Invicta Mine Feasibility Study: Prepared For Audited by

INVICTA MINE FEASIBILITY STUDY
prepared for ANDEAN AMERICAN MINING

CORP.
audited by THE LOKHORST GROUP
VENTURES, INC.
JUNE, 2009
FEASIBILITY STUDY
INVICTA GOLD PROJECT
DISCLAIMER
The Invicta Project Feasibility Report summarizes the findings of a feasibility study of the Invicta gold-silver poly-metallic project.
This feasibility study examines all facets of the Project including geology, resources, ore reserves, mining, metallurgy, processing,
infrastructure, environmental impact assessment, and financial evaluation. The study presents the operating and capital costs of
mining and processing and it includes a financial analysis by Stanford Group - Stanford Consulting Peru SRL.
The Lokhorst Group was responsible for the auditing of all reports, assembling of all data, and compiling the report. Discover
Geological Consultants Inc. reviewed in detail all geological work, such as drill data, underground geological information, previous
and current resource data, and geochemical data. The focus of their report was to issue new and updated resource estimations.
Discover filed a NI 43-101 Technical Report on September 26, 2008. Minconsult S.R.L together with Escuela de Ingenieria de Minas
de la Universidad Pontificia Catolica del Peru was responsible for mine design and mine planning. Act Labs del Peru, Laboratoria
Plenge Ltda, ABR Mineria SAC, ED & ED Ingenieria, Universidad Nacional de Ingeniera performed metallurgical tests. CIMM Peru
Laboratories (ISO certification) assayed core and mine samples. Lakefield Laboratory performed initial metallurgical tests. Goldex
prepared the basic conceptual design of the 5100 t/d concentrator plant. Cesel Engineering performed the detailed Engineering for
water and power supply to the project as well as the environmental impact assessment (EIA) for the entire project. Stanford Group -
Stanford Consulting Peru SRL performed the financial analysis. Knelson Laboratory and Met Solve performed specific metallurgical
tests.
This report was prepared for the sole and exclusive benefit of Andean American Mining; the intention of The Lokhorst Group is that
this document exists as a whole and sections are not to be read or relied upon out of context. This document contains the
expression of the professional opinion of The Lokhorst Group based on information available at the time of preparation. The report
includes information generated or provided by other sources as listed above. The Lokhorst Group does not warrant the accuracy or
completeness of data supplied by outside sources. The Lokhorst Group provides this report for use only by Andean American
Mining.
June, 2009 1
FEASIBILITY STUDY
TABLE OF CONTENTS
1 EXECUTIVE SUMMARY.........................................................................................................7
1.1 Introduction ...............................................................................................................7
1.2 Ownership & History ................................................................................................11
1.3 Regional and Local Geology ......................................................................................11
1.4 Resources.................................................................................................................13
1.5 Quality Control .........................................................................................................14
1.6 Mine Design .............................................................................................................14
1.7 Metallurgy Testing and Design..................................................................................14
1.8 Reserves and LOM (life of mine) ...............................................................................15
1.9 Products Schedule and Commercialization ...............................................................15
1.10 Processing and Project Development........................................................................16
1.10.1 Processing Plant ...............................................................................................16
1.10.2 Ore Haulage System .........................................................................................17
1.10.3 Energy Supply ..................................................................................................17
1.10.4 Water Supply ...................................................................................................18
1.10.5 Access Road .....................................................................................................18
1.10.6 Environmental Study and Legal Permissions .....................................................18
1.10.7 Social Permission .............................................................................................19
1.11 Operating and Capital Costs......................................................................................20
1.12 Project Schedule.......................................................................................................20
1.13 Conclusions & Recommendations.............................................................................20
2 Author certificates.............................................................................................................23
2.1 Guy Lokhorst, P. Eng.................................................................................................23
2.2 Victor Jaramillo, P. Geo.............................................................................................25
2.3 Les Tarnai, P. Eng......................................................................................................28
2.4 Rose Masias, MSc .....................................................................................................30
3 Background .......................................................................................................................31
3.1 History......................................................................................................................31
3.2 The Property ............................................................................................................33
3.3 Property Location, Service Features & Biophysical Environment ...............................35
4 Geology .............................................................................................................................38
4.1 Regional Geology......................................................................................................38
4.2 Property Geology .....................................................................................................40
4.3 Property Description ................................................................................................43
4.3.1 Report by Discover Geological Consultants Inc. ....................................................43
4.4 Section References ...................................................................................................47
5 Mining...............................................................................................................................48
5.1 Mining Methodology ................................................................................................48
5.2 Geotechnical Investigations and Assessments...........................................................49
5.3 Geologic Block Modeling ..........................................................................................49
5.4 Mine Design & Layout...............................................................................................50
5.4.1 Open Pit ...............................................................................................................50
5.4.2 Sublevel Stoping...................................................................................................53
5.4.3 Cut and Fill Stoping...............................................................................................54
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5.4.4 Shrinkage Stopes..................................................................................................55

5.4.5 Mine Development...............................................................................................56
5.4.6 Mine Plan.............................................................................................................56
5.5 Infrastructure, Equipment & Services .......................................................................57
5.5.1 Infrastructure .......................................................................................................57
5.5.2 Equipment ...........................................................................................................59
5.5.3 Ventilation ...........................................................................................................59
5.5.4 Water...................................................................................................................60
5.5.5 Compressed Air ....................................................................................................60
6 Metallurgy.........................................................................................................................61
6.1 Testing Summary......................................................................................................61
6.2 Gravity Separation....................................................................................................62
6.3 Atenea 2 Flotation ....................................................................................................63
6.4 Z – 4 Flotation ..........................................................................................................65
6.5 Pucamina Flotation...................................................................................................65
6.6 Atenea Flotation.......................................................................................................66
6.7 Processing Plant .......................................................................................................71
6.7.1 Concentrator Plant – Basic Engineering ................................................................73
6.7.2 Primary, Secondary, & Tertiary Crushing ..............................................................74
6.7.3 Grinding ...............................................................................................................74
6.7.4 Flotation...............................................................................................................75
6.7.5 Thickeners & Filters..............................................................................................76
6.7.6 Tailings Disposition...............................................................................................77
6.8 References ...............................................................................................................78
7 Infrastructure ....................................................................................................................79
7.1 Power Supply ...........................................................................................................79
7.2 Water Supply............................................................................................................81
7.3 Access Roads ............................................................................................................82
8 Environmental Impact Assessment (EIA), and Community Relations ..................................84
8.1 Environmental Impact Assessment ...........................................................................84
8.2 Community Relations ...............................................................................................86
8.2.1 Community of Paran.............................................................................................87
8.2.2 Community of Lacsanga........................................................................................88
8.2.3 Community of Santo Domingo de Apache ............................................................89
8.3 Regulation Approvals Received.................................................................................90
9 Cost, Financing & Commercial Terms.................................................................................92
9.1 Total Operating Costs ...............................................................................................92
9.1.1 Operating Personnel: Mine, Plant, and Lima office. ..............................................94
9.1.2 Miscellaneous expenses for mine and plant .........................................................95
9.2 Cost for Underground and Open Pit Mining ..............................................................95
9.2.1 Mine Unit Costs....................................................................................................96
9.3 Processing Plant .......................................................................................................98
9.3.1 Processing Operating Costs ..................................................................................98
9.3.2 Miscellaneous Lima Expenses.............................................................................100
9.4 Capital Costs...........................................................................................................100
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9.5 Financial Analysis....................................................................................................102

9.6 Commercial Terms and Valuation of Concentrates .................................................106
10 Engineering, Procurement and Construction...............................................................107
10.1 Overview ................................................................................................................107
10.2 Time of Performance..............................................................................................108
10.3 Critical Path Planning and Scheduling .....................................................................108
10.4 Engineering ............................................................................................................109
10.4.1 Process ..........................................................................................................109
10.4.2 Metallurgy .....................................................................................................110
10.4.3 Civil Works .....................................................................................................111
10.4.4 Structural Works ............................................................................................111
10.4.5 Mechanical and Piping Design. .......................................................................112
10.4.6 Electrical and Instrumentation Design ............................................................112
10.4.7 Environmental Work and Permitting ..............................................................112
10.5 Quality Assurance and Quality Control....................................................................113
10.6 Safety .....................................................................................................................114
10.6.1 Program Effectiveness....................................................................................114
10.7 Procurement ..........................................................................................................115
10.8 Construction Team .................................................................................................115
10.9 Training and Development for Operating Personnel ...............................................116
10.10 Communities......................................................................................................116
11 Appendix A - NI 43-101 Technical Report ....................................................................117
12 Appendix B - Mine Plan...............................................................................................118
13 Appendix C - Metallurgical Reports .............................................................................119
14 Appendix D - Engineering Process Diagrams................................................................120
15 Appendix E - Infrastructure .........................................................................................121
16 Appendix F - Environmental Impact ............................................................................122
17 Appendix G - Cost, Financing & Commercial Terms .....................................................123
18 Appendix H - Planning.................................................................................................124
LIST OF TABLES
Table 1.1: Sulfides Concentrates Production Plan ......................................................................16
Table 1.2: Gravimetric Concentrates Production Plan ................................................................16
Table 1.3: Base Case Metal Prices..............................................................................................21
Table 3.1: Concessions and Claims of Invicta Property ...............................................................34
Table 4.1: Regional Stratigraphy ................................................................................................40
Table 4.2: Pangea's Historical Resource Data.............................................................................45
Table 4.3: 2008 NI 43-101 Resource Estimates ..........................................................................46
Table 5.1: True Width Criteria of the Mineralized Zones ............................................................48
Table 5.2: Mining Dilution & Recoveries ...................................................................................49
Table 5.3: Mining Method Selection .........................................................................................49
Table 5.4: Mine Development ..................................................................................................56
Table 5.5: Ore Recovery by Year................................................................................................57
Table 5.6: Equipment ................................................................................................................59
Table 5.7: Required daily Volumetric Air Flow ...........................................................................59
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Table 5.8: Compressed Air Requirements ..................................................................................60

Table 6.1: Group 1 Metallurgy ...................................................................................................62
Table 6.4: Gravity Test Results...................................................................................................63
Table 6.5: Overall Flotation Results ...........................................................................................63
Table 6.6: Copper/Lead Separation Results ...............................................................................64
Table 6.7: Overall Z-4 Flotation Results......................................................................................65
Table 6.8: Overall Pucamina Flotation Results ...........................................................................66
Table 6.9: Atenea Overall Flotation Results ...............................................................................66
Table 6.10: Falcon Concentrator................................................................................................68
Table 6.11: Wilfley Table ...........................................................................................................68
Table 6.12: Jig Juba ...................................................................................................................68
Table 6.13: Group 1 Ore Recovery.............................................................................................69
Table 7.1: Consumption of Power and Estimated Energy per Month for Mine & Plant...............81
Table 9.1: Summary of Ore to Plant, Concentrate Produced, and Ore Processed per day...........92
Table 9.2: Total Operating Unit Cost (USD/t) Annual Summary..................................................93
Table 9.3: Personnel - Mine & Plant...........................................................................................94
Table 9.4: Personnel - Lima office..............................................................................................94
Table 9.5: Miscellaneous Expenses for Mine and Plant ..............................................................95
Table 9.6: Annual Ore Tonnages ................................................................................................96
Table 9.7: Mining Unit Costs......................................................................................................97
Table 9.8: Annual Mine Development Costs ..............................................................................97
Table 9.9: Electric Power ...........................................................................................................98
Table 9.10: Annual Production and Unit Processing Costs..........................................................98
Table 9.11: Annual Reagent Consumption .................................................................................99
Table 9.12: Energy Costs............................................................................................................99
Table 9.13: Cost for rental of equipment (450 hours/month).....................................................99
Table 9.14: Operating Expenses, Lima Office ...........................................................................100
Table 9.15: Invicta Project - Investment Summary ...................................................................101
Table 9.16: Cash Flow USD/year ..............................................................................................102
Table 9.17: Profit & Loss Statement.........................................................................................103
Table 9.18: Profit & Loss versus Metal Prices...........................................................................104
Table 9.19: Loan Amortization (USD) over 3 years ...................................................................104
Table 9.20: Base Case Metal Prices..........................................................................................105
Table 9.21: Mineral Pricing......................................................................................................106
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LIST OF FIGURES
Figure 1.1: Invicta Property location map ....................................................................................9
Figure 3.1: Map of Concessions and Claims ...............................................................................35
Figure 3.2: Location of Invicta Property ....................................................................................36
Figure 4.1: Invicta Property Regional Geology Map....................................................................39
Figure 4.2: Invicta Property Geology..........................................................................................41
Figure 5.1: Longitudinal View Open Pit .....................................................................................51
Figure 5.2: Plan - Atenea Veins, Open Pit...................................................................................52
Figure 5.3: Open Pit Phases, OP#1 and OP#2 .............................................................................53
Figure 5.4: Sub Level Stoping Schematic ....................................................................................54
Figure 5.5: Cut and Fill Stoping Schematic .................................................................................55
Figure 5.6: Shrinkage Stoping Schematic ...................................................................................56
Figure 5.7: Ore Transportation System From Mine to Plant .......................................................58
Figure 6.1: Processing Plant - Complete Flow Diagram...............................................................71
Figure 6.2: Flotation Circuit Flow Diagram .................................................................................73
Figure 6.3: Knelson Concentrators Flow Diagram.......................................................................75
Figure 6.4: Thickening and Filtration Flow Diagram....................................................................76
Figure 6.5: Tailings Disposition Flow Diagram ............................................................................77
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1 EXECUTIVE SUMMARY
1.1 Introduction
In May 2009 Andean American Mining Corp. commissioned the Lokhorst Group and
others to perform a variety of tasks with the ultimate aim of producing a complete
feasibility study for its Invicta Gold Project. Its mineralization is complex with two phases
of gold-silver and base metal of mesothermal type. This mineralized structure takes the
form of veins and stockwork veinlets with gold, pyrite, sphalerite, galena and
chalcopyrite.
The study has been completed by various consulting companies, each of which address
different areas of expertise:
!" The Lokhorst Group is responsible for the auditing of all reports, assembling of
all data, and compiling the report.
!" Discover Geological Consultants Inc. reviewed in detail all geological work, such
as drill data, underground geological information, previous and current resource
data, and geochemical data. The focus of their report was to issue a new and
updated resource estimation. A NI 43-101 Technical Report was filed on
September 26, 2008.
!" Minconsult S.R.L together with Escuela de Ingenieria de Minas de la Universidad
Pontificia Catolica del Peru were responsible for mine design and mine
planning.
!" Act Labs del Peru, Laboratoria Plenge Ltda, ABR Mineria SAC, ED & ED
Ingenieria, and Universidad Nacional de Ingeniera performed metallurgical tests.
!" Lakefield Laboratory performed earlier metallurgical tests.
!" CIMM Peru LAB (with ISO certification) assayed all diamond drill core and mine
samples.
!" Goldex prepared the basic conceptual design of the 5100 t/d concentrator plant.
June, 2009 7
FEASIBILITY STUDY
!" Cesel Engineering performed the detailed engineering for water and power
supply to the project as well as the Environmental Impact Assessment (EIA) for
the entire project.
!" SGS Group, South Africa performed general mineralogical ore characterization
testwork on high grade and low grade ore samples.
!" Knelson Laboratory and Met Solve Lab performed additional metallurgical tests.
!" Stanford Group, economic and finance modeling.
!" ACOMISA, for processing plant and tailing dams geomechanics, design and
detailed engineering.
Andean American Mining engineering team conducted a number of tasks, which have all
been reviewed and accepted or modified appropriately by The Lokhorst Group.
The Invicta Project covers a large mineral deposit. Diamond drill programs have
demonstrated a probable mineral reserve of 7.8 million tonnes. With processing,
500,000 ounces of gold, 3,200,000 ounces of silver, 41,500,000 pounds of copper,
14,300,000 pounds of lead and 5,600,000 pounds of zinc will be recovered. When in
production, an underground drilling programme will be initiated to upgrade the bulk of
inferred resources to an indicated category in the Atenea, Pucamina and Dany
mineralized structures. It is important to mention that in close proximity of the Atenea
System, there are several other mineralized structures that have yet to be tested by
drilling. These include Yurac Punta, Azulmina, Zone 8 and Flor de Loto.
June, 2009 8
FEASIBILITY STUDY
Figure 1.1: Invicta Property location map
The Invicta property is located in the Western Pre-Cordillera of the Peruvian Andes in
the Huaura Province, Department of Lima, Central Coast of Peru (Figure 1.1). The
property is approximately 250 km north of Lima, and approximately 29 km east of the
city of Sayan. This provincial city provides services, supplies and facilities to the mining
industry. The Invicta Property is accessible from the capital Lima via the Panamerican
Highway, north to Huaura (160 km) and east to Sayan via Highway 16 (45 km), and
Huambay, on packed dirt road (33 km). The distance from Lima totals 238 km, which will
take around 4½ hours by car.
The elevation ranges from 2300 to 3800 meters above sea level with a generally steep
topography and surfaces covered by dry colluviums above 2500 m, and relatively
undulating to flat dry lands below 2500 m. The temperature varies with altitude and
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June, 2009 9
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530 mm, during the rainy period from January to March. The climate is not expected to
affect operations anytime throughout the year.
The Invicta property lies close to the Huaura River, which is fed from the highlands with
yearlong flows varying between 10m³/sec in September to 73m³/sec in March. Three
creeks on the west side of the property join the river. Power supply will be obtained by
connecting into the regional grid at Sayan, around 29 km from the project site.
Currently, the closest port facility is located at El Callao, in Lima and Invicta will truck the
concentrate to this port.
Plant design is predicated on a rate of 5100 t/day, while the mine production will be
3000 t/day in Year 1, gradually increasing to 5000 t/day by Year 3 and maintained
through the life of the mine (LOM).
Leach and flotation testing by Lakefield Laboratory, Canada, and optimization by various
local laboratories show gold recovery by gravimetric and leaching processes to be
82.57-88.98% Au and 66.06-77.12% Ag from ore mined by open pit and underground
method. Blending these results with those of the flotation cycle will average total
recoveries of 87-94% Au and 79-89% Ag. The base metal recoveries are expected to
reach 70-78% Cu, 82-89% Pb and 72-87% Zn. The probable mineral reserves cover a
LOM of 5 years.
The Environmental Impact Assessment (EIA) was completed by Cesel Engineering and
submitted to the Mining Ministry on June 18, 2008. The viability approval, certificate
006-2008-MEM-AAM, was received from Ministry of Energy & Mines Department of
Director General of Environmental Affairs on January 24, 2009. Final approval of the EIA
by the Peruvian government is expected in July 2009.
Surface rights agreements have been reached with the native communities in the area.
Most of the areas are too rocky to serve for agricultural purposes.
June, 2009 10
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1.2 Ownership & History
Mining activities date back from 1968 to 1969, time during which two adits were
developed in the Atenea structure The longest adit is 162 meters long and the second
39 meters long. In 1990 Leopoldo Livschitz staked 900 hectares centered also on Atenea
structure. In 1991 all activities were put on hold. In 1994 the property was declared
abandoned by the Peruvian Ministry of Mines. In 1994 Pangea Goldfields visited the
property and claimed 8,000 hectares. In 1996 exploration began with surface mapping
and trenching, underground sampling, 46 km of magnetic and 48 km of IP geophysics
surveys. Between 1997 and 1998 Pangea performed a diamond drill program with 83
holes from surface and 29 from underground, totaling 12,476 meters.
Barrick Gold acquired Pangea Peru S.A. in the year 2000. Initial property acquisition by
Andean American Mining Corp. (Andean American) entailed 5,800 hectares in early
2005. On September 9, 2005, Andean American signed an Option Agreement with
Minera ABX Exploraciones S.A (a subsidiary of Barrick Gold in Peru) to acquire a 100%
interest in the Victoria Project (now called Invicta Property). Andean American
independently acquired an additional 32,000 hectares bringing the total land position
for this project to 41,500 hectares which are now 100% owned by Invicta Mining Corp.,
a subsidiary of the Andean American Mining Group.
1.3 Regional and Local Geology
The coastal batholith is the main lithological feature along the coast of Peru. It lies
parallel to the continental margin. The batholith is divided into several complexes, one
of which is the Huaura plutonic complex, divided into diverse plutons (Santa Rosa,
Paccho, etc). These plutons are mainly composed of tonalite, diorite and granodiorite.
The age of the Batholith is Lower Cretaceous to Middle Upper Cretaceous (Cobbins,
1973).
Marine volcanics of the Casma Formation outcrop west of the batholith and are mainly
composed of massive andesite and epidotized pyroclastics. The Casma Formation is of
June, 2009 11
FEASIBILITY STUDY
Lower to Mid-Cretaceous Age. Some remnants of this formation are present in the
northern part of the Invicta Property (Cobbins, 1973).
Sediments, quartzite, sandstone and limestone of the Goyllarisquizga Group were

