RPA Mandalay Cerro Bayo NI 43 101 Mar 27 20141

March 27, 2014
RPA Inc. T 55 University Ave. Suite 501 I Toronto, ON, Canada M5J 2H7 I + 1 (416) 947 0907 www.rpacan.com
MANDALAY RESOURCES CORPORATION
TECHNICAL REPORT ON THE
CERRO BAYO PROJECT,
REGION XI (AISN), CHILE
NI 43-101 Report
Qualified Persons:
Normand L. Lecuyer, P.Eng.
Rosmery Julia Crdenas Barzola, MAusIMM CP (Geo)

Report Control Form

Document Title Technical Report on the Cerro Bayo Project, Region XI
(Aisen), Chile

Client Name & Address

Mandalay Resources Corporation
76 Richmond Street East, Suite 330
Toronto, ON
M5C 1P1 CANADA

Document Reference
Project #2208

Status &
Issue No.

Final

Issue Date March 27, 2014

Lead Author Normand Lecuyer
Rosmery J . Crdenas Barzola

(Signed)
(Signed)

Peer Reviewer Luke Evans
Deborah McCombe

(Signed)

Project Manager Approval Normand Lecuyer

(Signed)

Project Director Approval Graham G. Clow

(Signed)

Report Distribution Name No. of Copies

Client

RPA Filing 1 (project box)

Roscoe Postle Associates Inc.
55 University Avenue, Suite 501
Toronto, Ontario M5J 2H7
Canada
Tel: +1 416 947 0907
Fax: +1 416 947 0395
mining@rpacan.com

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Mandalay Resources Corporation Cerro Bayo Project, Project #2208
Technical Report NI 43-101 March 27, 2014
Page i
TABLE OF CONTENTS
PAGE
1 SUMMARY ...................................................................................................................... 1-1
Executive Summary ...................................................................................................... 1-1
Technical Summary .................................................................................................... 1-11
2 INTRODUCTION ............................................................................................................. 2-1
3 RELIANCE ON OTHER EXPERTS ................................................................................. 3-1
4 PROPERTY DESCRIPTION AND LOCATION ................................................................ 4-1
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY ............................................................................................................... 5-1
6 HISTORY ........................................................................................................................ 6-1
7 GEOLOGICAL SETTING AND MINERALIZATION .......................................................... 7-1
Regional Geology ......................................................................................................... 7-1
Local and Property Geology .......................................................................................... 7-4
Mineralization................................................................................................................ 7-9
8 DEPOSIT TYPES ............................................................................................................ 8-1
9 EXPLORATION ............................................................................................................... 9-1
Exploration Potential ..................................................................................................... 9-1
10 DRILLING .................................................................................................................... 10-1
Previous Drilling .......................................................................................................... 10-1
Mandalay Drilling ........................................................................................................ 10-2
11 SAMPLE PREPARATION, ANALYSES AND SECURITY ............................................ 11-1
Previous Work ............................................................................................................ 11-1
Mandalay Work ........................................................................................................... 11-3
12 DATA VERIFICATION ................................................................................................. 12-1
Data Validation ........................................................................................................... 12-1
Quality Assurance and Quality Control........................................................................ 12-4
EXternal Check Assay Program ................................................................................ 12-20
Drill Hole Samples Blind QA/QC ............................................................................. 12-21
Channel Samples Blind QA/QC .............................................................................. 12-26
13 MINERAL PROCESSING AND METALLURGICAL TESTING ..................................... 13-1
Metallurgical Testing ................................................................................................... 13-1
14 MINERAL RESOURCE ESTIMATE ............................................................................. 14-1
Project Summary ........................................................................................................ 14-1
Resource Database .................................................................................................... 14-2
Wireframe Models ....................................................................................................... 14-8
Assay Statistics ......................................................................................................... 14-11
Grade Capping ......................................................................................................... 14-15
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Composites ............................................................................................................... 14-18
Block Model Parameters ........................................................................................... 14-22
Density...................................................................................................................... 14-24
Grade Estimation ...................................................................................................... 14-24
Block Grade Validation ............................................................................................. 14-29
Resource Classification ............................................................................................ 14-29
Comparison with Previous Resource Estimates ........................................................ 14-43
Cut-off Grade ............................................................................................................ 14-46
Mineral Resource Estimate ....................................................................................... 14-48
15 MINERAL RESERVE ESTIMATE ................................................................................ 15-1
Reserve Estimation Methodology ................................................................................ 15-1
Dilution and Extraction Factors ................................................................................... 15-3
Reconciliation ............................................................................................................. 15-5
16 MINING METHODS ..................................................................................................... 16-1
Mine Design and Mining Method ................................................................................. 16-1
Geomechanics and Ground Support ......................................................................... 16-11
Pre-production Schedule .......................................................................................... 16-15
Life of Mine Plan ....................................................................................................... 16-15
Infrastructure............................................................................................................. 16-18
17 RECOVERY METHODS .............................................................................................. 17-1
Historical Recovery ..................................................................................................... 17-1
Current Recovery ........................................................................................................ 17-3
18 PROJ ECT INFRASTRUCTURE .................................................................................. 18-1
19 MARKET STUDIES AND CONTRACTS ...................................................................... 19-1
Markets ....................................................................................................................... 19-1
Contracts .................................................................................................................... 19-1
20 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
......................................................................................................................................... 20-1
Environmental Studies and Information....................................................................... 20-1
Project Permitting ....................................................................................................... 20-3
Social or Community Requirements .......................................................................... 20-11
Mine Closure Requirements ...................................................................................... 20-11
21 CAPITAL AND OPERATING COSTS .......................................................................... 21-1
Capital Costs .............................................................................................................. 21-1
Operating Costs .......................................................................................................... 21-2
22 ECONOMIC ANALYSIS............................................................................................... 22-1
23 ADJ ACENT PROPERTIES .......................................................................................... 23-1
24 OTHER RELEVANT DATA AND INFORMATION ........................................................ 24-1
25 INTERPRETATION AND CONCLUSIONS .................................................................. 25-1
26 RECOMMENDATIONS................................................................................................ 26-1
27 REFERENCES ............................................................................................................ 27-1
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28 DATE AND SIGNATURE PAGE .................................................................................. 28-1
29 CERTIFICATE OF QUALIFIED PERSON .................................................................... 29-1

LIST OF TABLES
PAGE
Table 1-1 Summary of Mineral Resources Inclusive of Mineral Reserves December 31,
2013 ................................................................................................................................... 1-2
Table 1-2 Summary of Mineral Reserves December 31, 2013 ....................................... 1-2
Table 1-3 After-tax Cash Flow Summary .......................................................................... 1-8
Table 1-4 After-tax Sensitivity Analyses .......................................................................... 1-10
Table 1-5 Estimated LOM Capital Costs ......................................................................... 1-17
Table 1-6 Estimated Operating Costs ............................................................................. 1-17
Table 5-1 Water Permits ................................................................................................... 5-3
Table 6-1 Historic Mineral Resources ............................................................................... 6-3
Table 6-2 Historic Mineral Reserves ................................................................................. 6-3
Table 6-3 Production Since 2011 ...................................................................................... 6-5
Table 10-1 Drill Hole Database ....................................................................................... 10-1
Table 12-1 Expected Values and Ranges of Standards .................................................. 12-7
Table 12-2 Summary Statistics for Silver Duplicates ..................................................... 12-12
Table 12-3 Summary Statistics for Gold Duplicates ...................................................... 12-13
Table 12-4 Expected Values and Ranges of Certified Reference Material
1
................... 12-17
Table 12-5 Expected Values and Ranges of Standards ................................................ 12-21
Table 12-6 Summary Statistics for Field Duplicates ...................................................... 12-24
Table 13-1 Composite Ore Samples ............................................................................... 13-1
Table 13-2 Sample Grades ............................................................................................. 13-2
Table 13-3 Flotation Test Results ................................................................................... 13-3
Table 13-4 Process Plant - Major Equipment List ........................................................... 13-7
Table 13-5 Production Summary - Actual 2013 ............................................................... 13-9
Table 13-6 Production Summary - Budget 2013 ........................................................... 13-10
Table 14-1 Summary of Mineral Resources Inclusive of Mineral Reserves December 31,
2013 ................................................................................................................................. 14-1
Table 14-2 Resource Databases .................................................................................... 14-3
Table 14-3 Grade Capping Levels ................................................................................ 14-15
Table 14-4 Block Model Parameters ............................................................................. 14-23
Table 14-5 Vulcan Domain Search Directions ............................................................... 14-26
Table 14-6 Grade Estimation Parameters ..................................................................... 14-27
Table 14-7 Diluted Vein Grades .................................................................................... 14-28
Table 14-8 Comparison of RPA and Previous Resource Estimates Inclusive of Mineral
Reserves ........................................................................................................................ 14-44
Table 14-9 Resource Cut-off Grade Assumptions ......................................................... 14-46
Table 14-10 Mineral Resources Inclusive of Mineral Reserves by Domain December 31,
2013 ............................................................................................................................... 14-48
Table 15-1 Conversion of Resources to Reserves - Yasna Vein ..................................... 15-2
Table 15-2 Dilution Grades 2013 reserves ...................................................................... 15-3
Table 15-3 Mineral Reserves December 31, 2013 ....................................................... 15-4
Table 15-4 Production Results - 2013 ............................................................................. 15-5
Table 16-1 Geomechanical Characteristics - Q (Barton) vs. MRMR (Laubscher) ....... 16-12
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Table 16-2 Stope Safety Factor Walls ........................................................................ 16-13
Table 16-3 Stope Safety Factors - Roof ........................................................................ 16-13
Table 16-4 Ground Support Recommendations ............................................................ 16-14
Table 16-5 Mine Development ...................................................................................... 16-16
Table 16-6 LOM Production Schedule .......................................................................... 16-17
Table 16-7 Ventilation Requirements ............................................................................ 16-24
Table 16-8 Underground Equipment ............................................................................. 16-29
Table 16-9 Surface Equipment ..................................................................................... 16-30
Table 17-1 Historical Mill Performance ........................................................................... 17-2
Table 17-2 Mill Performance in 2013 .............................................................................. 17-3
Table 20-1 Project Permits Laguna Verde Sector ........................................................ 20-4
Table 20-2 Project Permits Furioso Sector................................................................... 20-5
Table 20-3 Project Permits Cerro Bayo Sector ............................................................ 20-5
Table 20-4 Project Permits Cascada Sector ................................................................ 20-6
Table 20-5 Project Permits Guanaco Sector ................................................................ 20-6
Table 20-6 Closure Costs Breakdown by Year ............................................................. 20-11
Table 21-1 Capital Costs ................................................................................................ 21-1
Table 21-2 LOM Operating Costs ................................................................................... 21-2
Table 21-3 Company Manpower ..................................................................................... 21-3
Table 21-4 Contract Manpower ...................................................................................... 21-3
Table 22-1 After-tax Cash Flow Summary ...................................................................... 22-3
Table 22-2 After-tax Sensitivity Analyses ........................................................................ 22-5

LIST OF FIGURES
PAGE
Figure 1-1 After-tax Sensitivity Analysis .......................................................................... 1-10
Figure 4-1 Location Map ................................................................................................... 4-5
Figure 4-2 Property Map ................................................................................................... 4-6
Figure 7-1 Regional Geology ............................................................................................ 7-3
Figure 7-2 Property Geology ............................................................................................. 7-7
Figure 7-3 Property Geology Legend ................................................................................ 7-8
Figure 8-1 Regional Deposits ........................................................................................... 8-3
Figure 12-1 In-House Standard Results - 2013 ............................................................... 12-8
Figure 12-2 Blank Assays Results - 2013 ..................................................................... 12-11
Figure 12-3 Pulp Duplicate Results - 2013 .................................................................... 12-14
Figure 12-4 Reject Duplicate Results - 2013 ................................................................. 12-15
Figure 12-5 Precision Curves for Silver Duplicates ....................................................... 12-16
Figure 12-6 Precision Curves for Gold Duplicates ........................................................ 12-16
Figure 12-7 Certified Reference Material Results - 2013 .............................................. 12-18
Figure 12-8 Check Results - 2013 ................................................................................ 12-20
Figure 12-9 Blind QA/QC - In-House Reference Material .............................................. 12-22
Figure 12-10 Blind QA/QC - Blank Assays .................................................................... 12-23
Figure 12-11 Field Duplicate Scatter Plots .................................................................... 12-25
Figure 12-12 Precision Curve for Silver Field Duplicates .............................................. 12-26
Figure 12-13 Blind QA/QC - Blank Assays .................................................................... 12-27
Figure 14-1 Fabiola Au Grade Comparison .................................................................... 14-4
Figure 14-2 Fabiola Ag Grade Comparison .................................................................... 14-5
Figure 14-3 Dagny Au Grade Comparison ...................................................................... 14-6
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Figure 14-4 Dagny Ag Grade Comparison ...................................................................... 14-7
Figure 14-5 Vein Models in Lagunas Verde Area Showing Drill Holes ............................ 14-9
Figure 14-6 Marcela Sur And Raul Vein Models in Cerro Bayo Area Showing Drill Holes ......
....................................................................................................................................... 14-10
Figure 14-7 Ag Box Plot and Assay Statistics Lagunas Verde Area ........................... 14-11
Figure 14-8 Au Box Plot and Assay Statistics - Lagunas Verde Area ............................ 14-12
Figure 14-9 Ag Box Plot and Assay Statistics - Cerro Bayo Area .................................. 14-13
Figure 14-10 Au Box Plot and Assay Statistics Cerro Bayo Area ............................... 14-14
Figure 14-11 Fabiola Ag Histogram Channel Samples .............................................. 14-16
Figure 14-12 Fabiola Ag Probability Plot Channel Samples ....................................... 14-17
Figure 14-13 Fabiola Vein Channel samples - Ag Cutting Curve .................................. 14-18
Figure 14-14 Ag Box Plot and Composite Statistics - Lagunas Verde Area .................. 14-19
Figure 14-15 Au Box Plot and Composite Statistics - Lagunas Verde Area .................. 14-20
Figure 14-16 Ag Box Plot and Composite Statistics Cerro Bayo Area ........................ 14-21
Figure 14-17 Au Box Plot and Composite Statistics Cerro Bayo Area ........................ 14-22
Figure 14-18 Dagny Variogram ..................................................................................... 14-25
Figure 14-19 Bianca Vein Ag Block Grades .................................................................. 14-31
Figure 14-20 Dagny Vein Ag Block Grades .................................................................. 14-32
Figure 14-21 Coyita Vein Ag Block Grades ................................................................... 14-33
Figure 14-22 Dalila Vein Ag Block Grades .................................................................... 14-34
Figure 14-23 Delia NW Vein Ag Block Grades .............................................................. 14-35
Figure 14-24 Delia SE Vein Ag Block Grades ............................................................... 14-36
Figure 14-25 Fabiola Vein Ag Block Grades ................................................................. 14-37
Figure 14-26 Yasna Vein Ag Block Grades ................................................................... 14-38
Figure 14-27 Trinidad Vein Ag Block Grades ................................................................ 14-39
Figure 14-28 Marcela Sur Vein Ag Block Grades .......................................................... 14-40
Figure 14-29 Raul Vein Ag Block Grades ..................................................................... 14-41
Figure 14-30 Example of Resource and Reserve Seam Block Model ........................... 14-42
Figure 15-1 Bianca Vein Longitudinal Section - Drilling & Mining Plan ............................ 15-7
Figure 15-2 Coyita Vein Longitudinal Section - Drilling & Mining Plan ............................. 15-8
Figure 15-3 Dagny Vein Longitudinal Section - Drilling & Mining Plan ............................ 15-9
Figure 15-4 Dalila Vein Longitudinal Section - Drilling & Mining Plan ............................ 15-10
Figure 15-5 Delia NW Vein Longitudinal Section Drilling & Mining Plan ..................... 15-11
Figure 15-6 Delia SE Vein Longitudinal Section Drilling & Mining Plan ...................... 15-12
Figure 15-7 Fabiola Vein Longitudinal Section Drilling & Mining Plan ........................ 15-13
Figure 15-8 Yasna Vein Longitudinal Section Drilling & Mining Plan .......................... 15-14
Figure 15-9 Trinidad Vein Longitudinal Section Drilling & Mining Plan ....................... 15-15
Figure 15-10 Marcela Vein Longitudinal Section Drilling & Mining Plan ..................... 15-16
Figure 15-11 Raul Vein Longitudinal Section Drilling & Mining Plan ........................... 15-17
Figure 16-1 Ramp Dimensions ....................................................................................... 16-3
Figure 16-2 General Plant Layout ................................................................................... 16-4
Figure 16-3 Schematic Section of Longhole Retreat Stoping Method ............................. 16-5
Figure 16-4 Production Drilling Cross Section (Typical) .................................................. 16-6
Figure 16-5 Production Drilling Cross Section (Fan Drilling) ........................................... 16-7
Figure 16-6 Fabiola Vein Longitudinal Section (2013-2014 Production) .......................... 16-8
Figure 16-7 Delia Vein Longitudinal Section (2013-2014 Production) ............................. 16-9
Figure 16-8 Dagny Vein Longitudinal Section (2013-2014 Production) ......................... 16-10
Figure 16-9 Stability Graph MRMR vs. HR ................................................................ 16-12
Figure 16-10 Fabiola Mine Underground 3D View ........................................................ 16-19
Figure 16-11 Dagny Mine Underground 3D View .......................................................... 16-20
Figure 16-12 Fabiola 177 Level Plan ............................................................................ 16-21
Figure 16-13 Delia 146 Level Plan ................................................................................ 16-22
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Figure 16-14 Dagny 130 Level Plan .............................................................................. 16-23
Figure 16-15 Fabiola Mine Ventilation .......................................................................... 16-25
Figure 16-16 Delia Mine Ventilation .............................................................................. 16-26
Figure 16-17 Dagny Mine Ventilation ............................................................................ 16-27
Figure 17-1 Crushing/Grinding Flow Sheet ..................................................................... 17-4
Figure 17-2 Flotation Circuit ............................................................................................ 17-5
Figure 17-3 Reagent Dosages ........................................................................................ 17-6
Figure 17-4 Process Plant Water Balance ...................................................................... 17-7
Figure 18-1 General Site Layout ..................................................................................... 18-3
Figure 18-2 Satellite View of Surface-Laguna Verde ....................................................... 18-4
Figure 18-3 Tailings Facility ............................................................................................ 18-5
Figure 22-1 After-tax Sensitivity Analysis ........................................................................ 22-4

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1 SUMMARY
EXECUTIVE SUMMARY
Roscoe Postle Associates Inc. (RPA) was retained by Mandalay Resources Corporation
(Mandalay) to prepare updated Mineral Resource and Mineral Reserve estimates and an
independent Technical Report on the Cerro Bayo Project (the Project), in the Aisn Region,
near Chile Chico, Chile. The purpose of this report is to document the increase in Mineral
Reserves and Mineral Resources based on 2013 drilling and mine development. This
Technical Report conforms to National Instrument 43-101 (NI 43-101) Standards of
Disclosure for Mineral Projects. RPA most recently visited the property from J anuary 8 to 10,
2014.

The Project consists of underground mines containing silver and gold veins, five of which are
currently mined from three individual portals. Veins with estimated Mineral Resources
include the Yasna, Fabiola, Dalila, Coyita, Dagny, Bianca, Delia NW, Delia SE, Trinidad,
Marcela Sur, and Raul. A processing facility, rated at 1,650 tpd, is located on the site and is
operational. The plant produces a silver and gold flotation concentrate that is trucked to the
port of Puerto Chacabuco, Chile, and shipped to a client in J apan. Tailings are disposed of
in a tailings facility located on site, with process water recycled from the tailings facility.
Power is generated on site from a 7 MVA diesel power plant for the plant and surface
facilities and a 2.8 MVA diesel plant for the underground mines.

In August 2010, Mandalay purchased 100% of Compaia Minera Cerro Bayo Ltda. (CMCB),
then a subsidiary of Coeur dAlene Mines Corporation (Coeur). At that time, the Project was
under care and maintenance. Mining commenced in September of 2010, with processing
initiated in J anuary 2011. The current Life of Mine (LOM) plan, based on Proven and
Probable Reserves, outlines a mine life of 5.5 years with an average production rate of 1,290
tpd over this period.

RPA previously completed Mineral Resource and Mineral Reserve estimates and NI 43-101
Technical Reports on the Project in March 2012 and March 2013.
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MINERAL RESOURCES AND MINERAL RESERVES
The Mineral Resource and Mineral Reserves estimated by RPA are listed in Tables 1-1 and
1-2, respectively. The resources and reserves are reported at silver equivalent (AgEq) cut-
off grades of 163 g/t and 200 g/t, respectively.

TABLE 1-1 SUMMARY OF MINERAL RESOURCES INCLUSIVE OF MINERAL
RESERVES DECEMBER 31, 2013
Mandalay Resources Corporation Cerro Bayo Project

Category
Tonnes
Gold
Grade
Silver
Grade
AgEq
Grade
Au
Ounces
Ag
Ounces
Ag Eq
Ounces
(000) (g/t Au) (g/t Ag) (g/t AgEq) (000) (000) (000)
Measured 411 3.60 423.0 637.7 48 5,596 8,435
Indicated 1,633 3.18 308.1 497.4 167 16,172 26,111
Total Measured
and Indicated
2,044 3.26 331.2 525.7 214 21,768 34,546

Inferred 433 3.33 400.4 599.1 46 5,580 8,349

Notes:
1. The Qualified Person for this Mineral Resource estimate is Rosmery Cardenas, MAusIMM CP (Geo.).
2. CIM definitions were followed for Mineral Resources.
3. Mineral Resources are estimated at a cut-off grade of 163 g/t AgEq.
4. Mineral Resources are estimated using US$1,400 per ounce Au, US$24 per ounce Ag, and a US$/C$
exchange rate of 1.
5. The AgEq was calculated using the formula AgEq =Ag +(Au x 59.64) where Ag and Au are in grams
per tonne after transport, treatment and refining costs are deducted.
6. A minimum vein width of 1.2 m was used.
7. A density of 2.63 t/m
3
was used.
8. Mineral Resources are inclusive of Mineral Reserves
9. Numbers may not add due to rounding.

TABLE 1-2 SUMMARY OF MINERAL RESERVES DECEMBER 31, 2013

Tonnes
Gold
Grade
Silver
Grade
AgEq
Grade
Au
Ounces
Ag
Ounces
AgEq
Ounces
Category (000) (g/t Au) (g/t Ag) (g/t AgEq) (000) (000) (000)
Proven 516 2.5 283 435 41 4,705 7,216
Probable 1,967 2.1 209 339 134 13,197 21,429
Total Proven and
Probabl e
2,483 2.2 224 359 174 17,901 28,646

Notes:
1. The Qualified Person for this Mineral Reserve estimate is Normand Lecuyer, P. Eng.
2. CIM definitions were followed for Mineral Reserves.
3. Mineral Reserves are estimated at a cut-off grade of 200 g/t AgEq.
4. Mineral Reserves are estimated using an average long-term gold price of US$1,200 per ounce, a silver
price of US$20 per ounce, and a US$/C$ exchange rate of 1.
5. The AgEq calculated using the formula AgEq =Ag +(Au x 61.64), where Ag and Au are in grams per
tonne after transport, treatment and refining costs are deducted.
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6. A minimum mining width of 2.4 m was used. Dilution grades vary by vein up to 0.22 g/t Au and 15g/t Ag
for the Dagny and Bianca veins.
3
was used.

CONCLUSIONS
RPA offers the following conclusions regarding the Cerro Bayo property:
The Project has met its 2013 exploration objectives in that significant new gold and
silver mineralization has been found and added to the Mineral Resources and Mineral
Reserves.

RPA is of the opinion that the Project hosts a significant gold and silver mineralized
system, and that there is good potential to further increase the resource base in
defined veins and adjacent targets.

Epithermal gold and silver mineralization is associated with quartz veining within a
moderately welded sequence of dacitic and rhyolitic tuffs.

Drilling to date has intersected high-grade mineralized veins and vein systems
associated with alteration assemblages that suggest at least three stages of precious
metal deposition.

In RPAs opinion, the sampling, sample preparation, and sample analysis programs
are appropriate for the type of mineralization.

The existing internal laboratory Quality Assurance/Quality Control (QA/QC) program
is appropriate, and Mandalay has implemented an additional blind QA/QC program
for enhanced validation of the accuracy and precision of the sample results, as
previously recommended by RPA.

Mineral Resources were estimated according to the Canadian Institute of Mining,
Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral
Reserves dated November, 2010 (CIM, 2010).

Mineral Resources are reported inside vein wireframe models based on US$1,400
per ounce gold and US$24 per ounce silver, at a 163 g/t AgEq cut-off grade,
accounting for concentrate transportation, treatment, and refining costs.

Mineral Reserves were estimated using prices of US$1,200 per ounce for gold and
US$20 per ounce for silver, at a 200 g/t AgEq cut-off grade accounting for
concentrate transportation, treatment, and refining costs.

The Mineral Reserves were estimated using a minimum mining width of 2.4 m. RPA
is of the opinion, based on observations on site, that the stope dilution factors could
be significantly lower with continued careful planning and execution of drilling and
loading operations. Reduction of dilution in the development drives, however, is more
difficult, as a minimum drift width is required to accommodate equipment sizes and
clearance regulations for such equipment.

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Based on the LOM plan, the mine is expected to have a positive after-tax cash flow of
US$130 million, with a mine life of approximately five and half years.

Metal prices average US$1,340 per ounce for Au and US$22.77 per ounce for Ag
over the mine life. RPA has also independently verified that the cash flow analysis
provides positive results at the reserve prices of US$1,200/oz for gold and US$20/oz
for silver.

For the LOM plan, the expected capital investment totals approximately US$78
million, including US$19 million for mine equipment and rebuilds, US$3.7 million for
concentrator upgrades, US$30 million in sustaining development, US$15.5 million in
closure costs and a contingency of US$10.2 million. RPA finds the capital costs to be
reasonable.

RPA is of the opinion that the mine development rates can be achieved provided
sufficient manpower and equipment is maintained.

The LOM plan indicates an increase to the present mining production rate. Production
will come from twelve veins during the LOM, accessed from portals, which provide
flexibility and sufficient working faces to meet the average production rate of 1,290
tpd. Production will come from the Marcela and Raul veins from 2017 to 2019.
Production will consist of 80% from stoping and 20% from ore development during
the LOM.

RPA is of the opinion that the average unit operating cost per tonne (US$102.84/t
milled during 2013) could be reduced however, it is important that the throughput be
realized. The average LOM operating cost is estimated at US$99.58 per tonne
milled. Given the number of potential work areas that can be developed, the current
productivity level, and the quality of the technical staff and management, RPA is of
the opinion that the LOM plan can be achieved.

Mandalay maintains longitudinal sections that identify the areas of mining and
indicate those areas that are within and outside of the planned mining areas to help
facilitate future reconciliation. RPA supports this initiative.

RECOMMENDATIONS
RPA makes the following recommendations:
Carry out additional density measurements on samples specific to individual veins, in
order to identify local variations, as well as confirm and support future resource
estimates.

Develop a standard operating procedure for in-house density determinations and
implement some outside checks on the density determinations to support and confirm
in-house results.

Carry out channel sampling across the entire face for each round, to obtain additional
information on grade distribution, especially along indistinct contacts between
mineralized and non-mineralized zones, and to determine dilution grades immediately
adjacent to veins.

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Document standardized checks of all core and channel sample data prior to entry into
the master database.

Sample all core intervals immediately adjacent to mineralization, to eliminate
undersampling of mineralized shoulders, with an additional review after assays have
been returned.

Monitor and document the blind QA/QC results on a regular basis.

Purchase a high grade silver CRM.

Use CRMs for the blind QA/QC program.

Select field core duplicates with representative ranges of grades.

Review the channel sampling and channel sampling duplicate procedures.

Resurvey drill hole collars that have discrepancies with the topographic surface.

Build a relational database incorporating the lithology and structural tables.

Digitize underground mapping and incorporate into the model.

Review vein wireframes prior to the next resource update, as some modelled
intersections were not tied to drill holes. Seam models are very sensitive to changes
in orientation; Mandalay personnel should ensure that the vein wireframes achieve
the resource minimum width criteria.

Carry out a structural analysis to assist in construction of future domain models.

Complete reconciliation on a more regular basis. Reconciliation each quarter is
recommended to permit adjustments of the yearly budget plan. This should include
reconciling tonnages and grades from stope operations to the mill production, and
resource block model, as well as confirmation of dilution factors through use of a
cavity monitoring system (CMS).

Complete the 2014 exploration plan, consisting of geochemical sampling and a
30,000 m drill program budgeted for approximately US$3.6 million to continue to
define the south extension under the lake of Yasna, Fabiola and Coyita veins and
explore for new veins.

Examine the potential use of some additional waste development, for example to
create easier and safer mucking where the veins are wider than normal or where very
poor ground conditions may be avoided and dealt with on the final retreat. Where the
vein is quite wide, for example, a second drawpoint can be very useful to optimize
extraction.

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ECONOMIC ANALYSIS
An after-tax cash flow projection has been generated from the LOM production schedule,
based on Proven and Probable Reserves and capital and operating cost estimates, as
summarized in Table 1-3. The Project before-tax NPV is US$133 million and the after-tax
NPV is US$106 million (at 7.5% discount rate). RPA has also independently verified that the
cash flow analysis provides positive results at the reserve prices of US$1,200/oz for gold and
US$20/oz for silver.

Key economic criteria are summarized below.

ECONOMIC CRITERIA
PHYSICALS
Mine Life: 5.5 years

Operations: 350 days per year

Production Rate: 1,290 tpd LOM average with high of 1,624 tpd in year
three and 1,072 tpd in last year of operation

Mine Development: 6,800 m/year lateral and 876 m/year vertical
development over six years of the LOM.

Total Mill Feed: 2.5 million tonnes grading 2.2 g/t Au and 224 g/t Ag

Metallurgical Recovery: 87.3% Au and 89.9% Ag

Average Annual Production: 25,400 oz Au and 2.7 million oz Ag

REVENUE
Payable silver and gold from smelting contract at 96.5% and 97%, respectively.

Total net revenue by metal is split between silver at 60% and gold at 40%.

All costs are in US$.

Metal prices vary from US$1,300/oz to US$1350/oz for gold and US$22/oz to US$24/
oz for silver. Averages over LOM are US$1,340 oz Au and US$22.77/oz Ag.

Net Smelter Return includes transportation, treatment, refining, price participation,
and royalties. At current prices, the average NSR is US$197 per tonne milled.

Revenue is recognized at the time of production.

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COSTS
The mine is currently in operation with production from four vein systems. The LOM
also includes developing a fourth portal to access the Delia SE vein as well as
production from Raul and Marcela Sur at Cerro Bayo.

Mine life capital totals US$78 million, which includes $10.2 million in contingency.

Average operating cost over the mine life is US$99.58 per tonne milled, including
mining, processing, general and administration costs.

TAXES AND ROYALTIES
The taxes and royalties that apply to the Project, as provided by Mandalay, are listed below:
There is a 2% NSR royalty paid to Coeur on cumulative gold production over 50,000
ounces and cumulative silver production over five million ounces sold from the
property. This NSR royalty was applied to the cash flow presented.

The CMCB tax rate within Chile is 20% and this was applied to the cash flow
presented. There is also a Value Added Tax (VAT) in Chile, although it does not
affect the CMCB since, as an exporter, 100% is recovered.

There is a Mining Royalty applied by the Chilean government for all material sold
exceeding an equivalent of 12,000 t of refined copper. This royalty was applied to the
cash flow presented using a copper price of US$3.50 per pound.

RPA completed the cash flow using the 20% tax rate on the net cash flow as shown
in Table 1-3.

Page 1-8
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Date: Feb-14
Units Inputs Total Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
2014 2015 2016 2017 2018 2019
Underground
Operating Days 1,925 350 350 350 350 350 175
Tonnes milled per day 1,290 1,362 1,372 1,624 1,245 955 1,072
Production '000 tonnes 2,483 477 480 568 436 334 188
Au g/t 2.18 2.34 2.00 2.10 2.68 2.05 1.59
Ag g/t 224 278 210 227 238 192 142
Waste '000 tonnes - - - - - - -
Ore Production tpd 1,272 1,362 1,372 1,624 1,245 955 1,072
Total Moved '000 tonnes 2,483 477 480 568 436 334 188
Processing
Mill Feed '000tonnes 2,483 477 480 568 436 334 188
Au g/t 2.18 2.34 2.00 2.10 2.68 2.05 1.59
Ag g/t 224 278 210 227 238 192 142
Contained Au oz 174,294 35,926 30,844 38,340 37,508 22,087 9,590
Contained Ag oz 17,902,096 4,259,506 3,238,499 4,153,899 3,332,938 2,061,502 855,751
Concentrate Produced t 47,151 10,724 8,264 10,253 8,375 7,067 2,468
Flotation Recovery %
Au 87.3% 88.6% 86.5% 87.0% 87.6% 88.0% 83.9%
Ag 89.9% 90.7% 89.5% 89.7% 90.0% 89.9% 88.0%
Metal Recovered oz
Au 27,666 152,165 31,817 26,695 33,340 32,838 19,428 8,047
Ag 2,926,514 16,095,827 3,863,916 2,897,708 3,727,474 3,000,832 1,852,809 753,088
Eq.Ag 25,225,363 5,772,872 4,499,315 5,727,820 4,971,060 3,018,434 1,235,861
Revenue
Metal Prices
Au US$/oz Au 1,340 $ $ 1,300 $ 1,350 $ 1,350 $ 1,350 $ 1,350 1,350 $
Ag US$/oz Ag 22.77 $ $ 22.00 $ 22.00 $ 23.00 $ 24.00 $ 23.00 23.00 $
Exchange Rate 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Au Equiv. Factor 61.64 61.64 61.64 61.64 61.64 61.64 61.64
Payable Gold % 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Payable Silver % 96.5% 96.5% 96.5% 96.5% 96.5% 96.5% 96.5%
Payable Oz Gold oz. 147,600 30,863 25,894 32,340 31,853 18,845 7,805
Payable Oz Silver oz. 15,532,473 3,728,679 2,796,288 3,597,012 2,895,803 1,787,961 726,730
Au Gross Revenue US$ '000 197,717 $ $ 40,122 $ 34,956 $ 43,659 $ 43,002 $ 10,537 25,441 $
Ag Gross Revenue US$ '000 353,618 $ $ 82,031 $ 61,518 $ 82,731 $ 69,499 $ 16,715 41,123 $
Total Gross Revenue US$ '000 551,335 $ $ 96,475 122,153 $ 126,391 $ 112,501 $ $ 27,252 66,564 $
Treatment Cost US$/T Conc. 365.00 17,210 $ $ 3,914 $ 3,016 $ 3,742 $ 3,057 $ 901 2,579 $
Transport (Truck+Ship) US$/T Conc. 400.00 18,860 $ 4,290 3,306 4,101 3,350 2,827 987
Total Charges US$ '000 54,637 $ $ 12,491 $ 9,553 $ 12,174 $ 10,073 $ 2,771 7,576 $
Royalty Au NSR US$ '000 2% 3,288 $ - 696.02 1,019 856 507 210
Royalty Ag NSR US$ '000 2% 4,662 $ - 640 1,583 1,332 787 320
Mining Royalty US$ '000 0.5% 436 $ $ 148 $ 20 $ 169 $ - 100 $ - $
Eq. Copper Value at $3.50 US$ '000 3.50 $ 92,568 $ 92,568 $ 92,568 $ 92,568 $ 92,568 92,568 $
Net Smelter Return US$ '000 488,312 $ $ 85,566 109,514 $ 111,446 $ 100,140 $ $ 23,952 57,695 $
Unit NSR US$/T 196.67 $ $ 229.74 $ 178.20 $ 196.05 $ 229.85 $ 127.70 172.53 $
Cut-Off Grade
% 40% 36% 40% 38% 42% 43% 43%
Net Revenue by Metal
Au
Ag % 60% 64% 60% 62% 58% 57% 57%
$ per g Au 35.70 $ $ 35.69 $ 35.71 $ 35.56 $ 35.88 $ 34.41 36.06 $
Revenue per Metal Unit (NSR Factor)
Au
Ag $ per g Ag 0.53 $ $ 0.53 $ 0.51 $ 0.53 $ 0.56 $ 0.51 0.51 $
Operating Costs (per tonne milled)
US$/t 56.90 $ $ 56.90 $ 56.90 $ 56.90 $ 56.90 $ 56.90 56.90 $
US$/t 25.95 $ $ 25.95 $ 25.95 $ 25.95 $ 25.95 $ 25.95 25.95 $
US$/t 16.73 $ $ 16.73 $ 16.73 $ 16.73 $ 16.73 $ 16.73 16.73 $
US$/t - $ - $ - $ - $ - $ - $ - $
Mining (Underground)
Processing
G&A
Depreciation/Depletion
Total Operating Cost US$/t 99.58 $ $ 99.58 $ 99.58 $ 99.58 $ 99.58 $ 99.58 99.58 $
Mining (Underground) US$ '000 141,268 $ $ 27,121 $ 27,319 $ 32,343 $ 24,788 $ 10,672 19,026 $
Processing US$ '000 64,444 $ $ 12,372 $ 12,462 $ 14,754 $ 11,308 $ 4,868 8,679 $
G&A US$ '000 41,536 $ $ 7,974 $ 8,032 $ 9,510 $ 7,288 $ 3,138 5,594 $
Depreciation/Depletion US$ '000 - $ - $ - $ - $ - $ - $ - $
Total Operating Cost US$ '000 247,248 $ $ 47,467 $ 47,814 $ 56,607 $ 43,384 $ 18,678 33,299 $
Unit Operating Cost US$/oz Au 598.24 $ $ 502 $ 649 $ 603 $ 532 $ 922 673 $
Equiv. Oz Au oz 413,291 94,503 73,705 93,812 81,522 49,486 20,264
Operating Cashflow US$ '000 241,064 $ 62,047 $ 37,752 $ 54,838 $ 56,757 $ 5,274 24,396 $
Capital Costs
Mining US$ '000 18,962 $ $ 4,962 $ 8,000 $ - 6,000 $ - $
Processing US$ '000 3,740 $ $ - 3,740 $ - $ - $ - $
Infrastructure US$ '000 - $
Indirect Costs US$ '000 - $
Sustaining US$ '000 29,921 $ 6,748 $ 11,385 7,839 3,949 -
Closure and Reclamation US$ '000 15,456 $ $ 716 $ 1,087 $ 2,263 $ 1,875 $ 1,918 2,556 $
Contingency US$ '000 15% 10,212 $ 2,425 $ 3,071 2,415 874 383 288
Total Capital Cost US$ '000 78,291 $ 18,591 $ 23,543 18,517 6,698 2,939 2,206
Cashflow
Net Pre-TaxCashflow US$ '000 162,773 $ $ 43,456 $ 14,209 $ 36,321 $ 50,059 $ 3,068 21,457 $
Cumulative Pre-TaxCashflow US$ '000 $ 43,456 $ 93,986 57,665 $ 144,045 $ 165,502 $ 168,570 $
Accumulated Losses US$ '000 - $ - $
Taxable Revenue US$ '000 $ 43,456 $ 14,209 $ 36,321 $ 50,059 $ 3,068 21,457 $
Taxes 20.0% 33,084 $ $ 8,691 $ 2,842 $ 7,264 $ 10,012 $ - 4,291 $
After-TaxCashflow 129,689 $ $ 34,765 $ 11,367 $ 29,057 $ 40,047 $ 3,068 17,165 $
Cumulative After-TaxCashflow $ 34,765 $ 75,189 46,132 $ 115,236 $ 132,402 $ 135,470 $
Total Cash Cost US$/oz Ag. 6.99 $ $ 3.46 $ 5.28 $ 4.87 $ 2.56 $ 9.26 5.54 $
Capital Cost US$/oz Ag. 4.86 $
Total Production Cost US$/oz Ag. 11.86 $
US$ '000 7.5% $132,901
US$ '000 10% $124,830
Pre-taxNPV at 7.5% discounting
Pre-taxNPV at 10% discounting
Pre-taxNPV at 15% discounting US$ '000 15% $110,872
US$ '000 7.5% $106,031
US$ '000 10% $99,626
After-TaxNPV at 7.5% discounting
After-TaxNPV at 10% discounting
After-taxNPV at 15% discounting US$ '000 15% $88,536
TABLE 1-3 AFTER-TAX CASH FLOW SUMMARY
Mandalay Resources Corporation - Cerro Bayo Project
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Page 1-9
CASH FLOW ANALYSIS
Considering the Project on a stand-alone basis, the undiscounted after-tax cash flow totals
US$130 million. The total cash cost is US$6.99/oz Ag, net of gold credits.
The total capital cost is US$4.86/oz Ag, net of gold credits, and the total production cost is
US$11.86/ Ag, net of gold credits, with an annual average gold and silver production of
25,400 oz and 2.7 million oz, respectively.
The pre-tax NPV at a 7.5% discount rate is US$133 million and the after-tax NPV at 7.5% is
US$106 million.
SENSITIVITY ANALYSIS
Key economic risks, as indicated below, were examined by running cash flow sensitivities:
Silver price
Exchange rate
Head Grade
Recovery
Operating costs
Capital costs
NPV sensitivity over the base case has been calculated for -20% to +20% variations. The
sensitivities are shown in Figure 1-1 and Table 1-4.
The Project is most sensitive to head grade and exchange rate, followed by silver price,
operating costs, capital costs and finally recovery.
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FIGURE 1-1 AFTER-TAX SENSITIVITY ANALYSIS

TABLE 1-4 AFTER-TAX SENSITIVITY ANALYSES

Parameter
Variables
Units -20% -10% Base 10% 20%
Silver Price US$/oz 18.21 20.49 22.77 25.04 27.32
Exchange Rate US$/C$ 0.80 0.90 1.00 1.10 1.20
Head Grade (Ag) g/t 179.40 201.83 224.3 246.68 269.10
Recovery % 86.9% 88.4% 89.9% 91.4% 92.9%
Operating Cost $millions 197.80 222.52 247.2 271.97 296.70
Capital Cost $millions 62.63 70.46 78.3 86.12 93.95

NPV @ 7.5% Units -20% -10% Base 10% 20%
Silver Price $millions $62 $84 $106 $128 $149
Exchange Rate $millions $42 $74 $106 $138 $170
Head Grade $millions $38 $72 $106 $140 $174
Recovery $millions $99 $102 $106 $110 $113
Operating Cost $millions $138 $122 $106 $90 $74
Capital Cost $millions $117 $111 $106 $101 $96
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
-25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%
A
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r
-
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D
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(
U
S
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0
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)

Percent Change From Base Case
Head Grade Recovery Ag Price
Exchange Rate Operating Cost Capital Cost
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TECHNICAL SUMMARY
PROPERTY DESCRIPTION AND LOCATION
The Cerro Bayo property is located in the General Carrera Province, Aisn (XI) Region,
Chile, at approximately 72W longitude and 46.5S latitude. The Cerro Bayo property is
situated approximately 130 km south of Coyhaique, the capital of Region XI in southern
Chile, and 12 km west of the town of Chile Chico, which is six kilometers west of the border
with Argentina.

