existing drill holes. Coordinates were generated for drilling grids spaced at 50 by 50 m, 50 by 50m with a central drill hole (denominated 35 x 35m), 50 by 100 m, and 100 by 100 m, as shown in Figures 8.1, 8.2, 8.3 and 8.4.

Figure 8.1 Sample Coordinates in the X-Y, X-Z and Y-Z planes for the 50 x 50 m Grid.

Sampling grid of 50 x 50 m Trimester and Annual

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Graphs on the left correspond to the high grade production block, and those on the right are for the lower grade production block. Locations of samples within the annual production block (blue outline) are shown as yellow points, and overlap the sample locations for the trimestral production block (red outline), which are shown as yellow points with blue squares around them. Sample locations were purposely selected so that a few samples would be located outside the blocks.

Figure 8.2 Sample Coordinates in the X-Y plane for the 50 x 50 m Grid with a Central Drillhole

Sampling grid of 50 x 50 m

Trimester and Annual

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Figure 8.3 Sample Coordinates in the X-Y plane for the 50 x 100 m Grid



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Figure 8.4 Sample Coordinates in the X-Y plane for the 100 x 100 m Grid



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Views of the X-Z and Y-Z planes for the 50 x 50m with a central drill hole, 50 x 100 m and 100 x 100 m drilling grids are similar to those shown in Figure 8.1. Kriging errors and drilling grids were determined for the high grade vein zone (geological unit 121), as this is the area which is of most interest in terms of resources and requires the most conservative classification scheme. Results of the analysis are shown in Table 8.2.

Table 8.2 Selected Drilling Grid Configurations

Zone Description Drilling

Grid Time Period No. Samples

Corrected Kriging Var.

Error (%)

35 x 35 Annual 574 3.88E-03 10.24 50 x 50 Annual 350 8.23E-03 14.92 100 x 50 Annual 210 1.72E-02 21.60

100 x 100 Annual 126 2.82E-02 27.61 35 x 35 Trimester 182 1.34E-02 19.05 50 x 50 Trimester 126 2.64E-02 26.74 100 x 50 Trimester 42 7.17E-02 44.04

Dorado Oeste

High Grade 10,000 t/d

100 x 100 Trimester 14 2.11E-01 75.580 35 x 35 Annual 2,027 1.35E-03 6.05 50 x 50 Annual 1,134 2.67E-03 8.49 100 x 50 Annual 630 5.70E-03 12.42

100 x 100 Annual 350 9.80E-03 16.28 35 x 35 Trimester 574 3.90E-03 10.27 50 x 50 Trimester 350 8.29E-03 14.97 100 x 50 Trimester 210 1.74E-02 21.67

Dorado Oeste

Low Grade 40,000 t/d

100 x 100 Trimester 126 2.83E-02 27.67

In Table 8.2, rows highlighted in yellow indicate drilling grids that have errors lower than 15% (with 90% confidence), and are adequate for use in classifying resources as indicated. Note that for the lower grade ore, a drilling grid of 100 x 100m was deemed adequate for

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classification purposes as the next closest grid (100 x 50m) gives rise to an error of 12.42%, which is further removed from an error of 15% than the 16.28% error incurred when using a 100 x 100m grid. Rows highlighted in cyan indicate drilling grids that have errors lower than 15% (with 90% confidence), and are adequate for use in classifying resources as measured. As a point of reference, classification grids defined in July 2009 for the entire Dorado Oeste vein zone resulted in a 100 x 100m grid for indicated and 50 x 50m grid for measured resources. Graphic representations of the results for different drilling grids are shown in Figures 8.5 and 8.6.

Figure 8.5 Relative Errors for Trimestral Production (for Measured Resources)

Volcan Trimestral Produccion (Measured)

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TRIMESTER 10.000 tons/day TRIMESTER 40.000 tons/day

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Figure 8.6 Relative Errors for Annual Production (for Indicated Resources)

VOLCAN Annual Produccion (Indicated)

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ANNUAL 10.000 tons/day ANUAL 40.000 tons/day

As mentioned at the beginning of this chapter, in order to estimate the errors associated with each drilling grid, the kriging variances were corrected using the mean and variance of the samples in the geological unit. In Table 8.2 and Figures 8.5 and 8.6, these values correspond to the geological unit 121, which will be exploited first and blocks will be destined to the flotation plant or to the leach heap. A sensitivity analysis was carried out using the means and variances of geological units 120, 111 and 110. GU 120 is adjacent to GU 121 and has intermediate grades. GU 111 is the high grade area of Dorado Oeste North, and GU 110 is the intermediate grade zone adjacent to GU 111. As shown in Table 8.3, drilling grids for these GUs are very similar to those determined based on the mean and variance of GU 121.

Table 8.3 Selected Drilling Grid Configurations

Error (%) Description Drilling

Grid Time Period

GU 121 GU 120 GU 111 GU 110 35 x 35 Annual 10.24 9.69 11.21 8.79 50 x 50 Annual 14.92 14.12 16.33 12.80 100 x 50 Annual 21.60 20.44 23.65 18.53

100 x 100 Annual 27.61 26.12 30.22 23.69 35 x 35 Trimester 19.05 18.02 20.85 16.35 50 x 50 Trimester 26.74 25.30 29.27 22.94 100 x 50 Trimester 44.04 41.66 48.20 37.78

High Grade 10,000 t/d

100 x 100 Trimester 75.50 71.43 82.64 64.78 35 x 35 Annual 6.05 5.73 6.62 5.19 50 x 50 Annual 8.49 8.04 9.30 7.29

Low Grade 40,000 t/d

100 x 50 Annual 12.42 11.75 13.59 10.65

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100 x 100 Annual 16.28 15.41 17.82 13.97 35 x 35 Trimester 10.27 9.71 11.24 8.81 50 x 50 Trimester 14.97 14.17 16.39 12.85 100 x 50 Trimester 21.67 20.50 23.72 18.59

100 x 100 Trimester 27.67 26.18 30.29 23.75

Based on the results of the sensitivity analysis, recommended drilling grids are shown in Table 8.4, and are applicable to the high and intermediate grade zones.