deposited in the Lower Cretaceous. These rocks are severely faulted and folded and are
host to base metal vein and replacement deposits in central Peru.
The Calipuy volcanics were deposited during the Tertiary (Miocene) over an erosional
surface of the Goyllarisquizga Group and the volcanics of the Casma Formation. This
group is mainly composed of andesites and tuffs of intermediate to felsic composition. A
conglomerate is observed at the base of these volcanics
Calipuy Group is crosscut by dioritic and andesitic porphyries that have introduced the
mineralization to the volcanic dominion along elongated structures that show lengths of
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Observation and data suggest multiple phases of mineralization. Two phases of

gold-silver plus base metal mesothermal type mineralization exist with a late-phase of
gold-silver plus copper vein type epithermal mineralization. The mesothermal
association is composed of pyrite, chalcopyrite and alteration minerals, such as epidote.
Chlorite and quartz have a wide distribution from the porphyries to the volcanic host
rocks, over long strike distances in the structures. This is named Family 1. A transitional
and mostly epithermal mineral association composed by pyrite, chalcopyrite, sphalerite,
galena and alteration minerals as quartz, pervasive chalcedonic silica, specularite and
additional chlorite and epidote comprises Family 2 and, from the high grade ore, shoots
overlapping Family 1. Both show breccias textures.
A third association, and final paragenetic stage, was introduced to the structures as
additional native gold, electrum, native silver, native copper, euhedral quartz and calcite
filling veinlets and microveinlets cross cutting the families deposited before. This
characteristic epithermal association is named Family 3 and frequently shows supergene
oxidation including free gold and silver.
June, 2009 12
FEASIBILITY STUDY
For surface drilling, the size of the core varied from HQ to NQ while XRT was used for
underground drilling. For each hole, RQD data was gathered over the total length, while
density tests were only done in the mineralized zones. CIMM Perù S.A assayed a total of
3,313 samples. Most of the ore zones were re-assayed by Bondar & Clegg.
As of October 2006 to the present, Andean American has completed an additional 48

diamond drill holes for a total of 14,200 m. Most of the drill holes were infill drill holes
and some were for exploration purposes.
1.4 Resources
The mineralogical associations are typical of low sulphidation ore deposit. To date at
least 5 mineralized systems have been identified on the Invicta Project: Atenea, Yurac
Punta, Zone 8, Azulmina and Flor de Loto. The most studied is the Atenea System where
7 structures have been identified: Atenea, Pucamina, Dany, Manuel, Zone 3, Zone 5 and
Zone 7. Andean American has performed 44 km of geophysics survey (IP and Magnetics)
over this system and new areas have been identified below the surface.
Current resource estimates are from the NI 43-101 Invicta Technical Report filed on
SEDAR and dated August 29, 2008, which includes a measured and indicated resource of
7,903,000 million tonnes grading 2.11 g/t Au, 19.1 g/t Ag, 0.52% Cu and inferred
resources at 11,695,000 million tonnes grading 1.22 g/t Au, 10.1 g/t Ag and 0.27% Cu.
The measured and indicated resource of 7,903,000 tonnes has been placed by G.
Lokhorst, P.Eng., of The Lokhorst Group Ventures Inc. in the probable mineral reserve
category in this feasibility study by demonstrating the economic viability of mining this
mineralized structure. By definition a ‘probable mineral reserve’ is the economically
mineable part of an ‘indicated’ and, in some instances, ‘measured mineral resource’
where adequate information on mining, processing, metallurgical and other relevant
factors have demonstrated, at the time of reporting, economic extraction can be
justified (CIM standards on mineral resources and reserves, August 20, 2000).
June, 2009 13
FEASIBILITY STUDY
1.5 Quality Control
The objective of Quality Assurance and Quality Control (QA/QC) programs on

exploration projects is to ensure that data from sampling, assaying, and recording of
geological observations are of high integrity and can be relied upon. These programs are
set up early in a project and adhere to standards that are high enough to ensure that the
accuracy and precision of the sampling and analytical process are at an acceptable level.
The Quality Assurance and Quality Control (QA-QC) program of Invicta follows a series of
integrated steps, each with a set of operating guidelines and checks to ensure data
reliability. The program is designed to ensure that assay results are accurate and precise
for the material being investigated (for a full description of the QA/QC program refer to
the filed NI 43-101 report of August 2008).
1.6 Mine Design
The geometry of the mineralization has dictated the mining methods. Some 60% of the
mineral reserves have widths greater than 4.0 meters; 23%, between 2 to 4 meters; and
7%, between 0.8 to 2.0 meters. The mining methods, as designed by Minconsult, are
sublevel stoping, cut and fill, and shrinkage, respectively. The remaining 10% will be
mined by open pit.
1.7 Metallurgy Testing and Design
In 1998 and 1999, Lakefield Laboratory Ltd. performed tests on Families 1 and 2,
producing average head grades of 4.12 g/t Au, 36.9 g/t Ag, 1.29% Cu, 0.92% Pb and
1.87% Zn. Metallurgical testing comprised crushing, grinding and gravimetric recovery
by using a Knelson concentrator; and classification and selective flotation concentration.
In the gravimetric process, recoveries of 61.4% gold and 4.8% silver were obtained. The
selective flotation produced three products: concentrates of copper averaging 26.9% Cu
and 385 g/t Ag, concentrates of lead averaging 63.2% Pb and 571 g/t Ag, and
concentrates of zinc averaging 59.2% Zn.
June, 2009 14
FEASIBILITY STUDY
Between 2005 and 2008, Andean American performed additional testing at local
laboratories including Act Labs del Peru, Laboratorio Plenge Ltda, ABR Minería SAC, ED &
ED Ingeniería, Universidad Nacional de Ingeniería, Knelson, SGS and Met-Solve labs.
Optimized recovery tests by these local laboratories indicated greatly improved
recoveries. Testing of ore has indicated recoveries of gold by gravimetric plus bulk
lixiviation in a range from 78% to 94%, depending on the grade of ore and the
treatment. For silver, the recovery ranges from 50% to 89%; for copper, the recovery
ranges from 50% to 75%.
1.8 Reserves and LOM (life of mine)
A sensitivity analysis was performed using different metal prices. Using the following
metal prices generated a cut off ore value of 24 USD/t: 650 USD/oz Au, 13.75 USD/oz
Ag, 3.25 USD/lb Cu, 0.85 USD/lb Pb, and 0.90 USD/lb Zn. The probable mineral reserve
of 7.9 million tonnes has average concentrations of 2.1 g/t Au, 19.1 g/t Ag, 0.52% Cu,
0.38% Pb and 0.30% Zn.
The optimum production rate for the 7.9 million tonnes to be mined has been
determined to vary from 3,000 t/d to 5,000 t/d. The production rate for Year 1 will be
3,000 t/d, for Year 2 it will be 4,000 t/d, for Years 3, 4 and 5 it will be 5,000 t/d. The life
of mine (LOM) at these mining rates will be 5 years. MINCONSULT consultancy prepared
a mining plan (development, preparation and exploitation) to satisfy this schedule,
which consists of a detailed plan for the first 18 months and a general plan for the five
years production.
1.9 Products Schedule and Commercialization
The sulfides concentrates production plan is shown in Table 1.1.
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Table 1.1: Sulfides Concentrates Production Plan
Year 1 2 3 4 5 Total
Cu (lb) 11,829,224 4,661,406 6,060,369 7,366,862 11,553,979 41,471,840
Pb (lb) 4,390,177 8,275,010 151,509 0 1,482,317 14,299,014
Zn (lb) 1,592,771 2,402,677 1,596,386 0 0 5,591,835
The delivery of the concentrates from the mine to the CORMIN warehouse located in El
Callao seaport, in Lima, is 30 USD/t for copper. All the metals payments shall be paid at
the official London Mine Exchange (LME) prices as published in the Metal Bulletin during
the quotation period.
The gravimetric concentrates production plan is presented in Table 1.2.
Table 1.2: Gravimetric Concentrates Production Plan
Total Au (oz) 79,655 108,153 148,394 116,796 47,724 500,722
Total Ag (oz) 1,021,122 523,225 465,581 582,117 623,007 3,215,052
Procesadora Sudamericana offered the best contract for smelting and refining Invicta’s
ore. The cost proposed is 9 USD/kg (without I.G.V. tax) for either gold or silver received
after smelting. The time frame is 2 working days after receipt of product from the mine.
The recovery process is 99.75% Au and 99.00% Ag. The product results in a refined
metal grade of 99.98% for both precious metals. To sell the products in the local market
would cost 0.39% of the gold prices in the market (without I.G.V. tax) and for silver 3%
of the market price (without I.G.V. tax).
1.10 Processing and Project Development
1.10.1 Processing Plant
The Basic Conceptual Engineering for the concentrator plant was prepared by GOLDEX.
This plant is designed for production of 5,100-t/d. The plant includes areas for crushers,
pre-concentrators, grinders, flotation, thickeners, filters and tailings disposal for poly-
metallic ore, which contains gold, silver, copper, lead and zinc. The crushing area
June, 2009 16
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includes primary, secondary and tertiary crushing with ample storage between the
crushing stages and between the crushing and pre-concentrator area. There is a 20,000-
tonne capacity stockpile ahead of the crushing area.
The pre-concentrator area contains continuous Knelson gravimetric concentrators. The

addition of micron tables will be considered depending on tests underway at the time of
processing. The grinding circuit includes rod and ball mills. There are two flotation
circuits. The bulk flotation of lead/copper and rougher scavenger zinc will be in
cylindrical flotation cells, while the cleaning and separation stages will also be in
cylindrical cells, but of lower capacity. The flotation system is designed for high, medium
and low-grade ore operation. The thickening of concentrates will be made using
conventional high rate thickeners and the filtrate will be concentrated further with
vacuum disc filters. Copper, lead and zinc concentrates will be produced.
For tailings disposal, two “Ultra Sep” (ultra high rate thickeners) will be used and the
solids will be further concentrated with four vacuum disc filters. The dry tailings will be
conveyed to the geo-membrane lined tailings disposal site. The recovered water, which
will be about 85% of the total consumption, will be re-circulated to the concentrator
plant. The total consumption for the process is approximately 200 litres/second.
1.10.2 Ore Haulage System
The ore will be transported from the mine to the concentrator plant on an underground
mine conveyor system which will daylight above the plant site at elevation 3050 m.
From here the ore is placed on a concrete lined chute on surface to an elevation of
2900 m, at which point the ore is loaded unto 36” conveyors, taking it to a hopper at the
plant site at elevation 2380 m.
1.10.3 Energy Supply
The power supply for the project is the 220 kV national power grid. Invicta power
demand will be 4,776 kW in the first year of operation, 5,555 kW in the second year, and
at the design capacity of 6,762 kW in the third year. The project will draw power from
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the national grids through the Huacho substation where it is transformed to 66 kV and
fed to the Andahuasi substation through a 34 km transmission line. The new 66 kV
Invicta power line will start at this point and will be 29 km long, terminating at the
concentrator plant substation. The substation will transform the voltage to 10 kV for the
bus bar from which the various services will be taken through transformers. Invicta at
present is negotiating the power supply contract with EDEGEL for a rate, including
transmission costs and line losses, of 0.059 USD/kWh.
1.10.4 Water Supply
The concentrator plant water supply is a combination of reclaimed water from the
processing plant and fresh water, which will be taken from a well that has been drilled
adjacent the Huaura River. CESEL engineers investigated the various alternatives and
selected the location of this well using an electric geophysics survey. The well was
subjected to a three-day test to prove its capacity to be in excess of 50 l/sec. The system
design includes a submersible pump within the well and a receiving settling tank from
which the water is pumped, by a series of three pumps, to the make up water storage
pond at the concentrator plant. From the storage pond, five smaller pumps in series will
pump make up water to the mine. The engineering report supporting the make-up
water lines includes hydraulic, hydrological, geological, hydro-geological, mechanical
and electrical aspects.
1.10.5 Access Road
There are two new roads planned for the project. One is to be built from the plant to
Paran with improvements made to the existing road from Paran to the mine. The second
will start at the main road, which connects Sayan with Huarochiri, will branch off at
Choques and end at the concentrator plant.
1.10.6 Environmental Study and Legal Permissions
The project engineering and legal departments together with CESEL engineers prepared
and submitted the “Environmental Impact Assessment” to the Ministry of Energy and
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Mines on June 18, 2008. The project will meet or exceed industry standards in
environmental protection and in establishing good relations with the communities
around the Invicta site. Precautions will be taken during the construction and operating
stages of the project to minimize the impact on the surrounding communities and
environment in general. At the end of the project, the equipment will be removed, the
buildings demolished, and the project area returned to as close to the original natural
state as possible. The roads will be left in place to allow future inspections and
additional remediation if and when these would be required.
The project has the Approved Certification of absence of archaeological ruins in the
areas where work will be carried out. The viability approval, certificate 006-2008-MEM-
AAM, was received from Ministry of Energy & Mines Department of Director General of
Environmental Affairs on January 24, 2009.
1.10.7 Social Permission
Good community relations are an important part of a mining operation. Invicta

continues to work with the neighbouring communities, partnering where possible,
improving the local infrastructure, supporting local programs, and offering employment
where practical.
The company has supported local communities to the following amounts:
!" Paran Community Sl. 236,000.00;

!" Lacsanga Community Sl. 205,000.00; and,
!" Santo Domingo Community Sl. 5,000.00.
To date the company has assumed commitments for the following amounts:
!" Paran Community Sl. 200,000.00;

!" Lacsanga Community Sl. 100,000.00 in 2009, and USD50,000.00 annually, when
the mine exploitation begins; and
!" Santo Domingo Community USD 50,000.00 annually when the exploitation mine
starts up.
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1.11 Operating and Capital Costs
Cost estimates were prepared jointly by Invicta engineers, MINCONSULT for mine
development, GOLDEX for the concentrator plant and CESEL Engineers for the power
and water lines.
The mine and plant costs have been predicated on the Life Of Mine operating mining
plan of 5 years, with mine production rates of 3000 t/d in Year 1, 4000 t/d in Year 2, and
5000 t/d in Years 3, 4, and 5.
The average operating cost has been estimated to be 23.82 USD/t. When including
transportation cost of concentrates, treatment charge, refining and penalties, the total
average operating cost will be 28.92 USD/t.
The capital expenditures are estimated to be USD 65.3 million, which, with the proposed
mining plan, will be recovered in the first year of operation.
1.12 Project Schedule
The schedule for the project will cover twelve months. The project includes
construction of the plant and development of the mine, water and power lines, camps,
and roads.
1.13 Conclusions & Recommendations
The mineralized structure of the Invicta Project of Andean American can be mined in an
efficient and profitable way by a combination of underground and open pit mining
methods:
!" The mining methods selected will ensure the greatest recovery of the ore.
!" The 5-year Life of Mine (LOM) is practical and the most profitable for the
probable reserve of 7.9 million tonnes of ore to be mined.
!" The operating cost for the mine and plant is 28.92 USD/t and the capital cost is
USD 65.3 million.
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!" The sum of 5-years bulk revenue is USD 600.1 million and net profits are
USD 185.3 million, with a gold base price of USD 900/oz and copper base price
of USD 2.00/lb.
!" Detailed monthly and quarterly mining plans for Year 1 are to be generated.
!" An infill underground diamond drill program is recommended to upgrade the
bulk of the inferred resources to an indicated category in the Atenea, Pucamina
and Dany mineralized structures.
Stanford Group-Stanford Consulting Peru SRL performed a Financial Analysis based on
the following base case parameters (Table 1.3).
Table 1.3: Base Case Metal Prices

Year 1 Year 2 Year 3 Year 4 Year 5
Au USD/oz 921 845 864 760 600
Ag USD/oz 16 15.9 14.42 13.47 11.53
Cu USD/lb 3.28 3.02 2.41 2.25 2.05
Pb USD/lb 0.81 0.79 0.65 0.63 0.52
Zn USD/lb 0.94 1.04 1.05 0.89 0.7
Stanford conclusions:
1. Year 1 EBITDA/Sales ratio is 72.3%, decreasing over time due to change in

mineral content and decline of prices.
2. Average EBITDA/Net Investment ratio is above 158% during the first year of
operation.
3. 5-year Average return of investment of 67.8%.
4. The Stanford Net Present Value (11% discount rate) of the 5-year free cash flow
net of debt amortization amounts to USD 159 million in base case scenario.
5. Invicta Project’s NPV remains positive at higher discount rates.
6. When price levels are 20% below the base forecast the NPV for shareholders
remains USD 98.90 million and the IRR of the project at 72%.
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7. Invicta would remain a profitable project even if the estimated net investment
rises up to USD 90 million.
8. For every 5% change in the operating costs of Invicta the NPV changes
approximately USD 5 million.
9. When the operating costs are 20% above the estimated value the NPV for
shareholders is calculated as USD 137.65 million.
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2 AUTHOR CERTIFICATES
2.1 Guy Lokhorst, P. Eng.
I, Gijsbertus Lokhorst of the City of Victoria in the Province of British Columbia, do hereby
certify that:
1. I am a mining engineer with The Lokhorst Group, 4124 Holland Ave., Victoria BC
2. I am a member of the Association Professional Engineers and Geoscientists in the
Province of British Columbia - Registration Number 8454.
3. I am a graduate of the University of British Columbia (Bachelor of Applied Science,
1961).
4. I have practiced my profession as a geologist and mining engineer for 43 years in Canada
and the United States of America. I have completed investigations on coal and mineral
properties on behalf of public companies.
5. I visited Invicta project site and Lima, Peru, office from May 7th through May 14th, 2009,
inclusive.
6. I personally have reviewed the data referenced in this feasibility report.
7. In addition to information collected by me, in preparing this report I relied on the
original records of the Invicta property, and reviewed and modified wherever necessary.
8. I have no direct or indirect interest in any of Andean American Mining Corp. and the
Invicta Property, nor do I expect to acquire any such interest.
9. I have not been restricted in any way in my access to the Invicta Property, or to persons,
information, data or documents that I consider relevant to this report.
10. As at the date of this certificate, I am not aware of any material fact or material change
not reflected in this report, the omission to disclose which would make this report
misleading.
11. Andean American Mining Corp. is hereby given permission to reproduce this report, or
any part of it, in a prospectus, offering memorandum or other documents as may be
required by regulatory authorities or public stock exchanges, provided however, that no
portion may be used out of context in such a manner as to convey a meaning different
from that set out in the whole.
Dated at Victoria, British Columbia, this 30th day of June 2009.
Signed “G Lokhorst”
Gijsbertus Lokhorst
Original document with professional stamp.
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2.2 Victor Jaramillo, P. Geo.
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2.3 Les Tarnai, P. Eng.
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2.4 Rose Masias, MSc
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3 BACKGROUND
3.1 History
Exploration activities date back from 1968 to 1969, during which two adits were
developed, 162 meters long and 39 meters long. In 1990, Mr. Leopoldo Livschitz staked
an area of 900 hectares centered in the Atenea Vein. Work was put on hold in 1991 and
the property was declared abandoned in 1994 by the Department of Mines. In 1994
Pangea Peru S.A. geologists visited the property and in 1995 Pangea Peru S.A. (Pangea)
staked the property, a total of 12,500 hectares.
Between July and December 1996 Pangea Peru S.A. initiated the reconnaissance of the
Victoria Project (now called the Invicta Property) with trench channel sampling over the
main mineralized zones: Zone 1 called the ¨Atenea Vein¨, Zone 2 called the ¨Pucamina
Vein¨, Zone 3 called the ¨Juan Vein¨, Zone 4 called the ¨Dany Vein¨, and Zone’s 5, 6 and
7. Assays confirmed the occurrence of gold in most of these zones. Val d´Or Geophysics
completed an induced polarization (IP) and magnetic surveys over a total of 43 line-
kilometres. Pangea continued trench sampling and construction of the access road from
the community of Paran to the Invicta Camp.
During 1997 and 1998, a 12,400 meter diamond drill program was completed by Pangea
as well as detailed geological mapping, a stream sediment geochemical survey, and a
resource calculation. Barrick Gold acquired Pangea Peru S.A. and its entire worldly
property package in 2000.
On September 9, 2005, a subsidiary of Andean American Mining Corp., Andean