LAND TENURE
Mandalays mining rights comprise one contiguous block that covers an area of 23,096 ha of
exploitation concessions (mensuras), and 6,610 ha of manifestacins (exploitation
concessions in process), which is a classification of concessions that were previously
exploration concessions (pedimentos), but are in the process of transforming into exploitation
concessions. Mandalay is in the process of upgrading all exploration concessions to
exploitation concessions.

Mandalay owns 2,513 ha of surface rights, with another 3,504.5 ha held through surface use
agreements. All surface rights are located within the Cerro Bayo mining concessions.

Negotiations are currently being carried out with the Government to purchase the land
occupied by the mill and tailings facility.

EXISTING INFRASTRUCTURE
The Project is a producing mine that includes a 1,650 tpd capacity flotation mill, a seven
MVA diesel plant for the mill and surface power plus a 2.8 MVA diesel plant for underground
power requirements. Infrastructure at the Laguna Verde site includes an administration
building containing offices plus a cafeteria, a service building equipped with a 10 tonne crane
is used for equipment servicing and a separate building containing the assay laboratory.

The site also has a tailings facility with a capacity of 2.5 million tonnes and sedimentation
basins and polishing ponds for water treatment. Explosives magazines are located nearby
on the property, which adhere to regulation distances for explosives and detonator
magazines.

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HISTORY
Gold and silver mineralization was discovered in the Cerro Bayo District (termed Fachinal at
the time), during the summer of 1984 by Freeport Chilean Exploration Company (FCEC).
Coeur dAlene Mines subsequently purchased 100% of FCEC, including the Cerro Bayo
properties in early 1990. Construction of standard flotation mill installations started in 1994
and production started in May, 1995. Full production commenced in J anuary 1996.

In 1995, mining started in the Laguna Verde sector of the district. Mining was concentrated
in several breccia bodies, large veins and stockworks, where three open pits were
developed. This area was the main focus of operations until 2000. Due to declining metal
prices and depletion of open-pit reserves, the mine operation was suspended in November,
2000.

Prior to the mine suspension in 2000, a drilling program outlined a high grade vein system
near the Cerro Bayo dome, located 14 km west of Chile Chico and 12 km east of the mill at
Laguna Verde. Coeur spent most of 2001 conducting additional infill drilling, and engineering
and economic evaluations of this area. Underground drifting commenced in November 2001,
followed by mine development. The Laguna Verde processing plant was re-started in April
2002. Operations were suspended again in 2008 due to the economic situation and
depletion of developed reserves. Mandalay bought the property from Coeur in August 2010,
and mine development began in October of 2010, with processing commencing in J anuary of
2011.

Historical production from the Project area pre-2002 was reported at 2.43 million tonnes with
production of 161,200 ounces of gold and 10.56 million ounces of silver but detailed reports
were not available. Production, from detailed records, was 2.58 million tonnes from April
2002 to August 2008 with grades averaging 4.2 g/t Au and 346.7 g/t Ag over that period and
a total production of 317,000 ounces of gold and 27.7 million ounces of silver.

Production by Mandalay since 2010 totals 963,996 t with average grades of 1.98 g/t Au and
272.66 g/t Ag.

GEOLOGY AND MINERALIZATION
The rocks exposed in the Cerro Bayo District are part of a thick pile of silicic volcanic rocks
assigned to the Ibaez Formation, and are believed to represent a more or less continuous
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series of J urassic to Cretaceous volcanism. The Paleozoic basement that regionally
underlies the Mesozoic volcanic rocks is not exposed in the district, at least to a depth of 370
m from the surface, although fragments of the metamorphic rocks are contained in the
overlying volcanic strata. The Mesozoic sequence is overlain by Tertiary basalts and minor
volcaniclastic rocks.

Three main district-scale structural orientations have been identified in the Cerro Bayo and
Laguna Verde areas: north-south, northeast-southwest to east-west, and northwest to
southeast. A Landsat lineament study across the district illustrates district and regional-scale
structures with similar orientations and locations as the local structures. These structures
correspond to arc-parallel (north-south), arc-normal (approximately east-west), and
conjugate transfer structures (northeast-southwest and northwest-southeast) trends. Pre-
and post-mineralization displacement is documented in all three of the structural orientations.

The Cerro Bayo District hosts at least 90 major veins, stockworks and breccias containing
gold and silver mineralization, located in six principal areas in the district. The deposits show
multiple stages of mineralization and display open-space filling and banding, typical of low-
sulphidation style epithermal mineralization. Mineralogy is complex and is associated with
alteration assemblages that suggest at least three stages of precious metal deposition.

Gold mainly occurs as inclusions in pyrite, filling cavities and irregular surfaces in strongly
fractured porous grains. It has also been detected as inclusions along cleavages in galena
and iron-deficient sphalerite. Free gold occurs in quartz-bound grains, as irregular crusts
and flakes in micro cracks cutting the gangue, and within partially oxidized sulphide minerals.
Analyses with a Scanning Electron Microscope indicate that gold is argentian (electrum) with
a silver content that may reach 40%.

Silver is contained in a variety of minerals. Sulphosalts are the most common, including
freibergite, stephanite, proustite, pyrargyrite, and polybasite. Stromeyerite is also common,
as well as native silver. Argentite/acanthite, chlorargyrite, and boleite are supergene
products of surficial oxidation. In veins and veinlets, the silver minerals form irregular bands
and patchy aggregates, and are finely disseminated in the matrix of hydrothermal and
tectonic breccias. They are commonly included along fractures in pyrite grains and are also
found on the margins of galena aggregates. Larger sulphide grains may include sphalerite
and electrum. Silver minerals are more widespread than gold in the district.
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Base metal sulphides are common, though not abundant in the district. These include mostly
sphalerite, galena, and chalcopyrite, forming irregular aggregates, stringers, and massive
veinlets. Tetrahedrite occurs rarely, as well as bornite and famatinite. Supergene base
metal minerals are rare in the area, and include covellite, chalcocite (digenite, idaite),
cerussite, smithsonite, and hydrohetearolite.

In the Guanaco and Cascada sector of the Cerro Bayo District, gold and silver mineralization
occurs in veins, vein systems and veinlets hosted in a moderately welded sequence of
dacitic and rhyolitic tuffs. The volcanic sequence is intruded by the Cerro Bayo and other
dacitic domes, considered as post-mineral events.

At Laguna Verde, gold and silver mineralization occur in veins, hydrothermal and tectonic
breccias, stockworks (sheeted veins) and veinlets hosted in a moderately to strongly welded
sequence of rhyolitic and dacitic tuffs. Flow-banded dacitic domes intrude the volcanic
sequence at Coigues Hill, and at Cerro Bayo. Field evidence suggests post-mineral
intrusion.

Two main vein orientations are recognized at Laguna Verde.
North-south to north-northeast trending brecciated veins and breccias varying in dip
from vertical to 45 E.

315 to 345 oriented veins varying in dip between vertical and 75 northwest and
southeast.

EXPLORATION
In 2013, virtually all exploration drilling consisted of infill and extension drilling of the existing
zones of Inferred Mineral Resources on previously known veins in the Laguna Verde and
Cerro Bayo areas. Some drilling was carried out on new targets at Esperanza, Antimonio,
and Mallines West veins.

MINERAL RESOURCES
RPA estimated Mineral Resources for the Yasna, Fabiola, Dalila, Coyita, Dagny, Bianca,
Delia NW, Delia SE, Trinidad, Marcela Sur, and Raul veins located on the Cerro Bayo
property as of December 2013 (Table 1-1). Mineral Resources are constrained by
underground vein models for reporting purposes. The cut-off grade was estimated at 163 g/t
AgEq, taking into account the transportation, treatment, and refining costs.

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Lines based on the exploration drill holes, channel samples, and surface and underground
mapping were used in Vulcan software to create 3D vein wireframes, with a minimum
thickness of 1.2 m. Block grades were estimated by inverse distance cubed (ID3) method.

The Mineral Resource estimate and classification are in accordance with the Canadian
Institute of Mining, Metallurgy, and Petroleum (CIM, 2010) definitions as incorporated in
National Instrument 43-101 (NI 43-101).

MINERAL RESERVES
The Mineral Reserves are reported in Table 1-2. The Mineral Reserves were estimated by
Mandalay and reviewed/adopted by RPA with very slight adjustments where deemed
necessary. The cut-off grade was estimated at 200 g/t AgEq, taking into account the
transportation, treatment, and refining costs.

The tonnages and grades were estimated using Vulcan software, with veins diluted to a
minimum mining width of 2.4 m and for veins over this width an additional 0.4 m of dilution
width was added.

MINING METHOD
As a result of the very good ground conditions, a Longhole Retreat Stoping mining method is
employed. Some shrinkage stoping was used in the past. Development includes driving the
drifts through the vein at a minimum size of three metres by three metres, which is required
for the standard equipment sizes utilized.

The key to meeting the LOM production targets at Cerro Bayo is maintaining development
advance in order to provide sufficient working faces for production. Access to the veins via
three separate portals and production from an average of three to four veins throughout most
of the LOM should ensure meeting production requirements. On average, approximately
81% of production will come from the stopes, with approximately 19% coming from active
development headings. During 2013, total development averaged 23 m per day or
approximately 10% lower than the planned 24 m per day. LOM development requirements
average 20 m per day, with a high of 27 m per day during 2017. The addition of working
faces over the LOM will enable sustaining the level of development.

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MINERAL PROCESSING
The processing plant has a daily capacity of 1,650 t producing approximately 25 t of
concentrate with grades of 80 g/t Au to 120 g/t Au and 11,000 g/t Ag to 12,000 g/t Ag. The
process has a simple concept consisting of crushing, primary grinding in a SAG mill,
classification in hydrocyclones, secondary grinding in a ball mill, flotation, thickening,
filtration, and concentrate storage. The mill presently uses three stockpiles for high, medium,
and low grade ore and a loader feeds the mill hopper based on the grades to provide an
average feed grade to the mill. Average mill recoveries utilized in the LOM plan are 87.3%
for gold and 89.9% for silver.

The concentrate is trucked to the Port of Chacabuco, approximately 250 km from the mine
site, where it is loaded for shipment to smelters.

PROJECT INFRASTRUCTURE
The mine is well established with administration offices, catering service for the employees,
diesel power plant for the mill and surface facilities, and a separate diesel plant for the
underground facilities. A separate building houses the sample preparation and assay
laboratory. The mill operation is well run and kept clean.

There is a tailings facility with a storage capacity of 2.5 million tonnes on site. The
containment dam wall was raised during 2013 to provide sufficient capacity for the current
LOM plan.

MARKET STUDIES
Mandalay has concentrate sale agreements for 2014 concentrates with Dowa Metals and
Mining Co., Ltd. of Tokyo, J apan, LS Nikko Copper Inc. in Korea, Mitsubishi Materials
Corporation of J apan, and Pan Pacific Copper Co., Ltd., of J apan. These contracts provide
for 97% to 97.5% payable gold and 96% to 96.5% payable silver based on concentrate
grade. As well, they provide for a concentrate treatment charge and typical per ounce
refining charges for gold and silver paid.

ENVIRONMENTAL, PERMITTING, AND SOCIAL CONSIDERATIONS
Mandalay has presented all Environmental Impact Assessments (EIAs) and Environmental
Impact Declarations (DIA) to the designated authority of the Aisn Region. CMCB and
Mandalay have been processing and updating the permits required for the operations as
mining exploration has progressed and new areas have been incorporated into the mining
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operation. Current applications are submitted and processed through the Sistema de
Evaluacin de Impacto Ambiental (SEIA) in Chile.

CAPITAL AND OPERATING COST ESTIMATES
The capital costs over the LOM are presented in Table 1-5.

TABLE 1-5 ESTIMATED LOM CAPITAL COSTS

Description Units 2014 2015 2016 2017 2018/22 Total
Capital Development US$'000 6,748 11,385 7,839 3,949 0 29,921
Capital Equipment US$'000 8,702 8,000 6,000 0 0 22,702
Reclamation/Closure US$'000 716 1087 2263 1875 9515 15,456
Contingency (15%) US$'000 2,425 3,071 2,415 874 1,427 10,212
Total US$'000 18,591 23,543 18,517 6,698 10,942 78,291

The operating costs for the LOM are presented in Table 1-6.

TABLE 1-6 ESTIMATED OPERATING COSTS

Description
US$/yr. Avg.
(millions)
US$/t
Mining 24.36 56.90
Processing 11.1 25.95
G & A 7.16 16.73
Total 42.6 99.58

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2 INTRODUCTION
Roscoe Postle Associates Inc. (RPA) was retained by Mandalay Resources Corporation
(Mandalay) to prepare an updated Mineral Resource and Mineral Reserve estimate and an
independent Technical Report on the Cerro Bayo Project (the Project), near Chile Chico,
Chile. The purpose of this report is to document the increase in Mineral Reserves and
Resources, based on 2013 drilling and development results. This Technical Report
conforms to NI 43-101 Standards of Disclosure for Mineral Projects. RPA visited the
property in December 2011, in November 2012 and in J anuary 2014.

The Project consists of underground mines exploiting silver and gold veins, four of which are
currently being mined from three individual portal accesses. A processing facility rated at
1,650 tpd is located on the site and is operational. In August 2010, Mandalay purchased
100% of Compaia Minera Cerro Bayo Ltda. (CMCB), then a subsidiary of Coeur dAlene
Mines Corporations (Coeur), which owns and operates the Cerro Bayo Mine. At the time,
the mine was under care and maintenance.

The Cerro Bayo sector deposit was discovered in 2000 and Coeur commenced mining
operations there in late 2001 with processing starting in April of 2002. Coeur suspended
mining operations at Cerro Bayo in November 2008, due to the downturn in the economy, but
continued exploration work on the property in 2009. Scott Wilson Roscoe Postle Associates
Inc., (predecessor to RPA) prepared a resource estimate for the Fabiola, Dagny, and Yasna
veins in February 2009, which was updated by RPA in 2011 and subsequently in 2012 and
2013.

Mandalay commenced underground mining at Laguna Verde in September 2010, and total
ore stockpiled at the mill in December 2010 was 12,048 t containing average grades of 0.87
g/t Au and 282 g/t Ag, for a total contained 336 ounces of gold and 109,346 ounces of silver.
Mandalay commenced processing ore in J anuary 2011. During 2012, approximately
358,256 t of ore were processed providing 2,959,289 ounces of recovered silver and 17,283
ounces of recovered gold with recoveries at 90% and 88%, respectively. During 2013,
approximately 386,480 t of ore were processed grading 2.02 g/t Au and 288.22 g/t Ag,
providing 2,110 ounces of recovered gold and 3,260,057 ounces of recovered silver with
recoveries of 88% and 91% respectively.
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Page 2-2
SOURCES OF INFORMATION
A site visit was undertaken by Normand Lecuyer, P. Eng., RPA Principal Mining Engineer,
and by Rosmery Cardenas, MAusIMM CP (Geo), RPA Senior Geologist, from J anuary 8 to
10, 2014. All of the underground operations, the processing plant, and all surface
infrastructures including the assay laboratory were visited.

The report was prepared by RPA Principal Mining Engineer Normand Lecuyer, P. Eng. and
by RPA Senior Geologist Rosmery Cardenas, MAusIMM CP (Geo.). Mr. Lecuyer is an
independent Qualified Person (QP) and is responsible for Sections 1 to 3, 5, 13, 15 to 22, 24
and parts of Sections 25, 26, and 27. Ms. Cardenas is an independent QP and is
responsible for Sections 4, 6, 7 to 12, 14, 23, and parts of Sections 25, 26, and 27.

Discussions were held with the following personnel from Mandalay Resources:
Mr. Dominic Duffy, P.Eng., Chief Operating Officer
Mr. Ronald Luethe, P. Geo., Country Manager, Chile
Mr. Kalenci Flores Mercandante, General Manager
Mr. Mario Silva, Superintendent of Mining Operations
Mr. J ose Manuel Gonzalez, Superintendent of Milling Operations
Mr. Marcos Cuevas Benavides, Chief Engineering Department
Mr. Ariel Pablo Rolando, Superintendent of Geology
Mr. J uan Pablo Ulla, Modelling and Resource Geologist, Mandalay
Mr. Humberto Vaccaro, Exploration Geologist, Mandalay
Mr. Roberto Casanga, Superintendent of Laboratory

The documentation reviewed, and other sources of information, are listed at the end of this
report in Section 27 References.

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Page 2-3
LIST OF ABBREVIATIONS
Units of measurement used in this report conform to the metric system. All currency in this
report is US dollars (US$) unless otherwise noted.
micron km
2
square kilometre
C
degree Celsius kPa kilopascal
F
degree Fahrenheit kVA kilovolt-amperes
g microgram kW kilowatt
A ampere kWh kilowatt-hour
a annum L litre
bbl barrels L/s litres per second
Btu British thermal units lb pound
C$ Canadian dollars m metre
cal calorie M mega (million)
cfm cubic feet per minute m
2
square metre
cm centimetre m
3
cubic metre
cm
2
square centimetre min minute
cm
3
cubic centimetre MASL metres above sea level
d day mm millimetre
dia. diameter mph miles per hour
dmt dry metric tonne MVA megavolt-amperes
dwt dead-weight ton MW megawatt
ft foot MWh megawatt-hour
ft/s foot per second m
3
/h cubic metres per hour
ft
2
square foot opt, oz/st ounce per short ton
ft
3
cubic foot oz Troy ounce (31.1035g)
g gram ppm part per million
G giga (billion) psia pound per square inch absolute
Gal Imperial gallon psig pound per square inch gauge
g/L gram per litre RL relative elevation
g/t gram per tonne s second
gpm Imperial gallons per minute st short ton
gr/ft
3
grain per cubic foot stpa short ton per year
gr/m
3
grain per cubic metre stpd short ton per day
hr hour t metric tonne
ha hectare t/m
3
Tonnes per cubic metre
hp horsepower tpa metric tonne per year
in inch tpd metric tonne per day
in
2
square inch US$ United States dollar
J joule USg United States gallon
k kilo (thousand) USgpm US gallon per minute
kcal kilocalorie V volt
kg kilogram W watt
km kilometre wmt wet metric tonne
km/h kilometre per hour yd
3
cubic yard
yr year

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Page 3-1
3 RELIANCE ON OTHER EXPERTS
This report has been prepared by Roscoe Postle Associates Inc. (RPA) for Mandalay
Resources Corporation (Mandalay). The information, conclusions, opinions, and estimates
contained herein are based on:
Information available to RPA at the time of preparation of this report,

Assumptions, conditions, and qualifications as set forth in this report, and

Data, reports, and other information supplied by Mandalay and other third party
sources.

For the purpose of this report, RPA has relied on ownership information provided by
Mandalay. RPA has not researched property title or mineral rights for the Project and
expresses no opinion as to the ownership status of the property.

RPA has relied on Mandalay for guidance on applicable taxes, royalties, and other
government levies or interests, applicable to revenue or income from the Project.

Except for the purposes legislated under applicable securities laws, any use of this report by
any third party are at that partys sole risk.

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Page 4-1
4 PROPERTY DESCRIPTION AND LOCATION
The Cerro Bayo property is located in the General Carrera Province, Aisn (XI) Region,
Chile, at approximately 72W longitude and 46.5N latitude. The Cerro Bayo property is
situated approximately 130 km south of Coyhaique, the capital of Region XI in southern
Chile, and 12 km west of the town of Chile Chico, which is six kilometres west of the border
with Argentina (Figure 4-1). The centre of the currently defined mineralization is located at
the boundary of UTM Zones 18S and 19S, at approximately 725,930 mE and 4,734,910 mN
(UTM Zone 18S), and 269,810 mE and 4,846,020 mN (UTM Zone 19S).

LAND TENURE
CMCB mining rights comprise one contiguous block that covers an area of 23,096 ha of
exploitation concessions (mensuras), and 6,610 ha of manifestacins (exploitation
concessions in process), which is a classification of concessions that were previously
exploration concessions (pedimentos), but are in the process of transforming into exploitation
concessions. Mandalay is upgrading all exploration concessions into mensuras. The
property list is provided in Table 4-1 and the concession map is shown in Figure 4-2.

TABLE 4-1 PROPERTY LIST

National Roll
Number
Exploitation Concessions Area (ha)
11201-0149-4 ARROYO 1-25 240
11201-0150-8 ARROYO 31-40 96
11201-0141-9 BUITRERA 61-90 300
11201-0142-7 BUITRERA 91-120 300
11201-0136-2 GUANACA 101-106 56
11201-0137-0 GUANACA 131-158 276
11201-0138-9 GUANACA 161-190 300
11201-0139-7 GUANACA 191-220 300
11201-0140-0 GUANACA 221-243 215
11201-0082-K J ARA 1-100 990
11201-0143-5 NIEVES 1-30 300
11201-0144-3 NIEVES 31-60 300
11201-0145-1 NIEVES 61-90 300
11201-0146-K NIEVES 91-120 300
11201-0147-8 NIEVES 121-150 300
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Page 4-2
National Roll
Number
Exploitation Concessions Area (ha)
11201-0148-6 NIEVES 151-180 300
11201-0125-7 LAPIZ 1-7 70
11201-0126-5 LAPIZ 21-32 120
11201-0127-3 LAPIZ 41-52 120
11201-0128-1 LAPIZ 61-72 120
11201-0129-K LAPIZ 81-92 120
11201-0130-3 LAPIZ 101-109 84
11201-0131-1 PERRA 101-123 225
11201-0132-K PERRA 131-160 300
11201-0133-8 PERRA 161-190 300
11201-0134-6 PERRA 191-220 300
11201-0135-4 PERRA 221-244 231
11201-0155-9 CARRERA 1-37 370
11201-0085-4 MALLINES 1-100 990
11201-0091-9 HORQUETAS 1-75 750
11201-0087-0 BUITRERA 1-60 600
11201-0092-7 BRILLANTES 1-100 990
11201-0088-9 BAYO 1-70 700
11201-0089-7 MESETA 1-100 990
11201-0090-0 AGUILA 1-100 990
11201-0086-2 SINTER 1-100 990
11201-0099-4 BAHIA 1-100 990
11201-0097-8 VERDE 1-60 600
11201-0096-K PERRA 1-66 660
11201-0098-6 VICUNA 1-45 426
11201-0094-3 LARGA 1-84 840
11201-0093-5 CASCADA 1-100 990
11201-0095-1 ALPACA 4-15, 19-45 390
11201-0083-8 GUANACA 6-17, 23-34, 38-87 717
11201-0084-6 LAGUNA 10-20, 30-40, 45-60, 62-80, 82-100 760
11201-0103-6 RIBERA 6-12, 18-24, 30-36, 41-48, 50-60 400
11201-0100-1 ROCA 5-15, 20-30, 32-100 900
11201-0102-8 PUNTA 3-15, 18-30, 33-45, 47-60, 62-75, 78-81, 88- 90 740
11201-0101-K ORILLA 12-15, 27-30, 37-45, 47-60, 62-75 450
Total

23,096

National Roll
Number
Exploitation Concessions In Process Area (ha)
11201-0203-2 EDITH 3 1/60 300
11201-0204-0 EDITH 4 1/60 300
11201-0205-9 EDITH 5 1/60 300
11201-0206-7 EDITH 6 1/60 300
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Page 4-3
National Roll
Number
Exploitation Concessions In Process Area (ha)
11201-0207-5 EDITH 7 1/28 140
11201-0208-3 EDITH 8 1/56 280
11201-0209-1 EDITH 9 1/56 280
11201-0210-5 EDITH 10 1/56 280
11201-0211-3 EDITH 11 1/60 300
Pending Sept. 2012 EDITH 12 1/40 200
11201-0199-0 MIRASOL 1 1/56 560
11201-0200-8 MIRASOL 2 1/36 360
11201-0201-6 MIRASOL 3 1/36 360
Pending J une 2012 MIRASOL 4 1/20 200
Pending Nov. 2012 J OE 1 100
Pending Nov. 2012 J OE 2 200
Total

6,610

A pedimento is valid for a maximum period of two years, at which time it may be either
reduced in size by 50% of the initial area and renewed for an additional two year period, or
converted to a manifestacin. A manifestacin is valid for 220 days and may be upgraded to
a mensura if a request is submitted within this time period.

The mensuras have been surveyed by a government licensed surveyor and subjected to field
inspection and verification prior to technical approval. Once constituted, an annual fee is
required to maintain the mensuras in good standing. Mandalays annual fee is
CLP$133,907,951 (or approximately US$280,000 at an exchange rate of CLP$500 : US$1).
There is no expiration date for mensuras as long as the required fees have been submitted in
a timely fashion.

Mandalay has indicated to RPA that the subject concessions are currently in good standing
and that all required payments to the Chilean government have been made.

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Page 4-4
SURFACE RIGHTS
CMCB owns 2,513 ha of surface rights, with another 3504.5 ha held by surface use
agreements. All surface rights are located within the Cerro Bayo mining concessions. These
surface use agreements include renewable contracts with the following:
Yamil Nasif Hasen Burgos - 600 ha
Hassen Burgos - 267.8 ha
Raul Lambert Villegas - 166.2 ha
Maria Elena Fica Burgos - 581 ha
Hector Antolin Crespo Fica - 949.17 ha
Sergio Haro Ramos - 290.3 ha
Waldemar Alexander Von Wussow Garces - 650 ha

Negotiations are currently being carried out with the Government to purchase the land
occupied by the mill and tailings facility.

TAXES AND ROYALTIES
The taxes and royalties that apply to the Cerro Bayo Project were provided by Mandalay and
are listed below:
property. This NSR was applied to the cash flow calculations.

presented in this report. There is also a Value Added Tax (VAT) in Chile, although it
does not affect CMCB since, as an exporter, 100% is recovered.

exceeding an equivalent of 12,000 t of refined copper sold. This royalty was applied
to the cash flow estimates using a copper price of US$3.50 per pound.

All permits for the Project have been received and are in good standing.

To RPAs knowledge, there are no environmental liabilities on the property.

To RPAs knowledge, there are no significant factors and risks that may affect access, title,
or the right or ability to perform work on the property.
CHILE
ARGENTINA
Pacific
Ocean
Gulfo de
Penas
Gulfo
Sarmiento
de Gamboa
Atlantic
Ocean
Mar Chileno
Mar
Chileno
R
i
o
I
t
a
t
a
Puerto Williams
FuerteBulnes
Puerto Hope
Porvenir
Puerto Curtze
Puerto Delgada
Puerto Progreso
Bahia Thetis
San Pablo
Rio Grande
San Sebastian
Monte Dinero
Cancha Carrera
El Calafate
Punta Arenas
Puerto Alegre
Puerto
Guadal
Chile Chico
Puerto Chacabuco
Bonito
Puerto Cisnes
Puerto Tictoc
Puerto Puyuguapi
Puerto Natales
Hill Station
Tres Lagos
Las Horquetas
Bajo Caracoles
Coihaique
Quelln Chaiten
Chonchi
Ayacara
Ancud
Los Muermos
Guayusca
Caunao
Osorno
Puerto Montt
Puerto Yartou
Panguipulli
Puerto Saavedra
Victoria
Canete
Llico
Parral Cobquecura
Perito Moreno
Loncopue
Valdivia
Talcahuano
Chillan
Los Angeles
Concepcion
Temuco
Tolten
Comodoro Rivadavia
AISEN
ARAUCANIA
BIO-BIO
LOS LAGOS
MAGALLANES
Pennsula
de
Taitao
A
r
c
h
i
p
i
l
a
g
o
D
e
s
o
l
a
c
i
n
Tierra del Fuego
Cabo de Hornos
Isla de
los Estados
40
38
68
68 66 64
48
54
56
56
54
48
46
52
52
46
44
50
50
44
42
42
72
72 76 74
70
70
40
38
Regions of Chile
I
II
III
IV
V
RM
VI
VII
VIII
IX
X
XI
XII
XIV
XV
Tarapac
Antofagasta
Atacama
Coquimbo
Valparaso
Santiago Metropolitan Region
OHiggins
Maule
Biobo
Araucana
Los Lagos
Aisn
Magallanes
Los Ros
Arica-Parinacota
CHILE
Area of
Interest
CERRO BAYO PROJECT
N
0
200 0 100
100
300 kilometres
200 miles
March 2014
Source: Map No. 4395, UNITED NATIONS, 2010.
Legend:
National Capital
Administrative Region
apital C
City, Town
Major Airport
National Boundary
Administrative Region
oundary B
Main Road
Secondary Road
Railroad
Location Map
Cerro Bayo Project
Region XI (Aisn), Chile
Figure 4-1
4-5
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EDITH 3 1/60
EDITH 6 1/60
EDITH 5 1/60
EDITH 4 1/60
EDITH 8 1/56
EDITH 9 1/56
E
D
I
T
H

1
1

1
/
6
0
EDITH 17 1/60
E
D
I
T
H

1
3

1
/
6
0
E
D
I
T
H

1
4

1
/
6
0
EDITH 10 1/56
E
D
I
T
H

1
5

1
/
5
0
E
D
I
T
H

1
6

1
/
5
0
EDITH
EDITH 7 1/28
MIRASOL 6 1/45
1/30
MIRASOL 5
1/20
MIRASOL 4
MIRASOL 1 1/56
M
I
R
A
S
O
L
3

1
/
3
6
M
I
R
A
S
O
L
2

1
/
3
6
G
U
A
N
A
C
A
H
O
R
Q
U
E
T
A
S

1
-
7
5
B
U
I
T
R
E
R
A
1
-
6
0
A
L
P
A
C
A
1
-
4
5
N
I
E
V
E
S

1
-
3
0
N
I
E
V
E
S

3
1
-
6
0
N
I
E
V
E
S

6
1
-
9
0
N
I
E
V
E
S

9
1
-
1
2
0
N
I
E
V
E
S

1
2
1
-
1
5
0
N
I
E
V
E
S

1
5
1
-
1
8
0
B
U
I
T
R
E
R
A
6
1
-
9
0
B
U
I
T
R
E
R
A
9
1
-
1
2
0
GUANACA 161-190
GUANACA 191-220
GUANACA
JOE 2
J
O
E
1
JARA 1-100
BAHIA 1-100
ROCAS
A
G
U
I
L
A
1
-
1
0
0
S
I
N
T
E
R

1
-
1
0
0
LARGA 1:84
M
E
S
E
T
A
1
-
1
0
0
L
A
G
U
N
A
BAYO 1-70
ORILLA
12-15, 27-30,
6-12, 18-24,
3-15, 18-30, 33-45,
5-15, 20-30, 32-100
C
A
S
C
A
D
A
1
-
1
0
0
M
A
L
L
I
N
E
S

1
-
1
0
0
P
E
R
R
A
1
-
6
6
B
R
I
L
L
A
N
T
E
S

1
-
1
0
0
V
E
R
D
E

1
-
6
0
RIBERA
P
E
R
R
A
1
6
1
-
1
9
0
P
E
R
R
A
1
9
1
-
2
2
0
P
E
R
R
A
2
2
1
-
2
4
4
P
E
R
R
A
1
3
1
-
1
6
0
GUANACA 221-243
L
A
P
I
Z
L
A
P
I
Z
L
A
P
I
Z
L
A
P
I
Z
L
A
P
I
Z
LAPIZ
ARROYO 31-40
256000
256000
260000
260000
264000
264000
268000
268000
272000
272000
276000
276000
280000
280000
284000
284000
288000
288000
4
8
3
2
0
0
0
4
8
3
2
0
0
0
4
8
3
6
0
0
0
4
8
3
6
0
0
0
4
8
4
0
0
0
0
4
8
4
0
0
0
0
4
8
4
4
0
0
0
4
8
4
4
0
0
0
4
8
4
8
0
0
0
4
8
4
8
0
0
0
4
8
5
2
0
0
0
4
8
5
2
0
0
0
PUNTA
V
I
C
U
N
A
1
-
4
5
ARROYO 1-25
CARRERA 1-37
1
0
-
2
0
,

3
0
-
4
0
,

4
5
-
6
0
,
6
2
-
8
0
,

8
2
-
1
0
0
6
-
1
7
,

2
3
-
2
4
,

3
8
-
8
7
GUANACA 101-106
8
1
-
9
2
4
1
-
5
2
2
1
-
3
2
6
1
-
7
2
1
0
1
-
1
0
9
1-7
P
E
R
R
A
1
0
1
-
1
2
3
131-158
12 1/40
62-75
50-60
88-90
37-45, 47-60,
30-36, 41-48
47-60, 62-75,78-81,
Exploitation Concession
Legend:
Exploitation Concession in Process
0 1000
Metres
2000 3000 4000
Local Coordinates
N
March 2014 Source: Mandalay Resources Corp., 2012.
Cerro Bayo Project
Property Map
Figure 4-2
4
-
6
w
w
w
.
r
p
a
c
a
n
.
c
o
m
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Page 5-1
5 ACCESSIBILITY, CLIMATE, LOCAL
RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY
ACCESSIBILITY
The site is approximately 30 km from the town of Chile Chico and accessible via Route 265,
a paved highway. This connects to Route 7, which ties to the city of Coyhaique (population
approximately 50,000 people) and to the port of Puerto Chacabuco approximately 250 km by
road from the mine. There is also ferry service across Lake General Carrera from Chile
Chico to Ibaez, which also allows access to Puerto Chacabuco. The concentrate is trucked
from the mine, usually once per week, to Puerto Chacabuco where it is loaded on ships for
delivery to smelting customers overseas.

CLIMATE
The climate in the area is sub-Mediterranean, with the winter months of J une to August at
temperatures of -10 to 0 C, with light snowfall and rain. Summers are warm and dry with
temperatures in the high teens to low 20C. Average annual precipitation is approximately
300 mm, most of which is rain. The humidity is generally around the 50% mark given the
proximity of Lake General Carrera. The area is located on the east side of the Andes
Mountains and on the edge of the Patagonia area, which is commonly windy. The climate
permits year round operation.

LOCAL RESOURCES
Most of the required labour for the mine is sourced locally, with some of the staff coming from
neighbouring countries such as Argentina. Supplies can be sourced from Chile Chico and
other supply centres in Chile, such as Coyhaique and Santiago.

INFRASTRUCTURE
At the time of acquisition by Mandalay, the surface and underground infrastructure at the
Cerro Bayo included the following:
A 1,650 tpd mill.

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Page 5-2
A tailings pond with a capacity of 2.5 million tonnes (measuring approximately
240 m by 600 m), and a process water pond (measuring approximately 210 m by
385 m) from which water is recycled.

A processing plant building measuring 22 m by 82 m.

A 1,500 tonne coarse ore bin and conveyor.

A 7 MVA power plant building for the processing plant, measuring 16 m by 30 m.

An administration building 20 m by 59 m and a lab building measuring 17 m
square.

A 27 m by 32 m service building with a 10 tonne crane.

A pumping station.

Three declines, each with and a series of ramp-connected levels, and associated
power, ventilation and dewatering infrastructure.

The power supply for the site is provided via the power 7 MVA plant for the processing plant
and surface facilities plus a 2.8 MVA plant at the Dagny site for the underground mining
operations. The plants deliver both 3.3 kV and 400 V power.

PHYSIOGRAPHY
The Project lies on the eastern side of the Andes Mountains at elevations that range from
approximately 200 MASL to 1,400 MASL. The topography varies from steep mountain
valleys to rolling farmland; the latter was largely agricultural prior to the eruption of the
Hudson volcano in 1991, which covered the area in ash. Subsequent recovery of vegetation
in the area is limited to grasses and trees. The landforms in the area consist of glacially
eroded valleys and glacial till soils deposits.

WATER SUPPLY
The process water is currently obtained from Lake General Carrera, surface streams, and
tailings recirculation. The water rights retained are currently sufficient for the plant. These
rights include a total of 680 L/s from Lake General Carrera and several additional smaller
rights of approximately 135 L/s. The list of water permits is provided in Table 5-1.

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Page 5-3
TABLE 5-1 WATER PERMITS

Location Date Resolution No. Qty. (L/s)
Lago General Carrera Feb. 1993 43 200
Lago General Carrera Feb. 1994 30 200
Lago General Carrera J an. 1994 45 80
Lago General Carrera Apr. 1993 104 200
Estero El Rodeo Oct. 1993 452 100
Estero La Tina Oct. 1993 441 35
Total 815

There are sufficient surface rights for mining operations and related infrastructure.

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Page 6-1
6 HISTORY
This section has been largely referenced from Sims (2010).

REGIONAL HISTORY
Gold and silver mineralization was discovered in the Cerro Bayo District (termed Fachinal at
the time), during the summer of 1984 by Freeport Chilean Exploration Company (FCEC).
Drilling of veins and potential bulk-minable stockworks commenced in 1986, and continued
until mid-1989. Exploration activities were discontinued in August 1989 due to Freeports
decision to terminate its Chilean investments.

Coeur dAlene Mines subsequently purchased 100% of FCEC, including the Cerro Bayo
property, in early 1990. CDE Chilean Mining Corporation, a wholly owned subsidiary of
Coeur, resumed evaluation of the area in the second quarter of 1990. Evaluation of the
Project was continued by Coeur South America (CSA) and subsequently, CMCB, both
subsidiaries of Coeur. Infill and step-out drilling and tunneling carried out from 1990 to 1993
resulted in an open pit and underground reserve, followed by a feasibility study and
production decision in mid-1994.

Construction of standard flotation mill installations started in 1994 and production started in
May 1995. Full production commenced in J anuary 1996.

Mining was concentrated on several breccia bodies, large veins, and stockworks in the
Laguna Verde area, where three pits were developed. This area was the main focus of
operations until 2000. Due to declining metal prices and depletion of open pit reserves, the
mine operation was suspended in November 2000.

Prior to the mine suspension in 2000, a drilling program outlined a high grade vein system
near the Cerro Bayo dome, located 14 km west of Chile Chico and 12 km east of the mill at
Laguna Verde. Coeur spent most of 2001 conducting additional infill drilling, and engineering
and economic evaluations of this area. Underground drifting commenced in November 2001,
followed by underground mine development. The Laguna Verde processing plant was re-
started in April 2002.

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Page 6-2
Production continued in 2003, from underground, as well as the Furioso (a subsidiary deposit
located 130 km SW of Chile Chico) and Tranque open pits, as well as from mineral
purchased from Coeurs Mina Martha mine located in Argentina. Exploration and
development drilling also continued through 2003. A pre-feasibility study was completed in
2004 for the expansion of CMCBs operations to include heap leaching, however, CMCB
decided not to proceed with heap leaching.

Production continued from both open pit and underground sources in 2005. From 2006 to
2008, production was limited to only underground mining. Mining and processing operations
were suspended in late 2008 due to diminishing reserves and the global financial crisis.

A full geological review of Laguna Verde commenced in early 2007 to identify potential
exploration targets. Detailed surface mapping and channel sampling resulted in the surface
delineation of three main structures (Dagny, Fabiola and Coyita) characterized by exposures
of altered fractures, scattered zones of narrow veinlets, and some isolated outcrops of
narrow veins. Subsequent drilling and additional surface mapping identified up to six
mineralized veins, including the Delia and Yasna veins. Exploration continued during 2009
resulting in reporting of Mineral Resources and Mineral Reserves.

Test geochemical studies were undertaken in 2009 in the Laguna Verde veins to assess the
possibility of using trace elements to determine the depth of mineralized shoots within the
veins. A series of vertical profiles were sampled in the Dagny and Delia veins, using surface
and core samples. Results were indeterminate and indicated that precious metal and trace
element anomalies (As, Ba, Cu, Pb, Zn, Mn, Sr) are restricted to the elevation in which
shoots develop (between 100 MASL and 220 MASL), decreasing upwards, to surface.

In August 2010, Mandalay purchased 100% of CMCB, then a subsidiary of Coeur, which
owns and operates the Cerro Bayo Mine in Chile. The mine was on care and maintenance
from October 2008 to September 2010 when Mandalay restarted mining. Processing
commenced in J anuary 2011, with the first shipment of concentrate in February 2011.