Table 8.4 Drilling Grid Recommendations

Process Drilling Grids Resource Classification

Les than 35 x 35 m Measured Ore to flotation plant

50 x 50 m Indicated 50 x 50 m Measured

Ore to heap leach 100 x 100 m Indicated

Blocks estimated within 50x 50 m and 100x 100 m drilling grids were identified (painted) within the Vulcan model as follows:

Blocks included in the measured and indicated categories were estimated with at

least 3 drillholes.

All blocks with Au grades above 0 ppb were classified.

The category model was smoothed in order to avoid isolated indicated blocks with the measured category, for example.

Artifacts were eliminated.

The final category model was visually inspected to ensure that no serious

anomalies occurred.

Classified blocks were assigned a category of 1, 2 or 3 (measured-red, indicated-green and inferred-blue respectively). Figure 8.7 shows the available samples as well as the distribution of categorized blocks in bench 4705.

Measured resources were further smoothed by means of three dimensional solids that excluded all discontinuities. This methodology was also applied to Dorado Central and Dorado Este, therefore, for these areas, tonnages and grades within the different categories will differ from those reported in 2009. Figure 8.8 shows the measured three dimensional solids for all Dorado zones.

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Figure 8.7 Distribution of Categorized Blocks - Plan 4705

Figure 8.8 Measured Resources 3D View

Dorado West – North Body

Dorado West – Main Body

Dorado Central

Dorado East

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APPENDIX IV

OTHER BLOCK MODEL VALIDATIONS

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BLOCK MODEL VALIDATION

Blocks estimated in the 1st, 2nd and 3rd passes were validated using the following statistical analyses.

7.1 Global Bias Analysis

This analysis consists of comparing each estimated block value with the grade of the sample that lies closest to the centroid of the block. Average results for each GU are reported (Au: Figure and Table 7.1, Cu: Figure and Table 7.2).

Figure 7.1 Estimated and NN Au Mean Grades

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100101 110111 120 121

Au (ppb)

GU Au

Au (ppb) BM

Au (ppb) NN

Table 7.1 Global Means – Au‐ppb

100101 103.34 109.11 1,649,678,291

110111 464.39 456.92 80,514,516

120 486.35 489.99 210,974,622

121 678.18 671.48 297,813,379

GU AuAu (ppb)

BM

Au (ppb)

NNTonnes

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Figure 7.2 Estimated and NN Mean Cu Grades

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Cu (ppb)

UG Cu

Grade Mean for UG

Cu (blocks) Cu (NN)

Table 7.2 Global Means – Cu‐ppm

UG_Cu Cu (blocks) Cu (NN) Tonnes

10 153.4 154.2 1,304,565,430

11 661.2 655.0 442,219,203

20 246.2 242.0 230,406,355

30 280.7 270.7 205,625,627

Results show that overall biases fluctuate between 0.3 (GU 120) and 3.8% (GU 100101) for gold and between 0.5 (GU 10) and 3.7% (GU 30) for copper. These overall biases are considered to be low.

7.2 Log‐Probability Plots – Samples, Nearest Neighbor and Blocks

In order to assess the kriging smoothing effect, the following log‐probability plots were generated for each GU: samples (red), nearest neighbor (green) and estimated blocks (blue). These are shown in Figures 7.3 to 7.8 for Au and Figures 7.9 to 7.11 for Cu.

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Figure 7.3 Log‐Probability Plot ‐ GUs 100‐101 – Au

Figure 7.4 Log Probability Plot – Gus 110‐111 – Au

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Figura 7.5 Log Probability Plot – GU 120 – Au

Figure 7.6 Log Probability Plot ‐ GU 121 – Au

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Figure 7.7 Log Probability Plot – GU 10 – Cu – DW North

Figure 7.8 Log Probability Plot – GU 11 – Cu – DW South Central

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Figure 7.9 Log Probability Plot – GU 20 – Cu – Dorado Central

Figure 7.10 Log Probability Plot – GU 30 – Cu – Dorado East

It can be seen that kriging in fact produces estimators that are smoother than the original samples or the declusterized samples (nearest neighbor). This result was as expected.

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7.3 Quantification of Smoothing Effect

The Smoothing Effect (f) is equivalent to: 1 – (γAVG/σ2), where:

γAVG corresponds to the average variogram (gamma-bar) within an estimation

block

σ2 = variance of samples within a GU

γAVG was calculated for blocks of 10x10x10–meters, that were discretized using a

16x16x16 grid, that is, 4096 points per block. Results are shown in Table 7.3.

Table 7.3 Smoothing Effect for Au and Cu Geological Units

Grade GU Average

Variogram γAVG f smoothing effect = 1‐ (γAVG /σ

2)

100‐101 0.366 0.634

110‐111 0.340 0.660

120 0.316 0.684 Au

121 0.449 0.551

10 0.335 0.665

11 0.280 0.720

20 0.275 0.725 Cu

30 0.332 0.668

Ideally, f should lie between 0.75 and 0.80, which is slightly higher than the f values obtained for this estimation. Nevertheless, results shown in Table 7.3 are considered satisfactory. Kriging plans may be adjusted in order to reach the 0.75 – 0.80 bracket but the modifications will probably cause a high conditional bias.

TECHNICAL REPORT ON THE VOLCAN GOLD PROJECT …APPENDIX I Glossary of Terms At end of Report...

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