Explorations SAC (which subsequently changed its name to Invicta Mining Corp SAC) and
Minera ABX Exploraciones SA (a subsidiary of Barrick Gold Corp.) entered into an Option
Agreement to acquire 100% interest in the Victoria Project (now called Invicta Property)
On March 30, 2006 the title for the Invicta El Misti Gold SAC transferred claims and
mining concessions to Andean Explorations SAC (both subsidiaries of Andean American
Mining Corp. in Peru).
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Later on April 4, 2006 Andean exercised the Option from ABX and by doing so the
project area then comprised 16,900 hectares, of which 3,700 hectares were under
option agreement from Barrick Gold Corporation (ABX in Peru). Subsequent to
exercising the Option, ANDEAN EXPLORATIONS acquired independently additional
mining claims.
Besides the shares already transferred to ABX, the following obligations remained at the
time:
!" Pay ABX a 1% NSR capped at 1 million US Dollars (USD 1,000,000.00) on all
mineral produced and transferred from any and all of the mining rights
comprising the Project. Andean will have the option to eliminate this obligation
at any time by paying ABX USD 1,000,000.00 cash.
!" Pay ABX USD 100,000.00 cash yearly as advanced royalty payments, starting
from the first anniversary considered since the Option exercise and until
production from the mining rights comprising the Project starts.
!" Pay ABX USD 50,000.00 cash at the end of each quarter beginning with the
commencement of production from any, some or all of the mining rights that
comprise the Project and for 16 quarters. Therefore, the amount to be paid in
total according to this clause will be USD 800,000.00. Andean will be able to pay
ABX the USD 800,000.00 at one time without penalties and at any time after
commencement of said production.
To date, Andean American has paid ABX USD 200,000 cash of the NSR with USD 800,000
cash remaining to be paid. The Invicta Property currently comprises 41,500 hectares.
As per the Option Agreement ABX will have a back-in right so that it can acquire up to
51% of the Project if more than 2.0 million ounces of gold (not gold equivalent) are
discovered and converted into proven or probable reserves as per CIM reserve
calculation specifications.
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3.2 The Property
The Invicta Property is comprised of 21 mining concessions and 30 claims, and

comprises a total area of 41,500 hectares as per the following schedule in Table 3.1. All
mining claims and concessions listed in Table 3.1 and shown in the map of Figure 3.1 are
in good standing. In Peru, Mining Concessions and Claims do not have expiry dates. They
are in good standing as long as the yearly fees are paid to the Ministry of Mines.
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Table 3.1: Concessions and Claims of Invicta Property

N o. N am e A re a ( h e c t a r e s ) C la i m N o . T y pe
1 VIC T O R IA U N O 1 ,00 0.00 10 33 41 95 C o n c e s s io n
2 VIC T O R IA D O S 40 0.00 10 33 62 95 C o n c e s s io n
3 VIC T O R IA T R E S 90 0.00 10 33 57 95 C o n c e s s io n
4 VIC T O R IA C U AT R O 40 0.00 10 19 71 96 C o n c e s s io n
5 VIC T O R IA S IET E 1 ,00 0.00 10 23 11 96 C o n c e s s io n
6 IN V I C T A I 1 ,00 0.00 10 31 29 05 C o n c e s s io n
7 IN V I C T A II 1 ,00 0.00 10 31 30 05 C o n c e s s io n
8 IN V I C T A II I 1 ,00 0.00 10 31 31 05 C o n c e s s io n
9 IN V I C T A IV 1 ,00 0.00 10 31 32 05 C o n c e s s io n
10 IN V I C T A V 90 0.00 10 31 33 05 C o n c e s s io n
11 IN V I C T A V I 60 0.00 10 31 34 05 C o n c e s s io n
12 IN V I C T A V I I 30 0.00 10 83 68 05 C o n c e s s io n
13 IN V I C T A V I I I 80 0.00 10 33 63 05 C o n c e s s io n
14 IN V I C T A IX 80 0.00 10 33 64 05 C o n c e s s io n
15 IN V I C T A X 90 0.00 10 33 65 05 C o n c e s s io n
16 IN V I C T A X I 1 ,00 0.00 10 33 66 05 C o n c e s s io n
17 IN V I C T A X I I 60 0.00 10 33 67 05 C o n c e s s io n
18 IN V I C T A X I I I 1 ,00 0.00 10 16 94 06 C o n c e s s io n
19 IN V I C T A X I V 1 ,00 0.00 10 16 95 06 C o n c e s s io n
20 IN V I C T A X V 1 ,00 0.00 10 16 96 06 C o n c e s s io n
21 IN V I C T A X V I 30 0.00 10 16 97 06 C o n c e s s io n
22 IN V I C T A X V I I 1 ,00 0.00 10 59 69 07 C la im
23 IN V I C T A X V I I I 1 ,00 0.00 10 59 70 07 C la im
24 IN V I C T A X I X 1 ,00 0.00 10 59 89 07 C la im
25 IN V I C T A X X 1 ,00 0.00 10 59 90 07 C la im
26 IN V I C T A X X I 50 0.00 10 60 19 07 C la im
27 IN V I X T A X X II 80 0.00 10 60 20 07 C la im
28 IN V I C T A X X I I I 1 ,00 0.00 10 62 23 07 C la im
29 IN V I C T A X X I V 1 ,00 0.00 10 62 24 07 C la im
30 IN V I C T A X X V 1 ,00 0.00 10 62 25 07 C la im
31 IN V I C T A X X V I 90 0.00 10 00 27 08 C la im
32 IN V I C T A X X V II 80 0.00 10 00 28 08 C la im
33 IN V I C T A X X V II I 80 0.00 10 00 29 08 C la im
34 IN V I C T A X X I X 60 0.00 10 00 30 08 C la im
35 IN V I C T A X X X 80 0.00 10 00 31 08 C la im
36 IN V I C T A X X X I 50 0.00 10 00 32 08 C la im
37 IN V I C T A X X X I I 1 ,00 0.00 10 00 33 08 C la im
38 IN V I C T A X X X I II 1 ,00 0.00 10 00 34 08 C la im
39 IN V I C T A X X X I V 80 0.00 10 00 35 08 C la im
40 IN V I C T A X X X V 1 ,00 0.00 10 00 36 08 C la im
41 IN V I C T A X X X V I 80 0.00 10 00 37 08 C la im
42 IN V I C T A X X X V I I 1 ,00 0.00 10 00 38 08 C la im
43 IN V I C T A X X X V I I I 90 0.00 10 00 39 08 C la im
44 IN V I C T A X X X I X 90 0.00 10 00 40 08 C la im
45 IN V I C T A X L 90 0.00 10 00 41 08 C la im
46 IN V I C T A X L I 60 0.00 10 00 42 08 C la im
47 IN V I C T A X L I I 60 0.00 10 00 43 08 C la im
48 IN V I C T A X L I II 60 0.00 10 00 44 08 C la im
49 IN V I C T A X L I V 60 0.00 10 00 45 08 C la im
50 IN V I C T A X L V 60 0.00 10 00 46 08 C la im
51 IN V I C T A X L V I 60 0.00 10 00 47 08 C la im
T O TAL = 41 ,50 0.00
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Figure 3.1: Map of Concessions and Claims
3.3 Property Location, Service Features & Biophysical Environment
The Invicta project is located in the central-western part of the Department of Lima,
Province of Huaura, in the Districts of Paccho and Leoncio Prado
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The Project is accessible from the capital of Peru, Lima, by PanAmerican Highway north
to Huaura (160 km), Highway 16 east to Sayan (45 km), and on hard surfaced road via
Huamboy to the Invicta Property (33 km). The Invicta Property location is shown in
Figure 3.2.
Figure 3.2: Location of Invicta Property
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Temperatures in the summer months reach up to 34° Celsius and during winter 5°
Celsius. The climate is semi-arid most of the year with little vegetation, mainly small
plants and cacti. The topography is rugged with deep V shaped valleys cutting through
the Andes. The average elevation in the project area is 3600 meters above sea level. The
rainy season runs from December to March, with annual rainfall of 25 to 40 centimeters.
There are several small springs supplying water 12 to 15 kilometers to the East of the
Atenea Vein. The Huaura River is located in the lower lands 7.5 kilometers to the west of
the property.
Power supply and trained mining personnel are available from the town of Sayan.
Surface rights agreements have been reached with the native communities in the area.
Most of the areas are too rocky to serve for agricultural purposes.
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4 GEOLOGY
4.1 Regional Geology
The Coastal Batholith is the main lithological feature along the coast of Peru. It lies
parallel to the continental margin. The Batholith is divided into several complexes, one
of which is the Huaura plutonic complex, divided into diverse plutons (Santa Rosa,
Paccho, etc). These plutons are mainly composed of tonalite, diorite and granodiorite.
The age of the Batholith is Lower Cretaceous to Middle Upper Cretaceous (Cobbins,
1973).
Marine volcanics of the Casma Formation outcrop west of the batholith and are mainly
composed of massive andesite and epidotized pyroclastics. The Casma Formation is of
Lower to Mid-Cretaceous Age. Some remnants of this formation are present in the
northern part of the Invicta Property (Cobbins, 1973).
Sediments, quartzite, sandstone and limestone of the Goyllarisquizga Group were

deposited in the Lower Cretaceous. These rocks are severely faulted and folded and are
host to base metal vein and replacement deposits in central Peru.
The Calipuy volcanics were deposited during the Tertiary (Miocene) over an erosional
surface of the Goyllarisquizga Group and the volcanics of the Casma Formation. This
group is mainly composed of andesites and tuffs of intermediate to felsic composition. A
conglomerate is observed at the base of these volcanics (see Figure 4.1).
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Figure 4.1: Invicta Property Regional Geology Map
The structural domain is directly related to the Andean Orogeny. The main orientations
are 055°, 110° and 130°. These trends are associated to the strikes of thrust faults and
transform faults associated with this event.
The regional stratigraphy is presented in Table 4.1: Regional Stratigraphy.
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Table 4.1: Regional Stratigraphy
4.2 Property Geology
The Invicta property is underlain by diorite, tonalite and granodiorite of the Paccho
intrusive (Coastal Batholith) overlain by a complex assemblage of volcanic to sub-
volcanic units of the Tertiary Calipuy Group (Figure 4.1).
Diorites and granodiorites cover the southwestern corner of the Victoria 1 claim and
most of the western half of the claim blocks (Figure 4.2). They are massive and generally
altered by weak to moderate propyllitic alteration with minor disseminated pyrite. In
the mineralized area, a zone of strong clay alteration is observed close to surface and
grades into propyllitic alteration at a depth of apparently less than 30 meters. This clay
alteration may be due to weathering of sulphides and of supergene origin. It could also
be related to a different hydrothermal event superimposed on the known mineralization
or a remnant of the lower portion of the epithermal environment eroded.
The volcanic rocks consist of mafic “flows” interbedded with tuffs and possible debris
flows, overlain by a diatreme-flow-dome complex, including several phreatic to phreato-
magmatic breccias and associated domes and tuff breccias. Flow banded felsic dykes,
previously described as vertically dipping ignimbrites; appear to cut all previously
mentioned units.
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Figure 4.2: Invicta Property Geology
The mafic “flows” are generally massive, fine grained, and locally finely porphyritic.
These rocks were mainly observed in the western part of the property surrounding the
dioritic intrusion. Some holes drilled in Zone 4 intersected intervals of this unit within
the diorite-granodiorite intrusion. These zones possibly represent feeder dykes cutting
through the intrusion. This unit is also described in the footwall and less frequently in
the hanging wall of the Atenea Structure.
The evidence for the dome diatreme complex is visible both on surface and in the core.
Although a diatreme pipe has not observed, a number of phreato-magmatic breccias
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cutting dome material and the mafic “flows” were observed on surface and in the core.
These breccias are characterized by milled matrix breccias hosting polymictic fragments
ranging from a few millimetres to several tens of centimetres grading into more
monolithic “crackle” breccias with very little matrix. In the Atenea Structure the
mineralization appears to be cutting through a pre-existing phreato-magmatic breccia
dike, often hard to discern due to strong alteration and veining.
The majority of what was previously mapped as crystal tuff or porphyritic andesite is
more likely flow-dome material. Both the dome and breccias are generally weakly
altered to weak clay and/ or weak to moderate propylitic alteration. Almost ubiquitous
is hematite staining, usually affecting the matrix and giving the rock a purple to red
coloration.
The large volume of poorly sorted and crudely bedded fragmental units are typical tuff
breccias. These include both rounded and angular fragments ranging from a few
millimeters to several tens of centimeters. In an area to the east of the Atenea
Structure, this unit locally hosts moderately to strongly siliceous fragments. This silica
alteration is massive and could have been related to low level, low temperature
hydrothermal activity. Subsequent phreatic activity destroyed these units and
incorporated them into the ejecta. A few fragments were possibly derived from the
sedimentary basement. The alteration within these rocks is similar to that described for
the dome and breccia units and mainly restricted to hematite staining and weak clay.
The unit mapped as ignimbrites or welded tuff is definitely not a pyroclastic unit. When
observed in the field, it clearly cuts the other units and generally dips close to vertical.
The presence of locally well-developed flow banding, a very common feature of rhyolitic
dykes, may have been confused for bedding. This unit appears to be a late feature and
could even be post mineral. It is generally weakly altered to clay and/ or silica and
epidote. These dikes range from aphanitic to fine grained, and are locally finely
porphyritic, generally when of larger size.
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Two large masses of this material appear to have been injected along the WNW
trending structure south of the mineralized Atenea Structure. One mass is located just
north of Zone 6. The other is approximately 200 meters east of the southern end of the
Atenea Structure, to the north of the campsite.
This stratigraphic sequence is similar to the Lower Calipuy in the Ancash area which
hosts diatreme-dome complexes with restricted hydrothermal activity and few large
alteration zones. Most of the base metal vein systems in Ancash are considered to have
formed at shallow to moderate depths (in mesothermal to epithermal environments),
and lie within this part of the stratigraphy.
4.3 Property Description
Victor A. Jaramillo of Discover Geological Consultants Inc., referenced in sub-section

4.3.2, describes the property. Section 4.3.1 contains excerpts from the report.
4.3.1 Report by Discover Geological Consultants Inc.

Victor A. Jaramillo, M.Sc.A., P.Geo., a geological consultant with Discover Geological
Consultants Inc., was retained by Andean American Mining Corp. on July 31th, 2008,
with the terms of reference for this assignment consisting of undertaking a geological
review of all exploration work done at the Invicta Property from October 2006 to the
present, particularly in reference to updating the resources estimated by the writer in a
report titled “Invicta Property Technical Report” dated July 24, 2007.
Previously, Mr. Jaramillo visited the Property on February 10th, 2006 (for one day), on
February 21, 2006 (for one day) accompanied by Mr. Lindsay Bottomer (Geological
Consultant) and Mr. Luis Vela, VP Explorations for Andean Explorations (a subsidiary in
Peru of Andean American), and from September 30 to October 2, 2006 (for 3 days), and
from October 16 to the 18, 2006 (for 3 days). From these visits and after reviewing all
available data at the time, a resource infill drill program was recommended in the report
dated July 24, 2007. Mr. Jaramillo has recently reviewed in detail all geological work
completed to date, such as drill data, underground geological information, previous and
current resource data, geochemical data and maps of the property. Most recently on
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August 18, 2008, Mr. Jaramillo was at Andean American’s Lima, Peru office where he
was able to review and verify that a recent resource estimate prepared by Andean
Explorations using DataMine software fully complied with the CIM Definition Standards
for Mineral Resources and Mineral Reserves. As part of due diligence on August 19,
2008 (for one day) the author visited the Invicta Property accompanied by Mr. Andrew
Gourlay, P.Geol.(President of Andean American) and Mr. Luis Vela, VP Explorations for
Andean Explorations in Peru.
With all this recent information, an updated drill database was prepared. New and
updated resource estimation is the focus of this report.
The Invicta Project is located in West-Central Peru in the department of Lima, province
of Huaura, approximately 250 kilometers by road northeast from the city of Lima, Peru.
The Invicta Property is comprised of 16 mining concessions and 30 claims held by

Andean American and 5 mining concessions held by Barrick (Minera ABX). It covers a
total area of 41,500 hectares.
The climate is semi-arid most of the year, with little vegetation. The topography is
rugged with deep V shaped valleys. Glacial springs supply water approximately 12 to 15
km East of the project.
As far as V. Jaramillo is aware, there are no pending environmental liabilities associated

with the properties and Andean will be obliged to comply with Peruvian environmental
laws and the environmental permitting process as the project advances.
The Invicta mineralized area is located near the contact of the Miocene Calipuy Volcanic
Group overlying the Cretaceous Paccho Intrusive Complex. The volcanic rocks host gold,
silver and base metal mineralized structures at Invicta. The Calipuy volcanics consist
mainly of andesites, lapilli and block tuff and welded tuff (ignimbrite).
The mineralized structures are characterized by pyrite and chalcopyrite followed by

sphalerite and galena. Some chalcocite, digenite after chalcopyrite and bornite are also
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reported, with traces of tennantite. Petrographic studies done by Pangea and Andean
Explorations suggest that gold exists as free grains in fractured quartz and pyrite.
In 1998 Pangea (Aubertin and Diaz, 1998) estimated a resource of approximately

1,700,312 tonnes, grading 6.16 g/t gold, 56 g/t silver and 1% Cu, between the Atenea,
Pucamina and Zones 4 & 6. This resource was estimated using a cut-off grade of 3.0
grams/tonne gold.. Also, at a 1.0 gram/tonne gold cut-off grade, resources had been
estimated at 3,531,871 tonnes, grading 3.58 g/t gold, 33.46 g/t silver and 0.68 % copper.
All of the resources were classified as sulphides (Table 4.2).
Table 4.2: Pangea's Historical Resource Data
The historical estimates in Table 4.2 were made in accordance with the standards in
effect at the time, but such estimates were not compliant with National Instrument 43-
101 (N.I. 43-101). They are reported here for reference purposes only, and should not
be relied upon.
To bring the deposit into compliance, Andean performed a validation work program,
which was later verified by the writer, and completed an updated resource estimate.
Andean initially validated 12 blocks in the Atenea Vein. Andean American obtained
geological and analytical data (assays, widths, areas, bulk densities and re-logging core
data). Although some slight differences were found, in block area, widths and bulk
densities, Andean American determined that there was good correlation with Pangea´s
resource estimate.
The writer divided the mineralization into a mixed type (oxides + sulphides) and a
sulphide type. The bulk of the mineralization in the Atenea Vein (78%) and almost all of
the mineralization in the Pucamina Vein was classified of the sulphide type.
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As of October 2006 to the present, Andean completed an additional 48 diamond drill

holes for a total of 14,200.87 meters. Most of the drill holes were infill drill holes and
some were for exploration purposes.
New underground exploration workings (Adit 3400) to explore the Atenea Structure has
totaled to date approximately 1,200 linear meters. These underground workings have
provided excellent geological information and have assisted in the measured resource
estimation provided in this report.
This report includes an updated resource estimate using geostatistical methodologies

and DATAMINE software (Table 4.3). All estimated updated resources are sulphides. The
tables below provide a summary of the current and updated resources at Invicta.
Table 4.3: 2008 NI 43-101 Resource Estimates
ATENEA STRUCTURE RESOURCES (Inverse Distance Squared)

Type Tonnes S.G. Au g/t Ag g/t Cu % Pb % Zn %
Measured 850000 2.77 2.2 29.48 0.69 0.67 0.54
Indicated 4339000 2.80 1.79 21.32 0.54 0.44 0.37
TOTAL = 5189000 1.86 22.66 0.56 0.48 0.40
INDICATED RESOURCE SUMMARY (Inverse Distance Squared)

Structure Tonnes S.G. Au g/t Ag g/t Cu % Pb % Zn %
Atenea 4339000 2.80 1.79 21.32 0.54 0.44 0.37
Pucamina 1114000 2.54 2.1 6.25 0.26 0.2 0.43
Dany 659000 2.74 0.53 9.28 0.37 0.1 0.14
Ydalia 1 193000 2.69 2.12 26.63 1.00 0.27 0.21
Ydalia 2 184000 2.72 4.65 10.68 0.33 0.33 0.11
Zone 4 564000 2.72 5.49 24.61 0.73 0.15 0.13
TOTAL 7053000 2.10 17.95 0.50 0.34 0.33
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SUMMARY OF MEASURED AND INDICATED RESOURCES