HISTORIC RESOURCE ESTIMATES
CMCB reported Mineral Resources and Mineral Reserves from 2003 to 2008. Mineral
Resources are presented in Table 6-1 and Mineral Reserves are presented in Table 6-2.
Historic Mineral Resources are exclusive of historic Mineral Reserves.
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TABLE 6-1 HISTORIC MINERAL RESOURCES
Measured Resources Indicated Resources Inferred Resources
Year-
End
US$/oz
Au
Us$/oz
Ag
Cut-off
Grade
(AuEq g/t)
Tonnes
(000)
Au
(g/t)
Au
Ounces
(000)
Ag
(g/t)
Ag
Ounces
(000)
Tonnes
(000)
Au
(g/t)
Au
Ounces
(000)
Ag
(g/t)
Ag
Ounces
(000)
Tonnes
(000)
Au
(g/t)
Au
Ounces
(000)
Ag
(g/t)
Ag
Ounces
(000)
2003 375 5.25 3.03 to 5.81 418.9 5.5 74.1 315 4,243 2,605.2 3.12 261 151 12,456.8 713.6 3.95 90.6 238 5,461
2004 390 6.00 3.03 to 5.81 583 3.45 64.6 197 3,691 1,450 2.38 110.9 113 5,271 1,441 2.88 133.4 161 7,462
2005 410 6.50 3.03 to 5.81 599 4.41 85 220 4,237 1,413 2.69 122.2 128 5,797 1,719 3.84 212 279 15,414
2006 475 8.00 4.0 to 5.0 413 5.67 75.3 321 4,267 659 4.7 99.6 209 4,436 1,204 5.37 207.7 309 11,944
2007 600 11.00 5.0 478.9 5.09 78.4 374 5,764.4 669.2 4.72 4.72 1 209 4,490.3 1,451 4.66 4.66 2 350 16,321.6
2008 750 13.25 5.0 287 5.28 49 49 326 3,005 537 4.27 74 336.9 5,816 1,217 4.02 157 368.9 14,436
From Sims, 2010
TABLE 6-2 HISTORIC MINERAL RESERVES
Proven Reserves Probable Reserves Total Proven and Probable Reserves
Year-
End
US$/o
z Au
US$/oz
Ag
Cut-off
Grade
(AuEq g/t)
Tonnes
(000)
Au
(g/t)
Au
Ounces
(000)
Ag
(g/t)
Ag
Ounces
(000)
Tonnes
(000)
Au
(g/t)
Au
Ounces
(000s)
Ag
(g/t)
Ag
Ounces
(000)
Tonnes
(000)
Au
(g/t)
Au
Ounces
(000)
Ag
(g/t)
Ag
Ounces
(000)
2003 375 5.25 4.7 to 5.3 265.5 5.25 44.8 278 2,375.7 319.6 4.77 49 292 3,001.3 585.1 4.98 93.8 286 5,377
2004 90 6. 390 3 4.7 5.3 to 305 4.41 43.2 258 2,533 77 4. 477 4 2.7 72.7 7 3,576 782 4.61 115.9 243 6,109
2005 410 6.50 4.7 to 5.7 398 5.31 67.9 294 3,764 450 4.4 63.7 257 3,712 848 4.83 131.6 274 7,476
2006 475 8.00 5.0 to 5.83 340 6.86 75 357 3,902 235 6.22 47 297 2,242 575 6.6 122 332 6,144
2007 600 11.00 6.0 399.1 5.23 67.1 334 334 4,28 309.7 4.47 44.5 297 297 2,95 708.8 4.9 111.6 317 7,234.3
2008 750 13.25 5.8 - - - - 496 2.39 38.1 349 5,563.8 496 2.39 38.1 349 5,563.8
From Sims, 2010
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Page 6-4
RPA did not review historic resource and reserve data, and therefore cannot comment on the
validity or reliability of these historic mineral resources and reserves, as it is unknown how
they were determined. These are relevant as these indicate the potential mineralization on
the project. These have been superseded by the current resource and reserve estimates in
this report and should not be relied upon. A Qualified Person has not done sufficient work to
classify the historical estimates as current Mineral Resources or Mineral Reserves and
Mandalay is not treating the historical estimates as current Mineral Resources or Mineral
Reserves.

HISTORIC PRODUCTION
The first mining in the district was focused on surface mining in the Laguna Verde zone
(formerly termed the Fachinal area) from 1995 to 2000. From May 2002 to 2008,
underground mining was carried out primarily to the east, in the Cerro Bayo and Cascada
areas, and from the Furioso and Tranque open pits. In 2008, mining commenced at the
Coigues Este area of Laguna Verde, involving pre-production development to establish
access to the Dagny and Fabiola veins. Operations terminated before production from the
Dagny and Fabiola veins.

Production from the Project area pre-2002 was reported at 2.43 million tonnes with
production of 161,200 ounces of gold and 10.56 million ounces of silver but detailed reports
are not available. Between 2002 and 2008, a total of 2.6 Mt ore was processed by the Cerro
Bayo plant, including during 2003 to 2007, ore from Coeurs Martha mine in Argentina. The
Cerro Bayo Project was under care and maintenance from late 2008 through August 2010,
with no production. Operations at Cerro Bayo were suspended to conserve existing Mineral
Reserves and focus on exploration and development of new discoveries in the Laguna Verde
area and existing veins.

Production since 2010 is summarized in Table 6-3.

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Page 6-5
TABLE 6-3 PRODUCTION SINCE 2011

Units 2010 2011 2012 2013 Total
Ore tonnes Mined dry t 12,048 207,783 358,944 385,221 963,996
Gold Grade Au g/t 0.87 1.06 1.71 2.02 1.68
Silver Grade Ag g/t 282 222.42 284.96 288.00 272.66

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Page 7-1
7 GEOLOGICAL SETTING AND
MINERALIZATION

REGIONAL GEOLOGY
The Cerro Bayo District is situated within a 250 km long north-south Mesozoic volcanic belt
that lies near the boundary between an eastern craton (Patagonian Plateau) and a western
magmatic arc (Patagonian Cordillera). Vast amounts of silicic to intermediate, calc-alkaline
volcanic rocks were erupted during J urassic to Middle Cretaceous times in a sub-aerial, intra-
arc to back-arc environment, and deposited over a Late Paleozoic accretionary basement
prism. The volcanic pile contains large volumes of rhyolitic to dacitic ash flow tuffs and
pyroclastic rocks interpreted to be associated with large volcanic structures. Marine
sedimentary horizons deposited during restricted transgressions that occurred in the
Cretaceous and Tertiary Periods are interbedded with the volcanic rocks. The belt is
unconformably overlain by plateau basalts that range in age from Early to Late Tertiary.

Intrusive rocks are mainly exposed west from Cerro Bayo. They form the Patagonian
Batholith, core of the Andes in the region, and intrude Late Paleozoic fore-arc assemblages.
The Batholith is composed of a variety of granitoids that range in age from J urassic to
Miocene, though most were emplaced in the Early to Middle Cretaceous. Small intrusive
bodies have been identified east of the Patagonian Batholith and are represented by coeval
fine-grained porphyries, Cretaceous rhyolitic and dacitic domes (such as the Cerro Bayo and
Mallines domes), and Tertiary dioritic-gabbroic porphyries and plugs. The distribution of
plutons in the region suggests the magmatic arc had oscillatory east-west behaviour since
the J urassic, a feature that contrasts with the typical eastward migration of the central and
northern Chile magmatic arc.

Crustal shortening and deformation was less in the Aysn area of southern Chile than in
other Andean regions. It occurred mainly in the Middle Cretaceous resulting in gentle folds
and steep northeast normal faults. Major east-west to northeast fracture zones are also
important in the region with the topography being exaggerated by Pleistocene glacial erosion
that modified the present topographic features such as the Lake General Carrera. The
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Page 7-2
largest regional structure is the Liquie-Ofqui fault, a large transform zone that controlled the
emplacement of Cenozoic eruptive centres, that locally overlap the Batholith, and along
which the coastal area appears to have been northerly displaced.

Figure 7-1 shows the regional geology.

Quaternary
Tertiary
Cretaceous
Jurassic-Cretaceous
Jurassic
Triassic
Carboniferous-Permian
Igneous and Metamorphic Rocks
Paleozoic
Precambrian-Paleozoic
Quaternary Volcanics
Cretaceous-Tertiary Volcanics
Mesozoic Volcanics
Mesozoic-Cenozoic Intrusives
Paleo-Mesozoic Intrusives
Sedimentary Rocks
Other Units
Water
Glacial Ice
Unmapped Area
ARGENTINA
CHILE
PACIFIC
OCEAN
ICE
ICE
ICE
U
ICE
ICE
ICE
ICE
U
U
U
U
U
U
36
40
44
44
48
48
48
48
52
52
32
28
24
20
20
78
78
66 72
72
72
66
South
America
CHILE
Interest
Area of
CERRO BAYO PROJECT
CERRO BAYO
PROJECT
N
N
0 200 800
Kilometres
400 600
0 200
Kilometres
400
March 2014
Source: www.geology.about.com, 2012.
Figure 7-1
Regional Geology
Cerro Bayo Project
7-3
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Page 7-4
LOCAL AND PROPERTY GEOLOGY
The rocks exposed in the Cerro Bayo District are part of a thick pile of silicic volcanic rocks
assigned to the Ibaez Formation, and are believed to represent a more or less continuous
record of J urassic to Cretaceous volcanism. The Paleozoic basement that regionally
underlies the Mesozoic volcanic rocks is not exposed in the district, at least to a depth of 370
m from the surface, although fragments of the metamorphic rocks are contained in the
overlying volcanic rocks. The Mesozoic units are overlain by Tertiary basalts and minor
volcaniclastic rocks.

The volcanic sequence that hosts the precious metal mineralization is interpreted to be
related to a system of large volcanic centers and rhyolitic domes, the most prominent being
the Cerro-Bayo-Mallines dome complex, which is hosted in a regional north-south trending
fracture zone. The volcanic sequence consists of alternating units of pyroclastic rocks of
rhyolitic to dacitic composition, including basal surge deposits, interbedded with ash fall tuffs,
lavas, and sediments. The older units are exposed at Laguna Verde, while the youngest are
exposed at Brillantes. The thickness of individual flows varies from tens to over a hundred
meters, however, an estimate of the total thickness of the sequence is difficult to determine
due to block faulting of the units. Several volcanic cooling units displaying varying degrees
of welding are recognized in the area. Radiometric dates ranging from 130 MY to 159 MY
have been produced in volcanic and intrusive rocks from the Ibaez Formation south of the
Cerro Bayo District using K/Ar and Ar/Ar methods.

Extensive basaltic flows (Meseta Lago Buenos Aires Formation) top the sequence to the
south of the district, representing the westernmost outcrops of a large basaltic province. A
300 m thick sequence of olivine tholeiites to alkaline basalts is exposed, consisting of 5 m to
25 m thick flows, locally separated by interflow detrital or tuffaceous horizons. Radiometric
dating indicates two main cycles of effusion, during the Eocene and Miocene to Pliocene
respectively.

Intrusive rocks are sparsely exposed at Cerro Bayo, and are restricted to Mesozoic and
Tertiary subvolcanic domes, plugs, and dyke swarms of varying compositions. Mesozoic
intrusions are generally sub-circular, flow-banded rhyolitic and dacitic domes characterized
by columnar jointing and sharp walls that rise 100 m to 250 m above the surface. The most
prominent of these is the Cerro Bayo Dome. Their emplacement is controlled by deep
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Page 7-5
regional north-south fractures and/or intersections of major faults. The domes and a set of
dacitic flow-banded dikes are estimated to be cogenetic with the felsic tuffs, predating and
postdating the main mineralization events. Andesitic dike swarms controlled by ENE
fractures are common across the district, postdating mineralization. Tertiary necks and plugs
of massive basalts and dioritic-gabbro porphyries are exposed in the southern highlands of
the district, generating local argillization of the host rocks. These bodies are cogenetic with
the Tertiary basaltic volcanism.

STRUCTURAL GEOLOGY
Three main district-scale structural orientations have been identified in the Cerro Bayo and
Laguna Verde areas, north-south, northeast-southwest to east-west, and northwest to
southeast. A Landsat lineament study across the district illustrates district and regional-scale
structures with similar orientations and locations as the local structures. These structures
correspond to arc-parallel (north-south), arc-normal (approximately east-west), and
conjugate transfer structure (northeast-southwest and northwest-southeast) trends. Pre- and
post-mineralization displacement is documented in all three of the structural orientations.

ARC-PARALLEL STRUCTURES
Arc-parallel structures are part of a north-south oriented, deep-seated regional fault system
that controls the emplacement of the Cerro Bayo and other domes in the area, as well as
some veins. At Laguna Verde, a north-south to north-northeast arcuate fault system
assumed to be related to the arc-parallel structures contains brecciated veins and breccias
with silver-gold-molybdenum-lead-zinc mineralization. The entire district, particularly the
Cerro Bayo area, is contained within the arc-parallel structural corridors.

ARC-NORMAL STRUCTURES
Arc-normal structures are orientated east-west and are the least frequent in number. They
consist of faults with very large displacements, and control the southern boundary of the
Brillantes zone and the boundary between the southern Cerro Bayo area and the Raul Block.
Indications of dip-slip movements in excess of 400 m are suggested based on displacement
of volcanic units.

CONJUGATE TRANSFER STRUCTURES
Two main sets of structures are grouped within the conjugate transfer structures. The most
important is the northwest-southeast fracture system that controls the majority of the main
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Page 7-6
stage precious metal epithermal veins, such as Lucero and J aviera at Cerro Bayo, the
Guanaco vein system at the Guanaco Block, and Delia, Dagny and Tranque veins at Laguna
Verde. A second structural system is a late stage, post-mineralization, right lateral east-
northeast fault system responsible for the block faulting that formed the present day
topography. The combined effects of the arc-normal and the northeast-southwest transfer
structures generally displace stratigraphy down dip to the north on a district scale.

Figure 7-2 shows the property geology and a geology legend is provided in Figure 7-3.

0 1
Kilometres
2 3 4
N
March 2014 Source 4 : Mandalay Resources Corp., 201 .
NOTE:
Refer to Figure 7-2A
for Property Property
Legend.
Cerro Bayo Project
Property Geology
Figure 7-2
7
-
7
w
w
w
.
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p
a
c
a
n
.
c
o
m
Temer Unit: Rhyolitic crystalline and lapilli tuffs
Jara Unit: Dacitic tuffs - rhyodacitic lapilli tuffs
Cerro Colorado Unit: Tuffs, arenites, conglomerates
Undifferentiated Quarternary
Legend:
Upper Coi ues Unit: Dacitic tuffs - rhyodacitic lithic g
tuffs with fiammes
Fica Unit: Rhyolitic crystalline and lapilli tuffs
Intermediate Coi ues Unit: Rhyolitic arenitic tuffs g
Guadal Unit: Dacitic crystalline tuffs - minor lithic tuffs
Los Juncos Unit: Rhyolitic crystalline tuffs
Lower Dacitic Unit: Dacitic lithic tuffs
Andesite Unit: Porphyritic and vesicular andesitic lavas
Esperanza Unit: Rhyolitic crystalline tuffs
Rhyolite Unit: Rhyolitic lavas
Upper Andesite Unit: Porphyritic andesitic lavas
Mallines Unit: Rhyolitic lithic tuffs and lapilli tuffs
Siliceous replacement
Arenitic tuffs
Structures Symbols Intrusive Rocks
Lower Coi ues Unit: Rhyolitic, lithic and lapilli tuffs with fiammes g
Intermediate Dacite Unit: Dacitic crystalline and lithic tuffs
Lake
Stream
Secondary Road
Principal Road
Quartz Stockwork
Quartz Veins
Hydrothermal Alteration
Dacitic Dome (Flow)
Rhyolitic Dome
Dacitic Dome
Andesitic Stocks and Dikes
Fault
Breccia
March 2014
Property Geology Legend
Cerro Bayo Project
Figure 3 7-
7
-
8
w
w
w
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a
c
a
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Page 7-9
MINERALIZATION

The Cerro Bayo District hosts at least 90 major veins, as well as stockworks and breccias
containing gold and silver mineralization, located in six principal areas in the district (Figure
7-2). The deposits show multiple stages of mineralization and display open-space filling and
banding, typical of low-sulphidation style epithermal mineralization. Mineralogy is complex
and is associated with alteration assemblages that suggest at least three stages of precious
metal depositional environments.
An early, mesothermal event with silver-gold and base metals (Mo, Zn, and Pb)
hosted in arcuate north-south to north-northeast veins and tectonic breccias. This
style of mineralization is interpreted as resulting from igneous intrusions, doming, and
subsequent collapse.

An epithermal gold-silver mineralization event hosted mainly in north-northwest and
north-south to north-northeast structural trends with local high grades, such as the
Cerro Bayo, Cascada and Coigues Este veins.

A late mineralizing event is interpreted to coincide with the emplacement of a
porphyritic stock and related apophyses at Rodados Colorados, which is
characterized by a porphyry style alteration pattern. This includes moderately
extensive propylitic alteration with chlorite, epidote, disseminated cubic pyrite, and
specular hematite. Structures contain a gangue dominated by calcite with locally
abundant oxides and relict pyrite. Mineralization is characterized by gold-silver
associated with minor copper-lead-zinc. This type of mineral assemblage as well as
the porphyry style alteration also occurs at the Horquetas zone in the western portion
of the district, which is interpreted to belong to the same late stage event.

K/Ar and Ar/Ar dating carried out in veins from different areas in the district indicate an age of
alteration and/or mineralization ranging from Upper J urassic (156 Ma) to Lower Cretaceous
(114 Ma). The oldest mineralization recorded is that of the Mallines and Guanaco veins,
which range in age between 156 Ma and 137 Ma. The veins in the Cerro Bayo area were
dated at 128 Ma, indicating that mineralization pre-dates the Cerro Bayo dome, which is
consistent with the geological field evidence. Restricted data from the western part of the
district suggests that mineralization at Laguna Verde is younger than the rest (114 Ma).

Over 90 veins have been identified across the property, occurring in isolation or in clusters
(as in the Cerro Bayo and Laguna Verde areas). Veins pinch and swell following pre-mineral
faults and fractures. Exposed strike lengths vary from 300 m to 2,200 m with varying widths
between 0.5 m to five metres, and local pods up to seven metres wide.
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Veins are typically banded and brecciated, showing a variety of textures (crustiform,
colloform, comb, and carbonate replacement) that indicate several pulses of silica deposition
and brecciation. Hydrothermal breccias are matrix-supported, tabular to lens shaped bodies,
formed by round to angular fragments of silica flooded tuffs in a matrix of dark saccharoidal
to chalcedonic quartz and sulphides, mainly pyrite and subordinate silver sulphosalts.

Mineralization is mainly structurally controlled. Mineral fluids were channeled along pre-
mineral faults or fracture zones that were in-filled during successive hydrothermal pulses.
The brittleness and plasticity of the host rock units also control the vein widths, the degree of
development of sheeted zones, and the variations in the dip of veins due to refraction.

MINERALOGY
Gold mainly occurs as inclusions in pyrite, filling cavities and irregular surfaces in strongly
fractured porous grains. It has also been detected as inclusions along cleavages in galena
and iron-deficient sphalerite. Free gold occurs in quartz-bound grains, as irregular crusts
and flakes in micro cracks cutting the gangue, and within partially oxidized sulphide minerals.
Analyses with a Scanning Electron Microscope indicate that gold is argentian (electrum) with
a silver content that may reach 40%.

Silver is contained in a variety of minerals. Sulphosalts are the most common, including
freibergite, stephanite, proustite, pyrargyrite, and polybasite. Stromeyerite is also common,
as well as native silver. Argentite/acanthite, chlorargyrite and boleite are supergene products
of surficial oxidation. In veins and veinlets, the sulphide minerals form irregular bands and
patchy aggregates, and are finely disseminated in the matrix of hydrothermal and tectonic
breccias. They are commonly included along fractures in pyrite grains and are also found on
the margins of galena aggregates. Larger sulphide grains may include sphalerite and
electrum. Silver minerals are more widespread than gold in the district.

Base metal sulphides are common, though not abundant in the district. These include mostly
sphalerite, galena, and chalcopyrite, forming irregular aggregates, stringers, and massive
veinlets. Tetrahedrite occurs rarely, as well as bornite and famatinite. Supergene base
metal minerals are rare in the area, and include covellite, chalcocite (digenite, idaite),
cerussite, smithsonite, and hydrohetearolite.

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Page 7-11
Molybdenum mineralization is common in veins and tectonic breccias in the Laguna Verde
zone and consists of specks and fine disseminations of molybdenite accompanied by
tungsten and zinc-rich wulfenite and jordisite. Oxidation has produced ferrimolybdite and
ilsemanite close to the surface.

Quartz is the primary gangue and occurs in a variety of grain sizes and textures. Several
stages of deposition occurred, alternating with periods of brecciation and cementation. Pyrite
is ubiquitous as disseminations, aggregates, and veinlets. Adularia is common, intergrown
with quartz and in veinlets. Carbonates are common, mostly in veinlets, including mainly
calcite and some rhodochrosite, ankerite and siderite. Fluorite and barite are late gangue
minerals. Clays are presents and form aggregates of kaolinite-illite, smectite, and very minor
sericite/pyrophyllite. Minor sericite occurs in host-rock fragments that are included in mineral
zones. Partly limonitized hematite occurs locally.

ALTERATION
Pervasive silicification occurs as haloes around the major veins and vein clusters. Medium-
grained milky quartz was deposited in early stages and microcrystalline to opaline quartz in
late stages. Adularia occurs with quartz in veinlets adjacent to the veins. Very fine sericite,
illite, smectite and calcite replace feldspar and biotite. Kaolinite is present as a supergene
mineral.

Weak pyritization is widespread in the district, mostly as an early stage of alteration with
medium grained quartz. Propylitic alteration marked by chlorite, epidote, carbonate,
saussuritization of feldspars and montmorillonitic clays, forms haloes surrounding bleached
zones. Deuteric alteration is common in tuffs outside the main mineralized areas forming
aggregates of plagioclase, epidote, sericite, and zeolites.

The age of alteration related to mineralization is unknown. The only available determination
(K/Ar) from sericite collected close to a major vein gave an age of 114 +/- 3 Ma (Early
Cretaceous), coincident with the most intensive period of intrusive magmatism in the region.

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GEOCHEMISTRY
Available data suggests that mineral deposition is best defined by gold and silver in the main
stage of mineralization, and also by high concentrations of zinc and molybdenum in the older
silver-rich and base metal stage.

The clearest enrichment in trace elements is evidenced in hydrothermal and tectonic
breccias, which are enriched in lead, zinc, and molybdenum. Silver values are more
consistent and relate to other trace elements, however, crosscutting quartz veinlets carrying
gold complicate the analyses. The best correlations are between base metals, silver and
molybdenum, and silver and zinc. Gold correlates poorly with other elements. The most
significant signature of the different mineralizing events is the Ag-Mo-Zn association (with
subsidiary gold) for the initial stage, and the Au-Ag-Cu-Pb association for the latter stage.

Stockworks are enriched in gold, molybdenum and zinc, particularly where close to major
brecciated structures. A lesser enrichment in silver and lead is also evident. Silver values
are more related to other trace elements than gold. Best correlations are found in these
zones between base metals and between silver, molybdenum, lead and zinc. Gold
correlates poorly with other elements, except for a minor relationship with copper. The
different mineralizing events are marked by the Ag-Mo-Pb-Zn association (with subsidiary
gold) for the initial stage and by Au-Cu for the late stage.

Veins are enriched in gold, silver, and zinc and to a lesser degree in lead. Molybdenum is
erratic with values of over 100 ppm only in restricted brecciated structures. The relationship
between precious and trace metals is not as clear as in the other mineralized bodies. Silver
correlates weakly with lead and zinc, and gold with copper. Molybdenum is unrelated to
either precious or base metals. Limited studies have been undertaken using other
pathfinders, such as mercury, antimony, arsenic, selenium, and barium. Mineralizing events
are not well defined by elementary associations.

CERRO BAYO - GUANACO CASCADA
In the Guanaco and Cascada sectors of the Cerro Bayo district, gold and silver
mineralization occurs in veins, vein systems and veinlets hosted in a moderately welded
sequence of dacitic and rhyolitic tuffs. The volcanic sequence is intruded by the Cerro Bayo
and other dacitic domes, considered to be post-mineral events.

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The main vein systems have a 325 to 345 orientation, vary in dip from vertical to 75
northwest and southeast, with strike lengths between 50 m and 1,200 m. Additional
extensions in excess of 1,000 m have been disrupted by major faults trending east to
northeast. Widths are highly variable between the different vein systems and within
individual veins along strike and down dip, varying from centimetres up to five metres.

Mineralization is typically low sulphidation, epithermal, and representative of the main
mineralization stage in the district. Veins are normally brecciated with local banded textures.
They consist mainly of fine-grained quartz and chalcedonic silica, adularia, and fluorite, with
minor amounts barite and carbonates. Sulphide content is less than 5% and consists mainly
of pyrite and silver sulphosalts as disseminations and bands. Moderate argillic alteration is
common in the area, with strong silicification and silico-argillic alteration occurring as haloes
along the veins.

LAGUNA VERDE
Gold and silver mineralization occur in veins, hydrothermal and tectonic breccias, stockworks
(sheeted veins) and veinlets hosted in a moderately to strongly-welded sequence of rhyolitic
and dacitic tuffs. Post -mineralization flow-banded dacitic domes intrude the volcanic
sequence at Coigues Hill.

Two main vein systems are recognized at Laguna Verde.
North-south to north-northeast trending brecciated veins and breccias varying in dip
from vertical to 45 E.

315 to 345 oriented veins varying in dip between vertical and 75 northwest and
southeast.

Strike lengths up to 800 m have been recognized in some of the vein systems. Widths are
highly variable between the different vein systems and within individual veins along strike
and down dip, varying from centimeters up to 50 m in breccias and stockworks (sheeted
zones).

Two different mineralization events can be recognized at Laguna Verde.
A mesothermal early stage Ag-Mo-Zn-Pb event with lesser gold.

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A late stage epithermal low sulphidized gold-silver rich system, representative of the
main mineralization stage of the district (Delia, Coigues Este and Tranque vein
systems).

Brecciated veins and tectonic breccias are the typical structures of the early stage
mineralization, whereas the late stage epithermal mineralization is represented by banded
veins that are locally brecciated. The veins consist mainly of fine grained quartz and
chalcedonic silica, adularia, and fluorite, with minor amounts of barite and carbonates. The
overall sulphide content is less than 5%, although higher in the early stage event. Sulphides
are mainly pyrite, silver sulphosalts, and local sphalerite disseminations, clusters and bands.

OTHER AREAS
Preliminary exploration has been conducted in the district outside of Laguna Verde, Cerro
Bayo, Guanaco, and Cascada. Epithermal veins and porphyry style alteration and
mineralization exist in the Mallines, Horquestas, Rodados Colorados, Meseta and Brillantes
areas.

Large vein systems and stockwork zones are exposed at Mallines, with textural and chemical
characteristics that suggest the present day exposure level is above the favorable horizon in
the epithermal system, though local indications of high grade mineralization have been
found.

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8 DEPOSIT TYPES

The Aisn region hosts precious and base metal mineralization. Lead-zinc-copper minerals
have been mined from veins and from irregular pods and stratiform bodies hosted in
Mesozoic volcanic rocks and sedimentary rocks, and in Paleozoic metamorphic rocks.
Molybdenite-quartz veins and veinlets occur in pegmatitic facies of the Patagonian Batholith
that also include scheelite and complex minerals of uranium and thorium. Precious metals
related locally to lead and zinc minerals have also been explored and mined in vein
occurrences in the Chilean-Argentinean Patagonia. Cerro Bayo in Chile, and Martha, Cerro
Vanguardia, Manantial Espejo, and San J ose in Argentina are the largest deposits presently
known in the region (Figure 8-1).

The mineralogy and textures of the main stage event and the associated alteration phases
are consistent with a low-sulphidation model for volcanic-hosted precious metal deposits.

The following summary of low-sulphidation epithermal deposits is taken largely from Robert
et al. (2007).
The currently accepted definition of epithermal deposits includes precious and base metal
deposits forming at depths of <1.5 km and temperatures of <300 C in subaerial
environments within volcanic arcs, at convergent plate margins and in intra- and back-arc as
well as post-collisional extensional settings. Epithermal systems can be grouped in to high-,
intermediate- and low-sulphidation types based on variations in their hypogene sulfide
assemblages (Sillitoe and Hedenquist, 2003). Most epithermal gold deposits are Cenozoic in
age, but some older deposits are known, although none of the giant ones are older than
Cretaceous.

Low sulphidation epithermal gold deposits of the alkalic and subalkalic subtypes share a
number of characteristics and are described together. Differing characteristics of the less
common alkalic low sulphidation deposits are highlighted where appropriate. Most low
sulphidation gold deposits are found in intra or back-arc rifts within continental or island arcs
with bimodal volcanism. Rifts may form during or after subduction or in post-collisional
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settings. Additionally, some low sulphidation deposits are found in andesite-dacite-rhyolite
volcanic arcs, but only in clearly extensional settings (Sillitoe and Hedenquist, 2003).
Deposits of the alkalic subset of low sulphidation epithermal deposits are specifically
associated with alkaline magmatic belts but share an extensional setting with their calk-
alkaline counterparts (J ensen and Barton, 2000).

At the deposit scale, low sulphidation gold deposits are typically hosted in volcanic units, but
can also be hosted by their basement. Vein development in the basement does not reflect
syn-mineral uplift, as is the case in high sulphidation and intermediate sulphidation systems,
but rather the intersection of the hydrothermal system with rheologically more favorable
basement host rocks. Syn-mineral mafic dykes are common in these deposits (Sillitoe and
Hedenquist, 2003). Both low-grade disseminated and structurally controlled high-grade
deposits can form, such as Round Mountain and Hishikari, respectively. Calc-alkalic low
sulphidation deposits have restricted vertical continuity, generally <300 m, whereas alkalic
low sulphidation deposits such as Porgera and Cripple Creek can extend in excess of 1 km
vertically. Mineralization in subalkalic low sulphidation systems generally has high silver
(Au:Ag ratio <1) and low base metal content and gold is associated with pyrite high-Fe
sphalerite pyrrhotite arsenopyrite. In contrast, low sulphidation alkalic mineralization
commonly contains abundant telluride minerals, has elevated Au: Ag ratios, and less
voluminous quartz gangue (J ensen and Barton, 2000).

Alteration mineralogy in low sulphidation systems shows lateral zoning from proximal quartz-
chalcedonyadularia in mineralized veins, which commonly display crustiform-colloform
banding and platy, lattice-textured quartz indicative of boiling, through illite- pyrite to distal
propylitic alteration assemblages. Vertical zoning in clay minerals from shallow, low
temperature kaolinite-smectite assemblages to deeper, higher temperature illite have also
been described (Simmons et al., 2005). As with high sulphidation and low sulphidation
systems, host rock composition can also cause variations in the alteration mineral zoning
pattern in low sulphidation systems. Alteration assemblages in alkalic low sulphidation
deposits commonly contain roscoelite, a V-rich white mica, and abundant carbonate minerals
(J ensen and Barton, 2000).

66 64 68 72 70 74
46
50
48
0 40 200
Kilometres
80 120 160
Regional Deposits
Cerro Bayo Project
Figure 8-1
8
-
3
w
w
w
.
r
p
a
c
a
n
.
c
o
m
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9 EXPLORATION
Prior to 2009, Coeur had previously identified additional mineralized zones on the property
through detailed surface mapping and had started defining these targets, such as Cerro
Bayo Este, Pampa la Perra, La Tina, and Zone 2. In addition, detailed surface mapping was
conducted across Zone 2, resulting in the identification of the Gabriella and Gaby W vein
systems. Mapping in these areas delineated veins and veinlets of massive quartz between
0.1 m and 1.2 m in width, trending approximately 170 azimuth and dipping 86 east.

In 2011, Mandalay reviewed historic Coeur reports and data while continuing surface
mapping of the district.

In 2012, surface mapping was completed in the Mallines, Gabriela, and Laguna Verde zones
and exploration for new targets was carried out in the Esperanza, Antimonio, and Cerro
Amarillo zones.

In 2013, regional and local geochemical mapping was carried out using trace elements.
Surface mapping was completed in the Esperanza and Brillantes zones. Uraniumlead
dating of intrusive rocks was carried out in the Lagunas Verde Island and the Horqueta zone.
Hydrothermal alteration zones were mapped using Terraspec Hi Resolution Mineral
Spectrometer (ASD) and the lithological contact between Temer and Coigues units was
defined for the Lagunas Verde and Cerro Bayo areas.

EXPLORATION POTENTIAL
RPA is of the opinion that the Cerro Bayo Project hosts a significant silver and gold
mineralized system, and that there is good potential to increase the resource base where
existing mineralization and newly identified targets are open along strike and at depth.
Continued exploration is warranted.

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10 DRILLING
Drilling on the Cerro Bayo property has been conducted in phases by several companies
from 1986 to 2013. Total drilling consists of 4,454 diamond drill holes totalling approximately
596,155 m and 666 reverse circulation (RC) holes totalling 57,271 m. A small number of
exploration drill holes outside of the main mining areas are not included in the totals.

A summary of drilling by operator is included in Table 10-1. Drill hole locations for the
modelled veins in the Coigues Este area are included in Figures 14-5 to 14-6.

TABLE 10-1 DRILL HOLE DATABASE

Core Hol es RC Holes
Area Year Drilled
No.
Holes
No. Metres
No.
Holes
No.
Metres
Cerro Bayo
Dome/Guanaco
Pre-2010 1,967 206,486 9 1,582
Mallines Pre-2010 54 6,995 - -
Cascada Pre-2010 153 24,828 - -
Laguna Verde
(includes Coigues
Este)
Pre-2010 1,583 195,087 657 55,689
2010 15 2,668 - -
2011 290 60,457 - -
2012 230 62,189 - -
Cerro Bayo 2013 43 10,525 - -
Lagunas Verde 2013 94 20,994 - -
Mallines 2013 13 3,595 - -
Caadon Verde 2013 12 2,329 - -
Total 4,454 596,155 666 57,271

PREVIOUS DRILLING
PRE-2010

RC drilling was carried out in the Laguna Verde area in the early stages of exploration in the
district, between 1990 and 1992, and again in late 2003 and early 2004. RC drilling was
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Page 10-2
conducted by contractors using 5.5 in. bits. Sampling of cuttings obtained from RC drilling
was taken on 0.5 m and 1.0 m increments with a targeted total sample size of 20 kg to 22 kg
in the first case, and 40 kg to 45 kg in the latter case. The drill hole cuttings were logged by
the geologists for lithological, structural, and mineralogical information. Boxes with splits of
the sampled intervals were stored. The reject material was bagged and stored until the
drilling campaign, interpretation, and modelling were complete, in order to review or
resample if required.

Until 2009, most of the core drilling was carried out by contractors and by Coeur personnel
using CMCB-owned drill rigs (Diamec 251 and Diamec 262). BQ diameter holes were drilled
underground and BQ, NQ, and HQ diameter holes were drilled from surface.

Drill hole collar coordinates were surveyed using industry standard surveying techniques by
in-house and contract surveyors.

Sperry Sun downhole surveys were taken on the majority of the core holes. Results from
Sperry Sun surveys showed slightly less than 4 horizontal and 1.5 vertical deviations per
100 m, based on 481 surveyed core holes. In 2004, a Reflex multi-shot downhole survey
instrument was purchased and used for subsequent drilling. Downhole surveys were not
taken on reverse circulation holes.

Company geologists logged lithological, structural, and mineralogical information, while other
company personnel logged recovery and RQD data.

All drill hole data was originally maintained in manual form. Since the early 1990s, the data
was entered and stored in Excel spreadsheets. Data was later stored in a centralized
Access database, then moved into an acQuire information management system database.

MANDALAY DRILLING
2010-2011
Mandalay completed 63,125 m of core drilling in 305 holes during 2010 and 2011 at Laguna
Verde. The drilling was a part of the resource confirmation and extensional program
conducted by Mandalay Geological Team for Dagny, Fabiola, Yasna, Delia NW, Delia SE,
Marcela Sur, and Dalila veins. Blue sky exploration holes targeted the Gabriela vein.
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Mandalay drilling was completed using Atlas Copco Diamec 262 and 252 drill rigs. Master
Drilling used Boart Longyear F90 and Max1000 drill rigs. All Mandalay drill core is stored at
Granja Temer in Laguna Verde, and older core is stored in Guanaco near Cerro Bayo.

Drill hole collars were surveyed by Mandalay surveyors using total station survey
instruments. Downhole surveys were completed by Mandalay and contract drillers after the
hole was complete using Maxibor II instruments. Some of the downhole surveys were
corrected after the collars were reviewed and resurveyed.

The diamond drill core was placed in appropriately labelled wooden core trays at the drill rig
prior to transport. Core was carefully transported by Geological Assistants to the on-site
Granja Temer core logging facility by truck.

All geological information was manually logged on paper, and then transferred to Excel
spreadsheets. In late 2011, core logging was entered digitally into Geovectras GVMapper
logging software program. All diamond drill core was photographed using a digital camera
and the images were stored in the master database.

Geological information recorded includes lithology, veins, core recovery, description of
specific structures and alteration styles, along with their width, intensity, and associated
mineral assemblage. In addition, rock quality designation (RQD) was undertaken to record
the number and nature of natural breaks in the core for subsequent geotechnical
assessment.

2012
The purpose of the 2012 Mandalay drilling programs was to drill infill holes and extend
resources of the Dagny, Delia NW, Delia SE, Coyita, Dalila, and Trinidad veins. Blue sky
exploration holes targeted the Gabriela vein.

Mandalay completed a total of 230 diamond drill holes totalling 62,189 m, of which 61% was
completed at Laguna Verde and Marcela Sur and the remaining 39% at Gabriela,
Caiquenes, and Guanaco veins. All holes were collared and finalized using BQ, NQ, and HQ
diameter core.

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Following RPAs recommendations, Mandalay implemented standard operating procedures
for core logging, to be used by all current and future geology personnel.

2013
During 2013, Mandalay completed 162 drill holes for 37,445 m, of which 41% was infill
drilling, 35% was extensional definition drilling for some of the veins, and 24% was
exploration drilling in new targets. The infill drilling focused on the Delia NW, Trinidad,
Marcela Sur, Raul, and Coyita veins. The extensional definition drilling was completed in the
southeast area of the Fabiola and Yasna veins under the Lagunas Verde lake, at the
Lourdes West and Wendy North veins in the Cerro Bayo area, and at the Guanaco I, J uncos,
Chinita, Chatito, Condor, and Carola veins. The exploration drilling was concentrated on the
new targets at the Esperanza, Antimonio, and Mallines West veins.

As a result of the extensional drilling, Fabiola and Yasna vein mineralization was extended
for approximately 500 m to the southeast of the previous limits. The drilling also showed that
there is good potential to extend mineralization to the southeast of the Coyita vein.

In late 2013 there were five diamond drills on site. All five of the drills are company owned.
Drilling averages approximately 3,000 m per month.

RPA is not aware of any drilling, sampling, or recovery factors that could materially impact
the accuracy and reliability of the results.

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Page 11-1
11 SAMPLE PREPARATION, ANALYSES AND
SECURITY
PREVIOUS WORK
This section has been largely taken from SRK (2010).

A complete assay laboratory owned by Compania Minera Cerro Bayo and located at the mill
site near Laguna Verde, contains facilities for sample preparation, fire, wet and atomic
absorption assays. Both mine and exploration samples are assayed at this facility. Outside
consultants established testing procedures in accordance with industry standards. SGS
Lakefield Research Chile S.A. carried out an audit in 2011 and results showed that the
laboratory meets international standards. Prior to this, Snowden Mining Consultants Inc. and
J acobs Engineering reviewed the lab in 2001. Although the lab was not certified, their
findings were that the laboratory met international standard operating procedures.

All exploration and production sampling has been carried out by CMCB personnel.

Each core sample is identified with a unique sample number tracked throughout the assaying
process. Samples are weighed prior to crushing, jaw crushed to produce a 9.5 mm product,
roll crushed to achieve 90% passing 2.0 mm (10 mesh ASTM) product, then split with a one
inch riffle to approximately 0.5 kg. This 0.5 kg sample is air dried for 2 hours at 102 degrees
Celsius prior to pulverization using a plate pulverizer to 100% passing 0.15 mm (100 mesh
ASTM). After pulverizing each sample, the bowl, ring, and puck assembly are disassembled
with the pulverized sample, and placed on a rolling cloth. The pulverizer assembly is placed
back in the bowl with another sample. Two assemblies were used in an alternating fashion.
The pulverized sample is rolled and transferred to a numbered envelope. Silica sand is
pulverized at the end of the entire sample run to minimize possible contamination for the next
run. No cleaning or downgrading of the pulverizer assembly is performed during any single
sample. No significant material was carried over from sample to sample with this equipment.

Each RC sample is identified with a unique sample number tracked throughout the assaying
process. Samples are dried at 105
o
C, if required. Following drying, the sample is roll
crushed to achieve 90% passing 2.0 mm (10 mesh ASTM) product, then split with a one inch
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Page 11-2
riffle to approximately 500 grams. This sample is air dried for two hours at 105
o
C then
pulverized using a ring and puck pulverizer to 100% passing 0.15 mm (100 mesh ASTM).
After pulverizing each sample, the bowl, ring, and puck assembly are disassembled with the
pulverized sample, and placed on a rolling cloth. The pulverizer assembly is placed back in
the bowl with another sample. Two assemblies are used in an alternating fashion. The
pulverized sample is rolled and transferred to a numbered envelope. Silica sand is
run. No cleaning or downgrading of the pulverizer assembly is performed during any single
sample. No significant material is carried over from sample to sample with this equipment.

Channel samples and stockpile samples are two types of mine production samples analyzed.

Each channel sample is identified with a unique sample number tracked throughout the
assaying process. Samples are dried at 105
o
C if required. Samples are jaw crushed to
produce a 9.5 mm product, roll crushed to achieve 90% passing 2.0 mm (10 mesh ASTM)
product, then split with a one inch riffle to approximately 500 grams. This sample is air dried
for two hours at 105
o
C, and then pulverized using a ring and puck pulverizer to 100%
passing 0.15 mm (100 mesh ASTM). After pulverizing each sample, the bowl, ring, and puck
assembly were disassembled with the pulverized sample, and placed on a rolling cloth. The
pulverizer assembly is placed back in the bowl with another sample. Two assemblies are
used in an alternating fashion. The pulverized sample is rolled and transferred to a
numbered envelope. Silica sand is pulverized at the end of the entire sample run to minimize
possible contamination for the next run. No cleaning or downgrading of the pulverizer
assembly is performed during any single sample. No significant material is carried over from
sample to sample with this equipment.

Each stockpile sample is identified with a unique sample number tracked throughout the
assaying process. Samples were dried at 105
o
C if required. Samples are jaw crushed to
produce a 9.5 mm and split with a one inch riffle to 20 kg. This split is then roll crushed to
achieve 90% passing 2.0 mm (10 mesh ASTM) product, and then split with a one inch riffle
to approximately 500 g. This sample is air dried for two hours at 105
o
C, then pulverized
using a ring and puck pulverizer to 100% passing 0.15 mm (100 mesh ASTM). After
pulverizing each sample, the bowl, ring, and puck assembly are disassembled with the
pulverized sample, and placed on a rolling cloth. The pulverizer assembly is placed back in
the bowl with another sample. Two assemblies are used in an alternating fashion. The
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pulverized sample is rolled and transferred to a numbered envelope. Silica sand is
run. No significant material is carried over from sample to sample with this equipment.

All samples were assayed for gold and silver by fire assay and gravimetric finish using a 30 g
nominal sample weight (Cerro Bayo ME Grav21 method). Check assays, including duplicate
pulps and coarse rejects, totaling 285 samples, were carried out at the ALS Chemex lab in
La Serena, Chile, where samples were assayed by fire assay with gravimetric finish.

The gold and silver present in the sample were expressed according to the following
formulae:

Au (g/t) =au (mg) / sample weight (g)
Ag (g/t) =(Au +Ag) (mg) Au (mg) / sample weight (g)

MANDALAY WORK
CORE SAMPLING
Core is sampled predominately on the basis of geological logging with sample intervals
ranging from a minimum sample length of 0.1 m and a maximum sample length of 3.0 m.
Mineralized intersections and adjacent intervals are selectively sampled for assaying for
silver and gold content. An electric diamond saw is used to cut the core lengthwise, which is
then placed correctly back into the tray. The half-core is then sampled by Mandalay
Geological Assistants, ensuring that the same side is consistently sampled, and placed into
bags with the assigned sample number, then closed and sealed with staples. The samples
are then securely transported by truck to the on-site laboratory. Intervals that are not
assayed remain in storage at the mine site.

Mandalay has implemented standard operating procedures for core sampling, as
recommended in RPA (2012).

CHANNEL SAMPLING
Underground channel samples are collected from level development headings at an
approximate 2.4 m spacing. Veins and mineralization are selectively sampled on each face,
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with samples taken across the whole face width every fifth round. The minimum sample
length is 0.1 m and the maximum length is 1.0 m. The width of the channel ranges from 0.2
m to 0.4 m and the depth is typically 0.2 m. Each sampled face is mapped and recorded with
corresponding channel sample information.

RPA recommends channel sampling across the entire face for each round to obtain
additional information on grade distribution, especially along indistinct contacts between
mineralized and non-mineralized zones, and for use in determination of dilution grades
immediately adjacent to veins.

Mandalay implemented standard operating procedures for channel sampling.

SAMPLE ANALYSES
Assaying was completed by the on-site laboratory, which contains all facilities for sample
preparation, fire, wet and atomic absorption assays. The on-site laboratory is wholly-owned
by Mandalay and it is not certified.

In-house standard operating procedures have been developed and documented by
Mandalay for sample preparation, sample crushing and pulverizing, and fire assaying with
gravimetric finish.

All samples are received at the laboratory with standard work orders for each batch.
Information on the work orders is checked against the sample number tags prior to sample
preparation. All wet samples are dried in the furnace prior to sample preparation.

Dried samples are crushed in two stages to 85% passing 10 mesh. A 400 g to 500 g split is
riffled off and the unused portion stored as a coarse reject. The entire split sample is
pulverized to 95% passing 140 mesh.

Assaying is done by fire assaying methods with a gravimetric finish based on an approximate
30 g sample. Each sample is fire-assayed using a traditional lead oxide flux as well as a
known addition of silver, and then placed in fire assay furnaces. The fusion of the flux and
inquarted sample produced a molten mixture that is poured into conical molds and cooled.
The lead button formed during the fusion process is separated from the cooled slag and
pounded to remove any adhering slag. The lead button is then cupelled using a magnesium
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oxide cupel. The remaining dor bead is flattened and weighed. The weighed dor is placed
in a test tube and concentrated nitric acid is added. The button is then rinsed, ammonia is
added, and the button rinsed again. The button is dried and roasted for five minutes at
700
o
C. The gold is weighed after cooling. Silver to gold ratios are then checked. If the ratio
is lower than 3:1, additional silver and lead is added, and the sample is re-analyzed.

Coarse rejects and pulps are retained for future test work or further mineralogical and
metallurgical work.

SAMPLE SECURITY
Mandalays security procedure involves direct drill and sample management, secure
transportation methods, sampling, sawing, and logging areas.

LABORATORY AUDIT
SGS Lakefield Research Chile S.A. (SGS) conducted a laboratory audit from August 24 to
25, 2011. All laboratory procedures for sample analysis and the internal laboratory QA/QC
program, and laboratory equipment were reviewed. Details are documented in the SGS
Laboratory Audit Report (SGS, 2011).

SGS did not identify any issues in general, regarding the technical level of laboratory
personnel, the overall laboratory data management procedures, or the execution of the
sample preparation and sample analytical procedures.

SGS recommended implementing a few changes with periodic reviews regarding training of
lab personnel, fire assay furnace temperature control, equipment calibration, and loss of
silver during the cupellation stage. SGS also recommended taking note of the shelf life of
standards used for calibration of atomic absorption equipment, the use of precision curves
for controlling repeatability of analyses, and regular checks on the status of the lab
equipment.

Regarding Mandalays internal laboratory QA/QC program, SGS recommended the use of
certified reference materials (CRMs) as checks on the in-house reference materials used,
and the establishment of in-house procedures and control charts for timely review and
validation of analytical batches.
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SGS also recommended that the on-site laboratory obtain ISO (International Organization for
Standardization) certification for accreditation, involving the establishment and
implementation of a quality management system.

In RPAs opinion, the sample preparation, analytical procedures, and sample preparation
meet industry standards and are acceptable to support the resource estimation work. The
QA/QC procedures and results are summarized in Section 12.

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12 DATA VERIFICATION
DATA VALIDATION
PREVIOUS WORK
This section has been largely taken from SRK (2010) and RPA (2012).

2008 2009
Data verification was conducted on the Gemcom GEMS (Gemcom) resource databases
used for the 2008 Dagny, Fabiola, and Yasna resource models, and the 2009 Delia resource
model after the models were completed. The acQuire data management system was
implemented at Cerro Bayo in 2007 to 2008, but was not fully implemented at the time of
modeling. Discrepancies were identified when comparing the Gemcom databases to the
acQuire databases, due to missing assays in the Gemcom databases.

By early 2009, all Cerro Bayo data was stored in an acQuire database at the Coeur South
America (CSA) Exploration offices in Chile Chico and at the exploration office in Santiago.
The acQuire data management system stored data in a standardized structure, provided
tools for data QA/QC and reporting, and was securely backed up at the corporate office. All
assay certificates were imported directly into the acQuire database, and were linked to
sample numbers stored in the database, minimizing manual assay transfer errors.

CSA completed an extensive validation of the data collected from 2007 to 2009. Data
verification was limited to the data included in the mineral resource databases. No significant
discrepancies were found.

2010
Details of the following data verification conducted by SRK in 2010 are contained in SRK
(2010). The database verification consisted of checks in four drill holes from each of the
Delia, Dagny and the Fabiola-Yasna vein systems. Drill logs, collar information, assay
intervals and laboratory certificates were checked against vein cross section plots, and the
acQuire database. No significant discrepancies were identified.

Mandalay carried out a twin drill hole program in 2010. A total of 15 core holes were twinned
by a second core hole in the Cerro Bayo and Laguna Verde areas, including veins in the
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Page 12-2
Coigues Este area. This total includes holes in the Dagny vein and two holes in the Fabiola-
Yasna vein system. Selected holes were representative of the different domains and grades
in each vein. Core was split, and one half was assayed at the ALS-Chemex (Geolab)
laboratory in Santiago or La Serena. Blanks and standards were included for laboratory
checks.

All duplicate holes intercepted the target vein at or close to the expected location.
Comparative results confirmed the general position and widths of the mineralized structures.
Significant variability in grades were encountered with high gold and silver values above 15
g/t Au and 1,000 g/t Ag, which is related to the variability of mineralization in epithermal
veins. Grade variability may also be affected by a smaller sample volume taken from the
twinned holes (half core compared to whole core from the original holes) and different core
diameter of the twinned holes.

SRK visited the core logging and storage facility located near Laguna Verde. Mineralized
intercepts from six core holes were examined and compared with the original geologic logs.
No significant differences were identified in the logged descriptions of the lithologies,
mineralization, structures, or measured intervals.

Based on data verification undertaken in 2010, and independent reviews completed
previously, SRK determined that the general flow of data from original drill hole logs, drill hole
surveys, sampling, sample preparation, laboratory procedures, laboratory certificates, and
the construction of cross sections, were completed in accordance with generally accepted
best practice standards.

2011
Patti Nakai-Lajoie, Principal Geologist with RPA, and an independent QP, visited the
property from September 29 to October 10, 2011. During the visit, Ms. Nakai-Lajoie
examined underground exposures of mineralization, reviewed plans and sections, visited the
analytical lab on site, and reviewed core logging and sampling procedures. As part of the
data verification process, RPA checked the databases against copies of the assay
certificates, checked a selection of drill hole collars, and reviewed QA/QC data collected by
Mandalay.

The data verification and QA/QC conducted by RPA in 2011 are summarized as following:
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Surface drill hole locations were confirmed by RPA using a hand-held GPS.
Identified discrepancies were resolved through the implementation of an on-site
transformed coordinate system.

RPA checked a minimum of 10% of assay records in the Cerro Bayo drill hole and
channel databases against original hardcopy assay certificates. No significant
discrepancies were identified but a few minor database errors such as missing
lithology records and incorrect vein flag codes were noted.

2012
Rosmery Cardenas, Senior Geologist with RPA, and an independent QP, visited the property
from November 26 to 29, 2012. During the site visit, Ms. Cardenas examined underground
exposures of mineralization, reviewed plans and sections, visited the analytical laboratory on
site and the core shack, and reviewed core logging and sampling procedures. As part of the
data verification process, RPA checked the databases against copies of the assay
certificates, checked a selection of drill hole collars, and reviewed QA/QC data collected by
Mandalay.

Details of the data verification conducted by RPA in 2012 are contained in RPA (2012). The
principal data verification findings of the RPA (2012) report are summarized as follows:
20% of 2012 assay records in the Cerro Bayo drill hole database were checked
against original digital assay certificates. All digital data included in the Cerro Bayo
mineralized zones were also checked against original logs for discrepancies in collar
coordinates, downhole surveys, and lithology records. Questionable drill holes were
removed from the final database. No significant discrepancies were found.

CURRENT WORK
Rosmery Cardenas, Senior Geologist with RPA, and an independent QP, visited the property
most recently from J anuary 8 to 10, 2014. During the site visit, Ms. Cardenas examined
underground exposures of mineralization for the Yasna, Fabiola, Dagny, Bianca, and Delia
veins and surface exposures of mineralization at the Raul open pit, reviewed plans and
sections, visited the analytical laboratory. As part of the data verification process, RPA
checked the databases against copies of the assay certificates, checked a selection of drill
hole collars, and reviewed QA/QC data collected by Mandalay.

RPA checked 100% of 2013 assay records in the Cerro Bayo drill hole database against
original digital assay certificates. All digital data included in the Cerro Bayo mineralized
zones were also checked against original logs for discrepancies in collar coordinates,
downhole surveys, and lithology records. RPA queried the database for unique header,
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Page 12-4
unique sample, duplicate holes, overlapping intervals, and long interval sample. RPA did not
identify any significant discrepancies but noted a few minor database errors such as missing
lithology records, incorrect vein flag codes, overlapping intervals, a few differences between
database assay values and certificate assay values, and a small number of duplicated
unique sample numbers, however, these inconsistencies were corrected prior to the resource
estimation work.

Some discrepancies in drill hole collar coordinates with respect to the topography were
found. These discrepancies were confirmed through a visual comparison of the drill hole
vein intersection location with underground mapping and channel samples, and collar
coordinates were deemed unreliable. In the cases where such discrepancies were identified,
RPA gave more weight to the underground data over the drill hole data. RPA recommends
that Mandalay review drill holes with collar coordinates that do not correspond to the
topographic surface.

RPA recommends:
Validating all core and channel sample data prior to entry into the master database.

Building a relational database and creating queries to validate data.

Sampling all core intervals immediately adjacent to mineralization, as undersampling
of a few mineralized shoulders were noted. These unsampled intervals should also
be reviewed after assays have been returned.

Sending hardcopy assay certificates from the laboratory in a secure file format, such
as PDF, for enhanced security of assay results. Currently, assay certificates are
provided by the laboratory in Excel spreadsheets.

Carrying out and documenting data verification programs annually particularly in the
new exploration areas where there is a significant amount of historical data.

QUALITY ASSURANCE AND QUALITY CONTROL
Quality assurance (QA) consists of evidence to demonstrate that the assay data has
precision and accuracy within generally accepted limits for the sampling and analytical
method(s) used in order to have confidence in a resource estimate. Quality control (QC)
consists of procedures used to ensure that an adequate level of quality is maintained in the
process of collecting, preparing, and assaying the exploration drilling samples. In general,
QA/QC programs are designed to prevent or detect contamination and allow assaying
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(analytical), precision (repeatability), and accuracy to be quantified. In addition, a QA/QC
program can disclose the overall sampling-assaying variability of the sampling method itself.

PREVIOUS WORK
2009 - 2010
Details of the QA/QC program conducted by CSA in 2009 are contained in Sims (2010) and
are summarized here. Samples collected in 2009 were assayed at the CMCB facilities in
Laguna Verde. Quality control procedures included routine check assays of sample pulps
and duplicate pulps prepared from coarse rejects, and the use of blanks and standards.

Six in-house standards were prepared for use by the CMCB laboratory at Cerro Bayo and
used during 2009. Results were considered generally acceptable, except for standards STD-
2001-1 and Std-4, which returned values beyond accepted failure limits at the primary
laboratory. A systematic bias was identified in standard STD-2001-1 where gold results were
reported above the expected value, with a 9.3% failure rate. Standard Std-4 returned silver
values below the expected value, with a 28.5% failure rate. The reason for the failures could
not be identified and CSA discontinued the use of both standards.

Blank samples were originally collected from barren core, then from a large silica
replacement body located in the southeast area of the Cerro Bayo district. No contamination
was detected from routine insertion of blanks in the sample stream, with the exception of
three samples with silver contamination. Whole batches containing the contaminated blanks
were re-assayed. The re-assayed samples returned results within expectations, but one
blank failed a second time, due to contamination during sample preparation.

Approximately 5% of pulp duplicates and preparation duplicates (rejects) were sent to ALS
Chemex Chile (ALS) (ISO 9001), in Santiago, Chile for verification. ALS results for both the
pulp duplicates and preparation duplicates indicated a high relative error in gold values below
0.7 g/t Au. At higher grades, the relative errors were within accepted industry standards.

2011
RPA reviewed results from Mandalays internal laboratory QA/QC program undertaken from
J anuary to October 2011 (Casanga, 2011). The following points summarize the principal
QA/QC findings:
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Mandalay generated six property specific standards which were inserted into the
overall sample streams, including core, underground channel and grab samples,
concentrate, and environmental samples, at a rate of approximately 1 in 10 samples.
Results for the six standards are generally within acceptable limits, with a small
percentage of failures.

The grades for the six in-house reference standards in use in 2011 covered the range
of expected results, and were appropriate for use in Mandalays internal laboratory
QA/QC program.

Mandalays QA/QC protocol called for blanks to be inserted in the sample stream at a
rate of approximately 1 in 20 samples. The results indicated minimal evidence of
contamination, drift, or tampering.

Approximately 10% of the pulp samples were re-assayed. The pulp duplicate results
for gold and silver showed good precision.

Pulp samples from approximately 5% of the core samples and 2% of the channel
samples were sent to an outside laboratory for referee check assays. ALS Patagonia
S.A. (ALS), in Santiago, Chile, was used as the referee laboratory, and is accredited
to the ISO 17025 Standard by Certificate number 949. The mine and ALS assay
results showed good correlation and confirmed the mine laboratory gold and silver
assays were reliable with no significant biases evident.

2012
J anuary to October 2012 and found that the overall QA/QC results support the integrity of the
databases (RPA, 2012).

The following points summarize the principal findings of the RPA (2012) report:
Mandalay generated six property specific in-house standards which were inserted
into the sample stream. The standards cover the range of expected results and are
generally within acceptable limits, with a small percentage of failures.

Mandalay started the insertion of five CRMs in 2012, however, more data is needed
before meaningful conclusions can be made.

Mandalays QA/QC protocol called for blanks to be inserted in the sample stream at a
rate of approximately 1 in 20 samples. The results indicated minimal evidence of
contamination, drift, or tampering.

A total of 8% of the pulps were re-assayed. The pulp duplicate results showed very
good correlation between the gold and silver.

Pulp samples from approximately 5% of the core samples and 2% of the channel
samples were sent to ALS for referee check assays. The mine and ALS assay
results showed good correlation and confirmed the mine laboratory gold and silver
assays were reliable with no significant biases evident.
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The 2012 RPA recommendations included the following:
The establishment of a QA/QC program that is blind to the laboratory and
implemented by the Geology production and exploration personnel. This involved the
insertion of CRMs, blanks, and duplicates that are unknown to the laboratory, as a
check on the accuracy and precision of the sample results.

CURRENT WORK
INTERNAL LABORATORY QA/QC
J anuary to December 2013. Details are documented in Mandalays QA/QC report (Casanga,
2013) and summarized in the following sections. The figures have been provided by
Mandalay and are documented in Mandalays QA/QC report.

IN HOUSE REFERENCE MATERIAL
Mandalay inserted six property specific standards into the overall sample streams, including
core, underground channel and grab samples, concentrate, and environmental samples, at a
rate of approximately 1 in 10 samples. A total of 3,852 standards were inserted for a total
insertion rate of 12%. The in-house standards are not certified and their expected values
and standard deviations (SD) are listed in Table 12-1.

In RPAs opinion, the in-house standard grades cover the range of expected results, and are
appropriate for use in Mandalays internal laboratory QA/QC program.

TABLE 12-1 EXPECTED VALUES AND RANGES OF STANDARDS

Standard
Au Results Ag Results
Number of
Assays
Au (g/t) S.D. Ag (g/t) S.D.
REL-01 0.25 0.03 32 1.2 949
FDD-02 0.95 0.05 282 3.01 344
FDD-03 7.82 0.27 1,740 9.93 615
FDD-04 0.35 0.05 62 1.46 1040
FDD-05 1.87 0.06 315 2.54 659
STD-02 73.57 2.35 10,613 85.83 266
From Mandalay (2013)

Specific pass/fail criteria are determined from the standard deviation provided for the
standard reference samples. The conventional approach to setting reference standard
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Page 12-8
acceptance limits is to use the mean assay 2 standard deviations as a warning limit and 3
standard deviations as a failure limit. Results falling outside of the failure limit must be
investigated to determine the source of the erratic result, either analytical or clerical.

RPA reviewed the results returned from the standard reference samples. The following
graphs in Figure 12-1 were prepared by Mandalay, which illustrate the gold and silver assay
results compared to the in-house standard grades. Results for the six standards are
generally within acceptable limits with a small percentage of failures. The results confirm
that the mine laboratory gold and silver assays are accurate and no significant biases are
evident.

FIGURE 12-1 IN-HOUSE STANDARD RESULTS - 2013

0.14
0.24
0.34
0 100 200 300 400 500 600 700 800 900 1000
Au g/t
N Control
Control Estndar 2013 REL-01 ( 0,25 g/t Au )
Valor Recomendado Lmite Inferiror Lnea Superiror Control
27
29
31
33
35
37
0 100 200 300 400 500 600 700 800 900 1000
Ag g/t
N Control
Control Estndar 2013 REL-01 ( 32 g/t Ag )
Valor Recomendado Lmite Inferiror Lmite Superior Control
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Page 12-9

0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
0 25 50 75 100 125 150 175 200 225 250 275 300 325 350
Au g/t
N Control
Control Estndar 2013 FDD-02 ( 0,95 g/t Au )
265
270
275
280
285
290
295
300
0 25 50 75 100 125 150 175 200 225 250 275 300 325 350
Ag g/t
N Control
Control Estndar 2013 FDD-02 ( 282 g/t Ag )
6.70
7.20
7.70
8.20
8.70
0 50 100 150 200 250 300 350 400 450 500 550 600 650
Au g/t
N Control
1700
1720
1740
1760
1780
0 50 100 150 200 250 300 350 400 450 500 550 600 650
Ag g/t
N Control
0.18
0.28
0.38
0.48
0 100 200 300 400 500 600 700 800 900 1000
Au g/t
N Control
56
59
62
65
68
0 100 200 300 400 500 600 700 800 900 1000
Ag g/t
N Control
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Page 12-10
BLANKS
The regular submission of blank material is used to assess potential contamination during
sample preparation and to identify sample numbering errors. Mandalays QA/QC protocol
called for blanks to be inserted in the sample stream at a rate of approximately 1 in 20
samples.
Mandalay submitted 720 blank samples of which there were no failures for Au or Ag. RPA
considered an assay as failure if the result was higher than ten times the detection limit (DL)
of the method of analysis (for Au DL=0.1 g/t and for Ag DL=2 g/t). Results of the blanks are
illustrated in Figure 12-2 with Mandalays internal action threshold set at approximately 2.5
1.65
1.75
1.85
1.95
2.05
2.15
0 100 200 300 400 500 600 700
Au g/t
N Control
305
307
309
311
313
315
317
319
321
323
325
0 100 200 300 400 500 600 700
Ag g/t
N Control
65
67
69
71
73
75
77
79
81
83
0 25 50 75 100 125 150 175 200 225 250 275
Au g/t
N Control
Control Estndar 2013 STD-02 ( 73,6 g/t Au )
10300
10400
10500
10600
10700
10800
10900
11000
0 25 50 75 100 125 150 175 200 225 250 275
Ag g/t
N Control
Control Estndar 2013 STD-02 ( 10613 g/t Ag )
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Page 12-11
times the detection limits. In RPAs opinion, the results of the blanks are within acceptable
limits and the data can be used for resource estimation purposes.
PULP AND REJECT DUPLICATES
Duplicates help assess the natural local-scale grade variance or nugget effect and are also
useful for detecting sample numbering mix-ups. The duplicates help monitor the grade
variability as a function of both sample homogeneity and laboratory error.
The Thompson-Howarth (T-H) precision plot can be used to compare results for the three
duplicate types (field duplicates, reject duplicates, and pulp duplicates). The field duplicates
are expected to have the lowest precision, followed by the coarse reject duplicates. The pulp
duplicates are expected to have the best precision as they are the finest grain size and are
the most homogenized.
RPA received the results from 1,074 (4.4%) coarse reject duplicate pairs and 1,947 (6.9%)
pulp duplicate pairs for silver and gold. Figures 12-3 to 12-6 illustrate the results of the
duplicate pairs. Statistics for the duplicates results are shown in Table 12-2 for silver and in
Table 12-3 for gold.
2
4
6
8
0 100 200 300 400 500 600 700
Ag g/t
N Control
FIGURE 12-2 BLANK ASSAYS RESULTS - 2013
Control Muestra Blanco Ag g/t 2013
Lnea Accin Control
0.1
0.2
0.3
0.4
0 100 200 300 400 500 600 700
Au g/t
N Control
Control Muestra Blanco Au g/t 2013
Lnea Accin
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Page 12-12
For silver, the precision for coarse reject duplicates is approximately 3.3% at 300 g/t and the
precision for the pulp duplicates is approximately 1.2% at 300 g/t (Figure 12-5). For gold, the
precision for the coarse reject duplicates is approximately 6.5% at 3 g/t and the precision for
the pulp duplicates is approximately 3.6% at 3 g/t (Figure 12-6).
The sample duplicates have good correlation coefficients for silver and the relative standard
deviation (RSDs) range from 7% to 1% in the duplicates. The sample duplicates have good
correlation coefficients for gold and the RSDs range from 9% to 5%, which is very good for
gold mineralization.
In RPAs opinion, the duplicate results indicate that the analytical procedures for gold have
very good precision and results are well within acceptable limits.
TABLE 12-2 SUMMARY STATISTICS FOR SILVER DUPLICATES
Pulp Reject
Original
Duplicate
Original Duplicate
Number of Samples >DL (N)
1,947 1,947 1,074 1,074
Mean Assay
389.88 389.88 265.81 267.95
Maximum Assay
28,934 28,893 22,304 22,997
Minimum Assay
2.00 2.00 2.00 2.00
Median Assay
63.88 64.02 6.01 6.37
Variance
1,701,814 1,700,776 1,403,584 1,445,548
Standard Deviation
1,305 1,304 1,185 1,202
Coefficient of Variation
3.35 3.34 4.46 4.49
Correlation Coefficient 1 1
RSD 1% 7%
% Difference Between Means 0.001% -0.8%
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TABLE 12-3 SUMMARY STATISTICS FOR GOLD DUPLICATES

Pulp Reject
Original Duplicate Original Duplicate
Number of Samples >DL (N) 1,947 1,947 1,074 1,074
Mean Assay 2.90 2.89 2.17 2.18
Maximum Assay 237.87 234.20 210.78 214.23
Minimum Assay 0.10 0.10 0.10 0.10
Median Assay 0.90 0.90 0.10 0.10
Variance 97.12 97.82 79.62 80.23
Standard Deviation 9.86 9.89 8.92 8.96
Coefficient of Variation 3.40 3.42 4.10 4.12
Correlation Coefficient 1 1
RSD 5% 9%
% Difference Between Means 0.02% -0.02%

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Page 12-14
FIGURE 12-3 PULP DUPLICATE RESULTS - 2013

SILVER

GOLD

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FIGURE 12-4 REJECT DUPLICATE RESULTS - 2013

SILVER

GOLD

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FIGURE 12-5 PRECISION CURVES FOR SILVER DUPLICATES

FIGURE 12-6 PRECISION CURVES FOR GOLD DUPLICATES

0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
P
r
e
c
i
s
i
o
n
Ag g/t
Pulp Duplicates
Reject Duplicates
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0 10 20 30 40 50 60 70 80
P
r
e
c
i
s
i
o
n
Au g/t
Pulp Duplicates
Reject Duplicates
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CERTIFIED REFERENCE MATERIAL
Weekly QA/QC checks using five different certified reference material (CRM) standards were
performed on site. The CRMs were developed and certified by CDN Resources Laboratories
Ltd. (CDN) and their expected values and standard deviations (SD) are listed in Table 12-4.

In RPAs opinion, the low and moderate grades range are covered by CRMs and the results
are appropriate for use in Mandalays internal laboratory QA/QC program. RPA
recommends adding a high grade silver CRM.

TABLE 12-4 EXPECTED VALUES AND RANGES OF CERTIFIED
REFERENCE MATERIAL
1


Standard
Au Results Ag Results Number of Assays
CDN-ME-1101 0.564 0.028 68.2 2.3 73
CDN-ME-5 - - 206.1 6.6 64
CDN-ME-1206 2.61 0.10 274 7 60
CDN-GS-5J 4.90 0.23 72.5 2.4 75
CDN-GS-40 39.95 1.00 - - 36

1. CDN Resources Laboratories Ltd.

RPA reviewed the results returned from the certified reference material. The graphs in
Figure 12-7 illustrate the gold and silver assay results compared to acceptable limits of 3
standard deviations. Results for CRMs are generally within acceptable limits with a small
percentage of failures. The control charts show small positive gold biases for the higher
grade CRMs (CDN-GS-5J and CDN-GS-40). A small negative silver bias is visible in the
control charts for CDN-ME-1101 and CDN-GS-5J . These should be monitored on an
ongoing basis.

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Page 12-18
FIGURE 12-7 CERTIFIED REFERENCE MATERIAL RESULTS - 2013

0.45
0.55
0.65
0 10 20 30 40 50 60 70 80
Au g/t
N Control
Control Material Referencia Certificado CDN-ME-1101 ( 0,56 g/t Au )
Valor Recomendado Lmite Inferiror
58
63
68
73
0 10 20 30 40 50 60 70 80
Ag g/t
N Control
Control Material Referencia Certificado CDN-ME-1101 ( 68,2 g/t Ag )
185
195
205
215
225
0 10 20 30 40 50 60 70
Ag g/t
N Control
Control Material Referencia Certificado CDN-ME-5 ( 206,1 g/t Ag )
2.20
2.70
0 10 20 30 40 50 60
Au g/t
N Control
Control Material Referencia Certificado CDN-ME-1206 ( 2,61 g/t Au )
Valor Recomendado Lmite Inferiror Lmite Superiror Control
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Page 12-19

250
270
290
0 10 20 30 40 50 60
Ag g/t
N Control
Control Material Referencia Certificado CDN-ME-1206 ( 274 g/t Ag )
4.20
4.70
5.20
0 10 20 30 40 50 60 70 80
Au g/t
N Control
Control Material Referencia Certificado CDN-GS-5J ( 4,90 g/t Au )
65
70
75
80
0 10 20 30 40 50 60 70 80
Ag g/t
N Control
Control Material Referencia Certificado CDN-GS-5J ( 72,5 g/t Ag )
36
38
40
42
44
0 5 10 15 20 25 30 35 40
Au g/t
N Control
Control Material Referencia Certificado CDN-GS-40 ( 39,95 g/t Au )
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Page 12-20
EXTERNAL CHECK ASSAY PROGRAM
Mandalay selected 2% of mine production sample pulps and 5% of drill sample pulps to send
to ALS for referee check assays. The results for silver gave a correlation coefficient of 1,
which is good, and the secondary laboratory averages are only 0.7% higher than the primary
laboratory. For gold the results gave a correlation coefficient of 0.997, which is also very
good, and the secondary laboratory averages are only 0.5% lower than the primary
laboratory (Figure 12-8). RPA is of the opinion that the external check assays confirm the
mine laboratory gold and silver assays are accurate.

FIGURE 12-8 CHECK RESULTS - 2013

SILVER

GOLD

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DRILL HOLE SAMPLES BLIND QA/QC
Mandalay established a QA/QC program that involves the insertion of CRMs, blanks, and
duplicates unknown to the laboratory, at a rate of approximately one in 30 samples, as
recommended in RPA 2012 report.

IN-HOUSE REFERENCE MATERIAL
Mandalay inserted three property specific standards into the overall core sample stream, at a
rate of approximately 1 in 30 samples. A total of 447 standards were inserted. The in-house
standards are not certified and their expected values and standard deviations (SD) are listed
in Table 12-5.

TABLE 12-5 EXPECTED VALUES AND RANGES OF STANDARDS

Standard
Au Results Ag Results
Number of
Assays
High Grade 5.15 0.26 1,044 8.6 122
Moderate Grade 2.7 0.10 470 4.8 148
Low Grade 0.60 0.17 105 27.6 177
From Mandalay (2013)

The following control charts were prepared by Mandalay (Figure 12-9). Results for the three
standards are generally within acceptable limits with a small percentage of failures. A small
negative bias was identified in the high and low standards for silver. These should be
monitored on an ongoing basis.

BLANKS
Mandalay submitted coarse and fine blank samples. RPA considered an assay a failure if
the result was higher than ten times the detection limit (DL) of the method of analysis (for Au
DL=0.1 g/t and for Ag DL=2 g/t). One failure for gold and three failures for silver were
recorded (12-10). The impact of these blank failures is considered to be of no consequence
due to the low grades reported but they indicate that a minor sample contamination problem
exists. In RPAs opinion, the results of the blanks are within acceptable limits and the data
can be used for resource estimation purposes.

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FIGURE 12-9 BLIND QA/QC - IN-HOUSE REFERENCE MATERIAL

4.37
4.57
4.77
4.97
5.17
5.37
5.57
5.77
0 20 40 60 80 100
Au g/t
N Control
High Grade ( 5.15 g/t Au )
Valor Recomendado Lmite Inferiror Lmite Superiror Series4
1020
1030
1040
1050
1060
1070
0 20 40 60 80 100
Ag g/t
N Control
High Grade( 1050 g/t Ag )
Valor Recomendado Lmite Inferiror Lmite Superior Series4
2.40
2.50
2.60
2.70
2.80
2.90
3.00
1 21 41 61 81 101 121 141
Au g/t
N Control
Moderate Grade ( 2.7 g/t Au )
450
455
460
465
470
475
480
1 21 41 61 81 101 121 141
Ag g/t
N Control
Moderate Grade ( 470 g/t Ag )
0.30
0.40
0.50
0.60
0.70
0.80
0.90
0 20 40 60 80 100 120 140 160 180
Au g/t
N Control
Low Grade ( 0.6 g/t Au )
Valor Recomendado Lmite Inferiror Lmite Superiror Series4
90
95
100
105
110
115
120
0 20 40 60 80 100 120 140 160 180
Ag g/t
N Control
Low Grade ( 105 g/t Ag )
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Page 12-23
FIGURE 12-10 BLIND QA/QC - BLANK ASSAYS

FIELD DUPLICATES
RPA reviewed the results from forty field core duplicate pairs for silver and gold (Figure 12-
11). Statistics for the duplicates results, after the removal of three gold outliers, are shown in
Table 12-6 for silver and gold.

The precision for field duplicates for silver is approximately 4% at 300 g/t (Figure 12-12). The
correlation coefficient and the relative standard deviation (RSDs) are acceptable.

0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
0 50 100 150 200 250 300 350
Au g/t
N Control
Coarse Blank 2013( 0.1 g/t Au )
0
5
10
15
20
25
0 50 100 150 200 250 300 350
Ag g/t
N Control
Coarse Blank 2013 ( 2 g/t Ag )
0.00
0.20
0.40
0.60
0.80
1.00
1.20
0 50 100 150 200 250
Au g/t
N Control
Fine Blank 2013 ( 0.1 g/t Au )
0
10
20
30
40
50
0 50 100 150 200 250
Ag g/t
N Control
Fine Blank 2013 ( 2 g/t Ag )
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Page 12-24
The duplicates results for gold are not representative as the majority of the results are low
grade values close to the detection limit. RPA recommends selecting field duplicates that
are representative of the mineralization silver and gold grade ranges.

TABLE 12-6 SUMMARY STATISTICS FOR FIELD DUPLICATES

Gold Silver
Original
Duplicate
Original Duplicate
Number of Samples >DL (N)
37 37 40 40
Mean Assay
0.47 0.42 57.77 53.23
Maximum Assay
4.43 5.78 1,155 1,052
Minimum Assay
0.10 0.10 2.00 2.00
Median Assay
0.10 0.10 2.00 2.00
Variance
1.04 1.08 39,532 32,608
Standard Deviation
1.02 1.04 198.83 180.58
Coefficient of Variation
2.16 2.46 3.44 3.39
Correlation Coefficient
0.794 0.999
RSD
105% 27%
% Difference Between Means
10.7% 7.8%

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Page 12-25
FIGURE 12-11 FIELD DUPLICATE SCATTER PLOTS

SILVER

GOLD

0
200
400
600
800
1000
1200
0 200 400 600 800 1000 1200
F
i
e
l
d

D
u
p
l
i
c
a
t
e

A
s
s
a
y

(
A
g

g
/
t
)
Field Original Assay (Ag g/t)
0
1
2
3
4
5
6
0 1 2 3 4 5 6
F
i
e
l
d

D
u
p
l
i
c
a
t
e

A
s
s
a
y

(
A
u

g
/
t
)
Field Original Assay (Au g/t)
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Page 12-26
FIGURE 12-12 PRECISION CURVE FOR SILVER FIELD DUPLICATES

CHANNEL SAMPLES BLIND QA/QC
Mandalay established a QA/QC program that involves the insertion of blanks and duplicates
unknown to the laboratory, at a rate of approximately 1 in 30 samples, as recommended in
RPA 2012 report. Currently, Mandalay is reviewing the sampling procedure for taking
channel sample duplicates, as preliminary results show poor precision. RPA concurs with
Mandalays plan to review the channel sampling and channel sampling duplicate procedures.

BLANKS
Mandalay submitted coarse and fine blank samples. RPA considered an assay as a failure if
the result was higher than ten times the detection limit (DL) of the method of analysis (for Au
DL=0.1 g/t and for Ag DL=2 g/t). No failures exist (Figure 12-13).

In RPAs opinion, the data can be used for resource estimation purposes.

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0 200 400 600 800 1000 1200
P
r
e
c
i
s
i
o
n
Ag g/t
Field
Duplicates
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Page 12-27
FIGURE 12-13 BLIND QA/QC - BLANK ASSAYS

In summary, the methods used by Mandalay meet standard industry practices and no
significant discrepancies were identified during the verification process.

RPA considers that the surface drill hole and underground channel databases are valid and
are suitable to estimate Mineral Resources at Cerro Bayo.

The following are RPA QA/QC recommendations:






0.00
0.20
0.40
0.60
0.80
1.00
1.20
0 10 20 30 40 50 60 70 80 90 100
Au g/t
N Control
Control Blanco Grueso 2012( 0.1 g/t Au )
0.00
0.20
0.40
0.60
0.80
1.00
1.20
0 10 20 30 40 50 60 70 80 90 100
Au g/t
N Control
Control Blanco Grueso 2012( 0.1 g/t Au )
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Page 13-1
13 MINERAL PROCESSING AND
METALLURGICAL TESTING
METALLURGICAL TESTING
Metallurgical testing was carried out by CMCB in 2008 on samples from the Dagny and
Fabiola vein systems, the objectives of which were to assess the floatability and hardness of
the mineralization samples. In all, 16 composite samples were taken as listed in Table 13-1.
The reference report is entitled Informe Pruebas Flotacion Minerales Veta Dagny
completed in May 2008.

TABLE 13-1 COMPOSITE ORE SAMPLES

Sample Description
Sample Weight
(g)
Estimated Grade
(g/t Au Eq)
Dagny (No. 1) 11,910 1-3.99
Dagny (No. 2) 120,030 4-5.99
Dagny (No. 3) 9,760 6-9.99
Dagny (No. 4) 12,610 >10.0
Dagny Norte (No. 1) 2,500 1-3.99
Dagny Norte (No. 2) 500 4-5.99
Dagny Norte (No. 3) 3,770 6-9.99
Dagny Norte (No. 4) 3,930 >10.0
Lazo Dagny (No. 1) 4,350 1-3.99
Lazo Dagny (No. 2) 3,370 4-5.99
Lazo Dagny (No. 3) 1,240 6-9.99
Lazo Dagny (No. 4) 8,690 >10.0
Fabiola (No. 1) 9,910 1-3.99
Fabiola (No. 2) 7,740 4-5.99
Fabiola (No. 3) 8,290 6-9.99
Fabiola (No. 4) 10,450 >10.0

The samples were taken from drill core and assayed at the Laguna Verde laboratory.
Results are listed in Table 13-2.

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Page 13-2
TABLE 13-2 SAMPLE GRADES

Sample Description
Au Assay
(g/t)
Ag Assay
(g/t)
Equiv. Grade
(g/t Au Eq)
Dagny (No. 1) 1.1 84.0 2.6
Dagny (No. 2) 2.1 137.0 4.6
Dagny (No. 3) 3.4 332.0 9.4
Dagny (No. 4) 3.3 879.0 19.3
Dagny Norte (No. 1) 1.1 62.0 2.2
Dagny Norte (No. 2) 0.0 0.0 0.0
Dagny Norte (No. 3) 1.1 237.0 5.4
Dagny Norte (No. 4) 4.2 592.0 15.0
Lazo Dagny (No. 1) 0.7 52.0 1.6
Lazo Dagny (No. 2) 1.0 203.0 4.7
Lazo Dagny (No. 3) 0.0 0.0 0.0
Lazo Dagny (No. 4) 5.1 897.0 21.4
Fabiola (No. 1) 0.6 101.0 2.4
Fabiola (No. 2) 1.0 203.0 4.7
Fabiola (No. 3) 2.7 258.0 7.4
Fabiola (No. 4) 3.8 690.0 16.3

The samples were screened through a six-mesh sieve. A 900 g portion of each sample was
taken to provide a total of approximately 14 kg, which was sent to an external laboratory for
hardness tests. To compare the hardness of the Dagny and Fabiola material, a second
sample from the Cerro Bayo veins was sent to SGS Lakefield Research Chile S.A. The rest
of the material was processed in the Cerro Bayo laboratory. Finally the sample was passed
through a sieve to produce 100% passing 10 mesh, with each sample properly mixed,
quartered to provide one kilogram samples for flotation tests and 0.30 kg samples for
chemical analysis.

The parameters used for all of the samples were as follows:
Grinding to 70% -200 mesh.
Time of grind 35 minutes.
Solids percentage 60% (by wt.).
Flotation time 15 minutes.
MIBC (20 g/t), Aerofloat P-3477 (40 g/t), Amil Xanthate (40 g/t).
Conditioning time 10 minutes.

Results of the hardness testing returned the following results:
Cerro Bayo Bond Work Index (18.9 kWh/t)
Dagny Bond Work Index (15.8 kWh/t)

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Page 13-3
The flotation testing results are presented in Table 13-3 below.

TABLE 13-3 FLOTATION TEST RESULTS

Sample Head Grade Recovery
Conc.
Ratio
Conc. Grade Grind

Au
(g/t)
Ag
(g/t)
Au
%
Ag
%
(RC)
Au
(g/t)
Ag
(g/t)
%-200M
1.) Dagny #1 Test 1 1.0 90.2 87.6 86.7 11.8 9.0 714.0 70.0
2.) Dagny #1 Test 2 0.8 86.5 91.0 80.4 17.5 11.9 1007.0 69.8
3.) Dagny #2 Test 1 2.3 151.9 91.9 86.3 9.5 18.7 1118.0 71.5
4.) Dagny #2 Test 2 2.1 151.4 93.5 87.5 12.5 22.7 1469.0 70.8
5.) Dagny #3 Test 1 3.3 344.7 94.5 91.8 9.5 27.9 2791.0 69.0
6.) Dagny #3 Test 2 3.2 344.3 97.9 92.9 10.3 29.9 3100.0 70.8
7.) Dagny #4 Test 1 3.2 888.5 88.7 91.3 8.7 20.9 6353.0 71.3
8.) Dagny N #1 Test 1 0.8 44.1 86.8 91.8 6.6 4.0 243.0 68.5
9.) Dagny N #3 Test 1 2.8 248.1 89.6 89.1 6.6 15.3 1312.0 71.0
10.) Dagny N #4 Test 1 4.6 593.1 91.7 89.6 9.3 34.5 4355.0 71.3
11.) Lazo Dagny #1 Test 1 0.8 63.3 90.5 92.0 16.0 10.3 849.0 68.0
12.) Lazo Dagny #2 Test 1 1.3 222.2 94.9 91.3 10.6 12.5 1963.0 68.5
13.) Lazo Dagny #4 Test 1 5.2 921.4 96.5 95.9 6.6 32.1 5922.0 72.0
14.) Lazo Dagny #4 Test 2 6.3 1090.5 97.5 96.9 6.3 37.5 6398.0 70.0
15.) Fabiola #1 Test 1 0.8 112.8 84.7 90.7 7.1 4.2 638.0 69.5
16.) Fabiola #1 Test 2 0.6 102.1 88.8 86.8 16.2 7.6 1167.0 72.0
17.) Fabiola #2 Test 1 1.0 190.7 95.1 93.7 6.4 5.1 987.0 71.3
18.) Fabiola #2 Test 2 1.0 196.6 93.1 92.8 10.1 9.3 1724.0 70.3
19.) Fabiola #3 Test 1 2.3 248.6 94.3 87.6 10.2 21.4 2022.0 69.0
20.) Fabiola #3 Test 2 2.8 271.8 95.8 89.8 9.9 24.3 2122.0 72.0
21.) Fabiola #4 Test 1 3.7 679.0 88.3 93.5 10.0 27.5 5744.0 73.0
22.) Fabiola #4 Test 2 4.2 702.7 88.9 92.0 11.8 38.1 6889.0 72.0

The conclusions drawn from the test work were as follows:
In general, the mineralized material lends itself to the flotation milling process.