(Inverse Distance Squared)
Type Tonnes S.G. Au g/t Ag g/t Cu % Pb % Zn %
Atenea Measured 850000 2.77 2.2 29.48 0.69 0.67 0.54
Atenea Indicated 4339000 2.80 1.79 21.32 0.54 0.44 0.37
Pucamina Indicated 1114000 2.54 2.1 6.25 0.26 0.20 0.43
Dany Indicated 659000 2.74 0.53 9.28 0.37 0.10 0.14
Ydalia 1 Indicated 193000 2.69 2.12 26.63 1.00 0.27 0.21
Ydalia 2 Indicated 184000 2.72 4.65 10.68 0.33 0.33 0.11
Zone 4 Indicated 564000 2.72 5.49 24.61 0.73 0.15 0.13
TOTAL 7903000 2.11 19.19 0.52 0.38 0.35
INFERRED RESOURCE SUMMARY (Inverse Distance Squared)

Structure Tonnes S.G. Au g/t Ag g/t Cu % Pb % Zn %
Atenea 4079000 2.77 1.22 8.88 0.2 0.24 0.27
Pucamina 1103000 2.54 1.91 8.29 0.17 0.12 0.19
Dany 3124000 2.74 0.26 11.43 0.44 0.52 0.14
Ydalia 1 1334500 2.69 1.04 28.49 0.7 0.11 0.08
Ydalia 2 866000 2.72 0.51 16.17 0.47 0.1 0.24
Zona 4 1188500 2.72 1.29 13.7 0.56 0.26 0.09
TOTAL 11695000 1.22 10.14 0.27 0.24 0.23
4.4 Section References
For detailed analysis of the Invicta Property geology, drilling, mineral resources and
reserves, statistical analysis and other topics, please refer to the full report by Victor A.
Jaramillo, M.Sc.(A), P.Geo., dated August 29, 2008, of Discover Geological Consultants
Inc.
Appendix A contains the Invicta Property Resource Update Technical Report, dated
August 29, 2008, NI 43-101.
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5 MINING
5.1 Mining Methodology
The study and design of mining has been under the direction of Minconsult (Eng. Jaime
Mercado) and by Invicta mining engineers. The Catholic University of Lima, Eng. Jorge
Ramirez and Eng. Jose Ardito performed Geomechanical tests for underground and
surface mining.
The objective of the mine plan is to provide a continuous source of ore to produce
streams of concentrate throughout the mine life, in an economic manner. Target
production rates of ore mined and processed were determined by optimizing
efficiencies in plant performance and mine. Production rates have been set at 3000 t/d
for Year 1, 4000 t/d for Year 2, and 5000 t/d for Years 3, 4, and 5.
The varying width and inclination of the mineralized zone and its stability characteristics
have dictated the mining method. The following true width criteria of the mineralized
zone determine the underground stoping methods are shown in Table 5.1.
Table 5.1: True Width Criteria of the Mineralized Zones

Stoping Method True Width Criteria
Sublevel Stoping true width>6m
Cut and Fill Stoping true width>2m<6m
Shrinkage Stoping true width>0.7m<2M
In addition there will be an open pit mining operation on the Atenea Vein between
elevations 3550 and 3850 m. Only 10% of total production over the life of mine will
come from open pit operations. The average waste to ore ratio is 4.9/1. The waste/ore
ratio in the first year of operation will be as high as 7/1. The open pit waste will be
required for the back filling in ‘cut and fill’ underground stope mining. The underground
fill requirement for stoping in the Atenea veins has been estimated to be 1.24 tonne and
for the Pucamina stopes 0.65 tonne. Another 1.75 tonne will be placed in the open pit,
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while any waste not used for fill underground or open pit could be placed in a waste
dump located at a nearby valley site just northwest of the open pit.
Mining dilution and recoveries are assumed as shown in Table 5.2.
Table 5.2: Mining Dilution & Recoveries

Dilution Recoveries
Open Pit 0.20 m 100%
Sublevel Stoping 1.00 m 90%
Cut and Fill Stoping 0.40 m 90%
Shrinkage Stoping 0.20 m 95%
5.2 Geotechnical Investigations and Assessments
The mineralized zone is located in a regional fault, with presence of clay due to faulting
on both walls. The host rock can be andesitic porphyry which has an RMR that varies
between 60 and 70 and volcanic tuff with an RMR between 50 and 60. At the contact of
the walls and ore there is a fault zone with RMR from 5 to 15. The use of software “The
Mining Method Selection” validated from a geomechanical and economical point of
view the selection of the chosen method of mining.
Table 5.3: Mining Method Selection
Stability
Estimate Mining
Vein Mineralized Hosting Dips
width (m) method
zone rock
Sublevel
Type 1 4.0 – 22 stable stable 65° - 85°
stoping
moderate moderate Ascending
Type 2 1.5 – 4.0 sub vertical
stable stable cut and fill
moderate moderate
Type 3 ~0 - 1.5 sub vertical Shrinkage
stable stable
5.3 Geologic Block Modeling
A geostatistical analysis of all the samples included the construction of a variogram that
in turn resulted in a model. The block model uses geological knowledge of the
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mineralized structure at Invicta. The block size is 3 meters in the “X” axis and 10 meters
in the “Y” and “Z” direction, with sub blocks of 1.5 meters in the “X” direction and 5
meters in the “Y” and “Z” direction. Each block is defined using the “Inverse Distance
Squared” procedure where the value of any point is estimated by a weighted linear
combination of the nearby sample value. The weight assigned to each nearby sample is
inversely proportional to the square of its distance from the point estimated. All
resource blocks are graded with respect to the amount or percentage of metal it was
estimated to contain. The mining engineer, having determined the cost of mining, could
now decide which resource is economically mineable at a chosen mining method.
Please refer to Appendix B for further details.
5.4 Mine Design & Layout
5.4.1 Open Pit

Open pit mining will function on the Atenea Vein between elevations 3550 and 3850 m
(Figure 5.1). The benches will have a maximum height of 15 meters and will stand at an
angle of 68 degrees. Berms serving as access points along the walls and catchment areas
for loose material coming off the walls will have a width of 3.5 meters. The final pit
slope will be at 59 degrees. Ramps will have a maximum gradient of 10% and a width of
8 meters. The drilling of 6-inch diameter blast holes will be with track-based equipment,
ANFO explosives will blast rock and front-end loaders will load 30-tonne trucks.
The open pit will be mined in 2 phases, OP#1 and OP#2 as shown on Figure 5.3 Waste to
underground stoping areas will be dumped into the waste chute and drawn into the
stopes Ore from the open pit areas will be dumped in the ore pass taking it to the
crusher on the 3400 m level.
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Figure 5.1: Longitudinal View Open Pit
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Figure 5.2: Plan - Atenea Veins, Open Pit
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Figure 5.3: Open Pit Phases, OP#1 and OP#2
5.4.2 Sublevel Stoping

Mining of the Atenea Vein will be Sublevel stoping. This method of mining is a large
production stoping method and is chosen because of this fairly regular ore body with
ore and host rock requiring little support during mine activities. The wide dimension of
the mineralized zone and its steep dip are an advantage to the mining method. The
stopes will be 45 m. high, while leaving pillars of 3 m. The sublevels, 4.5 x 4.0 m., are
driven at midpoint (22.5 m). The starting slot is cut and drawn empty, and the draw
cone cut ahead of the slot, forming a stope undercut. Stope drilling, producing 11.5 cm
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diameter drill holes, is commenced at the lowermost sublevel with long-hole fan drilling.
The cone draw points will be exiting on the haulage level, in this way it will reduce tying
up ore in pillars and reduces development and maintenance costs. The loading levels are
4.5 x 4.0 m to accommodate a 4.6m³ scoop tram. It will require a ramp system in the
footwall for moving the ore from level to level.
Figure 5.4: Sub Level Stoping Schematic
5.4.3 Cut and Fill Stoping

A filled stope is one in which ground support is provided by waste material (Figure 5.5).
The ore body is extracted in small sections that are partly or completely filled before
adjacent ore is extracted. The waste material is to come from the open pit area, blasted
waste material or surface colluvial. Progress in the stope is upward, and supported
openings are extended through the fill. The ore is removed through ore raises, and
waste is moved into the stopes through waste chutes.
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Figure 5.5: Cut and Fill Stoping Schematic
5.4.4 Shrinkage Stopes
This method will be applied in cases where mineralization has been limited to a width of
less than 1.5 m. Progress is upward with draw points exiting on the haulage level. After
drawing the first lift, the stope will be drilled and blasted in lifts of 2 to 3 m, as per
Figure 5.6.
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Figure 5.6: Shrinkage Stoping Schematic
5.4.5 Mine Development
Mine development will consist of driving crosscuts, haulage ways, ramps, ventilation
raises, ore passes, waste chutes, and service raises. The plan is contained in Table 5.4.
Table 5.4: Mine Development

Works Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Dev. And Prep.
6,627 3,040 4,245 5,831 8,279 5,323 33,345
Total (m)
5.4.6 Mine Plan
An economically mineable part of the Indicated and Measured Mineral Resource has
been selected for developing a practical mine plan. Studies of this Probable Mineral
Reserve have dictated a mining plan that spans a period of 5 years through a sequence
of extraction of reserve blocks. Table 5.5 indicates the yearly tonnages of ore mined,
with attending grades.
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Table 5.5: Ore Recovery by Year

Diluted & Au g/t Ag g/t Cu % Pb % Zn %
Recovery Tons
YEAR 1 1,065,991 2.49 39.73 0.79 0.52 0.42
YEAR 2 1,399,755 2.57 17.89 0.42 0.63 0.49
YEAR 3 1,744,300 2.83 13.84 0.44 0.35 0.34
YEAR 4 1,797,502 2.15 13.99 0.44 0.21 0.21
YEAR 5 1,799,609 0.94 16.57 0.59 0.30 0.13
TOTAL 7,807,157 2.14 18.76 0.52 0.38 0.30
For further detailed information, please refer to Appendix B, which contains the
following Tables and Plan:
!" Appendix Table 1 LONG TERM MINING PLAN

!" Appendix Table 2 LONG TERM MINING PLAN BY MINING AREA
!" Appendix Table 3 RESERVE BLOCKS MINED IN YEARS 1 TO 5
!" Appendix Table 4 BLOCK OF MINEABLE RESERVES PER YEAR
5.5 Infrastructure, Equipment & Services
5.5.1 Infrastructure
Scoop tram and haulage trucks will haul the ore transportation inside the mine from the
Atenea Vein stope areas to the ore pass. Access to all levels will be by means of a ramp
system that runs from the 3520 m Level to 3150 m the main transport level. Ore from
the upper stopes of the Atenea Vein will be transported to a crusher on the 3400 m
Level. Subsequently, from the underground crusher location, a 1425 m long conveyor is
placed in a 15 degree inclined ramp that daylights at 3050 m elevation. At this point a
concrete-lined surface chute will carry the ore to a stockpile on elevation 2900 m, and
from here zigzagging in two steps to the plant site on two separate 36” conveyors.
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Figure 5.7: Ore Transportation System From Mine to Plant
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5.5.2 Equipment
The following equipment shown in Table 5.6, will be supporting the mine operation. The
required airflow, in underground workings where the equipment operates, has been
tabulated.
Table 5.6: Equipment

Equipment Power (HP) Quantity Utilization Airflow
(%) cfm m³/min
Scooptram LHD Atlas 200 2 70 29,680 842
Copco ST 1020
Scooptram LHD Atlas 140 2 70 20,776 588
Copco ST 710
Dumper Tamrock EJC 184 1 50 9,752 278
416 - 14 Ton
Simba - Atlas Copco 68 1 70 5,046 143
Jumbo Boomer H104 68 2 50 7,208 204
Atlas Copco
Truck of services 100 2 50 10,600 300
Trucks of services 80 2 40 6,784 192
5.5.3 Ventilation
The mine ventilation based on regulated requirements have been determined as per
“Norms of Mining Security and Hygiene”, Chapter 3, Management of the Mining
Operations, and, Standards of the Mining Operations, Mine Ventilation, Article 204,
Item C.
The required total airflow taking into consideration altitude, personnel, the use of diesel
equipment and ANFO explosives, as well as gas dilution, has been estimated, per level of
daily production, is shown in Table 5.7.
Table 5.7: Required daily Volumetric Air Flow

Mining Rate (t/d) Airflow (cfm)
3000 114,552
4000 200,533
5000 295,416
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A ventilation software program, VentSim 3.9, based on the “Theory for the Solution of
Ventilation, using the Hardy-Cross Method”, will be used to simulate long and short
term mine planning, and possible ways to mitigate poison gas accumulation, as well as
the airflow velocities and pressures.
5.5.4 Water
Water supplying the concentrator plant and the mine will be delivered through pipes
from a well struck near Huamboy, at 1050 m elevation and lifted to a pond at 2400 m,
and from there the water will be further pumped to the mine and stored in a pond at
3950 m. The capacity of the pond will be of 1,500 m3, and will be able to provide water
storage for 72 hours of continuous operation. The estimated average water
consumption for the mine 5 l/s
5.5.5 Compressed Air
Compressed air is required to run conventional mining equipment, such as jacklegs,

jumbo drills, and stopers.
The compressed air requirement is calculated according to the number of pneumatic

machines inside the mine being used simultaneously and losses due to distance from
the compressor. The estimated compressed air requirement per level of daily
production is summarized in Table 5.8.
Table 5.8: Compressed Air Requirements

Mining Rate (t/d) Airflow (cfm)
3000 877
4000 1212
5000 1488
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6 METALLURGY
Testing of ore has indicated recoveries of gold by gravimetric plus bulk lixiviation in a
range from 82.57% to 88.98%, depending on the grade of ore. For silver the recovery
ranges from 66.06% to 77.12%.
The total recovery of gold and silver (gravimetric + bulk lixiviation + selective flotation)
ranges from: 87% to 94% for gold, and 79% to 89% for silver.
In the studies and calculations presented 80% of gold recovery was used for combined
gravimetric recovery and bulk flotation for the first 4 years of operation and 70% for the
fifth year, this being due to the change in ore grade. Recoveries of 50 to 65% for silver
gravimetric and bulk flotation were used, also depending on the ore grade.
The total average recovery for gold used in the metallurgical balances is between 78%
and 90%, and for silver between 60% and 75%.
It has been found that a higher release (regrinding) has a strong impact on the increase
of the gravimetric recovery of gold and silver. However, in the recovery and quality of
Cu, Pb and Zn concentrates, a higher release is not apparent.
Continuing metallurgical tests have indicated that recoveries can be optimized through
the application of micron wave tables and Knelson (CVD-continuous variable discharge)
concentrators. The plant design will be adjusted to incorporate when all of such
improvements have been finalized.
6.1 Testing Summary
The resources of Invicta Mining Corp SAC. are classified in three mineral groups.
Group 1 (Table 6.1) has contents of Au-Ag and Cu which are all recoverable. Pyrite and
chalcopyrite.
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Table 6.1: Group 1 Metallurgy

t Ore g/t Au g/t Ag %Cu %Pb %Zn
2443724 1.37 17.65 0.67 0.13 0.11
Group 2 (Table 6.2) has contents of Au-Ag-Cu-Pb and Zn, all of them recoverable. Pyrite,
chalcopyrite, galena and sphalerite.

4793016 2.47 20.90 0.49 0.54 0.41
Group 3 (Table 6.3) has contents of Au and Ag which are recoverable, with quartz and
some iron oxides.

570416 2.75 5.61 0.10 0.11 0.15
The process of concentration and gravimetric was defined based on the concentration
and gravimetric tests made by Lakefield Canada, for Pangea, in 1998.
6.2 Gravity Separation
The Gravity separation tests were conducted for each ore and the results are
summarized in Table 6.4. In each of the tests the recovery was higher at the coarser
grind.
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Table 6.4: Gravity Test Results

Mozley Test Grind Wt Assay Assay % dist. %dist. Tail Tail Cal. Cal.
Ore Nº min % g/t g/t Au Ag g/t g/t Head Head
Concentrate Au Ag Au Ag Au Au
Atenea 2 2 40 0.05 1265 1168 30.20 1.70 1.59 36.80 2.22 37.40
8 32 0.25 1001 693 61.40* 4.80 1.61 35.20 4.11 36.80
Z-4 3 40 0.04 1384 649 14.30** 0.70 3.46 36.50 4.01 36.70
9 32 0.15 998 551 28.30 2.00 3.87 40.70 5.36 41.50
Pucamina 4 40 0.02 8872 4344 53.10 15.90 1.93 5.20 3.70 60.70
10 32 0.13 2125 1115 63.30 15.00 1.53 8.07 4.29 9.51
Atenea 1 1 40 0.02 2481 1342 8.60 1.30 5.15 19.5 5.65 19.8
(*) High calculated head
(**) Low calculated head
Some of the calculated gold head values varied greatly. The Pucamina was the only ore
possessing gravity recoverable silver.
6.3 Atenea 2 Flotation
The results of the Atenea 2 ore flotation are summarized in Table 6.5.
Table 6.5: Overall Flotation Results

Assays % g/t %Distribution
Test Grind Product Weight Cu Pb Zn Au Ag Cu Pb Zn Au Ag
Nº min %
T2 40 Gravity conc. 0.05 - - - 1265 1168 - - - 30.20 1.70
Cu/Pb 2nd Cl 4.90 24.20 17.20 2.39 24.30 532 91.20 85.20 6.60 53.70 69.70
Conc.
Grav+Cu/Pb 4.96 24.00 17.00 2.36 37.60 538 91.20 85.20 6.60 83.90 71.30
2nd Cl Concs
Cu/Pb Ro 6.93 17.80 13.50 2.81 17.70 427 94.60 94.60 11.00 55.40 79.10
Conc.
Grav+Cu/pb 6.99 17.60 13.40 2.79 27.20 432 94.60 94.60 11.00 85.50 80.70
Ro Concs
Zn 2nd Cl 2.52 0.62 0.13 59.50 0.57 29 1.20 0.30 84.90 0.60 2.00
Conc
Zn Ro Conc 3.38 0.90 0.34 45.20 0.75 47.30 2.30 1.20 86.30 1.10 4.30
Zn Ro Tail 89.96 0.045 0.047 0.053 0.33 6.25 3.10 4.30 2.70 2.70 13.30
Head (assay) 100.00 1.30 0.99 1.77 2.22 37.40 100.0 100.00 100.00 100.00 100.0
T8 32 Gravity Conc 0.25 - - - 1001 693 - - - 61.40 4.80
Cu/Pb 2nd Cl 4.98 23.10 13.50 9.10 22.10 448 89.10 73.20 24.20 26.70 60.50
Conc
Grav+Cu/Pb 5.23 22.00 12.80 8.66 69.40 460 89.10 73.20 24.20 88.10 65.30
2nd Cl Conc
Cu/Pb Ro 7.98 15.40 10.90 18.80 14.80 349 95.10 94.50 80.10 28.60 75.60
Conc
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Assays % g/t %Distribution

Test Grind Product Weight Cu Pb Zn Au Ag Cu Pb Zn Au Ag
Nº min %
Grav+Cu/Pb 8.23 14.90 10.50 18.20 45.10 360 95.10 94.50 80.10 90.00 80.30
Ro Concs
Zn 2nd Cl 0.55 1.90 0.74 50.20 11.30 84.80 0.80 0.40 14.90 1.50 1.30
Conc
Zn Ro Conc 5.14 0.52 0.35 5.96 3.26 51.80 2.10 2.00 16.40 4.10 7.20
Zn Ro Tail 86.88 0.042 0.037 0.077 0.28 5.30 2.80 3.50 3.60 5.90 12.50
Head assay 100.00 1.29 0.92 1.87 4.12 36.90 100.0 100.00 100.00 100.00 100.0
Good results were readily obtained in the initial test but in test T8 the zinc floated in the
copper-lead circuit. Copper-lead separation was performed for this ore. The results
(Table 6.6) confirmed that separations can be successfully achieved. More copper
floated in the Pb rougher in test T2 but this was improved in the Test T8.
Table 6.6: Copper/Lead Separation Results