The hardness of the mineralized material is similar for the tests performed.

The Fabiola samples produced a finer product after 30 minutes of grinding.

The samples from Dagny and Fabiola indicated a Bond Work Index of 15 kWh/t while
Cerro Bayo samples indicated a higher Bond Work Index of 17 kWh/t.

The lower hardness of the Dagny and Fabiola mineralized material will result in lower
energy consumption under operating conditions.

In general, the higher the head grade, the higher the recovery.

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Page 13-4
Compared to the historical plant operating data, the gold head-grade and recovery
relationship is similar and the silver recovery was slightly lower than the historical
data.

The higher gold recoveries were found to be in the range of 69% to 71% minus 200
mesh size, while the higher silver recoveries were approximately 71% minus 200
mesh.

With a larger number of samples, it would be possible to investigate the grinding size,
type, and combination of reagents and kinetic test to optimize recoveries.

Automation of the flotation system (FloatStar) to improve recoveries was engineered
and completed in 2012 and implemented in 2013.

The capital investment for the tailings dam lift of two metres will be carried out in
2014.

GENERAL
The Cerro Bayo processing plant has a daily capacity of 1,650 t producing approximately 25 t
of concentrate with grades of 60 g/t Au to 80 g/t Au and 11,000 g/t Ag to 12,000 g/t Ag. The
process is simple, consisting of crushing, primary grinding in a semi-autogenous (SAG) mill,
classification in hydrocyclones, secondary grinding in a ball mill, flotation, thickening,
filtration, and concentrate storage. The mill presently draws from three stockpiles (high,
medium, and low grade ore), and a loader feeds the mill hopper based on the grades to
provide an average feed grade to the mill.

The FloatStar System for automation has resulted in an increase in recovery of almost 1%
since it was put on stream. This system, coupled with a new programmable control system
(PLC) system, has improved recovery and plant operations by providing immediate response
to any required adjustments and operators are extremely pleased with the system.

INSTRUMENTATION AND CONTROL
The plant utilizes an Allen Bradley SLC 500 PLC in the control room. Status of the
operations, from the coarse ore bins to the filtering of the final concentrate, including the
water recycling is indicated on the controller. All systems are displayed including the
instrumentation, control loops, and the electrical distribution system.

The atomization of the plant will add level sensors in the floatation, pressure gauges, density
meters, and two blue star online analyzers. The programs Millstar and Floatstar will be
installed for grind and float optimization.
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Page 13-5
CRUSHING
The plant stockpiles receive muck from the underground via 25 t trucks. A loader feeds the
crusher hopper that feeds the 42 inch by 48 inch Allis Minerals jaw crusher (200 HP). The
crusher product is 80% minus six inches that discharges onto a 900 mm belt that delivers the
ore to a 1,500 t storage silo.

GRINDING
The ore is fed via two Skako vibrating feeders to a belt with a weightometer that controls the
weight delivered to the 18 ft by 9.25 ft SAG mill (Marcy/Allis Minerals) operating with a 1,340
HP (1,000 Kw) motor.

The ball charge occupies 12% of the internal mill volume and the ball sizes are made up of
30% of five inch balls and 70% of four inch balls. The mill is equipped with an internal
recirculation trammel that returns material over 10 mm in size. The minus 10 mm fraction
goes to a pump box and is fed to the ball mill circuit. A Warman 8 inch by 6 inch pump, of
hardened steel pumps the slurry to a bank of four Warman cyclones each 381 mm (15 inch)
for classification. The cyclones can function individually via control valves to maintain
operating requirements.

The discharge from the hydrocyclones (oversize) is fed to the 11.5 ft by 18.0 ft ball mill
(Marcy/Allis Minerals) that is driven by a 1,340 HP motor, and is subjected to the secondary
grind. The ball mill operates with a load of 38% of 2.5 inch balls.

The final product of the grinding circuit is 70% minus 200 mesh (74 microns) which is fed to
the flotation circuit.

FLOTATION
The final product from the grinding circuit feeds the conventional flotation circuits consisting
of the following stages: roughers, scavengers, cleaners, and columns. There is a column cell
that is used for flash flotation to recover coarsely liberated gold and silver, into a flotation
concentrate that can be sent directly to the final concentrate. The rougher/scavenger circuit
consists of seven 14.2 m Wemco cells with a residence time of 28 minutes, which generates
a low grade concentrate of approximately 30 g/t Au and 1,500 g/t Ag. The product from the
rougher/scavenger feeds the cleaner circuit consisting of six conventional Agitar cells with
4.25 m capacity each and a column cell 10 m high by 1.10 m in diameter to produce a final
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Page 13-6
grade of 80 g/t Au to 120 g/t Au and 11,000 g/t Ag to 12,000 g/t Ag. The rougher/scavenger
tails do not contain commercial value and are pumped to the tailing facility for storage. The
tails are fed through a group of six hydrocyclones of six inch diameter (Warman) to thicken
the tails and the water, containing residual reactants, is recycled to the process, in order to
minimize use of fresh makeup water.

There is an automatic sampler at the final grinding product stage that feeds the rougher
flotation circuit, at the final concentrate and at the final waste stream. The samples are sent
to the laboratory for analysis for use in the metallurgical balance and to manage plant
performance.

REACTANTS
There is an area dedicated to the preparation of reactants, storage, and distribution for
different areas in the circuits. The reactants utilized in the process include Potasium Amil
Xanthate (x-350) collector and Aerofloat A-3477, Methal Isobutal Carbinol (MIBC) frother.
The two collectors are prepared in a 5% solution and the MIBC is fed in pure form.

THICKENING
The final concentrate is approximately 25% solids, which is increased to 60% solids via a
nine metre diameter thickener and to promote sedimentation and solid-liquid separation,
Superfloc A-110 flocculant is used.

FILTERING
The thickened concentrate is pumped to a surge tank 3.5 m in diameter by 5.2 m high where
the contents are agitated prior to filtration via Larox filters (one operating and one standby
unit). The filter has a surface area of 6.2 m and operates automatically with batch cycles
every eight minutes, producing a concentrate with 8% to 9% humidity. The filtered
concentrate is stored and then transported by company owned trucks to the port of
Chacabuco, Chile where it is loaded onto ships for delivery to the clients.

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Page 13-7
TAILINGS
Tailings are pumped to the tailing facility located nearby. Water from the tailings facility is
then recycled to the plant for reuse. The tailings dam was raised to the 316 m elevation
during 2012 and is scheduled to be lifted a further two metres in the fourth quarter of 2014.

MAJOR EQUIPMENT
A list of major equipment in the processing plant is shown in Table 13-4 below.

TABLE 13-4 PROCESS PLANT - MAJOR EQUIPMENT LIST

Item Size Description Qty. HP
Crushing Plant
Apron Feeder 48 x 20 Stephen-Adamson 1 10
J aw Crusher 42 x 48 Allis Chambers 1 200
Conveyor 1 36 x 6 1 2
Conveyor 2 36 x 10.5 1 15
Conveyor-Silo 36 x 107 1 30
Conveyor-SAG 36 x 79 1 15
Coarse Ore Bin 1,500 t
Vibrating Feeder Skako 2 1.5
Grinding Circuit
SAG Mill 18 x 9.25 Svedala 1 1,341
Ball Mill 11.5 x 18.0 Svedala 1 1,341
Cyc. Feed Pump 8 x 6 Warman 1+1 150
Cyclones D-15 Warman 2+2 -
Spiral Classifier 42 1 10
Flotation Circuit
Flash Flotation 150 ft Wemco 2 40
Rougher Flot. 500 ft Wemco 5 40
Scavenger Flot. 500 ft Wemco 4 40
Cleaner 1 Flot. 150 ft Agitair 2 30
Column Flotation 42 x 33 1
Dewatering Cir.
Conc. Thickener 30 Dia. Envirotech 1 2
Conc. Filter 67 ft Larox 2 5+15
Compressor 36L x 15 Bar Atlas Copco 2 50

Mandalays silver and gold recovery assumptions are based on the metallurgical test work
and the actual plant recoveries. In general, the test samples from Dagny and Fabiola cover
a wide range of grades that are representative of the mineralization at Cerro Bayo. There
are no known processing factors or deleterious elements that have a significant impact on
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Page 13-8
the gold and silver recoveries. The actual silver and gold recoveries for 2013, were 91% and
88%, respectively (Table 13-5). The actual silver recovery is slightly higher than the 89%
budget value and the actual gold recovery is the same as the budget value of 88% (Table 13-
6). In general, there was not a large variance between actual and budget. The greatest
difference was in metal production where there was a 15% increase as compared to budget.

TABLE 13-5 PRODUCTION SUMMARY - ACTUAL 2013
Description Units Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Tonnes Milled dry t 23,459 29,680 41,436 33,134 37,481 31,396 33,062 34,781 29,853 30,951 30,991 30,256 386,480
Grade Ag g/t 287 211 218 320 295 346 229 285 284 343 347 315 288.22
Grade Au g/t 2.1 1.7 1.6 2.1 2.0 2.4 1.7 2.4 2.1 2.2 2.1 2.0 2.0
Contained
Metal
oz Ag 216,492 201,355 290,577 340,563 355,716 348,894 243,506 318,686 272,355 341,262 345,754 306,072 3,581,230
oz Au 1,611 1,586 2,138 2,235 2,424 2,457 1,800 2,654 2,053 2,209 2,059 1,913 25,140
Recovery % Ag 91% 88% 89% 91% 91% 92% 90% 91% 92% 93% 91% 91% 91%
Au 88% 83% 86% 89% 89% 90% 88% 89% 89% 89% 88% 86% 88%
Concentrate Tonnes 498 482 802 872 851 920 614 785 694 858 877 751 9,003
Conc. Grade g/t Ag 12,279 11,466 10,064 11,088 11,816 10,875 11,162 11,480 11,219 11,463 11,141 11,601 11,263
g/t Au 88 85 71 71 79 75 80 94 82 72 64 68 76.39
Metal
Produced
oz Ag 196,549 177,605 259,453 310,790 323,115 321,823 220,327 289,730 250,218 316,273 314,106 280,011 3,260,003
oz Au 1,413 1,320 1,836 1,979 2,147 2,220 1,583 2,367 1,823 1,973 1,812 1,637 22,110
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TABLE 13-6 PRODUCTION SUMMARY - BUDGET 2013
Description Units Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Tonnes Milled dry t 29,320 32,243 33,065 31,204 30,420 32,223 34,059 31,757 29,999 30,230 32,404 32,627 379,551
Grade Ag g/t 246.8 276.0 275.1 332.9 324.0 303.6 231.4 279.8 288.2 227.3 201.0 277.8 271.69
Grade Au g/t 1.5 1.6 2.0 2.2 2.0 1.8 2.0 2.1 2.2 2.2 2.1 2.5 2.0
Contained
Metal
oz Ag 232,637 286,107 292,399 333,986 316,890 314,536 253,407 285,661 277,986 220,933 209,385 291,416 3,315,343
oz Au 1,417 1,675 2,092 2,214 1,927 1,823 2,225 2,169 2,100 2,098 2,220 2,617 24,576
Recovery % Ag 89% 89% 89% 90% 90% 90% 89% 89% 89% 88% 88% 89% 89%
Au 86% 87% 88% 89% 88% 87% 88% 88% 88% 87% 87% 89% 88%
Concentrate Tonnes 598 672 689 821 761 732 710 690 625 504 506 709 8,017
Conc. Grade g/t Ag 10,757 11,826 11,784 11,406 11,665 11,979 9,869 11,502 12,366 12,054 11,317 11,419 11,485
g/t Au 63 67 83 75 69 68 86 86 92 113 119 102 83.70
Metal
Produced
oz Ag 206,933 255,390 260,980 301,121 285,214 282,039 225,128 255,298 248,464 195,251 184,224 260,387 2,960,431
oz Au 1,221 1,450 1,832 1,967 1,696 1,589 1,952 1,911 1,852 1,834 1,934 2,335 21,574
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Page 14-1
14 MINERAL RESOURCE ESTIMATE
PROJECT SUMMARY
RPA prepared updated Mineral Resource estimates for the Yasna, Fabiola, Dalila, Coyita,
Dagny, Bianca, Delia NW, and Trinidad veins located on the Lagunas Verde area, and
estimated Mineral Resources for the Raul and Marcela Sur veins located on the Cerro Bayo
area. The Dalila and Delia SE estimates have remained unchanged since the December 31,
2012 estimate (RPA, 2013), however, the silver equivalent (AgEq) has been updated. The
Mineral Resources are constrained by underground vein models for reporting purposes.

This Mineral Resource estimate is an update of the December 31, 2012 estimate (RPA,
2013).

Mandalay provided drill hole and density databases, lithology and mineralization wireframes,
as well as supporting documentation to RPA for use in resource estimation. Mineralized vein
models were interpreted and wireframed by Mandalay.

The Qualified Person for the Cerro Bayo Mineral Resource estimate is Rosmery Cardenas
MAusIMM CP (Geo.), Senior Geologist with RPA. The effective date of the estimate is
December 31, 2013.

The Cerro Bayo Mineral Resource estimate, inclusive of Mineral Reserves, is summarized in
Table 14-1.

TABLE 14-1 SUMMARY OF MINERAL RESOURCES INCLUSIVE OF MINERAL
RESERVES DECEMBER 31, 2013

Category
Tonnes Gold
Grade
Silver
Grade
AgEq
Grade
Au
Ounces
Ag
Ounces
AgEq
Ounces
(000) (g/t Au) (g/t Ag) (g/t AgEq) (000) (000) (000)
Measured 411 3.60 423.02 637.67 48 5,596 8,435
Indicated 1,633 3.18 308.10 497.44 167 16,172 26,111
Total Measured
and Indicated
2,044 3.26 331.23 525.67 214 21,768 34,546

Inferred 433 3.33 400.43 599.14 46 5,580 8,349
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Page 14-2

Notes:
exchange rate of 1.
3
was used.

The Mineral Resource estimate and classification are in accordance with the CIM (2010)
definitions incorporated in NI 43-101.

RESOURCE DATABASE
The drill hole database was provided by Mandalay in Vulcan Isis format and comprises drill
hole collar coordinate data, drill hole collar azimuth and dip data, lithology, vein data, and
sample interval and assay data for the Yasna, Fabiola, Coyita, Dagny, Bianca, Delia NW,
Trinidad, Raul, and Marcela Sur veins.

Numerous underground channel samples were collected by Mandalay in 2011, 2012, and
2013 from the Bianca, Dagny, Fabiola, and Delia NW veins, and previously by Coeur from
the Fabiola and Marcela Sur veins, and surface channel samples for Raul vein. Channel
sample databases were provided by Mandalay in Excel format for the Bianca, Dagny,
Fabiola, Delia NW, Raul and Marcela Sur veins, and comprise channel name, channel
sample number, sample start and end location data, and assay data. The channel sample
databases were converted into drill hole databases for use in interpretation and resource
estimation.

The effective date of the Cerro Bayo databases used by RPA is December 31, 2013. The
Cerro Bayo drill hole and channel databases are listed in Table 14-2.

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Page 14-3
TABLE 14-2 RESOURCE DATABASES

Vein
No. of Drill
Holes
No. of Core
Samples
No. of Channels
No. of Channel
Samples
Bianca 23 49 390 561
Coyita 68 278 - -
Dagny 150 518 1,900 3,267
Dalila 62 137 - -
Delia NW 314 1,173 1,209 3,298
Delia SE 127 628 - -
Fabiola 147 453 1,940 3,415
Yasna 115 392 1,058 1,687
Trinidad 101 188 - -
Marcela Sur 128 489 693 1,840
Raul 136 569 616 1,725

Drill hole and channel sample databases were compared to identify any significant
differences with respect to data type in areas where both drill holes and channels are located
in the Dagny and Fabiola veins. Results are shown in Figures 14-1 to 14-4.

In RPAs opinion, there is some difference between data types in the upper parts of the
Dagny and Fabiola veins based on statistical analyses and a visual check in Vulcan. This is
due to high grade zones defined by the channel samples that generally were not intersected
in the exploration drill holes, however, after reviewing the reconciliation using both
databases, RPA determined that both databases were suitable for use in resource
estimation.

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Page 14-4

FIGURE 14-1 FABIOLA AU GRADE COMPARISON

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Page 14-5

FIGURE 14-2 FABIOLA AG GRADE COMPARISON

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Page 14-6

FIGURE 14-3 DAGNY AU GRADE COMPARISON

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Page 14-7

FIGURE 14-4 DAGNY AG GRADE COMPARISON

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Page 14-8
WIREFRAME MODELS
Mandalay provided a topographic surface and preliminary wireframe solid models for the
individual Yasna, Fabiola, Coyita, Dagny, Bianca, Delia NW, Trinidad, Raul, and Marcela Sur
veins. Mandalay generated the preliminary wireframe models using Vulcan.

The topographic surface was generated from detailed topographic surveys conducted by
Coeur and Mandalay surveyors from 1994 to 2011.

Intrusive dikes intersecting the Coyita, Yasna, Delia NW, Bianca, and Fabiola veins were
modelled based on lithology and structure from surface and underground mapping, and drill
hole data. The dike model intersecting the Bianca vein was not extended down dip due to
limited data at depth. RPA recommends extending the dike model throughout the entire vein
as additional data is collected in future.

RPA refined the preliminary wireframe models provided for the Coyita, Bianca, Dagny, Delia
NW, Fabiola, Yasna, Trinidad, Raul, and Marcela Sur veins based on drill hole and channel
sample data. Polylines were digitized on section lines spaced approximately 20 m apart
across individual veins and tied to logged drill hole intervals, using a minimum thickness of
1.2 m. Some surface drill holes with unreliable collar coordinates were ignored in the
generation of wireframe solids. Vein intersections of these drill holes were then manually
flagged to be associated with each respective wireframe. Vein models are shown in Figures
14-5 and 14-6.

RPA recommends review and revision of the vein models prior to the next resource update.

As requested by Mandalay, diluted vein wireframe solids were generated by Mandalay and
reviewed and adjusted by RPA for the Yasna, Fabiola, Coyita, Dagny, Bianca, Delia NW,
Trinidad, Raul, and Marcela Sur veins using a minimum thickness of 2.4 m, and a minimum
dilution width of 0.2 m on each side of the vein for use in Mineral Reserve estimation.

Mandalay generated AutoCAD long sections of mined out areas, based on underground
surveys conducted by Mandalay surveyors. RPA generated solid models from the
longitudinal sections, which were removed from the final vein and diluted vein models.

270,500 E 271,000 E 271,500 E 272,000 E 272,500 E
4
,
8
4
1
,
5
0
0

N
4
,
8
4
1
,
0
0
0

N
4
,
8
4
0
,
5
0
0

N
4
,
8
4
0
,
0
0
0

N
4
,
8
4
1
,
5
0
0

N
4
,
8
4
1
,
0
0
0

N
4
,
8
4
0
,
5
0
0

N
4
,
8
4
0
,
0
0
0

N
270,500 E 271,000 E 271,500 E 272,000 E 272,500 E
Fabiola
Bianca
Coyita
Yasna
Dalila
Dagny
Delia SE
Delia NW
Trinidad
0 100 500
Metres
200 300 400
N
March 2014
Vein Models in Lagunas Verde
Area Showing Drill Holes
Cerro Bayo Mine
Figure 14-5
14-9
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Marcela Sur
Raul
2
8
0
,
0
0
0

E
0 100 500
Metres
200 300 400
N
March 2014
Cerro Bayo Project
Marcela Sur and Raul
Vein Models in Cerro Bayo Area
Showing Drill Holes
Figure - 14 6
1 0 4-1
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Page 14-11
ASSAY STATISTICS
The resource wireframes for the Yasna, Fabiola, Dalila, Coyita, Dagny, Bianca, Delia NW,
Delia SE, and Trinidad veins contain a total of 3,816 assay intervals from 1,107 drill holes,
and 12,228 channel assays from 6,497 channels. A total of 1,058 assay intervals from 264
drill holes and a total of 3,565 channel assays from 1,309 channels are included in the Raul
and Marcela Sur resource wireframes. Sample statistics of the assayed information are
shown in Figures 14-7 to 14-10.
FIGURE 14-7 AG BOX PLOT AND ASSAY STATISTICS LAGUNAS VERDE
AREA
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Page 14-12
FIGURE 14-8 AU BOX PLOT AND ASSAY STATISTICS - LAGUNAS VERDE
AREA
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Page 14-13
FIGURE 14-9 AG BOX PLOT AND ASSAY STATISTICS - CERRO BAYO AREA
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Page 14-14
FIGURE 14-10 AU BOX PLOT AND ASSAY STATISTICS CERRO BAYO AREA
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Page 14-15
GRADE CAPPING
Capping levels were determined for raw assays for individual mineralization domains prior to
compositing in order to limit the influence of high grade outliers. All assays located inside
each mineralization wireframe were combined to determine an appropriate capping level for
each mineralized zone. Table 14-3 lists the capping levels determined for each sample type
and vein. Histograms, probability, percentile, and cutting curve plots were used, with
examples shown in Figures 14-11 to 14-13.
TABLE 14-3 GRADE CAPPING LEVELS
Vein
Sample
Type
Capping
Level
No.
Capped
Assays
No.
Uncapped
Assays
Capping
Level
No.
Capped
Assays
No.
Uncapped
Assays (Au g/t) (Ag g/t)
Bianca
DH 35 0 49 3,000 0 49
CHN 50 3 558 6,000 0 476
Coyita DH 15 5 273 2,500 3 275
Dagny
DH 35 2 516 3,000 1 517
CHN 50 18 3,155 6,000 19 3,154
CHN - HG 50 1 93 10,000 6 88
Dalila DH 15 5 132 1,500 3 134
Delia NW
DH 40 9 1,164 4,000 5 1,168
CHN 70 24 3,274 6,000 25 3,273
Delia SE DH 40 11 617 4,000 10 618
Fabiola
DH 35 4 449 4,000 5 448
CHN 50 18 3,397 6,000 37 3,378
Yasna
DH 10 6 386 3,000 3 389
CHN 20 20 1,667 5,000 25 1,662
Marcela Sur
DH 15 7 482 3,000 4 485
CHN 40 8 1,717 4,000 20 1,705
Raul
DH 20 5 564 2,000 7 562
CHN 20 8 1,832 3,000 4 1,836
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Page 14-16
FIGURE 14-11 FABIOLA AG HISTOGRAM CHANNEL SAMPLES
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Page 14-17
FIGURE 14-12 FABIOLA AG PROBABILITY PLOT CHANNEL SAMPLES
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Page 14-18
FIGURE 14-13 FABIOLA VEIN CHANNEL SAMPLES - AG CUTTING CURVE
COMPOSITES
Run-length composites across the width of the domains were generated inside the vein
domain wireframes, flagged by mineralization domain. Where the vein wireframe was
extended out to a minimum 1.2 m width, some run-length channel composites were
lengthened to extend to the wireframe width. This occurred where channel samples were not
taken across the entire face width, but were restricted to only the vein, leaving unsampled
intervals in the footwall and hangingwall. Unsampled intervals were replaced with gold and
silver grades based on statistical analyses of assays adjacent to and outside of the original
vein models, but inside the diluted vein models, prior to compositing. All composites located
inside underground mined models were maintained in the resource database. The classical
statistics for the final composites are presented in Figures 14-14 to 14-17.
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Page 14-19
FIGURE 14-14 AG BOX PLOT AND COMPOSITE STATISTICS - LAGUNAS
VERDE AREA
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Page 14-20
FIGURE 14-15 AU BOX PLOT AND COMPOSITE STATISTICS - LAGUNAS
VERDE AREA
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Page 14-21
FIGURE 14-16 AG BOX PLOT AND COMPOSITE STATISTICS CERRO BAYO
AREA
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Page 14-22
FIGURE 14-17 AU BOX PLOT AND COMPOSITE STATISTICS CERRO BAYO
AREA
BLOCK MODEL PARAMETERS
For the current Mineral Resource estimate, RPA generated ten rotated seam block models
for the 1) Yasna vein, 2) Fabiola vein, 3) Coyita vein, 4) Dagny vein, 5) Bianca vein, 6) Delia
NW vein, 7) Trinidad vein, 8) Marcela Sur vein, 9) Raul Norte vein, and 10) Raul Sur vein
using Maptek Vulcan version 8.2.3 software. Block models were constructed along individual
vein orientations. The final block dimensions were controlled by the vein domain wireframes
and have variable vein widths and are one metre high by one metre along strike.
For the Dalila and Delia SE veins, RPA generated seam block models in 2012 using Maptek
Vulcan 8.1.4. The block models were not updated because no new drilling has been carried
out at these veins. Block model parameters are listed in Table 14-4.
P
a
g
e

1
4
-
2
3
w
w
w
.
r
p
a
c
a
n
.
c
o
m
M
a
n
d
a
l
a
y

R
e
s
o
u
r
c
e
s

C
o
r
p
o
r
a
t
i
o
n

C
e
r
r
o

B
a
y
o

P
r
o
j
e
c
t
,

P
r
o
j
e
c
t

#
2
2
0
8

T
e
c
h
n
i
c
a
l

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e
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o
r
t

N
I

4
3
-
1
0
1

M
a
r
c
h

2
7
,

2
0
1
4

TABLE 14-4 BLOCK MODEL PARAMETERS
Vein/Block
Model
Azimuth
(X)
Origin Length (m)
Y X Y Z X Z
Parent Block Size (m)
X Y Z
Sub-block Size (m)
X Y Z
Yasna 50 deg 271,932 4,840,663 -5 200 1400 390 2000 1 1 0.1 1 1
Fabiola 150 1 1 0.1 1 1
Dalila 300 1 1 0.1 1 1
Coyita 250 1 1 0.1 1 1
Dagny 300 1 1 0.1 1 1
Bianca 150 1 1 0.1 1 1
Delia NW 300 1 1 0.1 1 1
Delia SE
45 deg 271,941 4,840,614 -10 150 1400 390
60 deg 271,257 4,840,846 30 300 680 350
45 deg 271,867 4,841,143 -10 250 890 390
45 deg 271,478 4,840,382 -50 300 740 380
70 deg 271,025 4,840,978 -50 150 190 380
33 deg 271,471 4,840,197 -90 300 1120 390
25 deg 272,021 4,840,038 -45 250 620 320 250 1 1 0.1 1 1
Trinidad 25 deg 271,690 4,840,110 0 120 900 300 120 1 1 0.1 1 1
Marcela Sur 70 deg 280,003 4,840,516 10 400 1500 450 400 1 1 0.1 1 1
Raul Norte 73 deg 280,321 4,839,555 328 150 780 210 150 1 1 0.1 1 1
Raul Sur 109 deg 280,277 4,839,465 328 70 155 230 70 1 1 0.1 1 1
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Page 14-24
DENSITY
Coeur evaluated the densities of all major veins in the Fachinal District. A total of 270
samples were tested for density determinations, resulting in an average density of 2.64 t/m
3

(Sims, 2010).
RPA reviewed 253 density determinations taken by Coeur from 55 holes drilled in the Delia
NW and Delia SE veins in 2009. Most samples were taken from inside these major veins,
and along most of the strike length of the veins. Results ranged from 2.42 t/m
3
to 3.55 t/m
3
,
averaging 2.63 t/m
3
. It is unknown how the bulk densities were determined. Mandalay has
not undertaken additional density determinations.
RPA is of the opinion that the density determinations are acceptable for use in resource
estimation, as the average is comparable to other similar quartz vein deposits. RPA
recommends taking additional density samples specific to individual veins in order to identify
local variations and to confirm and support future resource estimates. RPA also
recommends developing a standard operating procedure for in-house density determinations
and implementing some outside checks on the density determinations to support and confirm
in-house results.
GRADE ESTIMATION
Gold and silver grades were estimated for each block using the inverse distance cubed (ID
3
)
method. Domain models were used as hard boundaries to limit the extent of influence of
composite grades within the domains.
RPA constructed a variogram model using channel composites located inside the Dagny,
Fabiola, Yasna, Delia NW, Marcela Sur, and Raul veins. Suitable variograms could not be
generated for other individual domain models due to either the small number of contained
sample composites or the presence of multiple trends. Similar ranges were approximated for
the Bianca, Delia SE, Dalila, Coyita, and Trinidad veins based on visual inspection of grade
continuity. Variogram ranges were used to support pass estimation search ranges for the
Bianca, Dagny, Delia NW and SE, Fabiola, Yasna, Dalila, Coyita, Trinidad, Marcela Sur, and
Raul veins. A directional variogram example for the Dagny vein is shown in Figure 14-18.
March 2014
Dagny Variogram
Cerro Bayo Mine
Figure 14-18
14-25
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Page 14-26
Search directions were determined visually for each domain. Isotropic search ranges in the
major and semi-major directions following the trend of the domain models were applied.
Search directions and trends are listed in Table 14-5.

TABLE 14-5 VULCAN DOMAIN SEARCH DIRECTIONS

Vein
Area /
High Grade
General Trend Vulcan Rotation
Strike Plunge Dip
Z
rotation
Y
rotation
X
rotation
Bianca
NW 160 0 -85E 160 0 85
CE 110 0 -90 110 0 -90
SE 160 0 -85W 160 0 -85
Coyita - 135 -5 -75E 135 -5 75
Dagny
HG 135 5 -75W 135 5 -75
- 135 0 -75W 135 0 -75
Dalila - 150 -5 -75W 150 -5 -75
Delia NW - 125 0 -70E 125 0 70
Delia SE - 115 0 -65E 115 0 65
Fabiola
- 135 -5 -75E 135 -5 75
SE1 145 -15 -75E 145 -15 75
SE2 130 -15 -75E 130 -15 75
Yasna
- 140 -5 -80W 140 -5 -80
SE1 150 -15 -80W 150 -15 -80
SE2 125 -15 -80W 125 -15 -80
Trinidad - 115 0 -85E 115 0 85
Marcela Sur - 160 0 -60W 160 0 -60
Raul Norte 163 0 -70W 163 0 -70
Raul Sur 20 0 -75E 20 0 75

NW: northwest, CE: central, SE: southeast, HG: High grade envelope, SE1: South Extension 1, SE2: South
Extension 2

Two grade estimation passes were run for Dalila and Bianca veins, with increased search
ranges used for the second estimation. Three grade estimation passes were run for Dagny,
Bianca, Delia NW, Delia SE, Trinidad, Coyita, Marcela Sur, and Raul Norte and Raul Sur. In
general, the two first passes were made inside a silver equivalent envelope of 120 g/t AgEq
and the last pass outside the envelope. In Dagny, the first pass was run inside a high grade
envelope. A few of the second pass search ranges used for the minor axes were not
increased, as the first pass search ranges were sufficiently large to include all run-length
composites. Estimation flags were stored for all estimation runs based on search distances.
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Page 14-27
The number of samples was stored in a separate block variable for use in determining
resource classification. Grade estimation parameters are listed in Table 14-6.

Channel and drill hole composites were used to estimate grades in the first run for the
Bianca, Dagny, Fabiola, Yasna, Delia NW, Marcela Sur, and Raul veins. Drill hole
composites were then used in grade estimation for the following runs. The Coyita, Dalila,
Delia SE, and Trinidad veins were estimated using only drill hole composites. Figures 14-19
to 14-29 illustrate the Mineral Resource estimation by vein.

TABLE 14-6 GRADE ESTIMATION PARAMETERS

Vein
Estimation
Run
HG/AGEQ Envelope
Search Ranges Number of samples per estimate
Major
Axis
Semi-
major
Axis
Minor
Axis
Min.
samp/est
Max
samp/est
Max
samp/dh
Bianca
2

1 inside AGEQ Env. 50 50 15 2 5 -
2 outside AGEQ Env, 60 60 20 1 6 -
Coyita
2

1 inside AGEQ Env. 50 50 15 2 5 -
2 inside AGEQ Env. 70 70 35 1 6 -
Dalila
1 - 50 50 15 2 5 -
2 - 60 60 20 1 6 -
Dagny
2

1 inside HG Env. 30 50 15 2 5 -
2 inside AGEQ Env. 50 50 15 2 5 -
3 inside AGEQ Env. 50 50 15 1 6 -
Delia NW
2

1 inside AGEQ Env. 50 50 15 2 5 -
2 inside AGEQ Env. 60 60 20 1 6 -
Delia SE
2

1 inside AGEQ Env. 50 50 15 2 5 -
2 inside AGEQ Env. 60 60 20 1 6 -
3 outside AGEQ Env. 60 60 20 1 6 -
Fabiola
2

1 inside AGEQ Env. 50 50 15 2 5 -
2 inside AGEQ Env. 60 60 20 1 6 -
3 outside AGEQ Env 60 60 20 1 6 -
1
1
inside AGEQ Env & SE1 80 50 20 1 6 -
1
1
Inside AGEQ Env & SE2 80 50 20 1 6 -
Yasna
2

1 inside AGEQ Env 50 50 15 2 5 -
2 inside AGEQ Env 60 60 20 1 6 -
1
1
1
1
Trinidad
2
1 inside AGEQ Env. 50 50 15 2 5 -
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Page 14-28
Vein
Estimation
Run
HG/AGEQ Envelope
Search Ranges Number of samples per estimate
Major
Axis
Semi-
major
Axis
Minor
Axis
Min.
samp/est
Max
samp/est
Max
samp/dh
2 inside AGEQ Env. 70 70 35 1 6 -
Marcela
Sur
2

1 inside AGEQ Env. 50 50 15 2 5 -
2 inside AGEQ Env. 85 85 20 1 6 -
Raul
Norte
2

1 inside AGEQ Env. 75 25 20 2 5 -
2 inside AGEQ Env. 75 30 20 1 6 -
Raul Sur
2

1 inside AGEQ Env. 25 25 20 2 5 -
2 inside AGEQ Env. 35 35 20 1 6 -

1
SE1: South Extension 1, SE2: South Extension 2.
2
Estimated veins using AgEq envelope at 120 g/t.

Dilution grades were applied to those blocks located outside the final vein models and inside
the larger diluted vein models. Dilution grades were statistically determined for each diluted
vein based on drill hole assays located only inside the portion of the diluted vein models
outside of the final vein models, and listed in Table 14-7. Diluted vein grades and models
were used only for Mineral Reserves, and not used for reporting Mineral Resources. The
resource blocks were reblocked into the diluted block model. The reblocked grades were
assigned based on volume weighting of the original block grades. An example of the final
resource and reserve seam block models is shown in Figure 14-30.

TABLE 14-7 DILUTED VEIN GRADES

Zone
Dilution Grade
(Au g/t)
Dilution Grade
(Ag g/t)
Bianca 0.15 10
Dagny 0.15 10
Delia NW 0.18 11
Delia SE 0.18 11
Fabiola 0.13 15
Yasna 0.13 15
Coyita 0.14 11
Dalila 0.22 15
Trinidad 0.14 7
Marcela Sur 0.15 10
Raul Norte 0.2 14
Raul Sur 0.2 14
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Page 14-29
BLOCK GRADE VALIDATION
Visual validation comparing assay and composite grades to block grade estimates showed
reasonable correlation with no significant overestimation or overextended influence of high
grades in all domains.

Average block grades were compared to average composite grades by vein for the Bianca,
Dagny, Delia NW and SE, Fabiola, Yasna, Dalila, Coyita, Trinidad, Marcela Sur, and Raul
veins. This visual comparison generally showed good spatial correlation between composite
and block grades.

The vein wireframe volumes are within three percent of the block model volumes reported at
a zero grade cut-off.

The block grades were statistically validated for all veins and no significant discrepancies
were identified.

RESOURCE CLASSIFICATION
The Cerro Bayo Mineral Resource classification complies with the CIM (2010):

A Measured Mineral Resource is that part of a Mineral Resource for which
quantity, grade or quality, densities, shape, and 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.

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
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Page 14-30
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.

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.

Resource classification within mineralization domains was primarily based on drill hole
spacing and continuity of grade, and was manually completed. Manual adjustments were
made to eliminate any unusual artifacts generated from the estimation passes.

The classification of the Mineral Resource estimate was applied in the following way:
Blocks estimated for the Bianca, Dagny, Fabiola, Yasna, Delia NW, and Raul veins
during the first estimation pass with a minimum of two composites, with distance to
the holes consistently less than 15 m and well established geological and grade
continuity, were classified as Measured Resources.

Blocks estimated for the Bianca, Dagny, Fabiola, Yasna, Delia NW and SE, Dalila,
Coyita, Trinidad, Marcela Sur, and Raul veins with a minimum of one and a maximum
of six composites, with a maximum search radius of 30 m, and demonstrating
reasonable geological and grade continuity, were classified as Indicated Resources.
This search range is similar to previous search ranges used for the Indicated
Resource classification.

All blocks completely or partially contained within a wireframe model were assigned a
minimum classification of Inferred. All blocks estimated for Fabiola SE1, Fabiola
SE2, Yasna SE1, and Yasna SE2 veins were classified as Inferred due to the wide
spacing of drill holes.

N
2
7
E
1
0
5
0
200 L
100 L
Drill Hole Trace
Contact Limit
with Dagny
Surface
300 L
50 m
4841150 N
2
7
1
0
0
0

E
2
7
1
0
5
0

E
2
7
1
1
0
0

E
4841100 N
4841050 N
4841000 N
Looking NE
2
7
1
1
5
0

E
PLAN VIEW
Drill Hole Trace
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Bianca Vein
Ag Block Grades
Figure 9 14-1
1
4
-
3
1
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
2
7
1
0
0

E
2
2
7
1
0
0

E
3
2
7
0
0

E
1
4
2
7
0
0

E
1
5
300 L
100 L
Drill Hole Trace
50 m
Surface
200 L
0 L
Contact Limit
with Bianca
2
7
1
0
0

E
1
4841000 N
2
7
1
3
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
4840900 N
4840800 N
4840600 N
4840700 N
4840500 N
2
7
1
1
0
0

E
2
7
1
2
0
0

E
Drill Hole Trace
Looking NE
PLAN VIEW
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Dagny Vein
Ag Block Grades
Figure 20 14-
1
3
2
4
-
w
w
w
.
r
p
a
c
a
n
.
c
o
m
PLAN VIEW
N
2
7
1
4
0
0

E
2
7
1
5
0
0

E
2
7
1
6
0
0

E
2
7
1
7
0
0

E
400 L
100 L
Drill Hole Trace
Drill Hole Trace
50 m
S
u
rfa
c
e
200 L
300 L
2
7
1
0
0

E
9
2
7
1
0
0

E
8
2
7
1
9
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
4841800 N
4841600 N
4841700 N
2
7
1
6
0
0

E
2
7
1
8
0
0

E
Looking NE
4841500 N
4841300 N
4841400 N
4841200 N
2
7
1
7
0
0

E
2
7
2
0
0
0

E
2
7
2
1
0
0

E
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Coyita Vein
Ag Block Grades
Figure 21 14-
1
4
-
3
3
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
PLAN VIEW
Drill Hole Trace
2
7
1
1
0
0

E
2
7
1
2
0
0

E
2
7
1
3
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
2
7
1
6
0
0

E
300 L
100 L
Drill Hole Trace
50 m
Surface
2
7
0
7
0
0

E
2
7
0
8
0
0

E
2
7
0
9
0
0

E
2
7
1
0
0
0

E
200 L
2
7
1
7
0
0

E
2
7
1
8
0
0

E
2
7
1
9
0
0

E
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Dalila Vein
Ag Block Grades
Figure 14-22
1
4
-
3
4
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
2
7
0
7
0
0

E
2
7
1
0
0
0

E
2
7
1
1
0
0

E
200 L
100 L
Drill Hole Trace
50 m
Surface
0 L
2
7
0
8
0
0

E
2
7
0
9
0
0

E
2
7
1
5
0
0

E
2
7
1
4
0
0

E
2
7
1
3
0
0

E
2
7
1
2
0
0

E
300 L
2
7
1
1
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
4840800 N
4840600 N
4840700 N
2
7
1
6
0
0

E
2
7
1
2
0
0

E
4840500 N
4840300 N
4840400 N
4840200 N
2
7
1
3
0
0

E
2
7
1
0
0
0

E
2
7
0
9
0
0

E
2
7
0
6
0
0

E
2
7
0
7
0
0

E
2
7
0
8
0
0

E
4841000 N
4840900 N
Looking NE
Drill Hole Trace
PLAN VIEW
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Delia NW Vein
Ag Block Grades
Figure 23 14-
1
4
-
3
5
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
Drill Hole Trace
PLAN VIEW
2
7
1
6
0
0

E
2
7
1
7
0
0

E
2
7
1
8
0
0

E
2
7
1
9
0
0

E
F
a
u
l
t
2
7
2
0
0
0

E
2
7
2
1
0
0

E
200 L
100 L
Drill Hole Trace
50 m
S
u
rfa
c
e
0 L
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Delia SE Vein
Ag Block Grades
Figure 14-24
1
4
-
3
6
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
South Extension
2
7
1
1
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
4841000 N
2
7
2
0
0
0

E
2
7
1
2
0
0

E
4840900 N
2
7
1
3
0
0

E
PLAN VIEW
2
7
4
8
0
0

E
2
7
1
9
0
0

E
2
7
1
6
0
0

E
2
7
1
7
0
0

E
4841400 N
4841200 N
4841300 N
4841100 N
4841600 N
4841500 N
2
7
1
1
0
0

E
2
7
1
2
0
0

E
2
7
1
3
0
0

E
2
7
1
4
0
0

E
400 L
200 L
Drill Hole Trace
50 m
Surface
300 L
0 L
2
7
1
5
0
0

E
2
7
1
6
0
0

E
2
7
1
0
0

E
7
2
7
1
0
0

E
8
2
7
1
0
0

E
9
100 L
Drill Hole Trace
2
7
1
5
0
0

E
4840800 N
Looking NE
South Extension
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Fabiola Vein
Ag Block Grades
Figure 14-25
1
4
-
3
7
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
Drill Hole Trace
South Extension
300 L
2
7
1
3
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
2
7
1
6
0
0

E
2
7
1
7
0
0

E
200 L
100 L
Drill Hole Trace
50 m
S
u
r
fa
c
e
2
7
1
0
0

E
8
2
7
1
0
0

E
9
400 L
2
7
1
1
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
4841000 N
2
7
2
0
0
0

E
2
7
1
2
0
0

E 4840900 N
2
7
1
3
0
0

E
PLAN VIEW
2
7
4
8
0
0

E
2
7
1
9
0
0

E
2
7
1
6
0
0

E
2
7
1
7
0
0

E
4841400 N
4841200 N
4841300 N
4841100 N
4841600 N
4841500 N
2
7
1
5
0
0

E
4840800 N
Looking NE
South Extension
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Yasna Vein
Ag Block Grades
Figure 6 14-2
1
4
-
3
8
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
2
7
1
0
0
0

E
2
7
1
1
0
0

E
2
7
1
2
0
0

E
2
7
1
3
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
300 L
100 L
Drill Hole Trace
50 m
Surface
200 L
Drill Hole Trace
2
7
1
1
0
0

E
2
7
1
4
0
0

E
2
7
1
5
0
0

E
4840400 N
2
7
1
2
0
0

E
4840300 N
2
7
1
3
0
0

E
4840500 N
4840200 N
4840400 N
2
7
1
6
0
0

E
PLAN VIEW
2
7
1
0
0
0

E
Looking NE
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Trinidad Vein
Ag Block Grades
Figure 7 14-2
1
4
-
3
9
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
2
7
0
0

E
9
8
2
7
0
0

E
9
9
2
0
0

E
8
0
0
2
8
0
1
0
0

E 0 L
200 L
Drill Hole Trace
50 m
Surface
300 L
Drill Hole Trace
2
7
9
6
0
0

E
2
8
0
2
0
0

E
2
8
0
4
0
0

E
2
7
9
8
0
0

E
4841800 N
2
8
0
0
0
0
E
2
7
1
6
0
0

E
PLAN VIEW
2
7
9
4
0
0

E
Looking NE
400 L
100 L
4841000 N
4841200 N
4841400 N
4841600 N
4840800 N
4840600 N
2
8
0
8
0
0

E
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Marcela Sur Vein
Ag Block Grades
Figure 8 14-2
1
4
-
4
0
w
w
w
.
r
p
a
c
a
n
.
c
o
m
N
2
0
0

E
8
0
2
2
8
0
3
0
0

E
500 L
Drill Hole Trace
50 m
Surface
300 L
Drill Hole Trace
Raul Norte Block Model
Raul Sur Block Model
2
8
0
2
0
0

E
2
8
0
3
0
0

E 4840200 N
2
8
0
1
0
0

E
2
8
0
4
0
0

E
PLAN VIEW
Looking NE
400 L
4839800 N
4839900 N
4840000 N
4840100 N
4839700 N
4839600 N
2
8
0
5
0
0

E
2
8
0
3
0
0

E
2
8
0
6
0
0

E
2
8
0
7
0
0

E
2
8
0
8
0
0

E
2
8
0
9
0
0

E
4839500 N
2
8
1
0
0
0

E
Raul Norte Raul Sur
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Samples: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
< 50.00000
< 100.00000
< 300.00000
< 500.00000
< 800.00000
< 1500.00000
< 3200.00000
< 99999.00000
Legend: Blocks: Ag
0.00000 <=
50.00000 <=
100.00000 <=
300.00000 <=
500.00000 <=
800.00000 <=
1500.00000 <=
3200.00000 <=
March 2014
Cerro Bayo Project
Raul Vein
Ag Block Grades
Figure 9 14-2
1
4
-
4
1
w
w
w
.
r
p
a
c
a
n
.
c
o
m
Resource Block Model Reserve Block Model
Vein Thickness
Diluted Vein
Thickness
0 2 10
Metres
4 6 8
March 2014
Example of Resource and
Reserve Seam Block Model
Cerro Bayo Project
Figure 30 14-
14-42
www.rpacan.com
www.rpacan.com

Page 14-43
COMPARISON WITH PREVIOUS RESOURCE ESTIMATES
A comparison of the current RPA estimate, inclusive of Mineral Reserves, to the previous
2013 Mineral Resource estimates is presented in Table 14-8. The reasons for the changes
are primarily due to the addition of the new resources through exploration diamond drilling,
and the subtraction of material through mining.

Since the previous Mineral Resource estimate in 2012, Mandalay has undertaken surface
drilling and underground channel sampling programs to infill and extend existing
mineralization along strike and at depth, in addition to delineating mineralization in newly
discovered veins. This additional data has increased the extents of the Dagny, Delia NW,
Coyita, Fabiola, Yasna, Marcela Sur, and Raul mineralized zones, with resultant increases in
Mineral Resource tonnages, and gold and silver metal content. Mineral Resources were not
previously estimated for the Raul vein.

Closely spaced channel samples were used to estimate Mineral Resources for the Bianca,
Dagny, Fabiola, Delia NW, Yasna, and Raul veins, and confirmed geological and grade
continuity with sufficient confidence for classification as Measured Resources.

TABLE 14-8 COMPARISON OF RPA AND PREVIOUS RESOURCE ESTIMATES INCLUSIVE OF MINERAL RESERVES
Resource Class
December 31, 2013 December 31, 2012
Tonnes
(000)
Grade Contained Metal
Tonnes
(000)
Au g/t Ag g/t
Au
Ounces
(000)
Ag
Ounces
(000)
Au g/t Ag g/t
Au
Ounces
(000)
Ag
Ounces
(000)
MEASURED
Yasna 62.4 2.2 473.1 4.4 949.7 48.1 1.3 456.7 2.1 706.5
Fabiola 71.0 2.5 465.8 5.6 1,063.1 80.8 2.1 511.9 5.6 1,329.2
Dalila - - - - - - - - - -
Coyita - - - - - - - - - -
Dagny 114.0 3.9 473.3 14.3 1,733.9 77.0 4.3 626.0 10.8 1,550.6
Bianca 16.3 3.6 201.1 1.9 105.5 23.1 3.6 285.4 2.6 211.8
Delia NW 122.4 5.1 397.6 20.1 1,564.3 98.4 3.9 544.8 12.3 1,723.1
Delia SE - - - - - - - - - -
Trinidad - - - - - - - - - -
Marcela Sur - - - - - - - - - -
Raul 25.4 1.7 219.8 1.4 179.4 - - - - -
TOTAL MEASURED 411.4 3.6 423.0 47.6 5,595.9 327.4 3.2 524.6 33.3 5,521.2
INDICATED
Yasna 60.0 2.0 277.7 3.9 536.1 110.1 1.7 281.1 6.2 995.3
Fabiola 55.3 2.3 155.3 4.1 276.3 135.9 1.7 321.0 7.3 1,402.4
Dalila 102.2 3.1 267.5 10.1 878.7 103.7 3.1 265.1 10.2 884.0
Coyita 286.4 1.8 295.8 16.5 2,724.1 237.9 1.4 282.1 10.8 2,157.7
Dagny 69.1 2.6 306.2 5.9 680.7 164.6 2.8 340.4 14.8 1,801.5
Bianca 0.6 2.5 114.2 0.1 2.4 8.1 3.4 287.3 0.9 74.9
Delia NW 391.1 3.2 277.9 39.8 3,493.9 449.2 3.5 300.7 50.1 4,343.5
Delia SE 272.8 6.2 471.3 54.0 4,134.6 273.5 6.1 470.5 54.0 4,136.9
Trinidad 70.4 3.9 114.9 8.9 259.9 - - - - -
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Resource Class
December 31, 2013 December 31, 2012
Tonnes
(000)
Tonnes
(000)
Au g/t Ag g/t
Au
Ounces
(000)
Ag
Ounces
(000)
Au g/t Ag g/t
Au
Ounces
(000)
Ag
Ounces
(000)
Marcela Sur 242.3 2.3 338.5 18.1 2,636.8 78.7 2.5 378.9 6.2 958.3
Raul 82.4 2.0 207.2 5.3 548.7 - - - - -
TOTAL INDICATED 1,632.6 3.2 308.1 166.7 16,172.2 1,561.7 3.2 333.7 160.5 16,754.4
TOTAL MEASURED AND
INDICATED
2,044.1 3.3 331.2 214.3 21,768.1 1,889.1 3.2 366.8 193.8 22,275.7
INFERRED
Yasna 65.8 2.0 358.5 4.2 758.7 11.8 1.6 259.4 0.6 98.4
Fabiola 72.0 6.5 1,263.7 15.1 2,926.4 33.4 2.1 264.8 2.2 284.5
Dalila 22.6 1.8 171.6 1.3 124.5 23.4 1.8 169.2 1.3 127.1
Coyita 38.8 2.9 304.6 3.6 380.4 48.3 1.2 252.0 1.8 391.4
Dagny 11.9 1.2 283.5 0.5 108.9 15.7 1.3 325.0 0.7 164.6
Bianca - - - - - 3.1 2.9 326.5 0.3 32.9
Delia NW 35.9 3.6 122.2 4.2 141.0 25.4 2.7 51.4 2.2 42.0
Delia SE 43.1 4.8 271.2 6.7 375.9 43.4 4.8 270.3 6.7 377.0
Trinidad 32.1 2.2 122.9 2.2 126.9 115.1 3.5 101.5 12.8 375.5
Marcela Sur 111.1 2.4 178.4 8.7 637.3 132.4 1.6 241.7 6.6 1,028.8
Raul - - - - - - - - - -
TOTAL INFERRED 433.4 3.3 400.4 46.5 5,580.1 452.1 2.4 201.1 35.2 2,922.2
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Page 14-46
CUT-OFF GRADE
Table 14-9 outlines the parameters used to estimate the 163 g/t AgEq Mineral Resource cut-
off grade based on gold and silver prices of US$1,400/oz and US$24/oz, respectively. The
input parameters were derived from information provided by Mandalay for smelter terms and
actual mining costs over the last year.

TABLE 14-9 RESOURCE CUT-OFF GRADE ASSUMPTIONS

Mine Production Tonnes 000 489
Gold Grade g/t 2.0
Silver Grade g/t 234.8

Mill Total Ore Milled Tonnes 000 489
Gold Grade g/t 2.0
Silver Grade g/t 234.8
Recoveries
Gold % 88.8%
Silver % 91.4%
Concentrate
Ag-Au Concentrate dmt 8,977
Concentrate ratio 54.45
Gold Grade g/t 95.74
Silver Grade g/t 11,683

Revenue Metal Prices
Gold US$/oz 1,400
Silver US$/oz 24.00
Exchange Rate C$/US$ 1.00 C$/US$
Contained Au ounces 27,632
Contained Ag ounces 3,371,996
Payable Au % 97.0%
Payable Ag % 96.5%
Payable Au Metal ounces 26,723
Payable Ag Metal ounces 3,244,214
Gross Value
Gold US$000 37,412
Silver US$000 77,861
Total US$000 115,273
Transport Charges
Truck US$000 200.00 US$/wmt conc 1,795
Ship US$000 200.00 US$/wmt conc 1,795
Treatment Charges
Concentrate US$000 300.00 US$/dmt conc 2,693
Refining Charges
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Page 14-47
Gold in conc. US$000 6.00 US$/oz 160
Silver in conc. US$000 1.00 US$/oz 3,244

Net Smelter Return US$000 105,584
US$/t ore 216.00
NSR Model Factors
Gold % 33.3%
Silver % 66.7%
Gold $ per g Au 36.38
Silver $ per g Ag 0.61

Silver Equivalent Factor
g Ag per g
Au
59.64
Operating Costs
Underground Mining US$000 55.00 US$/t 26,885
Processing US$000 28.00 US$/t 13,687
G & A US$000 17.00 US$/t 8,310
Total Operating Costs US$000 48,882
US$/t 100.00
US$/g Ag 0.47
Cut-Off Grades
Break-Even COG g/t AgEq 163
Incremental COG g/t AgEq 73

The 200 g/t AgEq Mineral Reserve cut-off grade was estimated using all of the assumptions
in Table 14-9 except the gold and silver prices, which were set at US$1,200/oz and
US$20/oz, respectively.

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Page 14-48
MINERAL RESOURCE ESTIMATE
The Cerro Bayo Mineral Resource estimate, inclusive of Mineral Reserves, is summarized by
domain at a 163 g/t AgEq cut-off grade in Table 14-10.

TABLE 14-10 MINERAL RESOURCES INCLUSIVE OF MINERAL RESERVES BY
DOMAIN DECEMBER 31, 2013

Measured Resources
Category
Tonnes
Gold
Grade
Silver
Grade
AgEq
Grade
Au
Ounces
Ag
Ounces
AgEq
Ounces
(000) (g/t Au) (g/t Ag) (g/t AgEq) (000) (000) (000)
Yasna 62 2.18 473.06 602.96 4 950 1,211
Fabiola 71 2.47 465.83 613.21 6 1,063 1,399
Dalila - - - - - - -
Coyita - - - - - - -
Dagny 114 3.89 473.27 705.27 14 1,734 2,584
Bianca 16 3.59 201.10 415.44 2 105 218
Delia NW 122 5.11 397.61 702.33 20 1,564 2,763
Delia SE - - - - - - -
Trinidad - - - - - - -
Marcela Sur - - - - - - -
Raul 25 1.66 219.82 319.01 1 179 260
Total 411 3.60 423.02 637.67 48 5,596 8,435

Indicated Resources
Category
Tonnes
Gold
Grade
Silver
Grade
AgEq
Grade
(g/t AgEq)
Au
Ounces
Ag
Ounces
AgEq
Ounces
(000)
(000) (g/t Au) (g/t Ag) (000) (000)
Yasna 60 2.03 277.70 398.85 4 536 770
Fabiola 55 2.29 155.30 291.86 4 276 519
Dalila 102 3.09 267.52 451.72 10 879 1,484
Coyita 286 1.79 295.85 402.84 17 2,724 3,709
Dagny 69 2.64 306.25 463.77 6 681 1,031
Bianca
1 2.47 114.17 261.33 0 2 5
Delia NW
391 3.17 277.88 466.72 40 3,494 5,868
Delia SE
273 6.15 471.32 838.39 54 4,135 7,355
Trinidad
70 3.94 114.88 349.92 9 260 792
Marcela Sur
242 2.32 338.52 476.62 18 2,637 3,712
Raul
82 2.01 207.24 326.87 5 549 865
Total
1,633 3.18 308.10 497.44 167 16,172 26,111

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Page 14-49
Inferred Resources
Category
Tonnes
Gold
Grade
Silver
Grade
AgEq
Grade
(g/t AgEq)
Au
Ounces
Ag
Ounces
AgEq
Ounces
(000)
(000) (g/t Au) (g/t Ag) (000) (000)
Yasna 66 1.99 358.47 477.11 4 759 1,010
Fabiola 72 6.53 1,263.69 1,652.90 15 2,926 3,828
Dalila 23 1.81 171.63 279.69 1 124 203
Coyita 39 2.88 304.64 476.69 4 380 595
Dagny 12 1.20 283.48 355.32 0 109 136
Bianca
- - - - - - -
Delia NW
36 3.63 122.23 338.57 4 141 391
Delia SE
43 4.80 271.17 557.69 7 376 773
Trinidad
32 2.16 122.89 251.49 2 127 260
Marcela Sur
111 2.43 178.44 322.94 9 637 1,153
Raul
- - - - - - -
Total
433 3.33 400.43 599.14 46 5,580 8,349

Notes:
exchange rate of 1.
3
was used.

RPA is not aware of any environmental, permitting, legal, title, taxation, socio-economic,
marketing, political, or other relevant factors that could affect the Mineral Resource estimate.

www.rpacan.com

Page 15-1
15 MINERAL RESERVE ESTIMATE
RESERVE ESTIMATION METHODOLOGY
The Mineral Reserves were estimated by Mandalay using the Mineral Resources that were
estimated by RPA. For conversion to Mineral Reserves, the Mineral Resources were diluted
to a mining width of 2.4 m and an extraction factor of 95% was applied. For those veins over
2.4 m in width, an additional 0.4 m of dilution was included. RPA has reviewed and confirms
the Mineral Reserves estimate.

An example of the conversion from Resources to Reserves for the Yasna Vein is presented
in Table 15-1. The dilution grades and extraction factors are applied to the resources that
are included in the underground level development and stopes. All of these are summed and
reported for each vein.

Dilution grades were added and varied from vein to vein. The dilution grades are shown in
Table 15-2 below. Dilution tonnages, at the dilution grades, were then added to the vein
tonnages using a weighted average calculated to determine the final equivalent silver grade
of the ore. The AgEq grade is calculated using the ratio of gold to silver to determine the
equivalent ounces of silver, taking into account the transportation, treatment and refining
costs. An extraction factor of 95% was then applied to arrive at the final reserve tonnage.

TABLE 15-1 CONVERSION OF RESOURCES TO RESERVES - YASNA VEIN
Category Tonnes %Dist.
Diluted
Tonnes
Total
Tonnes
Au
(g/t)
Au
Dilution
Grade
(g/t)
Final
Au Dil.
(g/t)
Ag.
(g/t)
Dil.
Ag
(g/t)
Final
Ag
(g/t)
Dil.
Tonnes
(zero
grade)
Tonnes
Au.
(g/t)
Ag
(g/t)
Ag.Eq.
(g/t)
Au.
Oz
Ag.
O
AgEq.
Oz
Drift
147S
Meas. - - - - - - - - - - - - - - - - - -
Ind. 156 75% 154 310 1.18 0.13 0.56 471 15 207 56 366 0.56 207 242 7 2438 2,843
Inf. 52 25% 50 102 1.13 0.13 0.54 459 15 203 18 121 0.54 203 236 2 785 914
Stope
147S-
1
Meas. 4,550 100 1,981 6,531 1.56 0.13 1.129 447 15 316 6,204 1.13 316 385 225 62,965 76,849
Ind.
- - - - - - - - - - - - - - - - - -
Inf.
- - - - - - - - - - - - - - - - - -
147S-
4
Meas. 906 100 681.4 1,587 1.70 0.13 1.02 907 15 524 1,508 1.02 524 587 50 25,406 28,465
Ind.
- - - - - - - - - - - - - - - - - -
Inf.
- - - - - - - - - - - - - - - - - -
147S-
5
Meas. 2,678 65% 1,654 4,333 0.77 0.13 0.52 380 15 240 4,116 0.52 240 273 69 31,820 36,087
Ind. 1,391 34% 1,385 2,776 1.08 0.13 0.61 422 15 219 2,637 0.61 219 256 51 18,550 21,716
Inf. 56 1% 58 114 1.14 0.13 0.63 454 15 230 108 0.63 230 269 2 803 937
147 N Meas. 8,587 100 7,599 16,186 3.12 0.13 1.71 505 15 275 15,377 1.71 275 381 847 136,043 188,279
Ind.
- - - - - - - - - - - - - - - - - -
Inf.
- - - - - - - - - - - - - - - - - -
Total Proven 16,721 11,916 28,637 2.33 0.13 1.36 495 15 293 27,205 1.36 293 377 1192 256,234 329,680
Probable 1,547 1,539 3,086 1.09 0.13 0.60 427 15 218 3,003 0.60 217 254 58 20,988 24,559
To LOM 18,268 13,455 31,723 2.21 0.13 1.29 489 15 286 30,208 1.29 285 365 1,249 277,222 354,239
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Page 15-3
TABLE 15-2 DILUTION GRADES 2013 RESERVES

Zone
Dilution Grade
(Au g/t)
Dilution Grade
(Ag g/t)
Bianca 0.15 10
Dagny 0.15 10
Delia NW 0.18 11
Delia SE 0.18 11
Fabiola 0.13 15
Marcela Sur 0.15 10
Yasna 0.13 15
Coyita 0.14 11
Dalila 0.22 15
Trinidad 0.14 7
Raul Norte 0.20 14
Raul Sur 0.20 14

DILUTION AND EXTRACTION FACTORS
The Mineral Resources were reported at the vein width and diluted to an average mining
width of 2.4 m for conversion to Mineral Reserves. The dilution for the development averages
85% while the stope dilution averages 50%. The Marcela vein is not included in the dilution
numbers as the reserve was carried forward from last year. It represents a very small fraction
of the total reserves (less that 3%). An extraction factor of 95% was applied, to account for
various losses.

The drifts in the ore zones are driven at three metres by three metres. The stope design
allows for production drilling to be carried out with an offset of approximately 150 mm from
the hanging wall and footwall contacts of the ore, while the minimum stope width utilized is
2.4 m. For the stopes wider than 2.4 m, an additional 0.4 m is included for dilution beyond
the vein width. Vein widths for the different zones vary from 1.2 m up to over three metres,
with an average of approximately 1.8 m. RPA is of the opinion, based on observations on
site, that the stope dilution factors indicated above can be significantly lower by careful
planning and execution of drilling and loading operations. Dilution in the development,
however, provides less of an opportunity as a minimum drift width is required to
accommodate equipment sizes and clearance regulations for such equipment.

The Mineral Reserves for the Cerro Bayo Project are listed in Table 15-3.
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Page 15-4
TABLE 15-3 MINERAL RESERVES DECEMBER 31, 2013

Category Vein Tonnes
Grade
Au
Grade
Ag
Grade
AgEq
Ounces
Au
Ounces
Ag
Ounces
AgEq.*

(g/t) (g/t) (g/t) (oz) (oz) (oz)

Fabiola 88,499 1.6 305 405 4,601 867,532 1,151,161

Yasna 91,474 1.3 287 367 3,853 842,979 1,080,501

Dagny 183,231 2.3 264 404 13,342 1,557,919 2,380,319

Bianca 13,277 2.4 134 284 1,040 57,005 121,091

Dalila - - - - - - -
Proven Delia NW-1 120,080 4.4 321 590 16,833 1,239,945 2,277,503

Delia NW-2 4,867 2.8 379 553 443 59,230 86,539

Delia SE - - - - - - -

Marcela - - - - - - -

Coyita - - - - - - -

Trinidad - - - - - - -

Raul 14,791 1.3 168 251 639 79,951 119,333

Subtotal 516,220 2.5 283 435 40,751 4,704,561 7,216,446

Fabiola 45,648 1.5 99 191 2,179 145,591 279,889

Yasna 71,539 1.1 191 260 2,602 438,189 598,597

Dagny 59,954 2.3 208 348 4,367 401,374 670,568
Probable Bianca - - - - - - -

Dalila 159,804 1.7 154 259 8,821 789,237 1,332,993

Delia NW-1 50,192 2.3 146 288 3,708 235,683 464,239

Delia NW-2 383,868 2.3 219 359 27,968 2,706,470 4,430,439

Delia SE 411,323 3.4 272 485 45,540 3,603,320 6,410,382

Marcela 237,193 1.8 261 370 13,514 1,991,147 2,824,167

Coyita 365,033 1.2 198 271 13,848 2,325,393 3,178,960

Trinidad 87,181 2.5 65 218 6,959 182,931 611,889

Raul 94,989 1.3 124 205 4,052 377,559 627,339

Subtotal 1,966,724 2.1 209 339 133,559 13,196,893 21,429,463

Fabiola 134,148 1.6 235 332 6,780 1,013,123 1,431,050

Yasna 163,013 1.2 244 320 6,456 1,281,167 1,679,098

Dagny 243,185 2.3 251 390 17,709 1,959,293 3,050,887

Bianca 13,277 2.4 134 284 1,040 57,005 121,091
Proven + Probable Dalila 159,804 1.7 154 259 8,821 789,237 1,332,993

Delia NW-1 170,273 3.8 270 501 20,540 1,475,628 2,741,741

Delia NW-2 388,735 2.3 221 361 28,411 2,765,701 4,516,978

Delia SE 411,323 3.4 272 485 45,540 3,603,320 6,410,382

Marcela 237,193 1.8 261 370 13,514 1,991,147 2,824,167

Coyita 365,033 1.2 198 271 13,848 2,325,393 3,178,960

Trinidad 87,181 2.5 65 218 6,959 182,931 611,889

Raul 109,780 1.3 130 212 4,691 457,509 746,672

Total 2,482,944 2.2 224 359 174,310 17,901,454 28,645,909
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Page 15-5

Notes:
1. CIM definitions were followed for Mineral Reserves.
2. Mineral Reserves are estimated at a cut-off grade of 200 g/t AgEq.
3. Mineral Reserves are estimated using an average long term gold price of US$1,200 per ounce, a silver
price of US$20 per ounce, and a US$/C$ exchange rate of 1.
4. The AgEq calculated using the formula AgEq. =Ag +(Au x 61.64), where Ag and Au are in grams per
tonne after transport, treatment, and refining costs are deducted.
5. A minimum mining width of 2.4 m was used. Dilution grades vary by vein up to 0.25 g/t Au and 24 g/t Ag
for the Dagny and Bianca veins.
6. Density is 2.63 t/m
3
.

RECONCILIATION
The production for 2013 is shown in Table 15-4.

TABLE 15-4 PRODUCTION RESULTS - 2013

YTD 2013
Item Units Actual Budget Variance
Milling Dry Tonnes 386,480 379,551 102%
Grade Ag (g/t) 288 272 106%

Au (g/t) 2.02 2.01 100%
Contained Metal Ag (oz) 3,581,290 3,315,399 108%

Au (oz) 25,141 24,576 102%
Recovery Ag 91% 89% 102%

Au 88% 88% 100%
Concentrate Tonnes 9,003 8,017 112%
Concentrate Grade Ag (g/t) 11,263 11,485 98%

Au (g/t) 76.39 83.70 91%
Metal Produced Ag (oz) 3,260,057 2,960,480 110%

Au (oz) 22,110 21,574 102%

Table 15-4 indicates very close reconciliation of the planned and actual production results for
2013. Only the gold head grade and concentrate grade were slightly below forecast, with all
other metrics above the budget indicating a high level of accuracy in the forecasting.

Figures 15-1 to 15-11 show the areas of the veins that were mined in 2012 with
corresponding explanatory information for areas that were mined outside of the original plan
for the year.

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Page 15-6
RPA recommends that reconciliation be completed on a more regular basis. It is
recommended that Mandalay carry out reconciliation each quarter to permit timely
adjustments of the yearly budget plan. This should include reconciling tonnages and grades
from stope operations to the mill production and resource block model as well as
confirmation of dilution factors through use of a cavity monitoring system (CMS).

RPA notes that Mandalay currently maintains up-to-date longitudinal sections of each vein
illustrating the mining completed in order to provide current information on the source of the
resources for reconciliation purposes. RPA agrees with this practice.

RPA is not aware of any mining, metallurgical, infrastructure, environmental, permitting,
legal, title, taxation, or other relevant factors that could have affected the estimate of Mineral
Resources.

300 Y
0 25
Metres
50 75 100
200 Y
100 Y
Cerro Bayo Project
Bianca Vein
Longitudinal Section
Drilling and Mining Plan
Figure 15-1
1
5
-
7
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a
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NW SE
Laguna Verde
200 Z
100 Z
300 Z
400 Z
500 Z
0 Z
200 Z
100 Z
300 Z
400 Z
500 Z
0 Z
0 100
Metres
200 150 50
Cerro Bayo Project
Coyita Vein
Figure 15-2
1
5
-
8
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a
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m
0 50
Metres
100 150 200
Cerro Bayo Project
Dagny Vein
Figure 15-3
1
5
-
9
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300 Z
400 Z
200 Z
0 0 Z .
100 Z
0 50
Metres
100 150 200
Cerro Bayo Project
Dalila Vein
Figure 15-4
1
0
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a
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a
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c
o
m
0 100
Metres
200 150 50
Cerro Bayo Project
Delia NW Vein
Figure 15-5
1
5
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1
1
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r
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a
c
a
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c
o
m
0 100
Metres
200 150 50
Cerro Bayo Project
Delia SE Vein
Figure 15-6
1
5
-
1
2
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r
p
a
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a
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.
c
o
m
NW SE
300 Z
200 Z
100 Z
400 Z
-100 Z
0 Z
0 50
Metres
100 150 200
March 2014 Source 4. : Mandalay Resources Corp., 201
Cerro Bayo Project
Fabiola Vein
Figure 15-7
1
3
5
-
1
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w
w
.
r
p
a
c
a
n
.
c
o
m
400 Z
200 Z
100 Z
300 Z
NW SE
-100 Z
0 Z
0 100
Metres
200 150 50
Cerro Bayo Project
Yasna Vein
Figure 15-8
1
5
-
1
4
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m
0 100
Metres
200 150 50
Cerro Bayo Project
Trinidad Vein
Figure 15-9
1
5
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1
5
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200 Z
100 Z
300 Z
N S
100 Z
400 Z
500 Z
0 100
Metres
200 150 50
Cerro Bayo Project
Marcela Sur Vein
Figure 10 15-
1
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1
6
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0 100
Metres
200 150 50
Cerro Bayo Project
Raul Vein
Figure 11 15-
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Page 16-1
16 MINING METHODS
MINE DESIGN AND MINING METHOD
The mine design for the Cerro Bayo vein systems includes the main access via four metre by
4.5 m decline ramps because most veins are less than 200 m below surface. The ramps are
typically driven in the footwall of the target vein at a gradient of -12.5%. The ramp
arrangement is shown in Figure 16-1. The access drifts driven from the ramp to the ore are
three metres by three metres as are the access drifts to the ventilation raises. The ground
conditions were very good in all areas visited. During the site visit, RPA visited the Dagny
mine and Fabiola mine accesses where stoping operations were underway and the Delia
mine was visited where development was underway. All of the portals are located within a
radius of one kilometre of the processing plant. The surface plan is shown in Figure 16-2
illustrating the general plant layout.

As a result of the very good ground conditions, a longhole mining method is employed
although shrinkage stoping was used in the past by Coeur. Production development
includes driving the drifts on ore at a minimum dimension of three metres by three metres,
which is required for the standard equipment sizes utilized. The appropriate name for the
type of stoping method is longhole retreat stoping. The average production rate over the
LOM is 1,290 tpd.

Stoping is carried out with the drilling of 51 mm diameter production holes drilled upwards
from the drill drift towards the upper drift. Production drill holes are drilled to within
approximately one metre of breakthrough and stopped at that point in order to avoid
blockage of the hole. Typically, blasting will start at the lateral limit of ore on a particular level
and the stope will advance in a retreat fashion towards the main access drift. The drifts on
ore are driven from the access drift in both directions, to provide two production headings
from which drilling, blasting, and mucking operations can take place simultaneously. The
stope dimensions, and method, are shown in Figure 16-3.

The 51 mm production drill holes are drilled as near to the contact as possible (usually
approximately 150 mm) and upwards, following the dip of the vein. The final stope width is
estimated at 2.4 m based on an average vein width of 1.2 m. If the vein is wider than 2.4 m,
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Page 16-2
an additional dilution width of 0.40 m is added when estimating the Mineral Reserves. A
typical stope cross section is shown in Figure 16-4. The typical drill pattern in narrow stopes
is a 2-1-2 pattern with a one metre burden. In the wider stopes, like those at Delia, fan
drilling is used as indicated in Figure 16-5. While the holes are angled to follow the dip of the
vein, RPA recommends also that drill holes be systematically angled into the stope at 70,
providing for safer conditions when loading the holes with explosives prior to blasting. This is
standard practice in many mines using the smaller diameter longhole drill method.

Longitudinal sections of the Fabiola, Delia and Dagny veins, with the mining sequence
indicated for 2013-2014, are shown in Figures 16-6 to 16-8 respectively. Typical level
intervals are 15 m but can range from 12 m to 15 m. Rib pillars are typically left at
approximately 80 m (vertically) centered along strike. Crown pillars are left at approximately
55 m spacing, horizontally. These pillars are normally referred to as Sill Pillars with the
Crown pillar designation reserved for the surface Crown pillar. Raises to re-slot are driven
conventionally (by hand) where the rib pillars are left for regional support. The result of stope
blasting was observed underground with excellent ground control noted. Both hanging and
footwall contacts were visible with little overbreak beyond the contacts observed. The
blasted ore is mucked by scooptram back to the access drift and loaded into haul trucks for
haulage to the surface stockpile.

Split Set Bolts
4 m
4
,
5

m
Split Set Bolts
Split Set Bolts
Split Set Bolts
Leaky Feeder
1
,1
m
Ventilation Duct 110mm
Electric Cable
Compress Air Line 4"
Water Line 2"
Pump Line 3"
Pump Line 3"
Cerro Bayo Project
Ramp Dimensions
4.0 m x 4.5 m
Figure 16-1
16-3
www.rpacan.com
Laguna Verde
Sedimentation Basins
Area Installations
Magazine
Portal 2
Portal 1
Detonator Mag.
Top Soil
Waste Dump
Portal 3
Tailings Facility
Water Pond
271,500 E 271,750 E 271,000 E 271,250 E 270,500 E 270,250 E 270,000 E
4
,
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4
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4
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4
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N
4
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N
269,750 E
0 100 500
Metres
200 300 400
N
General Plant Layout
Cerro Bayo Project
Figure 16-2
1
6
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4
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Rib Pillars
(Planned)
Vein
Open Stope
(Mined Out)
15.0m
15.0m
15.0m
Vein
Vein
Open Stope
(Mined Out)
Mucking
Rib Pillars
Production Drift 3.0m Access Drift Drilling
R
a
i
s
e
Access Drift
Crown Pillar
R
a
i
s
e
R
a
i
s
e
Sill Pillar
Production Drift 3.0m
Cerro Bayo Project
Schematic Section of Longhole
Retreat Stoping Method
Figure 16-3
1
6
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5
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1 2 3 2 3 1 2 3
Lower Sublevel
Nv. 145. South
Vein
Upper Sublevel
Nv. 160. South
F
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T
A
C
C
E
S
S
1
2
3
Blasthole Layout Report
Layout : PAR52
Angle : -89.0
L : Left R : Right
Incline Holes : 1 degree
R6 / R7 PIVOT : 0.65
18 R
18 R
18 R
0.68 L
0.00 R
0.71 R
12.13
12.05
12.25
10
10
10 1/4
Total Lenght
Hole Distance L/R Angle L/R Lenght Rods
36.43
0 1 5
Metres
2 3 4
March 4 201 Source: Mandalay Resources Corp., 2014.
Cerro Bayo Project
Dagny Mine
Production Drilling Cross Section
(Typical)
Figure 16-4
16-6
www.rpacan.com
10
11
12
13
14
15
6
7
8
9
1 2 3
4
5
Lower Sublevel
Nv. 176. North
Metres of Hole Loaded
Vein
Upper Sublevel
Nv. 191. North
F
R
O
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T
A
C
C
E
S
S
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Blasthole Layout Report
Layout : PAR.66
Angle : -89.0
L : Left R : Right
Incline Holes : 1 degree
R6 / R7 PIVOT : 0.65
22 R
22 R
23 R
28 R
32 R
38 R
44 R
53 R
62 R
73 R
85 R
99 R
113 R
141 R
125 R
1.73 L
0.83 L
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
0.06 R
9.90
9.81
10.24
10.85
11.63
9.97
7.47
5.68
4.81
4.12
3.43
3.14
3.04
0.95
2.10
8 1/4
8 1/4
8 1/2
9
9 3/4
8 1/4
6 1/4
4 3/4
4
3 1/2
2 3/4
2 1/2
2 1/2
3/4
1 3/4
Total Lenght
Hole Distance L/R Angle L/R Lenght Rods
97.14
0 1 5
Metres
2 3 4
Cerro Bayo Project
Delia NW Mine
Production Drilling Cross Section
(Fan Drilling)
Figure 16-5
16-7
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150 m 300 m 600 m 450 m
Nv_132
Nv_117
0 25 100
Metres
50 75
March 2014 Source: Mandalay Resources, 2013.
Cerro Bayo Project
Fabiola Longitudinal Section
(2013-2014 Production)
Alsn Region (XI), Chile
Figure 16-6
1
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150 m 300 m 450 m
0 25 100
Metres
50 75
Cerro Bayo Project
Delia Mine Longitudinal Section
Figure 16-7
1
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150 m 300 m 750 m 600 m 450 m
0 25 100
Metres
50 75
Cerro Bayo Project
Dagny Vein Longitudinal Section
Figure 16-8
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Page 16-11
GEOMECHANICS AND GROUND SUPPORT
Ground support varies depending on the type of opening. The most recent geomechanical
study was carried out by Sociedad Geoconsultora Ltda. (Geoconsultora), of Chile, in
November 2010. The study was carried out in preparation for development of the Delia vein
system and is titled Estudio de Diseo Geomecanico Preliminar y Recomendaciones de
Fortificacin Proyecto Delia NW. The geomechanical study included an approach using
three stages to evaluate support requirements. These methods included the following:

1. Support required for the underground openings and evaluation of the stability using
empirical methods, in particular the concept of hydraulic radius (HR). This is done by
determining the Q Index by Barton. This index is applied with the determination of
rock mass classification or MRMR by Laubscher. The results indicated the
requirement of Rib Pillars positioned at 80 m horizontal intervals along the vein
structure. Recommended pillar widths were five metres in order to support an
opening twice that of the vein width.

The hydraulic radius is defined as the perimeter of an opening divided by the area of
the opening. A graph showing the relationship of the HR with MRMR is shown in
Figure 16-7.

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Page 16-12
FIGURE 16-9 STABILITY GRAPH MRMR VS. HR
Geoconsultora proceeded to carry out testing in the Fabiola and Dagny mines to
obtain data to determine the Q factors. This included nine principal mapping areas;
five in Fabiola and four in Dagny. In all, 54 data points were acquired which permitted
determining the factors indicated in Table 16-1 below.
TABLE 16-1 GEOMECHANICAL CHARACTERISTICS - Q (BARTON) VS.
MRMR (LAUBSCHER)
Value Q MRMR
Minimum 1 39
Maximum 67 79
Average 12 59
Using the graph above, it can be determined that, in order to maintain stability of the
stope, a minimum HR of 12 must be maintained. Also considering that the veins dip
from 60 and steeper, analysis indicated that, in order to avoid caving of the
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Page 16-13
hangingwall, it was necessary to place rib pillars at 80 m spacing along strike with
possible variances of 10 m to 20 m. Also, the rib pillars should have a width double
that of the width of the vein or five metres.

2. The second stage of the study included refining the results obtained in the initial steps
by applying semi-analytical approximations based on classical solutions of stress
distributions around underground openings. Of special relevance in this phase of the
study was the application of the K factor (ratio of in-situ stresses) using a very
conservative figure of 1.4 (maximum). The results are summarized in Tables 16-2
and 16-3 of safety factors for stope heights of 55 m.

TABLE 16-2 STOPE SAFETY FACTOR WALLS

Horizontal Stresses - Stopes 55 m High
Constant K Stress
A
Safety Factor
0.5 2.33 20
1.0 1.01 47
1.4 0.004 12.83

TABLE 16-3 STOPE SAFETY FACTORS - ROOF

Roof (Back) Stresses - Stopes 55 m High
Constant K Stress
B
Safety Factor
0.5 12.56 3.8
1.0 27.77 1.7
1.4 39.33 1.2

The assumptions made in the above analysis included an average vein width of two
metres and rock density of 2.5 t/m
3
. Also the strength of the rock mass was
evaluated at 47 MPa. The safety factors shown in the table correspond to the ratio of
resisting stresses of the rock mass and induced stresses (
A
and
B
). Different stope
heights were analyzed with the results indicating the optimum stope height of 55 m,
with a crown pillar twice the width of the vein or four metres in thickness. Typically, a
factor of safety of 1.3 is used to ensure stability of openings. Although the factor of
safety indicated in the table is 1.2, the level of risk is considered low due to a.)
constant monitoring of the stope backs, b.) analysis is provisional and under normal
operations, other levels will be opened above, thereby reducing the intensity of the
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Page 16-14
induced stresses, and c.) criteria adopted for the analysis are considered extremely
conservative.

3. The third phase of the rock mechanics analysis included numerical modelling using
the software Phase
2
, which permits the study of stresses and gradual deformations of
the rock mass. This utilizes semi-numerical methods to refine the preliminary results.
The modelling investigated the effects of stope heights, hanging wall dip angles, and
rock types for the resulting potential of collapse or caving of the hangingwall. The
results of this analysis showed that a.) it was not recommended to mine without the
use of crown pillars for intermediate support, b.) it is recommended to position crown
pillars each 45 m, where the results of the analysis were most favorable, and c.) it is
possible to consider an increase in the crown pillar spacing to 60 m, but only with
strict restrictions, hence this approach is not recommended.

4. With respect to the sequence of mining, this will depend on operational factors,
however, in general the mining should be carried out in two phases, with the
intermediate or upper stopes completed first, followed by the lower level stopes. This
is recommended in order to protect the integrity of the crown pillar on the lower level
which will be subjected to the highest stress levels. If mining is required to start on
the lower levels, the use of controlled blasting and constant monitoring of the crown
pillar can be implemented without serious problems.

5. The use of Bartons Q Index permitted the estimation of ground control
requirements for the conditions indicated in Table 16-4 below.

TABLE 16-4 GROUND SUPPORT RECOMMENDATIONS

Quality
Rock Mass
Range of
Q
Appli cation Support
Very Good Q40 General Split Set Bolts, 2.6 m
Good 10Q40 Roof Split Set Bolts, 2.6 m, spacing 2 m
2
and
1.7 m
2
if required
Good Wall Split Set Bolts, 2.6 m
Fair 1Q10 Roof Split Set Bolts, 2.6 m,spacing at 1.5 m
2
,
screen (Inchalam 10006 or 3500)
Fair Wall Split Set Bolts, spacing at 1.5 m
2
, screen
(Inchalam 10006 or 3500).

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Page 16-15
The control of blast vibration levels was also addressed and the standard Scaled Distance
formula can be used to determine the weight of explosives per delay in order to keep the
vibration levels within recommended limits to avoid damage. The standard drill pattern is 2-
1-2 in narrow veins and 3-3 in wider veins, with a one metre burden between drill holes rings.
Only one hole per delay is blasted with an average hole length of 12.5 m, therefore vibrations
from blasting are kept very low, ensuring no damage to the stope walls and surrounding
areas.

Recommendations with respect to future development include geomechanical mapping of
the openings, incorporating the geomechanical information in the planning process, refine
and optimize mining designs, better definition of support requirements and a rigorous
program of control and monitoring of blasting methods and procedures to continue
optimization.