Assay % g/t %Distribution
Test Grind Product Weight
Nº min % Cu Pb Zn Au Ag Cu Pb Zn Au Ag
T2 40 Overall
recoveries
Pb 1st Cl 0.77 8.13 63.20 0.94 2.16 571 4.80 48.80 0.40 0.70 11.70
Conc
Pb Ro Conc 2.57 19.10 32.30 1.91 11.40 472 37.50 83.70 2.80 13.20 32.40
Pb Rougher 2.34 29.90 0.64 2.91 38.50 597 53.70 1.50 3.80 40.60 37.30
Tail
Cu/Pb 2nd Cl 4.90 24.20 17.2 2.39 24.30 532 91.20 85.20 6.60 53.70 69.70
Conc(Feed)
Stage
Recoveries
Pb 1st Cl 15.62 8.13 63.20 0.94 2.16 571 5.20 57.30 6.20 1.40 16.80
Con
Pb Ro Conc 52.31 19.10 32.30 1.91 11.40 472 41.10 98.20 41.80 24.50 46.40
Pb Rougher 47.69 29.90 0.64 2.91 38.50 597 58.90 1.80 58.20 75.50 53.60
Tail
Cu/Pb 2nd Cl 100.00 24.20 17.20 2.39 24.30 532 10.00 100.00 100.00 100.00 100.00
Conc (Feed)
T8 30 Overall
Recoveries
Pb 1st Cl 0.58 5.33 70.50 0.81 1.60 590 2.40 44.90 0.30 0.20 9.30
Conc
Pb Ro Conc 1.32 12.50 48.80 2.18 10.1 624 12.80 70.30 1.50 3.20 22.30
Pb Rougher 3.66 26.90 0.71 11.60 26.40 38.50 76.30 2.80 22.70 23.40 38.20
Tail
Cu/Pb 2nd Cl 4.98 23.10 13.50 9.10 22.10 448 89.10 73.20 24.20 26.70 60.50
Conc (Feed)
Stage
Recoveries
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Assay % g/t %Distribution

Test Grind Product Weight
Nº min % Cu Pb Zn Au Ag Cu Pb Zn Au Ag
Pb 1st Cl 15.62 8.13 63.20 0.94 2.16 571 2.70 60.80 1.00 0.80 15.30
Conc
Pb Ro Conc 52.31 19.10 32.30 1.91 11.40 472 14.30 95.80 6.30 12.10 36.90
Pb Rougher 47.69 29.90 0.64 2.91 38.50 597 85.60 3.90 93.70 87.80 63.20
Tail
Cu/Pb 2nd Cl 100.00 24.20 17.20 2.39 24.30 532 10.00 100.00 100.00 100.00 100.00
Conc (Feed)
6.4 Z – 4 Flotation
The results of the Z-4 ore flotation are summarized in Table 6.7. Good results were
obtained from this Cu-Au-Ag ore. The lead recovery was low due to the low head grade.
Table 6.7: Overall Z-4 Flotation Results

Assay % g/t % Distribution
Test Grind Weight
Nº min Product % Cu Pb Zn Au Ag Cu Pb Zn Au Ag
T3 40 Gravity Conc 0.04 - - - 1384 649 - - - 14.3 0.7
Cu/Pb 2nd Cl Conc 3.77 23.80 1.30 1.91 66.00 592 83.10 23.90 65.00 61.90 60.80
Grav+Cu/Pb 2nd Cl 3.81 23.50 1.29 1.89 80.40 593 83.10 23.90 65.00 76.20 61.50
Concs
Cu/Pb Ro Conc 6.68 14.40 0.92 1.20 39.80 384 89.30 30.00 72.40 66.20 70.00
Grav+Cu/Pb Ro 6.72 8.53 0.71 0.70 30.20 264 91.00 39.60 72.80 86.60 82.60
Concs
Cu/Pb Ro Tail 93.28 0.12 0.15 0.033 0.84 11.50 10.70 70.00 27.60 19.40 29.30
Head (assay) 100.00 1.08 0.21 0.11 4.01 36.70 100.00 100.00 100.00 100.00 100.00
T9 32 Gravity Conc 0.15 - - - 998 551 - - - 28.3 2.00
Cu/Pb 2nd Cl Conc 4.59 15.20 1.08 1.41 53.40 461 66.50 22.90 56.00 45.70 51.00
Grav+Cu/Pb 2nd Cl 474 14.70 1.05 1.36 83.70 464 66.50 22.90 56.00 74.00 53.00
Concs
Cu/Pb Ro Conc 8.21 11.10 0.85 0.95 35.70 338 86.90 32.20 67.50 54.80 67.00
Grav+Cu/Pb Ro 8.36 10.90 0.83 0.93 53.20 342 86.90 32.20 67.50 83.10 69.1
Concs
6.5 Pucamina Flotation
The results of the Pucamina ore flotation are summarized in Table 6.8. The gold
recovery was 90%, with most collected by gravity. Some silver was also recovered in the
gravity circuit.
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Table 6.8: Overall Pucamina Flotation Results

Assay % g/t % Distribution
Test Grind Weight
Nº min Product % Cu Pb Zn Au Ag Cu Pb Zn Au Ag
T4 40 Gravity Conc 0.02 - - - 8872 4344 - - - 51.30 14.90
Cu/Pb 2nd Cl Conc 0.05 7.05 31.00 5.49 2578 1557 6.10 3.60 1.10 33.60 12.00
Grav+Cu/Pb 2nd Cl 0.07 - - - 4515 2415 - - - 84.90 26.90
Concs
Cu/Pb Ro Conc 3.09 0.21 1.09 0.44 44.70 50.30 11.90 8.30 6.20 38.70 25.90
Grav+Cu/Pb Ro 3.11 - - - 103 78.80 - - - 90.00 40.80
Concs
Cu/Pb Ro Tail 94.79 0.049 0.38 0.22 0.34 3.30 86.90 89.50 93.80 9.00 52.10
Head (assay) 100.00 0.053 0.40 0.22 3.70 6.07 10.00 100.00 100.00 100.00 100.00
T10 32 Gravity Conc 0.13 - - - 2125 1115 - - - 63.30 15.00
Cu/Pb 2nd Cl 0.03 - - - 1784 1379 - - - 14.50 5.00
Conc*
Grav+Cu/Pb 2nd Cl 0.16 - - - 2052 1171 - - - 77.80 20.00
Concs
Cu/Pb Ro Conc 2.29 - - - 46.90 170 - - - 25.10 40.90
Grav+Cu/Pb Ro 2.42 - - - 157 220 - - - 88.40 55.90
Concs
Cu/Pb Ro Tail 97.58 0.036 0.31 0.24 0.51 4.30 - - - 11.60 44.10
Head (calc) 100.00 - - - 4.29 9.51 - - - 100.00 100.00
*Insufficient sample for assay
6.6 Atenea Flotation
The Atenea 1 ore was more difficult to treat than in Atenea 2. The selectivity in the
Cu/Pb rougher between Cu-Pb and zinc was poor. This was evidently caused by soluble
copper (and perhaps lead) activation of sphalerite. See Table 6.9 for results.
Table 6.9: Atenea Overall Flotation Results

A s s a y % g / t % D i s t r i b u t i o n
Test Na CN Z nSO 4 Weight
Nº g/t g/t P r o d u c t % C u P b Z n A u A g C u P b Z n A u A g
T1 25 0 G r a v i t y C o n c 0.02 - - - 2481 1342 - - - 8 .6 0 1.30
Cu/Pb 3rd Cl Conc 1.92 8 .1 7 28.60 28.10 123 333 4 4 .9 3 7 .8 46.00 41.80 32.20
G r a v + C u / P b C l Co n c s 1.94 8 .0 9 28.30 27.80 147 343 44.90 37.80 46.00 50.40 33.60
Cu/Pb Ro Conc 7.24 4 .0 5 14.30 14.40 57.30 193 84.10 71.20 89.20 73.30 70.70
Grav+Cu/Pb Ro Concs 7.26 4 .0 4 14.20 14.40 63.80 197 84.10 71.20 89.20 82.00 72.00
Zn 2nd Cl Conc 0.23 2 .9 7 14.30 2 . 82 34.70 195 2 .0 0 2 .3 0 0.60 1 .4 0 2.30
Z n R o C o n c 3.32 0 .4 3 1 .9 1 0 . 48 5 .6 4 40.80 4 .0 0 4 .4 0 1.40 3 .3 0 6.80
Z n R o T a i l 89.41 0.046 0 .4 0 0 . 12 0 .9 3 4. 6 9 11.90 24.40 9.50 14.70 21.20
H e a d ( a s s a y ) 100.00 0 .3 5 1 .4 5 1 . 17 5 .6 5 19.80 100.0 100.0 100.0 100.0 100.0
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A s s a y % g / t % D i s t r i b u t i o n
Test Na CN Z nSO 4 Weight
Nº g/t g/t P r o d u c t % C u P b Z n A u A g C u P b Z n A u A g
T5 50 500 Cu/Pb 2nd Cl Conc 2.03 10.60 31.90 18.90 165 491 59.70 42.60 29.40 61.60 48.30
Cu/Pb Ro Conc 8.92 3 .5 9 12.90 12.80 51.50 190 88.60 75.70 87.70 84.30 81.90
C u / P b R o T a i l 91.08 0.045 0 .4 1 0 . 18 0 .9 4 4. 1 2 11.40 24.30 12.30 15.70 18.10
H e a d ( a s s a y ) 100.00 0 .3 6 1 .5 2 1 . 31 5 .4 5 20.70 100.00 100.00 100.00 100.00 100.00
T6a 150 500 Cu/Pb 2nd Cl Conc 1.88 10.70 35.70 15.90 226 544 56.80 43.70 24.70 68.70 39.90
Cu/Pb Ro Conc 3.17 6 .6 0 22.30 10.50 137 350 59.30 46.00 27.40 70.00 43.20
Cu/Pb Ro+Scav Concs 5.51 5 .1 9 19.90 15.50 88.40 274 81.00 71.40 70.50 78.70 78.80
Zn 2nd Cl Conc 0.52 2 .6 7 2 .9 0 38.60 52.00 193 3 .9 0 1 .0 0 16.40 4 .3 0 3.90
Zn Rougher Conc 8.13 0 .3 7 1 .0 0 2 . 82 6 .2 3 33.00 8 .4 0 5 .3 0 18.90 8 .2 0 10.50
Zn Rougher tail 86.36 0.043 0 .4 1 0 . 15 0 .9 4 9. 1 3 10.50 23.30 10.70 13.10 30.70
H e a d ( a s s a y ) 100.00 0 .3 5 1 .5 4 1 . 21 6 .1 9 25.70 10.00 100.00 100.00 100.00 100.00
T6 150 500 Cu/Pb 2nd Cl Conc 1.11 13.60 33.10 17.10 190 582 43.40 25.30 15.00 42.90 30.00
Cu/Pb Ro Conc 4.44 6 .1 1 21.70 18.80 79.20 302 78.20 66.50 66.00 71.80 62.30
Zn 2nd Cl Conc 0.88 3 .0 1 10.10 28.60 35.80 194 7 .6 0 6 .1 0 19.90 6 .4 0 7.90
Z n R o C o n c 7.98 0 .4 8 1 .5 8 3 . 40 7 .2 4 43.30 11.20 8 .7 0 21.50 11.80 16.10
Z n R o T a i l 87.58 0.042 0 .4 1 0 . 18 0 .9 2 5. 3 0 10.60 24.80 12.50 16.50 21.60
H e a d ( a s s a y ) 100.00 0 .3 5 1 .4 5 1 . 26 4 .9 0 21.50 100.0 100.0 100.0 100.0 100.0
T7 DDS4 SO 2 Cu/Pb 2nd Cl Conc 1.18 6 .0 7 22.80 36.10 216 468 20.10 18.20 36.20 51.20 23.80
Cu/Pb Ro Conc 5.58 5 .1 8 19.10 18.30 68.80 252 81.20 71.90 86.90 77.20 60.80
Zn 2nd Cl Conc 0.42 2 .8 8 3 .0 3 2 . 17 38.10 231 3 .4 0 0 .9 0 0.80 3 .2 0 4.20
Z n R o C o n c 6.78 0 .4 1 0 .7 0 0 . 33 7 .3 8 52.40 7 .8 0 3 .2 0 1.90 10.10 15.30
Z n R o T a i l 87.65 0.045 0 .4 2 0 . 15 0 .7 2 6. 3 0 11.10 24.90 11.20 12.70 23.90
H e a d ( a s s a y ) 100.00 0 .3 6 1 .4 8 1 . 17 4 .9 7 23.10 100.0 100.0 100.0 100.0 100.0
*One collector addition only in the Cu/Pb rougher

The following modifications were made in an effort to improve selectivity:
!" Lower and single stage collector addition.

!" Increase in ZnS04 from 0 to 500 g/t.
!" Increase in NaCN from 25 to 150 g/t.
!" Alternative depressants SO2 and DDS4 (a mixture of four depressants, including
cyanide.
The changes had little beneficial effect. Any reduction in zinc flotation was accompanied
by a similar decrease in copper and lead flotation.
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From January to May 2008, tests of gravimetric, bulk flotation, differential flotation,
lixiviation were developed by ACTLABS and ABR Mineria laboratories, Juan Zegarra,
National University of Engineering and Eng. Jose Gonzalez, determining parameters that
allowed us to make corrections and finally determine the ore process for INVICTA
MINING CORP SAC for three groups, crushed, grinding- separation, gravimetric-
lixiviation of the gravimetric concentrates and total bulk concentrate, differential
flotation of the lixiviation tailing in order to obtain concentrates of copper, lead and
zinc for Group Nº 1, concentrates of copper for Group Nº2 and for group Nº3 there are
no base metal contents.
In METSO MINERALES laboratories, SOROCABA BRAZIL, evaluations of grindability of our

minerals were developed determining that:
!" Abrasiveness grade = 0.34

!" Work index for rod mill: 11.84 kWh/t to 14.54 kWh/t
In the laboratories of the National University of Engineering and EMPRESA ED & ED,
evaluations of gravimetric in FALCON SB 40 gravimetric concentrator, Wilfley table and
jig juba were developed. The results are shown in Table 6.10, Table 6.11, and Table
6.12.
Table 6.10: Falcon Concentrator

ORE GRADE RECOVERIES
g/t Au g/t Ag %Au %Ag
3.20 23.60 62.5 52.5
Table 6.11: Wilfley Table

3.15 29.79 55.04 24.45
Table 6.12: Jig Juba

3.33 29.85 37.61 14.38
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From the basic and optimization tests in ACTLABS Peru and ED & ED (Eng. Jose Gonzalez)
laboratories, the consolidated processes for the three groups are getting the results
shown in Table 6.13, Table 6.14, and Table 6.15.
Table 6.13: Group 1 Ore Recovery

HIGH GRADE ORE RECOVERIES
g /t Au g/t Ag %Cu %Pb %Zn %Au %Ag %Cu %Pb %Zn
7.85 67.85 1.23 0.76 028 70.72 54.17 60.98 60.71 66.21
LOW GRADE ORE RECOVERIES
7.80 69.73 1.28 0.69 0.20 75.07 62.08 75.12 61.76 58.23

6.02 48.56 1.02 1.08 1.40 83.42 75.35 72.38 82.68 85.98
1.81 32.51 0.56 0.94 0.77 80.86 67.59 71.80 86.88 83.38

3.78 17.56 83.25 72.78
3.53 16.04 71.61 61.72
For the minerals of Group 1 a test of optimization was made varying the grades of
grinding 60, 70 and 80% 200 mesh, this will increase the recovery of the precious and
base metals. In the lixiviation the cyanide increased from 3000 ppm to 5000 ppm,
declining the consumption of 12 kg/tm of concentrates to 3.5 kg/tm. The gravimetric
concentrate and bulk flotation are reground in order to increase the total recovery of
the precious and base metals.
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For the ores of Group 2 and 3 a basic test was made reaching good recoveries, pending
an optimization test in order to get good recoveries of the precious and base metals
(Copper).
The following processing diagrams of basic and optimization tests by ABR Minera SAC
are defined as follows:
!" Group 1: Crushing-grinding-gravimetric-total flotation-lixiviation of gravimetric

concentrates, and total flotation-flotation of copper tailing of lixiviation.
concentrates and total flotation-differential flotation of the lixiviation tailings.
concentrates and total flotation.
With these results GOLDEX S.A.C, Eng. Godofredo Barrios, prepared the Basic
engineering of the plant gravimetric and flotation.
The lixiviation plant was defined in a conventional way (agitators-clarifiers, filter of

plates, line of deaerator-precipitation). To optimize this investigations are ongoing to
use equipment like ACACIA, (reactor of intensive lixiviation), solvent extraction and
electro wining.
In Knelson Laboratories, Zimbabwe, evaluations of the use of gravimetric concentrator

CVD are being developed which will allow higher recoveries of Au. Pre-concentration
tests are also ongoing.
The test in a pilot plant will confirm gold recovery of over 80% in the lixiviation of the
gravimetric concentrates and total flotation, the time of lixiviation should be increased
in order to reduce the content of Au that pass to the concentrates. The qualities of the
concentrates will be improved with higher stage of cleaning. For zinc concentrate the
regrinding of the rougher concentrates is required.
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6.7 Processing Plant
The Basic Engineering for the concentrator plant was prepared by GOLDEX (Figure 6.1).
Figure 6.1: Processing Plant - Complete Flow Diagram
This plant is designed for 5,100 t/d polymetallic ore production containing gold, silver,
copper, lead and zinc. The plant includes areas for crushing, gravimetric concentration,
grinding, flotation, thickeners, filters for concentrates and filters for tailings and tailings
disposal.
The crushing area includes primary, secondary and tertiary crushing with ample storage
between the crushing stages. There is a 20,000 tonne capacity stock pile ahead of the
crushing area.
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The gravimetric concentration area includes continuous Knelson gravimetric

concentrators (CVD). Here the addition of vibrating micron wave tables is also
considered depending on tests conducted presently.
The grinding circuit includes rod and ball mills.
There are two flotation circuits (Figure 6.2). The bulk flotation, separation circuits of
Pb/Cu and rougher scavenger Zn will be in cylindrical flotation cells of 50 m³, while the
cleaning and separation stages will also be in cylindrical cells, but of lower capacity
(5 m³). The flotation system is designed for high, medium and low grade ore operation.
The thickening of concentrates will be made in conventional high rate thickeners and
the filtrate will be concentrated further with vacuum disc filters. Copper, lead and zinc
concentrates will be produced.
For tailings disposal two “Ultra Sep” (ultra high rate thickeners) will be used and the
solids will be further concentrated with four vacuum disc filters. The dry tailings will be
conveyed to the geo-membrane lined tailings disposal site.
The recovered water, which will be about 85% of the total consumption, will be re-
circulated to the concentrator plant.
The plant total consumption for the process is approximately 200 liters/second.
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Figure 6.2: Flotation Circuit Flow Diagram
6.7.1 Concentrator Plant – Basic Engineering
The present study shows the Basic Conceptual Engineering for the installation of a
Concentrator Plant of 5100 t/d, which includes the Areas of Crushing, Pre-
Concentration, Grinding, Flotation, Thickeners, Filters and Tailing disposal for treatment
of polymetallic ore containing Gold, Silver, Lead, Copper and Zinc.
The concentrator plant will be located in the North East of the department of Lima,
approximately 250 km by road from Lima, in the District of Leoncio Prado, Province of
Huaura, Department of Lima and about 2300 meters above sea level. This design has
been completed on the basis of Invicta basic data with input from the technical
personnel of Invicta Mining Corp.
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For better understanding of the project a descriptive summary for each Treatment Area
is presented in the following sub-sections.
6.7.2 Primary, Secondary, & Tertiary Crushing
The crushing circuit will be designed for treatment of 5100 t/d of ore in 16 hours of
operation per day, 7 days a week with equipment availability of 73 %.
As described in Section 5.4.1, primary crushing is performed in the mine and ore (-5”
diameter, or 127-mm) is transported to the stockpile. From this point, the ore is
conveyed via an apron feeder which feeds the mineral to a vibrating grizzly screen. The
ore passes through secondary and tertiary crushing. Output from these crushers is
conveyed to the two fine ore bins (fine ore size is approximately -3/8”).
6.7.3 Grinding
The grinding circuit will be designed for a daily treatment of 5100 t/d, 24 hours per day,
7 days a week with equipment availability of 98 %. As suggested by Invicta Mining Corp.
Primary, Secondary and Tertiary Grinding as well as Gravimetric Pre-Concentration will
be considered.
The parameters considered for the grinding section, according the indications of Andean
American, will be:
!" Input Feed: 217 t/h

!" Primary grinding: F80 of 6600 microns and a P80 of 650 microns.
!" Secondary grinding: F80 of 650 micron and a F80 of 320 microns
!" Tertiary grinding: F80 of 320 microns and a P80 of 50 microns.
The work index considered is 12 kWh/t
The -3/8” from the fine ore bin will be transported by a belt conveyor to a Rod Mill. The
discharge from this mill will be pumped to a Derrik classification screen. The coarse
material from the screen will pass to the secondary grinding and the discharge together
with the discharge of the rod mill via the same pump will return to the Derrick screens.
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The fines from the screen will feed two Gravimetric continuous Knelson concentrators
by gravity (Figure 6.3). From these concentrators, the concentrate goes to regrinding
(Tertiary Grinding) in a Ball mill, while the residual goes to the bulk flotation.
Figure 6.3: Knelson Concentrators Flow Diagram
The regrinding mill (tertiary grinding) will work in a closed circuit with 3 cyclones D20.
The overflow from regrinding will feed another Knelson concentrator, with the purpose
of capturing the Gold and Silver present in the ore. The overflow of the cyclones will
pass to a unit flotation, which will be determined by laboratory tests made by Knelson.
6.7.4 Flotation
There are two flotation circuits: material coming to flotation from the residuals of the
continuous Knelson concentrator and overflow from the cyclones D20 which feed the
tertiary mill (subject to the laboratory tests made by Knelson).
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The bulk flotation Pb/Cu and rougher-scavenger Zn will be cylindrical cells flotation,
while in the cleaning and separation stages will also be cylindrical cells but of lower
capacity. Before the flotation, conditioners will be installed for each type of ore to float.
The concentrates of Pb, Cu and Zn will be fed to their respective thickeners and filters.
The flotation system is designed for high, medium and low grade ore operation.
6.7.5 Thickeners & Filters
The thickening of the concentrates will be made in conventional high rate thickeners
and the filtrate will be concentrated with vacuum disc filters (Figure 6.4).
Figure 6.4: Thickening and Filtration Flow Diagram
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The following concentrates will be produced:
!" Lead Concentrate.

!" Copper Concentrate
!" Zinc Concentrate.
The concentrates of Pb, Cu, and Zn will have their respective thickeners and disc filters
and the dry product will be collected in piles for each product where the shipment of
concentrates will be made.
Figure 6.5: Tailings Disposition Flow Diagram
6.7.6 Tailings Disposition
For the tailings disposition, two UltraSep thickeners will be considered (ultra high rate
thickener). The underflow of the thickeners will go to a filtrate stage (Figure 6.5) in four
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vacuum disc filters. From the filters belt conveyors will transport the tailings to the
tailings pond. The filtrate will be recovered and returned to the process.
The water quantity required for the process will be 200 lit/sec. or 723 m3/h, 85%of
which will be recovered and the balance will be made-up with fresh water. The fresh
and recirculated water will be stored in their respective storage ponds located at the
concentrator plant of Invicta Mining Corp.
6.8 References
See the following documents, in Appendix C, for further process information:
!" ABR Minera SAC, Metallurgical, Gravimetric Test and Flotation of Polymetallic
Minerals
!" Universidad Nacional de Ingenieria – Pilot Plant of Ores Processing and
Extractive Metallurgy
!" Universidad Nacional de Ingenieria – Gravimetric Metallurgical Test
!" SGS Lakefield Laboratories report
!" ED & ED Ingenieria SAC report
!" Knelson CVD report
!" Met-Solve Laboratories
Appendix D contains engineering process drawings.
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7 INFRASTRUCTURE
7.1 Power Supply
The power supply for the project is the 220 kV national power grid.
Invicta power demand will be ramped up from 4,776 kW in the first year of operation,
through 5,555 kW in the second year and reaching the design capacity of 6,762 kW the
following year. The project will take the power from the 220 kV grid at the Huacho
substation where it is transformed to 66 kV and fed to the Andahuasi substation
through a 34 km transmission line.
The new Invicta power line will start at the Andahuasi substation. This new 66 kV power
line will be 29 km long and terminate at the concentrator plant substation. Here the
power will be transformed to 10 kV and fed to a bus bar. From this 10 kV bus bar the
various services will be taken through their transformers.
CESEL Engineers completed the detailed engineering study including equipment

specification and detailed calculations:
!" Extension of Adahuasi substation,

!" 29 km 66kV line with towers, from Andahuasi substation to Invicta Plant
substation,
!" Substation located at the Invicta Concentrator Plant; with a capacity of 10/12
MVA and 66/10 kV,
!" 13 km 10 kV Primary power lines to supply the pumping system from Huamboy
to the Concentrator Plant and to provide power to the Mine, and
!" Budget estimate of the lines and substations.
Invicta is at present negotiating the power supply contract with EDEGEL, an Electric
Power Generation Company. The cost, including transmission cost and line losses, will
be 5.9 US cents/kWh.
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EDEGEL is the second largest power producer in Peru. This company has hydroelectric
and thermal power stations (GN), as well as diesel power generators. The Invicta
preliminary contract is for 1500 MW with an average sale of 800 MW. The delivery of
EDEGEL energy to Huacho’s bar will be at 0.1267 cents Sl./kW-h or 0.045 USD /kW-h.
With line loss and transmission cost, the energy at the Invicta Substation will be
0.059 USD /kWh.
In consultation with REP, the owner of the Huacho substation, Invicta has found feasible
technical and economical solutions to increase the capacity of the Huacho substation.
REP has this substation ready for expansion, awaiting financing by the Ministry of Energy
and Mines. The application has been submitted in September 2008. REP estimates that
the extension of Huacho substation will be completed in 20 months.
Invicta is investigating transformer manufacturers in Peru, Brazil, Argentina and

Colombia. To date, a quotation has been received from Trafo Brasil, who specify a
manufacturing time of 8 months.
The 66 kV transmission line from Huacho to Andahuasi substation (32.8 km) is

administered by ADINELSA. Invicta has negotiated an agreement to use the
transmission line and to expand the Andahuasi substation.
The optimum solution is for Invicta to share the transformer cost and provide the
engineering study for the installation for a second transformer at Huacho that would
match the existing transformer: 30/30/10 MVA and of 220/60/10 kV. The financing is
pending and should the necessary dates of acquisition and assembly be realized, the
total investment would be assumed by the Ministry of Energy and Mines. This will also
meet the scheduled mine start-up.
Alternatively, a hydroelectric power station may be constructed with sufficient capacity

to supply energy to the mining project by using the Huaura River. This option would
provide an alternative strategy and would not depend on the power supply of a third
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party. It would provide energy at a lower cost and bring about the possible sale of the
surplus power (Table 7.1).
Table 7.1: Consumption of Power and Estimated Energy per Month for Mine & Plant
YEAR 1 YEAR 2 YEAR 3

Power in peak hour (kW) 3 949.68 5140.84 5665.81
Power in non peak hour (kW) 5 091.79 6344.93 6977.70
Power in peak hour (kWh/month) 592 452.10 771125.62 849871.98
Power in non peak hour (kWh/month) 2 902 320.30 3616610.10 3977289.00
Peak Hours Month 150 Hours

Non Peak hours Month 570 Hours
Notes - In peak hours, the crushing area and water supply line will be shut down
- The peak hours are from: 6:00 PM to 11:00 PM.
YEAR 1: 3000 t/d
YEAR 2: 4000 t/d
YEAR 3: 5000 t/d
Detailed engineering and budget estimates were prepared by CESEL (Appendix E).
7.2 Water Supply
From the 53 watersheds that exist on the coast of Peru, only 5 remain with a steady
regimen of rivers. Among these is the Huaura River Basin, with unique topographic
characteristics and orographic containment that permit it to flow throughout the year.
Within the analysis of the alternatives for water supply for the operations of Invicta
Mining Corp., a hydrological evaluation was made in the sector of Huaura River and in
the stream of Paran, to identify the area to drill a well and to select an aquifer with
favorable conditions for the extraction of groundwater. Groundwater recovery comes
from the rains in the Basin of Huaura River and from the snowmelt in the high
catchment basin. In the assessed area, additional recovery of the aquifer comes from
the Paran stream.
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Invicta Mining Corp., in order to meet the current and future demand requires a flow of
20 liters/second, water will be pumped from the selected area of the Huaura River at
1100 meters above sea level, near the stream of Parán confluence with the Huaura
River.
The existing well (0.35 m diameter and 47 m deep) was subjected to a three-day test
and proved its capacity to be in excess of 50 liters/second. The system design includes a
submersible pump in the well with a receiving settling tank. The water is pumped from
the well (1167 m elevation) by multi-stage centrifugal pumps to the make-up water
storage pond at the processing plant site (2295 m elevation), via three pump stations
located with equal dynamic head, and subsequently to another storage pond at the
mine site at 3662 meters above sea level. The segment from plant to mine has been
designed for a flow of 5 liters/second and five pumping stations.
The hydrogeology of the selected area to supply water to the Invicta Project is
considered a reliable source for water. Constructing the water supply system will be
technically feasible.
CESEL’s engineering report includes specifications of all make-up waterlines, pumping

stations, control systems of valves and pressure indicators, electrical equipment, and
power supply.
For detailed information refer to Appendix E.
7.3 Access Roads
There are two new roads planned. The first will provide access from the plant to the
mine which is composed of a new road from the plant to Paran and an existing road
from Paran to the Mine. The second will provide access from the main road, which
connects Sayan with Huarochiry departing from Choques and arriving at the
concentrator plant.
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The first new road from the processing plant to the mine will be 3 km long. The road
starts in Paran at 2155 meters and ends at the plant at 2275 meters elevation. The
steepest two sections of the road will have a gradient of 8% and are 170 meters and 80
meters long respectively. The road will be built to a width of 5 m that will allow heavy
transport to the mine and safe transport for personnel and materials.
The new road from Choques to the processing plant will be approximately 14 km long.
The road starts at 1105 m. and ends at the plant at 2275 m elevation, a difference of
1170 meters. The road will be built in sections and to a width of 10 m, some of which
may be as steep as 12 % for short stretches. The road will allow transport of heavy and
bulky loads and prefabricated modules required in plant construction, personnel,
materials and concentrates to and from the plantsite, in a safe manner. Crews to access
waterlines and electric powerlines for any maintenance requirement will also use the
road.
All road building material is readily available at the site and it will not require developing
borrow pits for this off-highway cut and fill construction. Construction material will
consist of mainly sand, gravel, clay, and rock fragments of andesite, rhyolites and
dacites. D8 size tractors, a grader, a compactor, trucks and loaders, and a water tank
truck will be required to build the roads. The roads will be built by road building
contractors.
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8 ENVIRONMENTAL IMPACT ASSESSMENT (EIA), AND COMMUNITY

RELATIONS
8.1 Environmental Impact Assessment
To comply with the current environmental legislation, Invicta Mining Corp SAC hired
CESEL S.A. to prepare the Invicta Project Environmental Impact Assessment (EIA), with
the aim to evaluate, determine, and measure the environmental and socio-economical
impacts related to the project, as well as the required mitigation measures.
The legal frame for this Environmental Impact Assessment has been developed within
the current national laws and bylaws regarding the protection of the environment.
The following permits are required before the implementation of the mining project:
!" Permit for Use of Water: The Ministry of Agriculture requires that Andean
Explorations obtain a permit for the use of water, modifications to natural
riverbeds and/or the performance of hydraulic works within the area of
influence of the Project. Permit must be issued by the ATDR (The Irrigation
District Technical Administration Authority). The Invicta Project will use the
water that has been previously authorized.
!" Authorization for the Domestic and Industrial Residual Waste Treatment and
Sanitary Disposal System: this authorization is issued by DIGESA. The INVICTA
Project will obtain this permit during the mining operation.
!" Authorization for the use of surface land owned by third parties and/or land
available for sale. (This is required by the communities and by the state or
private owners).
!" Authorization for the operation of a dump yard for the treatment of domestic
solid waste or to contract companies authorized by DIGESA for the
transportation and disposal of solid and hazardous waste. (This is required by
DIGESA). The Invicta Project will obtain this permit for the mining operation.
!" Certification of the absence of Archeological Ruins: Granted by the INC.
Currently the Invicta mining project has the approved Certification of absence of
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Archeological Ruins (CIRA) for the Mine, issued by the National Directorial
Resolution N° 191/INC. The CIRA for the plant is still an ongoing process waiting
for approval.
!" Studies Approved or On-Going: The Invicta Exploration Project has an “Invicta
Exploration Project Environmental Affidavit” approved by the Energy and Mining
Ministry.
!" Agreements or arrangements with the population: Invicta Mining Corp SAC has
registered ownership of real estate where it is stated that it has acquired the
authorization for mining exploration operations from the Communities of
Lacsanga and Santo Domingo de Apache.
!" Permits Obtained: Andean Explorations SAC is currently processing the permit
for the use of water. In regard to the other required permits Andean
Explorations SAC is preparing the documentation to start with the proceedings.
The project engineering and legal departments together with CESEL Engineers prepared
and submitted the “Environmental Impact Assessment” to the Ministry.
The project will meet or exceed the industry standards in environmental protection and
in establishing good relations with the communities around the Invicta site. Precautions
will be taken during the construction and operating stages of the project to minimize the
impact on the surrounding communities and the environment in general. At the end of
the project the equipment will be removed, the buildings demolished and the project
area returned to nature as close to the original state as possible. The roads will be left in
place to allow future inspections and additional remediation if and when these would be
required.
A list of “identified environmental components” is included in the study.
The EIA was presented on June 18, 2008 to the Ministry. The EIA was also submitted to
the Communities of the Area.
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The project has the Approved Certification of absence of archaeological ruins in the
areas where work will be carried out. The regulatory approvals received to date are
listed in Section 8.3.
To review the complete EIA Executive Summary, please refer to Appendix F.
8.2 Community Relations
Good community relations are an important part of a mining operation. Invicta

continues to work with the neighbouring communities, partnering where possible,
improving the local infrastructure and offering employment where practical. A
representative sample of meetings and activities are described in this chapter.
Invicta has in its area of influence the communities of Paran, Lacsanga and Santo
Domingo de Apaches. Invicta has good relations with each community based on the
constant communication and understanding between the communal and local
authorities and the company. Social Assistance work is continuing and has resulted in an
atmosphere of peaceful coexistence.
Ongoing communications and assistance make a significant difference. Other Peruvian

regions such as Cajamarca and/or Piura have opposition groups to mining that hinder or
prohibit mining companies to conduct their activities.
The main support that Invicta’s neighbour communities received is primarily related to
water supply projects. The region is arid and the water must be brought by channel or
pipe from the nearest lakes to irrigate the fruit trees such as peaches and avocado
which is the main source of income.
All the neighbouring communities have allowed the development and exploration that
has been carried out to date. Invicta presented the EIA to the communities in order for
them to review, analyze and make the pertinent observations. The document was also
submitted to the Ministry of Energy and Mines, IRENA and the different municipalities
where the communities are located.
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8.2.1 Community of Paran
The community of Paran is located in Leoncio Prado District, Province of Huara,

Department of Lima. This community has 120 members with the right to speak and the
right to vote in the assemblies, and approximately 280 settlers. Inside this community
are the hamlets of Santa Ana and Capia.
The commitments, supports and agreements provided by the company to the

community during the exploration stage are as follows:
!" In June 2006 the President of the Community received chairs, cement and iron
windows for the local community hall in a value of USD 1,200.00.
!" In March 2007 the irrigation pipes were repaired which were damaged by small
mud slides at a cost of USD 3,000.00
!" Several donations of school and sport supplies have been made for the
Educational Center No. 20337 of Paran.
!" Improvement to the Huamboy - Paran access road which included the widening
of the critical areas and radius of curvature between the hamlets from Huamboy
to Paran, using explosives, labour, cleaning equipment (tractor D6) and electric
drill.
!" Grading and cleaning the access road between Huamboy and Paran and filling
the potholes using heavy equipment (Tractor D6) and a hired labour force of
community members.
!" The access road Huamboy – Paran has been surface treated with molasses to
reduce dust generated by trucks, cars and light trucks.
!" The company has made the land survey of the access road Huamboy – Paran.
!" Land survey of the housing location for the mine has been made.
!" The land survey of the location for the mine drainage field has been made.
!" The company delivered 200 m. of 3” PVC pipe for the local Community.
!" The company delivered to the Community the study of potable water supply by
gravity.
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!" Sl. 22,610.00 were contributed to the study of potable water supply and
installation of a sewage system in Paran. Once the study is finished, the
Community together with the Municipality will submit a financing request to the
Ministry of Housing and Construction- Program “Agua para todos”.
!" The company as compensation for damages in the Mining and exploration zone
has provided Sl. 175,000.00, that will be used to finance part of the Project to be
submitted to the Program “Agua para todos”.
!" The company is committed to building the third floor of the local Community
Center, with calamine roof and two classrooms for Paran School.
!" Invicta Mining has compensated the Community for opening of the trail to
Pariocoto in the amount of Sl. 25,000.00.
!" The Community has given authorization for the drilling of water wells in
Huamboy and for the pipe line from the well pump to the concentrator plant.
!" The company has committed to the Community to use tanker trucks to water
the Huamboy – Paran access road, in order to reduce the dust between the
hamlets of Santa Ana, Paran and Capia.
!" The Community has given authorization for the continuation of the trail to
Pariocoto zone. For this the company is committed to building a classroom and
a Health Post in Huamboy.
!" The company will give a financial contribution of Sl. 5,000.00 to prepare
technical studies and design to construct the classrooms and Health Post.
!" The community has received a computer with monitor, keyboard and other
accessories appraised at USD 600.00.
8.2.2 Community of Lacsanga
The Community of Lacsanga is located in the District Municipality of Paccho. This

community has 80 members with the right to speak and the right to vote in the
assemblies, and approximately 280 settlers. Their main activity is agriculture and in
some cases trade, inside the community and in the hamlets of La Perla and Miraflores.
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The main agreements are:
!" Construction of a 45 km long unimproved dirt road from La Perla de Paccho

hamlet to Collaray, passing through Miraflores hamlet, at a cost of USD
45,000.00, Works took place between July and December 2006.
!" The Educational Institution No. 20118 of the hamlet of Miraflores received a
donation of Sl. 1,000.00.
!" Delivery of 3,500 meters of pipe valued at Sl. 67,468.84, which includes the
transportation and thermofusion valued at USD 9,426.50.
!" Invicta has the authorization to use water in the year 2008. In return Invicta
provided the community 1,000 meters of pipe line, valued at USD 8,895.25,
which includes transportation and thermofusion, at a cost of to USD 3,265.00.
!" The community gave permission for constructing the electric power line from
Collaray to Camp Sl. 18,000.00.
!" For the damage caused in the area where the mine exploration works took
place, the company gave 1,700 bags of cement and 1,000 iron rods in the
amount of Sl. 65,000.00.
!" Agreement was given for Grant of Easement, Usage Right and Permission of
Exploitation. The Community is in favour of Invicta Mining activities and was
given the rights of easement and usage of the surface ground where the Plant
will be built and will give permission for the exploitation. The Company is
committed to pay USD50,000.00 yearly, which will begin with the start of
operations and last until the end of extraction.
!" The Company has given continuous support through workshops for mothers,,
schools, and others.
8.2.3 Community of Santo Domingo de Apache
The Community of Santo Domingo de Apache is located in the Leoncio Prado District,
Province of Huaura, Department of Lima. This community has 270 members with the
right to speak and the right to vote in the assemblies.
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This Community has approximately 350 settlers to which the company has provided and
is providing economic support, as well as programs of social and educational assistance.
The main source income for the community is the cultivation of peaches and the
growing of different products. The Community has a main access road (an unimproved
dirt road) to Sayan.
The Company has made the following contributions:
!" A computer with monitor, keyboard, printer and other accessories valued at
USD 700.00 has been delivered to Santo Domingo School No. 20339.
!" The amount of Sl. 2,000.00 has been also delivered as a contribution to the
community.
!" The company’s engineer made an evaluation for the optimization of intake,
storage and distribution of water for agricultural purposes.
To date, the relations with the three communities are good and social assistance has
been carried out and developed in order to maintain good understanding between the
company and communities. The company also encourages the participation of the
municipal authorities and the Ministry of Energy and Mines.
8.3 Regulation Approvals Received
!" From Ministry of Energy & Mines Department of Director General of