PRE-PRODUCTION SCHEDULE
The Fabiola and Dagny veins are presently producing milling ore from development and
stope operations. Ore production started in October 2010, with milling starting in J anuary
2011. During 2013, production was provided from the Dagny (24%), Fabiola (41%), Delia
NW (35%). Delia SE is in the permitting process with development schedule for 2014 and
production to commence in 2015. Marcela and Raul are former mines in the Cerro Bayo
area that operated in the past and will be re-opened. They are currently scheduled for
production on a continuous basis starting in 2017 and ending at the end of the current LOM
in 2019.

LIFE OF MINE PLAN
The present LOM plan anticipates a production period of approximately six years,
culminating in 2019, based on the current reserves. Diamond drilling will continue with the
intent to increase the Resources and Reserves and to increase the mine life.

Development rates vary over the mine life from 25 m/day in 2014 to 11 m/day in 2018 for an
overall average of 21 m/day. This is an average of approximately 7,400 m per year, which in
RPAs opinion is sufficient to access and develop the stoping areas for production
requirements.
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Page 16-16
The annual development, including sustaining and operating, is shown in Table 16-5.

TABLE 16-5 MINE DEVELOPMENT

Description Units 2014 2015 2016 2017 2018 2019 Total
Total Development m 9,967 10,000 9,917 10,411 4,595 1,306 46,196
Primary - Drifting Capital m 2,621 3,247 2,630 2,269 796 278 11,841
Secondary - Drifting Operation m 6,282 5,721 6,089 7,096 3,120 788 29,096
Primary - Raises Capital m 160 253 409 302 223 36 1,383
Secondary - Raises Operation m 904 779 789 744 456 204 3,876
Drifting Capital +Operational m 8,903 8,968 8,719 9,365 3,916 1,066 40,937
Daily Advance rate m/d 25.4 25.6 24.9 26.8 11.2 3.1 21.3

RPA is of the opinion that the development rates listed in Table 16-5 can be achieved
provided sufficient manpower is available and equipment is maintained.

Production from stoping over the mine life ranges from an annual high of 1,624 tpd in 2016 to
a low of 955 tpd in 2018, averaging 1,290 tpd over the 5.5 year mine life. Maintaining the
average daily production should be achievable, requiring a stope advance average of 13 m
(linear) of stope per day or 10 m of stope per day with an equivalent of three drift rounds (at
three metre lengths), providing approximately 200 tpd. The average stope will provide 80
tonnes per metre of advance, based on a stope width of 2.4 m, stope height of 12.5 m and a
tonnage factor of 2.63 t/m
3
. The present LOM is shown in Table 16-6.

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TABLE 16-6 LOM PRODUCTION SCHEDULE
Description Units
Total or
Average
2014 2015 2016 2017 2018 2019
Operating Days 1,925 350 350 350 350 350 175
Underground
Au g/t 2.2 2.3 2.0 2.1 2.7 2.1 1.6
Ag g/t 224 278 210 227 238 192 142
Processing
Mill Feed '000 tonnes 2,483 477 480 568 436 334 188
Au g/t 2.2 2.3 2.0 2.1 2.7 2.1 1.6
Ag g/t 224 278 210 227 238 192 142
Contained Au oz 174,294 35,926 30,844 38,340 37,508 22,087 9,590
Contained Ag oz 17,902,096 4,259,506 3,238,499 4,153,899 3,332,938 2,061,502 855,751
Flotation Recovery
Au % 87% 89% 87% 87% 88% 88% 84%
Ag % 90% 91% 89% 90% 90% 90% 88%
Metal Recovered
Au oz 152,165 31,817 26,695 33,340 32,838 19,428 8,047
Ag oz 16,095,827 3,863,916 2,897,708 3,727,474 3,000,832 1,852,809 753,088
Eq.Ag oz 25,225,363 5,772,872 4,499,315 5,727,820 4,971,060 3,018,434 1,235,861
M
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Page 16-18
INFRASTRUCTURE
MINE ACCESS AND UNDERGROUND ARRANGEMENT
The veins at Cerro Bayo are all accessed via a 4.5 m by four metre ramp driven at a -12.5%
grade. All of the materials required for the underground operations are delivered
underground via the main ramp system. The major underground installations include the
main ventilation raises that deliver the required volume of ventilating air necessary for the
diesel equipment operating on the various levels and areas of the mine. Emergency egress
from the mine is provided via escape raise systems which are equipped with manways that
lead through to the surface. The level arrangements and location of underground
infrastructure for the Fabiola and Dagny mines are shown in Figures 16-9 and 16-10. Also,
Figure 16-11 is a typical level plan showing development off of the main access ramp on the
Fabiola and Yasna veins, Figure 16-12 the Delia 146 Level and Figure 16-13 the Dagny 130
Level. These plan shows that the veins are relatively straight along strike with little
complicating sinuosity.

Portal
Access X-Cuts
Main Ramp
Emergency Exit
Ventilation Raise
Cerro Bayo Project
Fabiola Mine
Underground 3D View
Figure 16-10
16-19
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Portal
M
ain
R
am
p
Emergency Exit
Ramp 55 Level
Access X-Cuts
Ventilation Raise
Cerro Bayo Project
Dagny Mine
Underground 3D View
Figure 16-11
1
6
-
2
0
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Level Development (ore)
Ramp
Yasna Vein
Fabiola Vein
271,600
4
,
8
4
1
,
5
0
0
271,500 271,400 271,300 271,200
4
,
8
4
1
,
4
0
0
4
,
8
4
1
,
3
0
0
4
,
8
4
1
,
5
0
0
4
,
8
4
1
,
4
0
0
4
,
8
4
1
,
3
0
0
271,600 271,500 271,400 271,300 271,100 4
,
8
4
1
,
2
0
0
4
,
8
4
1
,
2
0
0
0 25 100
Metres
50 75
N
Source: Mandalay Resources, 2013. March 4 201
Cerro Bayo Project
Fabiola 177 Level Plan
Figure 16-12
1
6
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2
1
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Ventilation Raise
Cross Cut
Ramp
4
,
8
4
0
,
9
0
0
271,000 270,900 270,800
4
,
8
4
0
,
8
0
0
4
,
8
4
0
,
7
0
0
271,000 270,900 270,800 271,100
4
,
8
4
0
,
9
0
0
4
,
8
4
0
,
8
0
0
4
,
8
4
0
,
7
0
0
0 25 100
Metres
50 75
N
Cerro Bayo Project
Delia 146 Level Plan
Figure 16-13
1
6
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2
2
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Ventilation Raise
Ramp
271,500
4
,
8
4
1
,
0
0
0
271,400 271,300 271,200 271,100
4
,
8
4
0
,
9
0
0
4
,
8
4
0
,
8
0
0
4
,
8
4
1
,
0
0
0
4
,
8
4
0
,
9
0
0
4
,
8
4
0
,
8
0
0
271,500 271,400 271,300 271,200 271,100
0 25 100
Metres
50 75
N
March 4 201 Source: Mandalay Resources, 2013.
Cerro Bayo Project
Dagny 130 Level Plan
Figure 16-14
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Page 16-24
MATERIAL HANDLING
All of the material required for the underground operations, such as explosives, drill steel and
accessories and general materials, such as pumps, are delivered by vehicle via the main
ramp.

BACKFILLING
There is no systematic backfilling planned for the Cerro Bayo mine operations. Waste is
dumped underground when possible but for the most part it is hauled and dumped on the
surface waste stockpile. If deemed necessary in the future, a system of backfill raises could
be designed to permit some backfilling of underground stopes.

VENTILATION
The ventilation circuits for the Fabiola, Delia and Dagny mines are indicated in Figures 16-14
and 16-16, respectively. Main fan and measuring locations are shown as well as air volumes
measured. Auxiliary fans are used on the levels to provide air to all of the headings, but are
not shown in the figures. These fans feed the headings before the air exhausts up the
stopes or back to the main ramp and up the exhaust air system. Egress from the mine is
provided via raises that lead to the surface and are accessible from each level underground.
These raises are downcast, to ensure that the personnel are always in fresh air.

The minimum air requirements for the various underground equipment, is shown in Table 16-
7.

TABLE 16-7 VENTILATION REQUIREMENTS

Description HP Vol. (m
3
/min.) Vol. (cfm)
Scooptrams 190 538 18,989
UG Truck 250 708 24,985
J umbo Drill 70 198 6,996
LH Drill 74 209 7,396
Service Unit 82 232 8,195
Truck-Explosives 125 354 12,493
Truck-Service 125 354 12,493
Service Vehicle 100 283 9,994
Personnel 3 106

5303.3 m/min
89.5 m/sec.
76.5 m/min
1.3 m/sec.
88.5 m/sec.
Portal
Ramp
Ventilation Raise (exhaust)
Ventilation Raise (escape way)
Lateral Development (ore)
Auxilary Fans
Ventilation Measuring Station
A-16
A-13
A-1
A-15
Cerro Bayo Project
Fabiola Mine
Ventilation System
Figure 16-15
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4162.8 m/min
69.38 m/sec.
162.5 m/min
2.71 m/sec.
67.04 m/sec.
Ramp
Level Dev. (ore)
Ramp
Lateral Development
Auxilary Fans
Cerro Bayo Project
Delia Mine
Ventilation System
Figure 16-16
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6703.05 m/min
111.7 m/sec.
209.6 m/min
13.5 m/sec.
56.5 m/sec.
A-2
A-21
A-20
Portal
Downcast (Escape way)
Lateral Dev. (ore)
Exhaust
Ramp
Lateral Development
Auxilary Fans
Cerro Bayo Project
Dagny Mine
Ventilation System
Figure 16-17
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Page 16-28
DEWATERING
Dewatering of the underground mines is completed with simple sump arrangements that are
located off of the ramp or nearby. The mines are considered quite dry in terms of dewatering
requirements.

The pumps utilized are all submersible with two main types, including a 12 kW and 20 kW
pump, with heads of 30 m to 50 m, and pumping capacities of 10 L/s to 20 L/s, capable of
keeping the mine adequately dewatered.

Sumps are excavated as the ramp advances and the sump pumps are slung from the back
to provide for easy service. The sumps are fairly shallow so that the pumps are not required
to be fully submerged.

POWER
Power for the underground mines is delivered via electrical cables installed in the ramp and
fed to the substations underground. Power cables are also run via boreholes that
breakthrough on levels underground when possible. For the main ramps, the power cable
utilized is a 4/0 super flex 3/120 +1/70 at 400 volts, 50 hertz and in the level development,
the cable utilized is a 2/0 super flex 3/120 +1/50 at 400 volt, 50 hertz capacity. The drill
jumbos and production drills are electrically driven.

The underground transformers include a 300 KVA unit plus a substation that houses an 800
KVA and 400 KVA unit at the Delia mine and also two 400 KVA transformers at both the
Fabiola and Dagny mines.

The diesel plant capacity for the processing plant and surface is 7 MVA, consisting of six
Caterpillar generators (1995) with 1,150 KVA driven by 3516 motors, providing 3.3 KV for the
main grinding mills and 400 volt service for other areas. For underground, the generating
plant at Dagny has a capacity of 2.8 MVA, using two Atlas Copco QAC1000 units with 1,000
KVA capacity (one 2011 and one 2010) and one Caterpillar 3412 unit with 800 KVA capacity
(2007), with a high voltage of 3.3 KV and low voltage side of 400 volts.

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Page 16-29
MAINTENANCE
All of the equipment maintenance is carried out in the surface shop and only minor services
are provided underground, such as changing of hydraulic hoses. The mines are quite
shallow in depth and removal of gear to the surface shop does not present major delays or
problems. The main central surface shop has three bays and is equipped with a 10-ton
crane. There is also a smaller shop facility at the Fabiola portal, where minor repairs and
service are carried out.

COMMUNICATIONS
Underground communication is provided by a leaky feeder system that allows for efficient
communications from basically every point in the mine. The site is also serviced with 12
telephone lines plus internet service.

MINE EQUIPMENT
A list of the mine equipment at the end of 2013 is provided in Table 16-8 below.

TABLE 16-8 UNDERGROUND EQUIPMENT

Description Type Qty Year Status
Scooptram (1) LHD TORO 006 1 2007 Operating
Scooptram LH 307 2 2008 / 2013 Operating
Scooptram R1300G 3 2011 to 2013 Operating
UG Truck (2) EJ C 522 1 2005 In Repair
UG Truck TH 320 2 2008 Operating
UG Truck TH 430 1 2013 Operating
UG Truck AD 30 1 2011 Operating
J umbo Drill DD310 1 2008 Operating
J umbo Drill BOOMER 281 1 2005 Operating
J umbo Drill DD311-40 2 2012 / 2013 Operating
LH Drill (3) Mini Raptor 1 2006 Operating
LH Drill Raptor DH 1 2011 Operating
LH Drill DL 210-5 2 2012 / 2013 Operating
Service Unit Manitou MT 1030 2 2007 / 2011 Operating
Service Unit Manitou MTX-1030S 1 2013 Operating
Service Truck Chevrolet NKR 513 2 2010 / 2013 Operating
Personnel Veh. Chevrolet NKR 513 2 2011 Operating
Personnel Veh. Chevrolet NKR 512 1 2013 Operating

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Page 16-30
Notes: (1) Replace in April 2014 with an LH 307.
(2) Replace in February 2014 with a TH 430
(3) Replace in April 2014 with a DL-210-5

SURFACE EQUIPMENT
The surface equipment at the Cerro Bayo project is shown in Table 16-9.

TABLE 16-9 SURFACE EQUIPMENT

Description Type Qty Year Status
Loader Fel CAT 924HZ 1 2012 Operating

CAT 962H 1 2012 Operating

CAT 980 1 1995 Operating

Volvo MC110C 1 2013 Operating
Excavator CAT 320 L 1 2007 Operating
Grader CAT 14 G 1 1995 Operating

Leeboy - 685B 1 2008 Operating
Crane Helli 1 2011 Operating
Compactor Rand - SD 100 D 1 1989 Operating
Truck Volvo BM 310 1 2011 Operating

Cat 769 WTC 1 1995 Operating

Mercedes 1315C 1 2006 Operating

Mercedes 3340 1 2000 Operating

Mercedes 1720 1 2005 Operating

Mercedes 915 C 2 2007 Operating

Mitsubishi 3.9 1 2005 Operating

Mitsubishi 5.7 1 2008 Operating

Chevrolet FTR 1524 1 2012 Operating

The mine site also has approximately forty various service vehicles, including an ambulance,
personnel vehicles, and other miscellaneous small vehicles.

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Page 17-1
17 RECOVERY METHODS
HISTORICAL RECOVERY
The production figures for 2002 to 2008 are summarized in Table 17-1. As indicated in the
table, the recoveries for Ag and Au averaged 94.7% and 92.2% respectively in 2007 and
93.01% and 90.1% respectively in 2008. Daily throughput averaged 1,053 tpd in 2007 and
dropped, in 2008, to an average of 650 tpd, with operations from J anuary through August.
Over the seven years of operating experience, the average grades were 4.2 g/t Au and 346.7
g/t Ag with recoveries averaging 90.7% for Au and 93.3% for Ag. Production from the
Project area pre-2002 was reported at 2.43 million tonnes with production of 161,200 ounces
of gold and 10.56 million ounces of silver but detailed reports were not available.

Year Tonnes Ratio
Au Ag Au Ag Au Ag Au Ag Conc. Au Ag
(gpt) (gpt) (gpt) (gpt) (gpt) (gpt) % %
2002 310,819 5.2 344.5 217.6 15,967.7 0.70 33.46 87.0 90.5 47.71 45,580 3,344,363
2003 451,146 4.7 349.9 179.2 14299.4 0.53 29.91 89.0 91.6 42.89 60,602 4,836,209
2004 442,574 4.4 329.1 161.1 13658.0 0.38 22.21 91.5 93.4 40.30 56,878 4,822,241
2005 398,040 4.9 411.6 194.7 16679.9 0.40 21.84 92.2 94.8 42.74 58,293 4,994,472
2006 419,463 3.3 363.8 118.2 13396.0 0.25 19.85 92.5 94.7 38.76 41,118 4,660,997
2007 383,189 3.2 357.2 108.7 12461.1 0.29 19.77 91.2 94.6 36.87 36,321 4,164,338
2008 171,887 3.7 172.9 148.8 7225.9 0.37 12.27 90.1 93.1 44.92 18,310 889,055
Total 2,577,118 4.2 346.7 160.7 13866.0 0.41 23.4 90.7 93.3 41.6 317,102 27,711,675
Heads Concentrate Tailings Recovery Concentrate Oz.
TABLE 17-1 HISTORICAL MILL PERFORMANCE
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Page 17-3
CURRENT RECOVERY
The plant performance for 2013 is shown in Table 17-2. RPA is of the opinion that
recoveries obtained in the past years, as shown in Table 17-1 can be achieved. Also strict
adherence to the mine plan should improve head grades, as compared to 2011 when a
significant amount of mining was completed outside of the resources planned for extraction
during the year.

TABLE 17-2 MILL PERFORMANCE IN 2013

YTD DECEMBER 2013
Description Units Actual Budget Variance
Ore tonnes milled dry t 386,480 379,551 102%
Grade Ag g/t 288 272 106%

Au g/t 2.02 2.01 100%
Contained Metal Ag Oz 3,581,289 3,315,399 108%

Au Oz 25,141 24,576 102%
Recovery Ag % 91% 89% 102%
Recovery Au % 88% 88% 100%
Tonnes Concentrate t 9,003 8,017 112%
Concentrate grade Ag g/t 11,263 11,485 98%

Au g/t 76.39 83.70 91%
Metal produced Ag Oz 3,260,057 2,960,480 110%

Au Oz 22,110 21,574 102%

Of the total tonnage milled during 2013, 24% was from the Dagny vein, 35% from the Delia
NW vein, and 41% from the Fabiola vein. Of the total ore milled approximately 30% came
from development of the drifts in ore, which totaled about 4,500 m during the year.

The crushing and grinding circuit is shown in Figure 17-1, the flotation circuit in Figure 17-2,
the reagent dosages in Figure 17-3, and the plant water balance in Figure 17-4.

SILO
1500
Ton
BALL MILL
11.5 x 18
WATER
JAW CRUSHER
HOPPER
42 x 48
TO OUGHER R
C D YCLONES -15
ORE
STOCKPILE
SAG MILL
18 x 9.25
Cerro Bayo Project
Process Plant
Crushing / Grinding Flow Sheet
Figure 17-1
17-4
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THICKENER
30
FILTERING
CONCENTRATE
SALA
1
FINAL
TAILS
ROUGHERS
3 Cel s 500 Ft3 l
SCAVENGERS
4 s 500 Ft3 Cell
C 2 LEANER
2 Cel s 150 Ft3 l
C 1 LEANER
4 s 150 Ft3 Cell
C 3 LEANER
2 C 150 Ft3 ells
CLEANER
TAILS
CYCLONES
CYCLONES
D-6
D-15
Cerro Bayo Project
Process Plant
Flotation Circuit
Figure 17-2
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FLOTA N TIO
ROUGHER
FLOTA N TIO
SCAVENGER
1 st. AND 2nd
CLEANERS
MILL
XANTHATE
MIBC
AERO-3477
550 cc/min
21 g/ton
200 cc/min
8 g/ton
100 cc/min
4 g/ton
800 cc/min
28 g/ton
300 cc/min
10 g/ton
50 cc/min
2 g/ton
25 cc/min
18 g/ton
8 cc/min
6 g/ton
Cerro Bayo Project
Process Plant
Reagent Dosages
Figure 17-3
17-6
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PROCESS
WATER
400 m
3
GRINDING
REGRIND
FLOTA ION T
RECYCLED TAILINGS WATER
TAILINGS CONCENTRATE
TAILINGS FACILITY
121,3 m
3
/h
18,5 m
3
/h
3,2 m
3
/h
4 m
3
/h
THICKENER
FRESH
WATER
430 m
3
Cerro Bayo Project
Process Plant
Water Balance
Figure 17-4
17-7
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Page 18-1
18 PROJECT INFRASTRUCTURE
A site surface plan is shown in Figure 18-1. Also Figure 18-2 shows a satellite photo of the
surface plan with the portal locations and extents of underground workings. The mine site is
accessed from the town of Chile Chico, located 35 km to the east.

Production of a concentrate containing silver and gold is carried out on site in a 1,650 tpd
capacity processing plant. Presently, the concentrate produced is hauled by company trucks
(20 tonne capacity) 215 km to the port of Chacabuco two times per week on average. During
2013, approximately 9,000 t of concentrate were shipped. During the LOM plan,
approximately 8,000 t of concentrate will be produced and shipped annually.

TAILINGS FACILITY
The tailings facility at Cerro Bayo is shown in Figure 18-3. The tailings dam was raised to
the 316 m elevation during 2012. The capacity of the tailings facility at the 320 m permitted
elevation is reported as being 2.5 million tonnes, which will satisfy the requirements of the
current LOM plan.

The tailings dam is scheduled to be lifted a further two meters in the fourth quarter of 2014.

POWER SUPPLY
Power is generated on site by a diesel plant because no grid power is available in the area.
The main power plant supplying the processing plant and surface operations consists of a 7
MVA plant from six diesel generators with 1,150 KVA capacities, providing 3.3 KV power for
the SAG and Ball Mill as well as 400 volt power for other areas of the site.

Power for the underground facilities is generated via a 2.8 MVA plant from two QAC 1,000
KVA, Atlas Copco generators and one Cat 3412- 800 KVA unit, also generating 3.3 KV and
400 volt power for the equipment.

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Page 18-2
SERVICE FACILITY
A three bay service garage is located on surface, where all major mechanical repairs are
carried out. The facility is equipped with a 10 ton overhead crane for heavy work and other
equipment necessary for the equipment maintenance.

WASTE ROCK DUMPS
The two main surface waste rock dumps shown on the surface plan are the Los J uncos
dump and the Los Cisnes dump, of which the use is not contemplated at this time. The Los
J uncos waste dump has a capacity of 453,000 t, with approximately 180,000 t currently being
utilized. In 2012 the historical Tranque open pit located close to the designed Delia SE mine
portal was authorized for 290,000 t of waste rock placement.

MINE WATER
The water from the underground operations is pumped to surface and to the sedimentation
basins, where the suspended solids are allowed to settle out. Water is recycled back to the
underground for reuse.

The process water from the mill tailings is recycled back to the processing plant for reuse.

269,000 E 269,500 E 268,000 E 268,500 E 267,500 E
4
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271,000 E 270,000 E 270,500 E
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Waste Dump
Los Cisnes
Waste Dump
Los Juncos
Tailings Facility
Juncos
Chile Chico
G
randja
Tem
er
Top Soil Deposit Water
CONDORES
CAIQUENES
CAIQUENES ESTE
Breccia
Waste Stockpile
Stock Pile
Process
Plant
Offices
Top Soil Storage Area
Cap Magazine
Powder Magazine
Sedimentation Basins
Lagunas
Los Cisnos
Area Instalations
Portal 2
DAGNY
Delia Mine
FABIOLA
Portal 1
Lagunas
Nueva
Lagunas
Verde
Lagunas
Salada
E
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269,000 E 269,500 E 268,000 E 268,500 E 267,500 E 271,000 E 270,000 E 270,500 E
0 2 0 0 10 0 0
Metres
4 0 0 6 0 0 8 0 0
N
General Site Layout
Cerro Bayo Project
Figure 18-1
18-3
www.rpacan.com
LAGUNA VERDE
Tailings
Facilities
Waste
Dump
Dagny
Portal
Delia South
Portal
Delia
Portal
Magazines
Fabiola
Portal
Plant
Source: Mandalay Resources Corp., 2014. March 4 201
Cerro Bayo Project
Satellite View of Surface
Laguna Verde
Figure 18-2
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TAILING FACILITY
Pumps
Process Water
Water Elev. 308.314
C
R
E
S
T
C
R
E
S
T
M
U
R
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2
PORTAL
Elev. 305
Elev. 318.00
270.000 E 270.500 E
4
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270.250 E
4
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270.750 E
T
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A
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M-1
M-2
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M-4
M-5
M-6
M-7
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N
270.000 E 270.500 E 270.250 E 270.750 E
PLANT TAILINGS LINE
0 50
Metres
100 200 250 150
N
Cerro Bayo Project
Tailings Facility
Figure 3 18-
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Page 19-1
19 MARKET STUDIES AND CONTRACTS
MARKETS
The principal commodities at Cerro Bayo are silver and gold, which are freely traded at
prices that are widely known, so that prospects for sale of any production are virtually
assured. For the cash flow, RPA used prices that vary during the mine life based on current
cash flow modelling, ranging from US$1,300 per ounce to US$1,350 per ounce for gold and
US$22 per ounce to US$24 per ounce for silver. RPA has also independently verified that
the cash flow analysis provides positive economics at the reserve cut-off grade prices of
US$1,200/oz for gold and US$20/oz for silver.

CONTRACTS
CMCB have concentrate sale agreements for the sale of concentrate in 2014 with Dowa
Metals and Mining Co., Ltd., Mitsubishi Materials Corporation, and Pan Pacific Copper Co.,
Ltd., all in J apan and LS Nikko Copper Inc., in Korea. These contracts provide for 97% to
97.5% payable gold and 96% to 96.5% payable silver based on concentrate grade. As well,
these provide for a concentrate treatment charge and typical per ounce refining charges for
gold and silver paid.

The terms of the concentrate sales agreement are confidential but have been reviewed by
RPA and are considered appropriate for the product and within industry norms.

Other contracts that exist with the mine and suppliers include those for:
a. Catering: Mario Chvez Uribe, with prices varying with the number of meals served
during the day.

b. Drilling Consumables: Atlas Copco Chilena S.A.C. for drilling consumables including
drill bits, drill rods and accessories on a cost per metre drilled basis.

c. Explosives: Orica Chile SA, for supply of explosives and explosives accessories such
as Excel LP and SP delays, electric delays, other minor accessories and Amex
explosive in 25 Kg bags and Cartridge explosives and Pentex boosters. Orica is also
responsible for administration of the explosives magazines on site. Contract duration
is three years.

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Page 19-2
d. Security: Servicios Integrales de Seguridad de la Patagonia, for security on the Cerro
Bayo mine site, providing for 17 security personnel, on average, to control site access
and safety aspects on the site, including use of the ambulance service.

e. Personnel Transport: Sotraser Limitada, for the transport of employees to and from
the mine to the town of Chile Chico.

f. Ore Transport: ICA S.A., for the transport of ore from the mine portal stockpiles to the
mill site using two 13 m
3
capacity trucks and one 3 m
3
front end loader.

CMCB also has a collective bargaining agreement with the Sindicato de Trabajadors de
Compaa Minera Cerro Bayo Ltda. The collective bargaining agreement was signed J uly
25, 2012, and is in effect until J uly 24, 2015.

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Page 20-1
20 ENVIRONMENTAL STUDIES, PERMITTING,
AND SOCIAL OR COMMUNITY IMPACT
The following information on Environmental aspects of the Project was provided by
Mandalay.

The Environmental Impact Study (EIA) for the Fachinal Project in the Laguna Verde sector
dates back to October 1994 and is covered under Resolution 001 of the CONAMA-SEA,
National Environmental Commission of Chile. The various installations were examined
during RPAs site visit previously and in J anuary 2014, and no major issues were noted with
respect to environmental planning, monitoring, and management.

ENVIRONMENTAL STUDIES AND INFORMATION
Since 2001, CMCB have been mining in a district that was originally mined from 1994 to
2000 by Compaia Minera CDE Fachinal.

The mining operations were concentrated in two areas, Cerro Bayo and Laguna Verde,
located 16 km apart. The latter is located near the processing plant, the tailings facility, and
surface installations including offices, services buildings, maintenance facilities, etc.

The initial mining from 1994 to 2000, predominantly by open pit, was in the Laguna Verde
area. In 2002, the mining moved to the Cerro Bayo area and was predominantly
underground.

Changes to the original project were submitted to the environmental authorities and the
projects that contained changes to the exploration or exploitation mining methods were
submitted to the Sistema de Evaluacin de Impacto Ambiental (SEIA) legal entity in Chile.

The operations were suspended in October 2008 due to the downturn in the economy and a
lack of developed ore. The mining operations were based on reserves contained in the veins
of Cerro Bayo and Laguna Verde.

The different areas of exploitation at Cerro Bayo include:
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Page 20-2
1. Cerro Bayo Area is located nine kilometres west of the town of Chile Chico. This is
the location of the Cerro Bayo vein system mined underground from 2002 to 2008 by
Coeur.

2. Guanaco Area is located 12 km west of the town of Chile Chico and comprises the
old Coeur exploration area of the Guanaco mine. The operational installations include
offices, exploration facilities, and core storage facilities.

3. Laguna Verde Area is located 25 km west of the town of Chile Chico. This is the
location of the processing plant, the tailings facility, and veins where mining is
currently carried out. This is also where Coeur operated an open pit from 1995 to
2000.

4. Cascada Area is located seven kilometres west of the town of Chile Chico. There is
service installations located at this site.

5. Furioso Area is: located 130 km southwest from Chile Chico. It was exploited in 2002
and 2003 and produced 48,727 t of ore and 584,724 t of waste rock. Reclamation of
this site was completed in the second quarter of 2012 and a closure report has been
submitted to Sernageomin, seeking sign-off on the closure.

The environmental studies for the mining areas were prepared in 1994 under the original
Environmental Impact Study for the Fachinal Project and EIA for the Furioso Project in 1999.
All projects requiring an environmental approval were presented under a Declaration of
Environmental Impact. Baseline studies were completed to characterize factors such as
biological, hydrological, hydrochemical, and archeological, including information for
monitoring the chemical quality of the water for all areas of influence of the Projects.

In October 2013, CMCB submitted a report to the Servicio Nacional de Geologia y Mineria
Zona Sur and the Superintendincia de Medio Ambiente XI Region, Gobierno de Chile for the
Mina Furioso, post-closure monitoring of surface waters for 2011, 2012, and 2013.
Monitoring of the surface waters indicates that all of the parameters are within the maximum
permissible limits of the current regulations.

While there is no formal community development plan, there have been donations to certain
sectors of the community. During 2013, the company has been able to provide assistance in
the areas of education (bursaries and pre-university subsidies), health (donations of new
beds for the hospital), infrastructure (Fachinal gymnasium is used by at least six
organizations in Chile Chico), plus other cultural activities.

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PROJECT PERMITTING
In Chile, Law 19.300 (1994) and subsequent modifying Law 20.417 (2010) regulates the
Environmental Impact Studies (EIS) of public and private investment projects or activities.
EIA regulations were enacted in April 1997, by D.S. No. 30 (Ministry of the General Secretary
of the Presidency) and modified by D.S. 95 (2001). The law provides that projects or
activities listed therein may only be executed or modified after an assessment of their
environmental impact. The main environmental authority in Chile is the Ministerio del Medio
Ambiente (MMA) whose functions and administration are regulated by Law 19.300. In
addition, the government organized a ministry level Advisory Council (Consejo Consultivo)
and Regional Ministerial Secretaries (SERIMIs) in each region of the Chilean territory
reporting to the environmental sub-secretary.

REQUIRED ENVIRONMENTAL PERMITS
Law 19.300 creates a system that integrates much of the sectorial environmental
requirements, known as the single window. This is coordinated through the Servicio de
Evaluacin Ambiental (SEA) with all the public agencies during the assessment process via
the Sistema de Evaluacin de Impacto Ambiental (SEIA). The corresponding environmental
resolution of SEA is based on reports from relevant public agencies that participate in the
evaluation of the assessment documents. If the assessment is favorable, and the final
approval is issued, no public agency may deny the pertinent environmental authorizations,
on the contrary, if the decision is negative, those same agencies must deny such
authorization. Additionally, there are also a number of other sectorial permits of a non-
environmental nature that are required for the mining operations.

STATUS OF CHILEAN REQUIRED PERMITS
CMCB has presented all EIAs and Environmental Impact Declarations (DIA) to the
competent authorities. In the case of Cerro Bayo, the competent authority was COREMA of
the Aisn Region. CMCB has been processing and updating the permits required for its
operations as mining exploration has progressed and new areas have been incorporated into
the mining operation. Current applications are submitted and processed through the SEIA.

Many environmental permits have been received since the start of operations for the various
sectors. A list of these permits, with resolution numbers, dates and locations follows in
Tables 20-1 to 20-5.
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TABLE 20-1 PROJECT PERMITS LAGUNA VERDE SECTOR
Mandalay Resources Corp. Cerro Bayo Project

SERVICE PROJECT NAME RES. N Date Status
CONAMA / SEA-
National
Environmental
Commission
Environmental Impact Study (EIA) "Proyecto Fachinal" 001 26-Oct-94 In Force
"Proyecto Modificaciones Plan Minero" 062/98 24-Dec-98 For Closure
Modification to Monitoring Plan for Ca. Minera CDE Fachinal Ltda. 004/ 2000 10-Mar-00 For Closure
Project "Modificacin Plan Minero 1999 " 002 04-Feb-00 For Closure
"Modificacin Procesamiento de Concentrado Final" 0703 26-Sep-02 In Force
"Modificacin Proyecto Fachinal, Transporte de Concentrado" 0002 05-J an-04 In Force
DIA Raising of Tailings Dam for Fachinal Project 188 13-Apr-10 In Force
Dagny Vein 129 17 J an 08 In Force
DIA Expansion of the Dagny Project 93 11 Feb 10 In Force
DIA Delia Sur 165 18 Apr 12 In Force
DIA Expansion of tailings dam (project presented December, 2013) In Evaluation
National Geology and
Mining Service
(Sernageomin)
Underground Mining Project- Delia Sur 33 18 Dec 13 To Commence
Underground Mining Project - Dagny Veins 1313 08-J ul-09 In Force
Construction and Operation of the Tailings Dam for the Fachinal Processing
Plant
731 25-Oct-94 In Force
Construction and Operation of the Waste Dumps for the Fachinal Mine 719 19-Oct-94 In Force
Exploitation Project for the Mine and Processing Plant 681 07-Oct-94 In Force
Regional Secretariat
of the Ministry of
Health (SEREMI
SALUD)
Landfill Expansion for domestic and non Dangerous Industrial wastes for the
Laguna Verde Sector
364 15-J un-05 In Force
Installation and Operation of the First Aid Room for Laguna Verde y
Guanaco
Authorization N for generation of Dangerous Wastes 94 24-J an-06 In Force
Operation of landfills in the Laguna Verde y the Guanaco Sector 128 08-Feb-96 In Force
Operation of the Sewer System for the Laguna Verde Mining Camp 124 08-Feb-96 In Force
Operation of the Potable Water system for the Laguna Verde Mining Camp 126 08-Feb-96 In Force
Approval of the Potable Water and Sewer System Project 636 04-Sep-95 In Force
Approval of the final disposal of used lubricants modification 0441 26-Dec-01 Not in force.
Operation of the Sanitary Landfill Expansion for the laguna Verde Sector 1097 05-Dec-11 In Force
Approval of the Potable Water System Installation 634 04-Sep-95 In Force
Director General for
Water (DGA)
Surface water usage rights - General Carrera Lake (4840690N, 727589E) 30 01-Feb-93 In Force
Surface water usage rights - General Carrera Lake (4841334N, 728235E) 43 09-Feb-93 In Force
Authorization of tailings dam construction 0729 06-Feb-94 In Force
Surface water usage and El Bao estuary rights 45 20-J an-94 In Force
Surface and confined water usage rights - General Carrera Lake
(4841431N, 728398E)
104 01-Apr-93 In Force
La Tina natural river bed diversion 617 23-Sep-09 In Force
Approval of water usage from La Tina estuary 441 26-Oct-93 In Force
Approval of water usage from El Rodeo estuary 452 29-Oct-93 In Force
Approval and authorization of the Fachinal Tailings dam construction 729 25-May-06 In Force
Ministry of Agriculture
Land Use permission for 992 ha Fachinal Project sector Laguna Verde 4 03-Oct-94 In Force
Land Use permission for 540 ha Fachinal Project sector Laguna Verde 5 03-Oct-94 In Force

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TABLE 20-2 PROJECT PERMITS FURIOSO SECTOR

CONAMA-
National
Environmental
Commission
Enviromental Impact Study "Proyecto Furioso, Explotacin Veta Laguna" 025/99 24-J un-99 Closed
Declaration of Admisible Modifications for the Proyecto Furioso Explotacin
Veta Laguna
795 22-Oct-02 Closed
"Modificacin del Medio de Transporte de Minera, Proyecto Furioso" 043 27-Oct-00 Closed
"Acopio Temporal de Mineral, Proyecto Furioso" 036 16-Mar-01 Closed
Temporary Authorization for Storage of Ore for the Furioso project. 571 14-Aug-02 Closed
Sernageomin
Approval of Closure Plan for the Furioso Mine. 2930 22-Sep-11 Closed
Combination of open pit (Slot Cut) and underground (Shrinkage stoping)
exploitation methods.
1321 01-Dec-99 Closed
SEREMI HEALTH
Landfill for Solid Wastes and the "Patio de Salvataje" appendix - Furioso
project
65 18-Apr-00 Closed
Procedure for Neutralization of acid water with lime 4 20-J an-00 Closed
Director General
for
Water (DGA)
Approval of surface water usage from the Furioso River, Furioso Mine
Project.
271 24-J un-03 Closed
Approval of surface water usage from the Pintura Chico Estuary, Furisoso
Mine Project.
008 26-May-03 Closed
Approval of surface water usage from the Los Carneros Estuary, Furioso
Mine Project.
10 26-May-03 Closed
SEREMI Ministry
of
Agriculture
Land Use permission for 0,5 ha for the Camp, Furioso Mine Project 19 15-J ul-03 Closed
Land Use permission for 158 ha for J aviera, surface w ith land use
permission- authorization for 140 ha.
Land Use permission for 28 ha for the Veta Laguna, Furioso Mine Project 12 10-J un-03 Closed
Land Use permission for 0,2 ha for the Mallin Grande Sector for temporary
waste rock storage.
9 12-J un-01 Closed
Land Use permission for 0,48 for the Mallin Grande Sector for temporary
waste rock storage.
8 02-J un-01 Closed
National Property Nulification of D.S.N 15 d 1998 (National Reserves) 219 18-May-98 Closed

TABLE 20-3 PROJECT PERMITS CERRO BAYO SECTOR

Sernageomin Project for Modification of Mining Plan 2011 for Bayo Veins. 3196 7-Nov-01 Standby
SEREMI HEALTH
Operating of the Casino building located in the Cerro Bayo Sector. 329 29-J ul-02 Standby
Potable Water and Sewer System Project for the Cerro Bayo Camp. 151 11-Apr-02 Standby
Installation and operation of Potable Water and Sewer system for the
Ra l and Guanaco II South Veins.
268 15-J un-04 Standby
Approval of the Potable Water and Sewer System Project 006 8-J an-02 Standby
SEREMI Ministry of
Agriculture
Land Use permission for 158 for J aviera, surface with land use
permission and authorization for 140
Land Use Permit 70 007 18-May-00 In Force
Land Use Permit 70 015 6-Aug-01 In Force
Land Use permission for Predio Sra. Elcira Padilla and Baha J ara 006 20-Apr-00 In Force
Land Use permission for 91 ha Raul west, 35 ha Raul y 8,3 ha Bayo
Sur.
14 2-May-02 In Force
CONAMA
DIA, "Report on Modification for the Fachina l Project, Sedimentation
Basins for the J aviera Vein."
363 12-Sep-05
In Force
(Temporary
Standby)
Declaration of Environmental Impact "Mining Plan 2006-2011" 613 01-Sep-06
In Force
(Temporary
Standby)
Declaration of Environmental Impact "Modifications Fachinal Project,
Exploitation of J aviera Vein."
341 20-May-03
In Force
(Temporary
Standby)
Declaration of Environmental Impact "Modification Fachinal Project,
Exploitation of the Guanaco 2 Sur Vein"
255 02-Apr-04 Closed
Declaration of Environmental Impact (DIA) "Modification of Mining Plan 0135/2001 26-J un-01 Standby
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2001, Bayo Ve ins"
Declaration of Environmental Impact "Modification Fachinal Project,
Exploitation of the Ral Vein"
0336 20-May-03 Standby
"Furioso Project" 012 19-Dec-97 Closed

TABLE 20-4 PROJECT PERMITS CASCADA SECTOR

CONAMA Declaration of Environmental Impact " Cascada Project" 201 4-May-07 Abandoned and Closed
SEREMI HEALTH
Potable Water and Sewer System, Cascada Project 341 08-May-07 Cancelled
Approval of Potable Water and Sewer System Project 0341 22-May-07 Cancelled
Roads & Highways Access to Route Ch-265 601 25-Mar-07 In Force
SEREMI Ministry of
Agriculture
Land Use permit for 6,85 hectares 10 03-Sep-07 In Force

Sernageomin Approval of the Waste Material deposit Project 976 13-Nov-07 Abandoned and Closed

TABLE 20-5 PROJECT PERMITS GUANACO SECTOR

SEREMI HEALTH
Approval of the Potable Water and Sewer System Project 635 04-Sep-95 In Force
Approval of the Potable Water Installation 633 04-Sep-95 In Force
Approval for operating storage building GU-7 for storage of
non-toxic, domestic and industrial wastes.
563 07-Sep-05 In Force
Installation and operation of Potable Water and Sewer
Systems for Ral and Guanaco II Sur Projects.
268 15-J un-04 Dismantled
Approval of the Sewer System for the Area Guanaco camp. 125 8-Feb-96 In Force
Approval of the Potable Water usage for the Guanaco Camp. 127 8-Feb-96 In Force
Authorization of the Casino operation 849 21-Nov-95 Closed
CONAMA
Declaration of Environmental Impact "Modification for Fachinal
Project, Exploitation of the Guanaco 2 Sur Vein"
255 02-Apr-04 Closed

TAILINGS FACILITY
The Fachinal tailings facility is part of the Exploitation Project that was approved by the
environmental authority in 1994.

Since it opened in October 1995, the tailings facility has operated for 12 years. The
operations were suspended from 2000 to 2002 and again from 2008 to 2011 due to a
temporary closure of the mine operations. Mandalay resumed tailings storage in J anuary
2011. In December of 2008, the tailings dam wall was 23.1 m high, equivalent to an
elevation of 316.1 m and contained 4,956,714 t of dry tailings. The permit for the tailings
facility has been in force since April 13, 2010. The major concern was potential infiltration of
the tailings water into the underground water. During the approval process, it was proposed
to monitor the water every quarter and analyze it for the various parameters.
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The tailings capacity will be increased by raising the dam during 2014 which will provide for
2.5 million tonnes of additional capacity.