Environmental Affairs certificate Nº. 006-2008-MEM-AAM viability approval,
January 24, 2009.
!" From the National Institute of Culture. Resolution Nº. 1708/NC Archeological
Evaluation of the Invicta Project to supply electrical power for industrial use,
November 29, 2008.
!" From the Technical Administration of the District of Riego, Huara. Resolution
Nº. 0168/2008-GRL.DRA/ATDR authorizing the procedures for drilling of “Invicta
1” well, December 23, 2008.
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!" From the office of Department of Utilities for the District of Riego, Huara.
Technical certificate Nº. 278-JUDRH-O&M approval to drill a cased well,
December 5, 2008.
!" From INRENA National Institute of Natural Resources certificate Nº. 765-2008-
INRENA-IRH Department of Hydrology to explore and study underground water
flows to drill a well, August 27, 2008.
!" From the Technical Administration of the District of Riega, Huara authorization
certificate Nº. 003 20082008 GRL.DRA/ATDRH approval for documenting the
hydrology studies of underground exploration, February 13, 2008.
!" From the Council of Consumers for the District of Riega, Huara technical
authorization Nº. 013-2008JUDRH-O&M exploration approval for water
intended to be supplied to Invicta Mine, January 11, 2007.
!" From the Technical Administration of the District of Riega, Huara certificate Nº.
0203/2006 GRL.DRA/ATDR authorizing use of surface water to do hydrology
studies for the Invicta Project, September 18, 2006.
!" From the Farmers Community of Lacsaga an extraordinary act of approval to
begin initial exploration studies, December 3, 2005.
!" From the Farmers Community of Paran approval to build the access trail from
Cementary to the area selected to construct the Invicta Mill, May 2, 2008.
!" From the Farmers Community of Paran permission granted to use the
Community road, April 29, 2008.
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9 COST, FINANCING & COMMERCIAL TERMS

The Invicta Mine Project costs include:
!" Total Operating Costs

!" Mining Costs
!" Processing Plant Costs
!" Capital Costs
All costs presented as fourth quarter 2008 USD remain constant over the life of mine
and no allowance for inflation has been included.
9.1 Total Operating Costs
The mine and plant costs have been predicated on the Life Of Mine operating mining
plan of 5 years, with mine production rates of 3000 t/d in Year 1, 4000 t/d in Year 2, and
5000 t/d in Years 3,4, and 5. Cost estimates were prepared jointly by: Invicta engineers;
MINCONSULT and a Peruvian mining contractor for mine development; GOLDEX, for the
concentrator plant; and CESEL, for the power line and the water line determination.
Table 9.1: Summary of Ore to Plant, Concentrate Produced, and Ore Processed per day
Ore t/year 1,065,991 1,399,755 1,744,300 1,797,502 1,799,609
Concentrate t/year 36,258 31,568 32,143 22,033 35,071
Ore Processed t/day 3,046 3,999 4,984 5,136 5,142
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Table 9.2: Total Operating Unit Cost (USD/t) Annual Summary

ITEMS year 1 year 2 year 3 year 4 year 5
Mine costs - extraction 10.02 10.08 10.15 13.48 13.06
Mine preparations and
development 2.31 2.17 2.55 2.72 1.70
Energy costs for the mine 0.36 0.38 0.34 0.34 0.34
Mine personnel (social
benefits included) 0.47 0.36 0.29 0.28 0.28
Plant costs (reagents, power,
spare parts) 7.56 7.11 7.00 5.67 5.67
Disposal of filtrate tailings 0.77 0.59 0.47 0.46 0.46
Plant operating and
maintenance personnel 0.94 0.71 0.57 0.56 0.56
Administration, safety,
environment, management
personnel 0.59 0.45 0.36 0.35 0.35
Miscellaneous mine expenses 0.69 0.52 0.42 0.41 0.41
Communities
(USD 20,000/month) social
expenses 0.23 0.17 0.14 0.13 0.13
Services personnel in Lima
(social benefits included) 0.80 0.61 0.49 0.48 0.47
Miscellaneous Lima expenses 0.11 0.08 0.07 0.07 0.06
Total operating costs (before
commercialization) 24.85 23.25 22.84 24.93 23.50
Total operating costs
USD/annum 26,491,747 32,540,125 39,846,434 44,815,066 42,283,657
Transportation of
concentrates $30/DTM 1.02 0.68 0.55 0.37 0.58
Commercialization: treatment
charge, refining costs,
penalties 7.38 4.19 3.44 2.70 4.29
Total unit cost (Transport &
commercialization included) 33.25 28.12 26.84 28.00 28.37
The unit prices are all inclusive costs, Andean American only provides water.
All costs shown in Table 9.1 unit costs are in USD/tonne. Hauling unit costs include
loading in underground methods.
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9.1.1 Operating Personnel: Mine, Plant, and Lima office.
The cost of all personnel is shown in Table 9.3 and Table 9.4.
Table 9.3: Personnel - Mine & Plant

AREA TOTAL
Management Number 3
USD/ month 6,000
Mine & Geology Number 23
USD/ month 29,000
Plant & Labs Number 47
USD/ month 37,700
Maintenance Number 22
USD/ month 19,800
Administration Number 41
USD/ month 24,800
Safety & Environment Number 4
USD/ month 5,300
Total personnel 140
Total salary USD 122,600
Salary + Social Benefits USD 2,133,240
Table 9.4: Personnel - Lima office

Staff TOTAL
General Management number 5
USD 14,500
Administration number 8
USD 9,500
Financial number 5
USD 7,000
Planning and Engineering number 5
USD 7,500
Explorations number 3
USD 10,600
Total USD 49,100
Total + social benefits USD/day 71,195
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9.1.2 Miscellaneous expenses for mine and plant
Table 9.5: Miscellaneous Expenses for Mine and Plant

DAILY TOTAL
ITEMS PERSONS USD USD/month
Food for the personnel S/.20 / day 41 7.14 8,786
Food for the workers S/. 16 / day 95 5.71 16,286
Maintenance accommodations 3,000
Health, medical expenses and others 3,000
Security gear (3 times per year) (*) 136 3,400
Office supplies and expenses 4,000
3 vehicles Custer type 130.00 11,700
Fuel and maintenance for 5 Invicta trucks 5,000
Communications, telephones and Internet 2,000
Trips and traveling expenses. 4,000
(*) Thermal cloths, steel toe boots, rubber boots, gloves,
respirator, TOTAL 61,171
glasses, helmet, mining lamps, charger. USD 100
9.2 Cost for Underground and Open Pit Mining
The operational mining plan dictates the tonnages mined, and by which mining methods
it is extracted. The tonnage for the LOM is reflected in Table 9.6.
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Table 9.6: Annual Ore Tonnages

CF SL SK OP
YEAR MINING METHOD Tons
year 1 Cut and fill 17,559 2% 17,559
Sublevel 1,048,432 98% 1,048,432
Total year 1 1,065,991
year 2 Open pit 291,276 21% 291,276
Cut and fill 35,442 3% 35,442
Shrinkage 23,470 2% 23,470
Sublevel 1,049,566 75% 1,049,566
year 3 Open pit 277,330 16% 277,330
Cut and fill 55,340 3% 55,340
Shrinkage 22,593 1% 22,593
Sublevel 1,389,037 80% 1,389,037
year 4 Open pit 162,984 9% 162,984
Cut and fill 921,362 51% 921,362
Shrinkage 174,749 10% 174,749
Sublevel 538,406 30% 538,406
year 5 Cut and fill 782,553 43% 782,553
Shrinkage 339,032 19% 339,032
Sublevel 678,024 38% 678,024
TOTAL 7,807,157 1,812,256 4,703,465 559,845 731,591
23.20% 60.20% 7.20% 9.40%
9.2.1 Mine Unit Costs
Mining unit costs have been tabulated in Table 9.7. Invicta engineers and MINCONSULT
have based the costs on known contract unit prices from a Peruvian contractor, and
data.
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Table 9.7: Mining Unit Costs

Open pit Open pit Cut and
Activity (waste) (ore.) fill Shrinkage Sublevel
Drilling 0.21 0.21 2.96 2.89 2.8
Blasting 0.17 0.17 1.24 1.03 0.58
Secondary drilling and
blasting 0.04 0.04 0 0 0
Loading 0.3 0.3 1 0 0
Hauling (*) 0.34 0.34 4.18 4.36 4.36
Safety 0.04 0.04 0.3 0.24 0.04
Support 0 0 0.5 0.17 0
Fill 0 0 3.01 0 0
Transport ore pass to plant 0 0.15 0.15 0.15 0.15
Subtotal (USD/t) 1.1 1.25 13.34 8.84 7.93
General expenses
(15%) 0.17 0.19 2 1.33 1.19
Utility (10%) 0.11 0.13 1.33 0.88 0.79
Total (USD/t) 1.38 1.56 16.67 11.05 9.91
Annual mine development costs are estimated and shown in Table 9.8
Table 9.8: Annual Mine Development Costs

YEAR Total Meters USD/ year
Total year 0 9,755 7,726,772
Total year 1 3,090 2,462,130
Total year 2 4,325 3,039,980
Total year 3 5,976 4,454,486
Total year 4 8,279 4,894,058
Total year 5 5,323 3,053,388
TOTAL 36,748 27,630,814
Mine electric power costs have been tabulated and are shown in Table 9.9.
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Table 9.9: Electric Power

Mining Rate t/year kW(inst.) Hours x year f.c. f.serv.
3000 t/d 1,065,991 1,234 8,400 0.85 0.75
4000 t/d 1,399,755 1,730 8,400 0.85 0.75
5000 t/d 1,792,399 1,944 8,400 0.85 0.75
Mining Rate Consumption kWh USD/kWh USD USD/t

3000 t/d 6,607,427 0.058 383,231 0.36
4000 t/d 9,263,989 0.058 537,311 0.384
5000 t/d 10,410,548 0.058 603,812 0.337
9.3 Processing Plant
The maintenance costs includes the cost of water pumping, maintenance, spare parts
and labour, and estimated as 25% of plant cost.
The personnel of the concentrator plant include laboratory personnel.
The cost for water is equivalent to the estimated taxes to be paid to INRENA for water
consumption.
9.3.1 Processing Operating Costs
The total operating costs of the processing plant are shown in Table 9.10.
Table 9.10: Annual Production and Unit Processing Costs

YEAR 0 1 2 3 4 5
CAPEX 20,100,000
Ore Weight t/year 1,065,991 1,399,755 1,744,300 1,797,502 1,799,609
t/day 3,046 3,999 4,984 5,136 5,142
Maintenance USD/t 2.01 1.61 1.61 1.61 1.61
Reagents USD/t 4.06 4.07 4.16 2.82 2.82
Personnel USD/t 0.62 0.47 0.38 0.36 0.36
Energy USD/t 1.81 1.67 1.43 1.43 1.43
Water USD/t 0.01 0.01 0.01 0.01 0.01
Net Process USD/t 8.50 7.83 7.58 6.23 6.23
Reagent Costs
The reagent costs for different products and tonnage are summarized in Table 9.11.
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Table 9.11: Annual Reagent Consumption
LIXIVIATION
BULK Cu.Pb
TAILS AREA
Cu.Pb CLEA
SUB TOTAL
CRUSHING
GRINDING
Pb-Cu SEP
Pb CONC
Zn FLOT
TOTAL USD/t
Year 1: 3000 t/d 0 0.995 0.408 0.015 0.102 0.063 1.335 0.982 0.16 4.06
Year 2: 4000 t/d 0 1.041 0.374 0.015 0.102 0.063 1.335 0.982 0.16 4.071
Year 3: 5100 t/d 0 1.092 0.408 0.015 0.102 0.063 1.335 0.982 0.16 4.156
Year 4/5: 5100 t/d 0 1.092 0.408 0.015 0.102 0.063 0 0.982 0.16 2.821
Energy Costs for Plant

The concentrator plant loads have been established and the energy cost calculated in
USD/tonne (Table 9.12).
Table 9.12: Energy Costs

Hours Consumption
DTM t/YEAR kW(inst.) per year f.c. f.serv. kWh $/kWh USD USD/DTM
3000 1,065,991 5,814 8,400 0.85 0.8 33,207,169 0.058 1,926,016 1.807
4000 1,399,755 7,052 8,400 0.85 0.8 40,280,681 0.058 2,336,280 1.669
5000 1,792,399 7,714 8,400 0.85 0.8 44,060,312 0.058 2,555,498 1.426
The disposal cost of filtrate tailings is itemized in Table 9.13. The costs include the rent
of the equipment.
Table 9.13: Cost for rental of equipment (450 hours/month)

USD/hr USD
Tractor D-6 89.29 40,179
Charger 966 62.50 28,125
Dump truck 30t 0.00 0
USD/month 68.304
450.00 hours x each equipment
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9.3.2 Miscellaneous Lima Expenses
Table 9.14: Operating Expenses, Lima Office

USD
Rent 5,000
Water 143
Phone 2,000
Light 200
Maintenance 400
Security 1,000
Variable mobiles 1,000
Total/month 9,743
9.4 Capital Costs
All capital costs include 19% IGV tax and a 12.5% contingency. Contracts include
engineering, supervision and contractor’s overhead. The total capital cost amounts to
USD 65,316,287 and a summary of all capital requirements covering crushing, grinding,
flotation, thickeners, tailings disposal, civil works, steel and piping, water, vehicles,
buildings , and roads has been listed in Table 9.15.
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Table 9.15: Invicta Project - Investment Summary

22% BY 12.5%
AREA Asset Amount CONTRACTORS IGV 19% CONTINGENCY TOTAL
EXPENSES
UNTIL MAR 31
'09 Intangible 12,000,000 included included 12,000,000
INVESTMENTS IN THE YEAR BEFORE START UP
Crushing Fix Asset 4,072,108 773,701 605,726 5,451,535
Grinding Fix Asset 4,111,425 781,171 611,574 5,504,170
Flotation Fix Asset 1,951,000 370,690 290,211 2,611,901
Thickeners and
Filters Fix Asset 1,449,500 275,405 215,613 1,940,518
Tailing Disposal Fix Asset 2,088,100 396,739 310,605 2,795,444
Foundation
Works (civil) Fix Asset 5,510,000 1,212,200 1,277,218 999,927 8,999,345
Structural Steel
& Piping Fix Asset 5,365,000 1,180,300 1,243,607 973,613 8,762,520
Water Supply Fix Asset 990,001 65,340 200,515 156,982 1,412,838
Materials and
communities Fix Asset 468,000 30,888 94,789 74,210 667,886
Electrical
Supply Fix Asset 5,859,298 1,047,558 1,312,303 1,027,395 9,246,554
Mine
Investment Intangible 10,480,814 0 1,991,355 1,559,021 14,031,190
Mobile
Equipment Fix Asset 512,000 97,280 76,160 685,440
Road to Plant Intangible 1,963,506 431,971 455,141 356,327 3,206,945
SUBTOTAL 44,820,752 3,968,258 9,269,912 7,257,365 65,316,287
WORKING CAPITAL FOR THREE MONTHS

Three month operating costs 1,872,906 355,852 278,595 2,507,353
FUNDS REQUIRED:
Expenses and Financing Charges: USD 12,000,000
Funds required in the year before start-up 65,316,287
After start-up mine development will be paid from income from operations. 65,316,287
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9.5 Financial Analysis
Project construction capital costs, preproduction expenses, and 3 months working

operating costs have been included in Table 9.15 Invicta Project – Investment Summary.
Total funds required will be USD 65,316,287.
A summary of the financial analysis is presented in Table 9.16, Table 9.17, Table 9.18,
and Table 9.19, Cash Flow Statement, Profit and Loss Statement, Profit and Loss versus
Metal Prices, and Loan Amortization respectively. The tables reflect the feasibility base
case metal price in USD as follows: Au 900/oz, Ag 12.50/oz, Cu 2.00/lb, Pb 0.50/lb, Zn
0.60/lb.
Table 9.16: Cash Flow USD/year
YEAR 0 1 2 3 4 5 TOTAL
Net Profit from P & L 29,713,355 38,619,115 59,737,490 45,391,839 11,794,146 185,255,945
Total Depreciation 12,659,911 12,952,249 14,666,947 13,781,030 11,256,151 65,316,288
IGV Reimbursement 2,507,353 6,762,559 9,269,912
Operating Expenses (3
months) 2,507,353
Cash Flow from
0 49,135,825 51,571,364 74,404,438 59,172,869 23,050,298 257,334,792
Operations
Mining Royalty 1,600,049 1,735,953 2,533,092 2,121,241 1,011,988 9,002,323

Workers Participation 3,691,100 4,797,406 7,420,806 5,638,738 1,465,111 23,013,161
Income Tax 12,734,295 16,551,049 25,601,782 19,453,645 5,054,634 79,395,405
Cash Flow before
Government 0 67,161,268 74,655,771 109,960,117 86,386,493 30,582,031 368,745,681
Deductions
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Table 9.17: Profit & Loss Statement

Ore Weight 1,065,991 1,399,755 1,744,300 1,797,502 1,799,609 7,807,157
Ore t/day 3,046 3,999 4,984 5,136 5,142
Revenue
Total from Flotation 78,355,293 97,907,218 131,898,658 106,286,921 44,540,919 458,989,009
Total from Gravimetry 31,647,150 18,890,422 24,755,936 29,775,152 36,058,470 141,127,130
Total Revenue 110,002,444 116,797,640 156,654,594 136,062,073 80,599,389 600,116,139
Operating Costs
Mine and Lima Expenses 26,491,747 32,540,125 39,846,434 44,815,066 42,283,657 185,977,029
Concentrate Transport 1,016,673 853,713 848,010 2,990 13,297 2,734,683
Concentrate Deductions 7,862,293 5,869,726 6,000,032 4,857,525 7,720,404 32,309,980
Total Operating Costs 35,370,713 39,263,564 46,694,476 49,675,581 50,017,358 221,021,692
Depreciation
Fix Asset: Machinery
Installed (20%) 7,788,661 7,788,661 7,788,661 7,788,661 7,788,661 38,943,303
Mobile Equipment (25%) 138,802 138,802 138,802 138,802 555,206
Balance of Plant (Life of
the Mine) 4,732,449 5,024,787 6,739,485 5,853,568 3,467,491 25,817,779
Total Depreciation 12,659,911 12,952,249 14,666,947 13,781,030 11,256,151 65,316,288
Interest Expenses
Amount to be Financed on
65,316,288
Interest 8% per annum 14,233,021 2,878,305 17,111,326
Operating Profit before
Mining Royalty, Taxes
and Workers'
Participation 47,738,799 61,703,522 95,293,170 72,605,463 19,325,879 296,666,833
Mining Royalty
% on Revenue: 1% first 60
million
and 2% on the Balance 1,600,049 1,735,953 2,533,092 2,121,241 1,011,988 9,002,323
Operating Profit before
Taxes
and Workers'
Participation 46,138,750 59,967,570 92,760,078 70,484,221 18,313,892 287,664,510
Workers Participation 8% 3,691,100 4,797,406 7,420,806 5,638,738 1,465,111 23,013,161
Profit before Income Tax 42,447,650 55,170,164 85,339,272 64,845,484 16,848,780 264,651,350
Income Tax 30% 12,734,295 16,551,049 25,601,782 19,453,645 5,054,634 79,395,405
Net Profit 29,713,355 38,619,115 59,737,490 45,391,839 11,794,146 185,255,945
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Table 9.18: Profit & Loss versus Metal Prices

1 2 3 4 5 TOTAL
Conservative 28,777,854 31,051,221 44,642,621 30,284,608 7,229,339 141,985,642
Base 29,713,355 38,619,115 59,737,490 45,391,839 11,794,146 185,255,945
Optimistic 73,377,420 78,682,135 87,832,171 60,517,291 20,294,826 320,703,843
Table 9.19: Loan Amortization (USD) over 3 years

Principle Fixed
Installments Principle Interest paid Payment Balance
1 73,154,243 731,542 2,712,082 3,443,624 70,442,161
2 70,442,161 704,422 2,739,202 3,443,624 67,702,959
3 67,702,959 677,030 2,766,594 3,443,624 64,936,364
4 64,936,364 649,364 2,794,260 3,443,624 62,142,104
5 62,142,104 621,421 2,822,203 3,443,624 59,319,901
6 59,319,901 593,199 2,850,425 3,443,624 56,469,476
7 56,469,476 564,695 2,878,929 3,443,624 53,590,547
8 53,590,547 535,905 2,907,719 3,443,624 50,682,828
9 50,682,828 506,828 2,936,796 3,443,624 47,746,033
10 47,746,033 477,460 2,966,164 3,443,624 44,779,869
11 44,779,869 447,799 2,995,825 3,443,624 41,784,044
12 41,784,044 417,840 3,025,784 3,443,624 38,758,260
13 38,758,260 387,583 3,056,041 3,443,624 35,702,219
14 35,702,219 357,022 3,086,602 3,443,624 32,615,617
15 32,615,617 326,156 3,117,468 3,443,624 29,498,149
16 29,498,149 294,981 3,148,643 3,443,624 26,349,507
17 26,349,507 263,495 3,180,129 3,443,624 23,169,378
18 23,169,378 231,694 3,211,930 3,443,624 19,957,447
19 19,957,447 199,574 3,244,050 3,443,624 16,713,398
20 16,713,398 167,134 3,276,490 3,443,624 13,436,908
21 13,436,908 134,369 3,309,255 3,443,624 10,127,653
22 10,127,653 101,277 3,342,347 3,443,624 6,785,305
23 6,785,305 67,853 3,375,771 3,443,624 3,409,534
24 3,409,534 34,095 3,409,529 3,443,624 6
TOTAL 9,492,739 73,154,237 82,646,971
In October 2008 the Lima Stanford Group - Stanford Consulting Peru SRL was
commissioned by Andean American Mining to perform a financial and sensitivity
analysis on the Invicta Project data available. By using Bloomberg’s market forecast of
metal prices a set of ‘Optimistic, Base, and Conservative’ metal prices for each year of
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the LOM were created. In their analysis the metal forecast prices of the ‘Base Case’ were
used (Table 9.20).
Table 9.20: Base Case Metal Prices

Year 1 Year 2 Year 3 Year 4 Year 5
Au USD/oz 921 845 864 760 600
Ag USD/oz 16 15.9 14.42 13.47 11.53
Cu USD/lb 3.28 3.02 2.41 2.25 2.05
Pb USD/lb 0.81 0.79 0.65 0.63 0.52
Zn USD/lb 0.94 1.04 1.05 0.89 0.7
Stanford’s summary conclusions were:
!" Year 1 EBITDA/Sales ratio is 72.3%, decreasing over time due to change in
mineral content and decline of prices
!" Average EBITDA/Net Investment ratio is above 158% during the first year of
operation.
!" 5 year Average return of investment of 67.8%.
!" The Net Present Value (11% discount rate) of the 5-year Free Cash Flow net of
debt amortization amounts to USD 159 million in base case scenario.
!" Invicta Project’s NPV remains positive at higher discount rates
!" When price levels are 20% below the base forecast the NPV for shareholders
remains USD 98.90 million and the IRR of the project at 72%.
!" Invicta would remain a profitable project even if the estimated net investment
rises up to USD 90 million.
!" For every 5% change in the operating costs of Invicta the NPV changes
approximately USD 5 million.
!" When the operating costs are 20% above the estimated value the NPV for
shareholders is calculated as USD 137.65 million.
Please refer to Appendix G for Stanford’s complete power point presentation.
Special Note: Revenue in the Stanford presentation is higher than those in the text of
this feasibility report. The results from Knelson Laboratories in Zimbabwe for CVD
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(continuous variable discharge) technology had only just become available and those
results were incorporated in the Stanford analysis. The CVD tests indicated higher
recoveries for all metals. It is Invicta’s intent to further examine the CVD technology
and change the processing plant design and add the required number of Knelson CVD
cones.
9.6 Commercial Terms and Valuation of Concentrates
The concentrates valuation is based on prices shown in Table 9.21.
Table 9.21: Mineral Pricing
Metal Unit Low Medium High Actual Projected

Gold USD/oz 450 550 650 854 1000
Silver USD/oz 8 10 13.75 15.25 20.00
Copper USD/lb 1.5 2.25 3.35 3.39 4.00
Lead USD/lb 0.5 1.00 1.50 0.88 1.00
Zinc USD/lb 0.8 1.25 1.50 0.76 1.25
The total recovery used for gold in the metallurgical balances are 78% to 90%, and for
silver 60% to 75%. However, in the last laboratory metallurgical tests, the total recovery
of gold and silver (gravimetric + bulk lixiviation + selective flotation) ranges from: 87% to
94% for gold and 79% to 89% for silver.
Two companies, Consorcio Minero Cormin S.A. and Procesadora Sudamericana, have
prepared commercial terms for the purchase of gold, silver, copper, lead, and zinc
concentrates. These letters are available in their entirety in Appendix G.
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10 ENGINEERING, PROCUREMENT AND CONSTRUCTION
10.1 Overview
The construction and engineering management team will be providing services that
include working methods and systems to effectively plan, schedule and organize,
monitor, control and report all the activities that make up the total program of the
Invicta project scope of work as well as those of all engineering and construction
contractors.
The status of the Invicta Project is as follows:
The main road to the concentrator plant has been surveyed and the secondary road
connecting Paran to the mine is plotted on the topographical maps.
The mining plan has been laid out and the adits, drifts, crosscuts and raises have been
located.
The first and critical activities of the project are the construction of the access roads and
driving the tunnels and raises in the mine.
Certificates have been obtained from the Ministry regarding the absence of
archeological remains in the areas affected by the project. The Environmental Impact
Assessment that was submitted to the Ministry in June 2008 is in the final approval
stage. Permits from the neighboring communities have been obtained to build the plant,
the roads, and the water and power lines on their lands.
Equipment with long delivery times has been purchased to allow adherence to the 12 to
15 months construction timeframe; in particular, the rod and ball mills, bridge crane and
the four tailings disc filters.
Site preparation will start as soon as the heavy equipment is brought up to the plant site
at 2,300 m elevation. The main building has been designed, and the contractor for the
supply and erection of the steel has been selected. The erection of the building steel
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frame and the installation of the bridge crane will allow speedy erection of tanks and
equipment inside the main building.
The remaining engineering work will be finished while the site preparation and the
building steel erection are completed. Inquiry specifications, comparisons of tenders
and purchase orders will be issued for long delivery items, such as transformers.
10.2 Time of Performance
Pre-production mine development will require approximately 12 months to complete. A

high probability exists that mine development work will yield minable ore, which will be
stockpiled to provide feed for the concentrator plant.
Although construction of the water line from the well to the plant site is not on the
critical path the detail design for this system is well under way.
The required power line section from the Andahuasi substation is not on the critical
path, but the high voltage switchgear that is required at the Andahuasi substation will
be a priority.
10.3 Critical Path Planning and Scheduling
The attached schedule (Appendix H) shows the critical path identified to-date. Items on
the critical path will be carefully monitored and reported on the bi-weekly schedule
issue. Any delay will be immediately identified and measures will be taken to rectify the
situation.
Regular expediting and inspection will be done by internationally recognized firms in the
equipment suppliers’ workshops. These reports will be reviewed together with the
schedule issues.
The first critical step for a successful project is detailed preplanning in conjunction with
the contractors and vendor representatives. Our past experience has proven that early,
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thorough preplanning leads to a more successful construction program both in time and
money.
Constructability reviews of preliminary engineering drawings often lead to construction

method and design changes, which can have a positive impact on both the cost and
schedule.
Changes made during the initial stages of a project are by far the most cost effective and
have the least impact on the project schedule. These changes are then integrated into
the master project schedule and cost control systems.
Wherever possible the activities will start as early as possible. This will take the pressure
off the construction teams and will allow for correction of activities where delay may be
developing.
10.4 Engineering
10.4.1 Process
The conceptual engineering for the process of the 5,100 t/d capacity concentrator plant
is now completed. This project includes areas for crushing, pre-concentration, grinding,
flotation, thickening, filtration and tailings disposal.
Process flow diagrams were prepared by Goldex SAC and are now being finalized as a
gravity flow flash flotation circuit.
The crushing circuit is designed to treat 5,100 t/d of ore in a 16 hour, seven day per
week operation. Primary crushing will take place in the mine and the ore conveyed to a
20,000 tonne storage pile near the concentrator plant at 2,300 m elevation.
The crushing circuit has three stages of crushing and screening feeding the fine ore bins
ahead of the pre-concentration. Material from the pre-concentrators will be fed to the
grinding circuit which consists of a rod mill producing material of 500 micron size
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feeding Knelson concentrators, Regrinding in a ball mill to 250 micron size followed by
another set of Knelson concentrators.
From the grinding circuit the material will be pumped to the flotation circuit which has
bulk flotation (Pb/Cu) and rougher-scavenger (Zn) flotation. Concentrates of Cu, Pb and
Zn will be fed to their respective thickeners and filters.
For tailings disposal UltraSep (ultra high rate) thickeners are considered. The underflow
from the thickeners will be pumped to four vacuum disc filters.
The recovered water will be recirculated for reuse, while the dry tailings will be
conveyed to the tailings disposal site approximately 400 m from the plant.
The water requirement of the above process is 200 l/s. The recovered water is 85%. The
balance will be made up from well water.
Power requirement of the process is 6,760 kW at the production rate of 5,100 t/d.
10.4.2 Metallurgy
The following is a summary of the metallurgical process research undertaken by Invicta

Mining Corp.
Invicta has a low sulphidation ore deposit with gold, silver, copper, lead and zinc
content. Considering the above metal content several metallurgical tests were
conducted in order to optimize the recovery process.
In February 2008 ABR Minera conducted exploratory gravimetric tests and bulk flotation
with basic metals of groups, each group with high, medium and low amounts of metals.
The results show 90% plus recovery of gold with 10% plus by gravimetric, 65% through
bulk concentrate and 10% in pyrite concentrate.
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In March 2008 the National University of Engineering (UNI) conducted optimization tests
of gravimetric and bulk flotation. Vibrating tables have improved the gravimetric
recovery of gold to 70%.
In April 2008 ED & ED Ingenieria y Servicios SAC, conducted a second gravimetric

optimization test vibrating tables confirming 68% gold recovery before differential
flotation.
In October 2008 high grade and low grade ore from the Invicta mine was tested by
Knelson Laboratories with 80 to 82% gold recovery by gravimetry.
Tests are currently being conducted combining gravimetry with flash flotation as well as
testing the recovery of Micron Wave tables in order to reach gold recovery of 98%. The
test results are shown in the Metallurgy section of this study.
10.4.3 Civil Works
Engineering for the “civil works” includes the site preparation for the concentrator
plant, the survey and detail design of the 13 km access road to the concentrator plant,
the 2.3 km road from Paran to the mine, design of the tailings dams, and design of the
building and equipment foundations.
To date the topographical maps for the roads, the tailing storage areas, the mine site
and plant site have been prepared. The roads have been surveyed and the design of the
main tailings dam has been completed. The mine camp, cook house and office layout
has been designed. Preliminary design of the ball mill foundation has been prepared.
10.4.4 Structural Works
Preliminary design of the concentrator plant main building is completed. Detail design of
the ancillary buildings, such as the plant office, control room, motor control center
(MCC), mechanical and electrical maintenance buildings, vehicle maintenance shop,
warehouse, bunk houses and cook house is under way.
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10.4.5 Mechanical and Piping Design.
A well has been drilled and proven in a 72 hour test that it is capable of supporting the
project. Detail design is now complete for the water supply system to the plant and to
the mine. Preliminary design is complete for the crushing circuit. Process flow diagrams
for the balance of the concentrator plant are being reviewed and modified to
incorporate the gravimetry and flash flotation systems.
All major equipment has been sized and tanks designed ready to be issued for price
inquiry.
10.4.6 Electrical and Instrumentation Design
Motors have been sized for all major equipment. Total power requirement of the
project has been calculated and the transmission line detail design has been completed.
Discussions were held with the owners of the Andahuasi substation to allow the
installation of the necessary high voltage switchgear on their property.
Preliminary design of the substation at the plant has been done.
Process controls will be supplied by the vendors of the crushing and grinding circuits,
the thickener and filter systems as well as the tailing thickener and filters. Process
control of the balance of plant will be designed in house.
10.4.7 Environmental Work and Permitting
Environmental Impact Assessment (EIA) has been submitted to the ministry in June
2008. The questions posed by the ministry have been satisfactorily answered,
community meetings were held with ministry representatives. We expect to receive the
official approval in the near future.
Archeological certificate (CIRA) to certify the absence of archeological remains from the
mine site has been received. Similar certificates for the plant site and the tailings
disposal site have been applied for. These certificates are expected to be issued shortly.
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Permission from the Communities and Municipalities has been received for the use of
the land for the water and power lines and the satellite buildings at the mine area.
Permission to build the concentrator plant is expected shortly.
Permission from the Huacho Municipality (ATDR) for drilling of the well has been
received. Application for the use of the water from ATDR is under way.
Permission for the use of the water from the Institute of National Resources (INRENA) is
a three stage process. First; the permit to study the use of the water is required.
Request has been made and permit received. Second; detail study has to be completed
and submitted. A study was made by CESEL and submitted. Third; this study has to be
approved by INRENA. Approval is expected shortly.
Building permit, plumbing permit and electrical permit have to be requested from the
Communities and Municipalities as detail design drawings are completed. These permits
are usually given as soon as the National Civil Defense reviews and approves them.
10.5 Quality Assurance and Quality Control
Quality workmanship is important to Andean American Mining in all facets of its

operations. Their team has numerous construction qualifications all based on sound
Quality Assurance systems and effective Quality Control procedures.
Invicta’s philosophy is “Doing it Right the First Time”, producing a design based on
sound engineering principles, in compliance with all applicable guidelines, codes and
standards that will result in a safe and operable facility.
The quality management system is designed to provide services that meet

requirements. Invicta’s management and staff are firmly committed to, and trained in,
the successful practicing of this program. The level of quality expected will be
established and communicated to all project team members at the beginning of the
project, and all work will be performed to that level of quality.
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The proposed project execution plan was developed based on the recognition that those
who actually perform the work within their respective department can best accomplish
compliance with quality requirements. Program requirements for control, surveillance
and documentation provide the necessary confidence to project management that
activities affecting quality are in compliance with the established criteria.
Invicta measures its quality performance by:
!" The degree of design rework between the Issued for Review documents and the
Issued for Construction package
!" Engineering, procurement, and vendor compliance with milestone dates in the
Procurement Plan;
!" Construction rework due to engineering or vendor errors or omissions;
!" Performance against budget;
!" Performance against schedule;
10.6 Safety
Safety is paramount in Andean American’s Invicta Project construction program. The

company recognizes the importance of putting safety first in the project design, project
construction, and in field support activities. Therefore, at the start of the project,
Andean American will develop a project-specific safety execution plan, which will
include a project specific safety program
10.6.1 Program Effectiveness
The effectiveness of the safety program depends upon the active participation and
personal cooperation of all employees and positive coordination of their efforts toward
carrying out the following responsibilities:
!" Proper planning of all work to minimize personal injury, property damage and
loss of productive efforts.
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!" Establish and maintain a safety culture, which will provide early detection and
correction of unsafe practices and conditions.
!" Establish and implement safety education and accident prevention programs
designed to stimulate and maintain the interest and active participation of all
personnel involved.
10.7 Procurement
A catalogue of potential vendors has been compiled with their budget price proposals.
Contract bids have been received for the supply of pump systems, electric motors and
crushers as well as for supply and installation of the power lines, water lines, thickeners
and buildings. Inquiries were sent to freight forwarding companies and their bids have
been compared and evaluated.
10.8 Construction Team
Members of Invicta management team have extensive and proven heavy industrial
construction backgrounds with the necessary experience for the successful execution of
this project.
The management team indicated on the organization charts presented are personnel
with many years of international experience working with multiple engineering
disciplines and construction groups. The management group experience covers
numerous mining projects; including gold, silver, copper, lead, zinc, uranium,
molybdenum and rare earth; as well as petrochemical plants, pipelines, compressor
stations, power dams, LNG, Propane/Butane plants, steam plants and a variety of
projects in the forest products industries.
Bringing this valuable experience to the Invicta Project ensures the completion of this
project within budget and schedule expectations
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10.9 Training and Development for Operating Personnel
Invicta Project plans to bring on board the operating and maintenance personnel early.
Approximately three months before start up, the training of the operating personnel by
professional trainers will begin. At that time some of the equipment will already be in
the testing stage, which is very useful for the operators to witness.
The maintenance personnel will be present during the testing and commissioning of the
equipment that will give them a better insight of the critical features of the equipment
that they will have to maintain later on.
10.10 Communities
There are three neighbouring communities Paran, Lacsanga and Santo Domingo de
Apache. Invicta has been working with these three communities since the beginning of
2008 (described in detail in Section 9). The company has been assisting with the design
and supply of some of the needed community infrastructure. The company has also
provided school supplies and workshops for women.
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11 APPENDIX A - NI 43-101 TECHNICAL REPORT
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12 APPENDIX B - MINE PLAN
Appendix Table 1: Metal Prices
Appendix Table 2: Mine Plan
Appendix Table 3: Long Term Mining Plan by Mining Area
Appendix Table 4: Block of Mineable Reserves per Year
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13 APPENDIX C - METALLURGICAL REPORTS
Contents
ABR Minera SAC, Metallurgical, Gravimetric Test and Flotation of Polymetallic

Minerals
Universidad Nacional de Ingenieria – Pilot Plant of Ores Processing and Extractive

Metallurgy
Universidad Nacional de Ingenieria – Gravimetric Metallurgical Test
SGS Lakefield Laboratories report
ED & ED Ingenieria SAC report
Knelson CVD report
Met-Solve Laboratories
June, 2009 119

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14 APPENDIX D - ENGINEERING PROCESS DIAGRAMS
Engineering Drawings
June, 2009 120

FEASIBILITY STUDY
15 APPENDIX E - INFRASTRUCTURE
CESEL Calculation
Water Supply document
June, 2009 121

FEASIBILITY STUDY
16 APPENDIX F - ENVIRONMENTAL IMPACT
Environmental Impact Assessment Report
June, 2009 122

FEASIBILITY STUDY
17 APPENDIX G - COST, FINANCING & COMMERCIAL TERMS
Consorcio Minero Cormin S.A. Report
Procesadora Sudamericana Report
Stanford Presentation Slides
June, 2009 123

FEASIBILITY STUDY
18 APPENDIX H - PLANNING
Critical Path and Scheduling
Purchasing Schedule
June, 2009 124

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INVICTA MINE FEASIBILITY STUDY

prepared for ANDEAN AMERICAN MINING

5.4.4 Shrinkage Stopes..................................................................................................55

9.5 Financial Analysis....................................................................................................102

Table 5.8: Compressed Air Requirements ..................................................................................60

Figure 1.1: Invicta Property location map

1.2 Ownership & History

1.3 Regional and Local Geology

Sediments, quartzite, sandstone and limestone of the Goyllarisquizga Group were

Observation and data suggest multiple phases of mineralization. Two phases of

As of October 2006 to the present, Andean American has completed an additional 48

1.5 Quality Control

The objective of Quality Assurance and Quality Control (QA/QC) programs on

1.6 Mine Design

1.7 Metallurgy Testing and Design

1.8 Reserves and LOM (life of mine)

1.9 Products Schedule and Commercialization

The sulfides concentrates production plan is shown in Table 1.1.

Table 1.1: Sulfides Concentrates Production Plan

The gravimetric concentrates production plan is presented in Table 1.2.

Table 1.2: Gravimetric Concentrates Production Plan

1.10 Processing and Project Development

1.10.1 Processing Plant

The pre-concentrator area contains continuous Knelson gravimetric concentrators. The

1.10.2 Ore Haulage System

1.10.3 Energy Supply

1.10.4 Water Supply

1.10.5 Access Road

1.10.6 Environmental Study and Legal Permissions

1.10.7 Social Permission

Good community relations are an important part of a mining operation. Invicta

The company has supported local communities to the following amounts:

!" Paran Community Sl. 236,000.00;

!" Paran Community Sl. 200,000.00;

1.11 Operating and Capital Costs

1.12 Project Schedule

1.13 Conclusions & Recommendations

Table 1.3: Base Case Metal Prices

1. Year 1 EBITDA/Sales ratio is 72.3%, decreasing over time due to change in

3. 5-year Average return of investment of 67.8%.

5. Invicta Project’s NPV remains positive at higher discount rates.

2.1 Guy Lokhorst, P. Eng.

Original document with professional stamp.

2.2 Victor Jaramillo, P. Geo.

2.3 Les Tarnai, P. Eng.

2.4 Rose Masias, MSc

On September 9, 2005, a subsidiary of Andean American Mining Corp., Andean

3.2 The Property

The Invicta Property is comprised of 21 mining concessions and 30 claims, and

Table 3.1: Concessions and Claims of Invicta Property

Figure 3.1: Map of Concessions and Claims

3.3 Property Location, Service Features & Biophysical Environment

Figure 3.2: Location of Invicta Property

4.1 Regional Geology

Sediments, quartzite, sandstone and limestone of the Goyllarisquizga Group were

Figure 4.1: Invicta Property Regional Geology Map

The regional stratigraphy is presented in Table 4.1: Regional Stratigraphy.

Table 4.1: Regional Stratigraphy

4.2 Property Geology