PROCESSING PLANT
The processing plant for the Fachinal Project was approved in 1994. The plant consists of
installations for crushing, grinding, flotation, thickening, agitation and filtration with a capacity
of 1,650 tpd. The plant is located close to other installations including, offices, service
buildings, storage buildings, generator building (for plant), etc. The plant has continued
operating without any significant modifications since the original approval and thus the
permits remain valid.

MINING EXPLOITATION IN LAGUNA VERDE
Presently, the sectors where mining operations are authorized in the Laguna Verde area
include the Delia NW, Dagny, and Fabiola veins, each accessed via its own portal and
decline.

The Dagny mine received environmental approval in February 2009. The permit includes
exploitation of the Dagny vein. The waste material is estimated to be 126,000 t, and this will
be stockpiled in the existing Los J uncos waste dump, which has sufficient capacity. This
dump has a capacity of 453,600 t with approximately 180,000 t presently stored and
therefore a balance of 273,600 t of remaining capacity. The Project required the construction
of four basins for each portal, consisting of three decantation basins and one recirculation
basin with a capacity of 600 m each.

Submitted in September 2009, the Dagny Expansion Project was approved in February
2010. The permit included incorporation of the Delia NW mine to the mining operation, with
extraction of 17,000 t per month over a four year period. The waste dump for this project
was the Los J uncos dump, which has sufficient capacity. The estimated waste volume for
the Project was 86,000 t.

Submitted in J anuary 2012, The Delia South Project was approved in April 2012. The
permit was for the operation of the Delia SE mine with extraction of 450 t per day over a
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period of four years. The Tranque open pit was authorized to be used as the waste dump
and was permitted for 290,000 t of waste rock.

MINING EXPLOITATION OF THE CERRO BAYO AREA
The exploitation of the Cerro Bayo area includes the Marcela Sur and Raul veins.

The most recent project presented for approval in this area was the Mining Plan 2006-2011,
approved in September 2006. The permits included exploitation of new deposits in the Cerro
Bayo area (the Raul and Bayo veins of the mineralized system Bayo 1-170 and Mallines 1-
100) using the Shrinkage mining method. The mining plan included a production of 40,500 t
per month over a five year period. This project is to be completed by 2014. (Ref. GER-
CMCB/0025-11, May 17, 2011.)

The project includes a water management system consisting of sumps within the mine, four
basins for primary sedimentation for each portal (with a capacity of 600 m each) and an
emergency sedimentation basin (with a capacity of 25,000 m). Water will be recirculated to
the mine for drilling water (189 m/d), and a portion of the water will be used for dust control
for the underground roadways and also for emergency purposes.

The waste dumps No. 1, 2 and 6 were approved in 2001 and have a sector approval
(Sernageomin) and environmental approval (CONAMA). The waste dumps No. 3 and 4 were
authorized by the environmental authority under the approval of Mining Plan 2006-2011,
however, the approval from Sernageomin was not received.

From October 2008 to September 2000, the operation was under care and maintenance
status. During that time, the underground workings were allowed to flood. Consequently, it
was necessary to receive permission to pump the water from the mine workings to an
adjacent dry lake (Laguna Bayo) that was dry due to a reduction in precipitation and natural
evaporation.

The request for permission was presented at the end of 2009 to the Superintendant of
Sanitary Services (SISS) considered the discharge a residual industrial liquid (RIL) and as
a result required the DS No. 90. However, CMCB personnel received a response from the
SISS (Ord. No. 763 date March 17, 2010) stating that the discharge was not a residual
industrial liquid and that the CONAMA should be consulted in this case. The request will be
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submitted to the proper ministry and if the permit is not received, the water will be pumped to
old areas of the Cerro Bayo mine operation and into decantation basins were the water will
evaporate.

WATER RIGHTS
CMCB has water right permits that exceed its requirements. The water right permits are
included in Tables 20-1 to 20-5.

PERMITS TO REINITIATE OPERATIONS
Cerro Bayo has requested and received the necessary permits and licenses to operate for
the LOM.

In the Cerro Bayo area, the mining activities have received authorization from both sectoral
and environmental authorities following the proposed Mining Plan 2006-2011, approved in
2006, that included exploitation of ore deposits within the mineralized systems of Bayo 1-170
and Mallines 1-100, with a monthly production rate of 40,500 t for a period of five years and a
total of 3.3 million tonnes of waste.

The plan should have commenced between 2006 and 2008 (when the operation was
suspended) and theoretically should have finished in 2011. However, as the mining
operations ceased, the period will be extended as the production limits will not be
significantly exceeded (if the modifications to the original project submitted to the SEA are
realized).

For this area the only permit that was not obtained was that from Sernageomin for the
exploitation and for the waste dumps No. 3 and 4, which will be updated. According to
CMCB personnel, only waste dump No. 4 was built and has not reached its full capacity.
Also there was an important permission for this area concerning water stored underground
after the operations were completed. As mentioned previously, the request was sent to the
SISS who referred that the matter be consider by the CONAMA. The request will be sent to
the CONAMA and if a response is not received, the water will be pumped to existing facilities
at Cerro Bayo as mentioned above.

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For the Laguna Verde area, the exploitation approval was received for the Dagny project,
including the exploitation of the Dagny and Delia NW. Dagny has received an approval for
extraction of approximately 25,000 t per month for a period of five years, and Delia NW for an
extraction of 17,000 t per month for a period of five years. The waste dump approved by the
environmental and sectoral authorities is Los J uncos, with 126,000 t for Dagny and 86,000 t
for Dalia NW. The remaining capacity of the waste dump will be 61,600 t.

The processing plant retains the original permits and sufficient capacity to receive any new
production.

The tailings facility was raised to an elevation of 316 m. The present plan calls for raising the
dam elevation (up to elevation 322 m) once again in the fourth quarter of 2014.

Any major change in the requested modifications to installations or works would require a
new application to the authorities. Depending on the magnitude of any change or
modification, this would require and EIA or DIA as mentioned previously.

ENVIRONMENTAL MANAGEMENT
The environmental management of the operation will be based on the monitoring program for
Water Quality, Meteorology, Air Quality, Soil Quality, Vegetation Quality and monitoring of
the fauna. CMCB carries out ABA (acid base accounting) periodically to determine and
monitor any acid water generation potential for the mine and waste dumps. The results are
reported to the authorities. However, there have not been any specific studies that
summarize results of the water quality monitoring or geochemical monitoring. Also there is
no formal plan for Environmental Management available which details objectives, procedures
and definition of responsibilities (the company has procedures which covers the most
important aspects in terms of environmental management). Similarly there are no
procedures for quality control and consequently some problems have been had to validate
results with authorities. ABA and NAG test were carried out by SGS and their J une, 2013
report concluded that the waste dumps had little or no potential for acid drainage.

RPA also reviewed the monthly reports for J uly and September 2013, completed by SGS for
monitoring of the air quality and meteorology as well as respirable particulate matter and
suspended solids which indicated that the measured values are within the required
regulatory limits.
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SOCIAL OR COMMUNITY REQUIREMENTS
CMCB, under the collective bargaining agreement, provides for educational funds from
elementary through to university classes, plus employee celebrations at Christmas and the
annual Mining Day Celebration that takes place in the town of Chile Chico.

The Company is also heavily involved in the local community with the following programs:
Seven university scholarships and one sporting scholarship for students from Chile
Chico.

Major sponsorship of Chile Chico week in J anuary and many other functions during
the year.

Bringing medical specialist to Chile Chico on an annual basis.

Sponsorship of many sporting, social, government and educational institutions in
Chile Chico.

Diverse courses organized and funded by CMCB for the general public of Chile
Chico.

MINE CLOSURE REQUIREMENTS
The closure plan was updated by Mineria y Medioambiente Limitada (MYMA), from the
previous estimate that was prepared in 2008. The updated closure plan is shown in Table
20-6.

TABLE 20-6 CLOSURE COSTS BREAKDOWN BY YEAR

Description Units 2014 2015 2016 2017 2018 2019 2020/22 Total
Cascada US$000 629 160 0 0 0 0 0 789
Cerro Bayo US$000 0 206 388 222 220 1511 0 2,547
Guanaco US$000 0 0 663 217 598 0 473 1,951
LV US$000 0 253 852 1355 1560 201 4245 8,466
Post US$000 87 468 360 81 178 206 323 1,703
Total US$000 716 1,087 2,263 1,875 2,556 1,918 5,041 15,456

The closure plan for the site areas include those for properly sealing of portals, rehabilitation
of waste and stockpile areas, rehabilitation of all sedimentation and other water basins and
miscellaneous clean up to ensure the site conditions are returned to as near as natural
condition.
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The cash flow shown in Section 22 also includes provision for the closure cost by year until
2022.

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21 CAPITAL AND OPERATING COSTS
CAPITAL COSTS
The Cerro Bayo Project has been in production since 2011, after a three year shut down.
The capital costs for equipment, rebuilds, ventilation, etc., are shown in Table 21-1. Also
included in the table is the sustaining capital cost for deferred development required as well
as the closure cost estimated by year.

TABLE 21-1 CAPITAL COSTS

Description Units 2014 2015 2016 2017 2018/22 Total
Capital Development US$'000 6,748 11,385 7,839 3,949 - 29,921
Capital Equipment US$'000 8,702 8,000 6,000 - - 22,702
Reclamation/Closure US$'000 716 1,087 2,263 1,875 9,515 15,456
Contingency (15%) US$'000 2,425 3,071 2,415 874 1,427 10,212
Total US$'000 18,591 23,543 18,517 6,698 10,942 78,291

The capital development shown in the table above consists of 8,332 m of horizontal
development at a unit cost of $3,591 per metre. This development is carried out in waste
and made up of ramp, access drifts, and other miscellaneous openings such as sumps. The
capital development makes up approximately 29% of the total development carried out in the
mine. Development requirements are relatively lower for the mines at Cerro Bayo because
of the mining method. No hanging wall or footwall drifts are driven along strike and
drawpoints are not utilized. The access drift is driven along the vein and mining progresses
in a retreat fashion towards the entry point from the main ramp. In this way, waste
development is reduced significantly. RPA recommends that mine planners investigate the
potential use of some additional waste development, for example to create easier and safer
mucking where the veins are much larger than normal or where very poor ground conditions
may be avoided and dealt with on the final retreat. Where the vein is large, for example, a
second drawpoint can be very useful to optimize extraction.

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OPERATING COSTS
Operating costs for the Cerro Bayo LOM plan are shown in Table 21-2 below. The actual
operating costs for year to date December 2013 were US$102.84 per tonne milled.
Production will average 1,290 tpd over the LOM, approximately 17% higher than the 2013
average.

TABLE 21-2 LOM OPERATING COSTS

Description US$/Year US$/t
Mining 24,355 56.90
Processing 11,110 25.95
G & A 7,160 16.73
Total 42,625 99.58

While a higher level of waste development was capitalized during 2013, the LOM plan has
approximately 29% of development (waste) capitalized and 71% of development in ore.

RPA is of the opinion that, with the higher throughput forecasted in the LOM plan, the
operating cost per tonne could be reduced, however, it is important that the throughput be
realized. Given the number of potential work areas that can be developed, the current
productivity level, and the quality of the technical staff and management, RPA is of the
opinion that the LOM plan can be achieved. All of the mines were visited during the site visit
and RPA noted that development is sufficiently kept well ahead of the stoping to achieve the
production forecasts of the LOM.

MANPOWER
The current manpower level at the Cerro Bayo project is shown in Table 21-3 below. It is
anticipated that this level of manpower will be necessary for the remainder of the LOM
period. Current contractor personnel are shown in Table 21-4 below. Apart from the current
tailings dam work, this level of contractor reliance is expected to continue throughout the
LOM period.

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TABLE 21-3 COMPANY MANPOWER

Area Number
Management 4
Mine Operation 197
Eng. & Survey 10
Geol. & D.D. 67
Processing 32
Lab 12
Mtce & Services 71
Accounting 7
Logisitics 17
Environment 4
Risk Prevention 5
Human Resources 4
Camp Services 8
Total 438

TABLE 21-4 CONTRACT MANPOWER

Area Number
Orica 7
Security 22
Sodexco 22
Sotraser(transp.) 11
Luiz Munoz (vulcanization) 3
Atlas Copco 3
Ore Transport 7
J uan Nunez (garbage) 2
Sergio Azocar (tanker truck) 6
Robinson Casanova (sanitary) 2
Robinson Casanova (water) 3
Raul Vernal (Conc. Transport) 3
Raul Vernal (tailings) 15
Trapananda (pest control) 2
Transporte Benumapu (fuel) 1
Total 109

The mine has varying schedules for personnel. The miners work a ten day on five day off
schedule, the plant personnel work a seven and seven schedule, the geology personnel work
a fourteen and seven schedule, cleaning personnel a six and one schedule, and the
administration personnel a five and two schedule.

There are a number of bonuses offered by the company as listed below.
Production and Cost bonus
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Safety bonus
Night shift bonus
Housing bonus
Legal Holiday bonus
School scholarships for employee dependents
Festive Day bonus
Seniority bonus
The company also offers benefits for medical plan, life insurance, death leave and
benefits, meals on site, clothing for winter season, annual vaccinations, transportation
benefits, and other benefits

RPA has reviewed the wages and benefits and these are comparable to other Chilean
operations.

Most of the hourly workforce comes from Chile Chico or nearby towns and villages and
employee turn-over is very low, the mine being of major economic importance to the area.
An exception to this is the geology staff, of which 60% come from Argentina, hence the 14
and seven work day cycle.

Relations with the site contractors appear to be very good as well as those with the mine
management and the workforce in general.

There are also 110 full time contract personnel on site made up of diamond drillers, catering,
security, personnel transport, and cleaning.

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22 ECONOMIC ANALYSIS
An after-tax cash flow projection has been generated by RPA from the LOM production
schedule and capital and operating cost estimates, and is summarized in Table 22-1. A
summary of the key criteria is provided below.

ECONOMIC CRITERIA
PHYSICALS
Mine Life: 5.5 years

Operations: 350 days per year

Production Rate: 1,290 tpd LOM average with high of 1,624 in year three
and 955 tpd in second year of operation

Mine Development: 7,400 m/year horizontal and 950 m/year vertical
development over 5 years of the LOM.

Total Mill Feed: 2.5 million tonnes grading 2.18 g/t Au and 224 g/t Ag

Metallurgical Recovery: 87.3% Au and 89.9% Ag

Average Annual Production: 25,350 oz Au and 2.7 million oz Ag

REVENUE
Payable silver and gold from smelting contract at 96.5% and 97% respectively.

Total net revenue by metal is split between silver at 60% and gold at 40%.

All costs are in US$.

Metal prices vary from US$1,300/oz to US$1,350/oz for gold and US$22/oz to
US$24/ oz for silver. Averages over LOM are US$1,340/oz and US$22.77/oz for gold
and silver respectively.

Net Smelter Return (NSR) includes transportation, treatment, refining, price
participation and royalties. At current prices, the average NSR is approximately
US$197 per tonne milled.

Revenue is recognized at the time of production.

COSTS
The mine is currently in operation with production from four vein systems. The LOM
also includes developing a fourth portal to access the Delia SE vein.
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Mine life capital totals US$78 million.

Average operating cost over the mine life is US$99.58 per tonne milled, including
mining, processing, general and administration costs.

TAXES AND ROYALTIES
The taxes and royalties that apply to the Project, as provided by Mandalay, are listed below:
property. This NSR royalty was applied to the cash flow presented.

presented. There is also a Value Added Tax (VAT) in Chile, although it does not
affect the CMCB since, as an exporter 100% is recovered.

exceeding an equivalent of 12,000 t of refined copper. This royalty was applied to the
cash flow presented using a copper price of US$3.50 per pound.

RPA completed the cash flow using the 20% tax rate on the net cash flow as shown
in Table 22-1.

CASH FLOW
The cash flow presented in Table 22-1. Although some accumulated losses were applied
against taxes in the previous RPA Technical Report (Lecuyer, N et al., 2012), no
accumulated losses are applied in the current cash flow.

The Project has a pre-tax NPV of US$133 million and an after tax NPV of US$ 106 million (at
7.5% discount rate). RPA has also independently verified that the cash flow analysis
provides positive economics at the reserve cut-off grade prices of US$1,200/oz for gold and
US$20/oz for silver.

Considering the Project on a stand-alone basis, the undiscounted after-tax cash flow totals
$130 million. The total operating cash cost is US$6.99 per ounce of silver, net of gold
credits.

The total capital cost is US$4.86 per ounce of silver, net of gold credits, and the total cost is
US$11.86 per ounce of silver, net of gold credits.

Page 22-3
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Date: Feb-14
Units Inputs Total Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
2014 2015 2016 2017 2018 2019
Underground
Operating Days 1,925 350 350 350 350 350 175
Au g/t 2.18 2.34 2.00 2.10 2.68 2.05 1.59
Ag g/t 224 278 210 227 238 192 142
Waste '000 tonnes - - - - - - -
Processing
Mill Feed '000tonnes 2,483 477 480 568 436 334 188
Au g/t 2.18 2.34 2.00 2.10 2.68 2.05 1.59
Ag g/t 224 278 210 227 238 192 142
Contained Au oz 174,294 35,926 30,844 38,340 37,508 22,087 9,590
Contained Ag oz 17,902,096 4,259,506 3,238,499 4,153,899 3,332,938 2,061,502 855,751
Flotation Recovery %
Au 87.3% 88.6% 86.5% 87.0% 87.6% 88.0% 83.9%
Ag 89.9% 90.7% 89.5% 89.7% 90.0% 89.9% 88.0%
Metal Recovered oz
Au 27,666 152,165 31,817 26,695 33,340 32,838 19,428 8,047
Ag 2,926,514 16,095,827 3,863,916 2,897,708 3,727,474 3,000,832 1,852,809 753,088
Eq.Ag 25,225,363 5,772,872 4,499,315 5,727,820 4,971,060 3,018,434 1,235,861
Revenue
Metal Prices
Au US$/oz Au 1,340 $ $ 1,300 $ 1,350 $ 1,350 $ 1,350 $ 1,350 1,350 $
Ag US$/oz Ag 22.77 $ $ 22.00 $ 22.00 $ 23.00 $ 24.00 $ 23.00 23.00 $
Exchange Rate 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Au Equiv. Factor 61.64 61.64 61.64 61.64 61.64 61.64 61.64
Payable Gold % 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Payable Silver % 96.5% 96.5% 96.5% 96.5% 96.5% 96.5% 96.5%
Payable Oz Gold oz. 147,600 30,863 25,894 32,340 31,853 18,845 7,805
Payable Oz Silver oz. 15,532,473 3,728,679 2,796,288 3,597,012 2,895,803 1,787,961 726,730
Au Gross Revenue US$ '000 197,717 $ $ 40,122 $ 34,956 $ 43,659 $ 43,002 $ 10,537 25,441 $
Ag Gross Revenue US$ '000 353,618 $ $ 82,031 $ 61,518 $ 82,731 $ 69,499 $ 16,715 41,123 $
Total Gross Revenue US$ '000 551,335 $ $ 96,475 122,153 $ 126,391 $ 112,501 $ $ 27,252 66,564 $
Treatment Cost US$/T Conc. 365.00 17,210 $ $ 3,914 $ 3,016 $ 3,742 $ 3,057 $ 901 2,579 $
Transport (Truck+Ship) US$/T Conc. 400.00 18,860 $ 4,290 3,306 4,101 3,350 2,827 987
Total Charges US$ '000 54,637 $ $ 12,491 $ 9,553 $ 12,174 $ 10,073 $ 2,771 7,576 $
Royalty Au NSR US$ '000 2% 3,288 $ - 696.02 1,019 856 507 210
Royalty Ag NSR US$ '000 2% 4,662 $ - 640 1,583 1,332 787 320
Mining Royalty US$ '000 0.5% 436 $ $ 148 $ 20 $ 169 $ - 100 $ - $
Eq. Copper Value at $3.50 US$ '000 3.50 $ 92,568 $ 92,568 $ 92,568 $ 92,568 $ 92,568 92,568 $
Net Smelter Return US$ '000 488,312 $ $ 85,566 109,514 $ 111,446 $ 100,140 $ $ 23,952 57,695 $
Unit NSR US$/T 196.67 $ $ 229.74 $ 178.20 $ 196.05 $ 229.85 $ 127.70 172.53 $
Cut-Off Grade
% 40% 36% 40% 38% 42% 43% 43%
Au
Ag % 60% 64% 60% 62% 58% 57% 57%
$ per g Au 35.70 $ $ 35.69 $ 35.71 $ 35.56 $ 35.88 $ 34.41 36.06 $
Au
Ag $ per g Ag 0.53 $ $ 0.53 $ 0.51 $ 0.53 $ 0.56 $ 0.51 0.51 $
Operating Costs (per tonne milled)
US$/t 56.90 $ $ 56.90 $ 56.90 $ 56.90 $ 56.90 $ 56.90 56.90 $
US$/t 25.95 $ $ 25.95 $ 25.95 $ 25.95 $ 25.95 $ 25.95 25.95 $
US$/t 16.73 $ $ 16.73 $ 16.73 $ 16.73 $ 16.73 $ 16.73 16.73 $
US$/t - $ - $ - $ - $ - $ - $ - $
Mining (Underground)
Processing
G&A
Depreciation/Depletion
Total Operating Cost US$/t 99.58 $ $ 99.58 $ 99.58 $ 99.58 $ 99.58 $ 99.58 99.58 $
Mining (Underground) US$ '000 141,268 $ $ 27,121 $ 27,319 $ 32,343 $ 24,788 $ 10,672 19,026 $
Processing US$ '000 64,444 $ $ 12,372 $ 12,462 $ 14,754 $ 11,308 $ 4,868 8,679 $
G&A US$ '000 41,536 $ $ 7,974 $ 8,032 $ 9,510 $ 7,288 $ 3,138 5,594 $
Depreciation/Depletion US$ '000 - $ - $ - $ - $ - $ - $ - $
Total Operating Cost US$ '000 247,248 $ $ 47,467 $ 47,814 $ 56,607 $ 43,384 $ 18,678 33,299 $
Unit Operating Cost US$/oz Au 598.24 $ $ 502 $ 649 $ 603 $ 532 $ 922 673 $
Equiv. Oz Au oz 413,291 94,503 73,705 93,812 81,522 49,486 20,264
Operating Cashflow US$ '000 241,064 $ 62,047 $ 37,752 $ 54,838 $ 56,757 $ 5,274 24,396 $
Capital Costs
Mining US$ '000 18,962 $ $ 4,962 $ 8,000 $ - 6,000 $ - $
Processing US$ '000 3,740 $ $ - 3,740 $ - $ - $ - $
Infrastructure US$ '000 - $
Indirect Costs US$ '000 - $
Sustaining US$ '000 29,921 $ 6,748 $ 11,385 7,839 3,949 -
Closure and Reclamation US$ '000 15,456 $ $ 716 $ 1,087 $ 2,263 $ 1,875 $ 1,918 2,556 $
Contingency US$ '000 15% 10,212 $ 2,425 $ 3,071 2,415 874 383 288
Total Capital Cost US$ '000 78,291 $ 18,591 $ 23,543 18,517 6,698 2,939 2,206
Cashflow
Net Pre-TaxCashflow US$ '000 162,773 $ $ 43,456 $ 14,209 $ 36,321 $ 50,059 $ 3,068 21,457 $
Cumulative Pre-TaxCashflow US$ '000 $ 43,456 $ 93,986 57,665 $ 144,045 $ 165,502 $ 168,570 $
Accumulated Losses US$ '000 - $ - $
Taxable Revenue US$ '000 $ 43,456 $ 14,209 $ 36,321 $ 50,059 $ 3,068 21,457 $
Taxes 20.0% 33,084 $ $ 8,691 $ 2,842 $ 7,264 $ 10,012 $ - 4,291 $
After-TaxCashflow 129,689 $ $ 34,765 $ 11,367 $ 29,057 $ 40,047 $ 3,068 17,165 $
Cumulative After-TaxCashflow $ 34,765 $ 75,189 46,132 $ 115,236 $ 132,402 $ 135,470 $
Total Cash Cost US$/oz Ag. 6.99 $ $ 3.46 $ 5.28 $ 4.87 $ 2.56 $ 9.26 5.54 $
Capital Cost US$/oz Ag. 4.86 $
Total Production Cost US$/oz Ag. 11.86 $
US$ '000 7.5% $132,901
US$ '000 10% $124,830
Pre-taxNPV at 7.5% discounting
Pre-taxNPV at 10% discounting
Pre-taxNPV at 15% discounting US$ '000 15% $110,872
US$ '000 7.5% $106,031
US$ '000 10% $99,626
After-TaxNPV at 7.5% discounting
After-TaxNPV at 10% discounting
After-taxNPV at 15% discounting US$ '000 15% $88,536
TABLE 22-1 AFTER-TAX CASH FLOW SUMMARY
Mandalay Resources Corporation - Cerro Bayo Project
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SENSITIVITY ANALYSIS
Key economic risks, as indicated below, were examined by running cash flow sensitivities:
Silver price
Exchange rate
Head Grade
Recovery
Operating costs
Capital costs

NPV sensitivity over the base case has been calculated for -20% to +20% variations. The
sensitivities are shown in Figure 22-1 and Table 22-2.

The Project is most sensitive to head grade and exchange rate, followed by silver price,
operating costs, capital costs, and finally recovery.

Cerro Bayo is an operating mine, and on a going forward basis, reporting of IRR and
payback period is not applicable.

FIGURE 22-1 AFTER-TAX SENSITIVITY ANALYSIS

$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
-25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%
A
f
t
e
r
-
T
a
x

N
P
V

a
t

7
.
5
%

D
i
s
c
o
u
n
t

R
a
t
e

(
U
S
$

0
0
0
)

Percent Change From Base Case
Head Grade Recovery Ag Price
Exchange Rate Operating Cost Capital Cost
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Page 22-5
TABLE 22-2 AFTER-TAX SENSITIVITY ANALYSES

Parameter
Variables
Units -20% -10% Base 10% 20%
Silver Price US$/oz 18.21 20.49 22.77 25.04 27.32
Exchange Rate US$/C$ 0.80 0.90 1.00 1.10 1.20
Head Grade (Ag) g/t 179.40 201.83 224.3 246.68 269.10
Recovery % 86.9% 88.4% 89.9% 91.4% 92.9%
Operating Cost $millions 197.80 222.52 247.2 271.97 296.70
Capital Cost $millions 62.63 70.46 78.3 86.12 93.95
NPV @ 7.5% Units -20% -10% Base 10% 20%
Silver Price $millions $62 $84 $106 $128 $149
Exchange Rate $millions $42 $74 $106 $138 $170
Head Grade $millions $38 $72 $106 $140 $174
Recovery $millions $99 $102 $106 $110 $113
Operating Cost $millions $138 $122 $106 $90 $74
Capital Cost $millions $117 $111 $106 $101 $96

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23 ADJACENT PROPERTIES
RPA is not aware of any significant deposits on adjacent properties.

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24 OTHER RELEVANT DATA AND
INFORMATION
No additional information or explanation is necessary to make this Technical Report
understandable and not misleading.

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Page 25-1
25 INTERPRETATION AND CONCLUSIONS
RPA offers the following conclusions regarding the Cerro Bayo property:
The Project has met its 2013 exploration objectives in that significant new gold and
silver mineralization has been found and added to the Mineral Resources and Mineral
Reserves.

RPA is of the opinion that the Project hosts a significant gold and silver mineralized
system, and that there is good potential to further increase the resource base in
defined veins and adjacent targets.

Epithermal gold and silver mineralization is associated with quartz veining within a
moderately welded sequence of dacitic and rhyolitic tuffs.

Drilling to date has intersected high-grade mineralized veins and vein systems
associated with alteration assemblages that suggest at least three stages of precious
metal deposition.

In RPAs opinion, the sampling, sample preparation, and sample analysis programs
are appropriate for the type of mineralization.

The existing internal laboratory Quality Assurance/Quality Control (QA/QC) program
is appropriate, and Mandalay has implemented an additional blind QA/QC program
for enhanced validation of the accuracy and precision of the sample results, as
previously recommended by RPA.

Mineral Resources were estimated according to the Canadian Institute of Mining,
Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral
Reserves dated November, 2010 (CIM, 2010).

Mineral Resources are reported inside vein wireframe models based on US$1,400
per ounce gold and US$24 per ounce silver, at a 163 g/t AgEq cut-off grade,
accounting for concentrate transportation, treatment, and refining costs.

Mineral Reserves were estimated using prices of US$1,200 per ounce for gold and
US$20 per ounce for silver, at a 200 g/t AgEq cut-off grade accounting for
concentrate transportation, treatment, and refining costs.

The Mineral Reserves were estimated using a minimum mining width of 2.4 m. RPA
is of the opinion, based on observations on site, that the stope dilution factors could
be significantly lower with continued careful planning and execution of drilling and
loading operations. Reduction of dilution in the development drives, however, is more
difficult, as a minimum drift width is required to accommodate equipment sizes and
clearance regulations for such equipment.

Based on the LOM plan, the mine is expected to have a positive after-tax cash flow of
US$130 million, with a mine life of approximately five and half years.

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Metal prices average US$1,340 per ounce for Au and US$22.77 per ounce for Ag
over the mine life. RPA has also independently verified that the cash flow analysis
provides positive results at the reserve prices of US$1,200/oz for gold and US$20/oz
for silver.

For the LOM plan, the expected capital investment totals approximately US$78
million, including US$19 million for mine equipment and rebuilds, US$3.7 million for
concentrator upgrades, US$30 million in sustaining development, US$15.5 million in
closure costs and a contingency of US$10.2 million. RPA finds the capital costs to be
reasonable.

RPA is of the opinion that the mine development rates can be achieved provided
sufficient manpower and equipment is maintained.

The LOM plan indicates an increase to the present mining production rate. Production
will come from twelve veins during the LOM, accessed from portals, which provide
flexibility and sufficient working faces to meet the average production rate of 1,290
tpd. Production will come from the Marcela and Raul veins from 2017 to 2019.
Production will consist of 80% from stoping and 20% from ore development during
the LOM.

RPA is of the opinion that the average unit operating cost per tonne (US$102.84/t
milled during 2013) could be reduced however, it is important that the throughput be
realized. The average LOM operating cost is estimated at US$99.58 per tonne
milled. Given the number of potential work areas that can be developed, the current
productivity level, and the quality of the technical staff and management, RPA is of
the opinion that the LOM plan can be achieved.

Mandalay maintains longitudinal sections that identify the areas of mining and
indicate those areas that are within and outside of the planned mining areas to help
facilitate future reconciliation. RPA supports this initiative.

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Page 26-1
26 RECOMMENDATIONS
RPA makes the following recommendations:
Carry out additional density measurements on samples specific to individual veins, in
order to identify local variations, as well as confirm and support future resource
estimates.

Develop a standard operating procedure for in-house density determinations and
implement some outside checks on the density determinations to support and confirm
in-house results.

Carry out channel sampling across the entire face for each round, to obtain additional
information on grade distribution, especially along indistinct contacts between
mineralized and non-mineralized zones, and to determine dilution grades immediately
adjacent to veins.

Document standardized checks of all core and channel sample data prior to entry into
the master database.

Sample all core intervals immediately adjacent to mineralization, to eliminate
undersampling of mineralized shoulders, with an additional review after assays have
been returned.






Resurvey drill hole collars that have discrepancies with the topographic surface.

Build a relational database incorporating the lithology and structural tables.

Digitize underground mapping and incorporate into the model.

Review vein wireframes prior to the next resource update, as some modelled
intersections were not tied to drill holes. Seam models are very sensitive to changes
in orientation; Mandalay personnel should ensure that the vein wireframes achieve
the resource minimum width criteria.

Carry out a structural analysis to assist in construction of future domain models.

Complete reconciliation on a more regular basis. Reconciliation each quarter is
recommended to permit adjustments of the yearly budget plan. This should include
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Page 26-2
reconciling tonnages and grades from stope operations to the mill production, and
resource block model, as well as confirmation of dilution factors through use of a
cavity monitoring system (CMS).

Complete the 2014 exploration plan, consisting of geochemical sampling and a
30,000 m drill program budgeted for approximately US$3.6 million to continue to
define the south extension under the lake of Yasna, Fabiola and Coyita veins and
explore for new veins.

Examine the potential use of some additional waste development, for example to
create easier and safer mucking where the veins are wider than normal or where very
poor ground conditions may be avoided and dealt with on the final retreat. Where the
vein is quite wide, for example, a second drawpoint can be very useful to optimize
extraction.

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Page 27-1
27 REFERENCES
Casanga, R., 2013, Informe, Aplicacin Programa QA/QC, Dpto. Control de Calidad, Enero-
Octubre 2013, in-house report prepared for Compaia Minera Cerro Bayo Ltda., 2013.


Rolando, A.P., 2013, Programa QA/QC aplicado a muestras de sondajes, 2013, in-house
report prepared by Grupo Exploracin C.M.C.B., 2013.

Rolando, A.P., 2013, Programa QA/QC aplicado a muestras de mina, 2013, in-house report
prepared by Grupo Mina C.M.C.B., 2013.



Casanga, R., 2011, Informe, Procedimiento de Determinacin Oro-Plata por Ensayo a Fuego
Via Gravimetrica, in-house report prepared for Compaia Minera Cerro Bayo Ltda., J une
1, 2011.

Casanga, R., 2011, Informe, Procedimiento de Preparacin Mecnica de Muestra Mineral,
in-house report prepared for Compaia Minera Cerro Bayo Ltda., J une 1, 2011.

Casanga, R., 2011, Informe, Procedimiento Uso Chancador de Mandbula, in-house report
prepared for Compaia Minera Cerro Bayo Ltda., May 30, 2011

Casanga, R., 2011, Informe, Procedimiento Uso Chancador de Rodillo, in-house report
prepared for Compaia Minera Cerro Bayo Ltda., May 30, 2011

Casanga, R., 2011, Informe, Procedimiento Uso Chancador de Pulverizador, in-house report
prepared for Compaia Minera Cerro Bayo Ltda., J une 1, 2011

CIM, 2010, CIM Definition Standards - For Mineral Resources and Mineral Reserves,
Prepared by the CIM Standing Committee on Reserve Definitions, Adopted by CIM
Council on November 27, 2010.

J ensen E.P. & Barton M.D., 2003, Gold deposits related to alkaline magmatism; In Society of
Economic Geologists Reviews in Economic Geology 13, 279-314.

Lecuyer, N. & Cardenas, R., 2013, Technical Report on the Cerro Bayo Project, Chile, NI 43-
101 Report, prepared for Mandalay Resources Corporation by Roscoe Postle Associates
Inc., March 27, 2013.

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Page 27-2
Lecuyer, N. & Nakai-Lajoie, P., 2012, Technical Report on the Cerro Bayo Project, Chile, NI
43-101 Report, prepared for Mandalay Resources Corporation by Roscoe Postle
Associates Inc., March 16, 2012.

Martinez, Marcos O. Quezada, 15 May, 2008, Informe Pruebas Flotacin Minerales Veta
Dagny, Planta Procesos- Compaia Minera Cerro Bayo Ltda. 37 pp.

OLeary, B., and Sims, J ., 2009, Cerro Bayo Mine, Technical Report, prepared for Coeur
dAlene Mines Corporation, J anuary 1, 2009.

Robert, F., Brommecker, R., Bourne, B.T., Dobak, P.J ., McEwan, C.J ., Rowe, R.R., Zhou,X.
2007: Models and Exploration Methods for Major Gold Deposit Types; In "Proceedings of
Exploration 07: Fifth Decennial International Conference on Mineral Exploration" edited
by B. Milkereit, 2007; Ore Deposits and Exploration Technology, p. 691-711.

Rolando, A.P., 2013, Informe Geologa de Exploracin, Diciembre de 2013, in-house report
prepared by Grupo Exploracin C.M.C.B., 2013.

Rolando, A.P., 2011, Informe Geologa de Exploracin, Diciembre de 2011, in-house report
prepared by Grupo Exploracin C.M.C.B., 2011.

SGS Lakefield Research Chile S.A., Informe Final, Auditoria Tcnica a Procesos de
Laboratorio Qumico de Compaia Minera Cerro Bayo, in-house report prepared for
Compaia Minera Cerro Bayo Limitada, Sept. 14, 2011.

Sillitoe, R.H., and Hedenquist, J .W, 2003, Linkages Between Volcanotectonic Setting, Ore-
fluid Compositions, and Epithermal Precious Metal Deposits, in Society of Economic
Geologists Special Publication 10, 315-343.

Simmons, S.F., White, N.C. and J ohn, D.A., 2005, Geological characteristics of epithermal
precious and base metal deposits, in Economic Geology 100th Anniversary Volume, 485-
522.

Sims, J ., 2010, Cerro Bayo Mine, Technical Report, prepared for Coeur dAlene Mines
Corporation, J anuary 1, 2010.

SRK Consulting, 2010, NI 43-101 Technical Report, Cerro Bayo Mine, Chile, prepared for
Mandalay Resources Corp., May 14, 2010.

Toms Salgado Meza, Ing. Analista Geomecnico, 8 Nov., 2010, Estudio De Diseo
Geomecnico Preliminar y Recomendaciones De Fortificacio Proyecto Delia NW
Compaia Minera Cerro Bayo Ltda., Informe Final.

www.geology.about.com, 2012, derived from A. Alden USGS OFR 97-470D (Generalized
Geologic Map of Chile).
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Page 28-1
28 DATE AND SIGNATURE PAGE
This report titled Technical Report on the Cerro Bayo Project, Region XI (Aisen), Chile and
dated March 27, 2014, was prepared and signed by the following authors:

(Signed & Sealed) Normand Lecuyer

Dated at Toronto, ON
March 27, 2014 Normand Lecuyer, P.Eng.
Principal Mining Engineer

(Signed & Sealed) Rosmery J. Crdenas Barzola

Dated at Toronto, ON
March 27, 2014 Rosmery J . Crdenas Barzola, MAussIMM CP (Geo)
Senior Geologist

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29 CERTIFICATE OF QUALIFIED PERSON
NORMAND L. LECUYER
I, Normand L. Lecuyer, P.Eng., as an author of this report entitled Technical Report on the
Cerro Bayo Project, Region XI (Aisen), Chile prepared for Mandalay Resources Corporation
(the Issuer) and dated March 27, 2014, do hereby certify that:

1. I am Principal Mining Engineer with Roscoe Postle Associates Inc. of Suite 501, 55
University Ave Toronto, ON, M5J 2H7.

2. I am a graduate of Queens University, Kingston, Canada, in 1976 with a B.Sc.
(Hons.) degree in Mining Engineering.

3. I am registered as a Professional Engineer in the provinces of Ontario (Reg. #
26055251), Qubec (Reg. #34914) and Newfoundland and Labrador (Reg. #06161).
I have worked as a mining engineer for a total of 36 years since my graduation. My
relevant experience for the purpose of the Technical Report is:
Review and report as a consultant on numerous exploration and mining projects
around the world for due diligence and regulatory requirements.
Vice-President Operations for a number of mining companies.
Mine Manager at an underground gold mine in Northern Ontario, Canada.
Manager of Mining/Technical Services at a number of base-metal mines in
Canada and North Africa.
Vice-President Engineering at two gold operations in the Abitibi area of Quebec,
Canada.

4. I have read the definition of "qualified person" set out in National Instrument 43-101
(NI 43-101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work experience, I fulfill the
requirements to be a "qualified person" for the purposes of NI 43-101.

5. I visited the Cerro Bayo Project from J anuary 8 to 10, 2014.

6. I am responsible for the overall preparation of the Technical Report, for Sections 1 to
3, 5, 13, 15 to 22 and 24 as well as parts of Sections 25, 26 and 27 of the Technical
Report.

7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.

8. I have prepared a Technical Report dated March 20, 2013 on the property that is the
subject of this Technical Report.

9. I have read NI 43-101, and those sections of the Technical Report for which I am
responsible, have been prepared in compliance with NI 43-101 and Form 43-101F1.

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10. At the effective date of the Technical Report, to the best of my knowledge,
information, and belief, those sections of the Technical Report for which I am
responsible contain all scientific and technical information that is required to be
disclosed to make the Technical Report not misleading.

Dated this 27
th
day of March, 2014

(Signed & Sealed) Normand Lecuyer

Normand L. Lecuyer, P.Eng.

www.rpacan.com

Page 29-3
ROSMERY J. CRDENAS BARZOLA
I, Rosmery J . Crdenas Barzola, MAusIMM CP (Geo), as an author of this report entitled
Technical Report on the Cerro Bayo Project, Region XI (Aisen), Chile prepared for
Mandalay Resources Corporation (the Issuer) and dated March 27, 2014, do hereby certify
that:

1. I am Senior Geologist with Roscoe Postle Associates Inc. of Suite 501, 55 University Ave
Toronto, ON, M5J 2H7.

2. I am a graduate of Universidad Nacional de Ingenieria, Lima, Peru, in 2002 with a B.Sc.
degree in Geological Engineering.

3. I am registered as a MAusIMM Chartered Professional under the Discipline of Geology in
the Province of Carlon South Victoria, Australia (Reg. #302872). I have worked as a
geologist for a total of 10 years since my graduation. My relevant experience for the
purpose of the Technical Report is:
Geological modelling and QA/QC experience.
Evaluation Geologist and Resource Modelling Geologist with Barrick Gold
Corporation at Pueblo Viejo Project (Dominican Republic) and Lagunas Norte Mine
(Peru).

4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI
43-101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work experience, I fulfill the
requirements to be a "qualified person" for the purposes of NI 43-101.

5. I visited the Cerro Bayo Project from J anuary 8 to 10, 2014.

6. I am responsible for Sections 4, 6 to 12, 14 and 23 as well as parts of Sections 1, 2, 25,
26, and 27 of the Technical Report.

7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.

8. I have prepared a Technical Report dated March 20, 2013 on the property that is the
subject of this Technical Report.

9. I have read NI 43-101, and those sections of the Technical Report for which I am
responsible, have been prepared in compliance with NI 43-101 and Form 43-101F1.

10. At the effective date of the Technical Report, to the best of my knowledge, information,
and belief, those sections for which I am responsible in the Technical Report contain all
scientific and technical information that is required to be disclosed to make the Technical
Report not misleading.

Dated 27
th
day of March, 2014

(Signed & Sealed) Rosmery J. Crdenas Barzola

Rosmery J . Crdenas Barzola, MAusIMM CP (Geo)

RPA Mandalay Cerro Bayo NI 43 101 Mar 27 20141

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