Bayaguana Concessions

overview

Perilya has 100% interests in the Managuá, Rincón Abajo and Trinidad Concessions and the Company's exploration program covers approximately 7,200 hectares of the Los Ranchos Formation. Perilya's concessions in the Bayaguana district cover a large area of intense alteration in the Los Ranchos Formation surrounding the Managuá volcanic centre and which is recognized as the largest hydrothermal alteration complex in the Dominican Republic outside the Pueblo Viejo system which lies 70 kilometers to the northwest. The Los Ranchos Formation hosts Barrick Gold/Goldcorp's operation at Pueblo Viejo where construction started in 2008.

During 2008, Perilya reinterpreted the geology of the eastern segment of the Bayaguana district, particularly the Guaimarote basin on the Trinidad Concession, and considers that the geological setting is very similar to that of the Pueblo Viejo system. This interpretation has been confirmed by geologists at the Pueblo Viejo operation. Perilya believes that a large portion of the Bayaguana district has had little exploration for gold. Copper and silver are also associated with mineralisation in the Los Ranchos Formation.

project highlights

• Concessions cover a large area of intense alteration in the Los Ranchos Formation surrounding the Managuá volcanic centre.
• The geological setting of the Trinidad Concession, volcanic centres associated with volcanoclastic basins, is very similar to the one of Pueblo Viejo. Interpretation of new aeromagnetic data and regional mapping has revealed the presence of sub-vertical hydrothermal feeder structures. These areas are subject of a current aggressive exploration program.
• Independent mineral resource estimates for three copper/gold deposits, Cerro Kiosko, Doña Amanda and Doña Loretta.
• Mineral resource estimates were reported in February, 2006 for the Cerro Kiosko deposit on the Managua Concession and the Doña Loretta and Doña Amanda deposits on the Rincón Abajo Concession. View Technical Report

Mineral Resource Statement
Mineral Type	Tonnes	Cu (%)	Ag (g/t)	Au (g/t)
Doña Loretta
Inferred	8.20	0.50
Doña Amanda
Inferred	127.77	0.31	1.43	0.19
Cerro Kiosko
Measured and Indicated	0.57	1.01	4.20	1.93
Inferred	4.36	0.98	5.17	2.01

location

The Bayaguana Concessions are situated some 50 kilometers northeast of Santo Domingo, and 5 kilometers north of the town of Bayaguana (population 20,000) where Perilya maintains an office. A paved highway connects Bayaguana to Santo Domingo and access to the property is by a network of gravel roads and agricultural tracks. The terrain is rolling hills, covered in light scrub or rough pasture, used for cattle or horse ranching.

regional geology

The geology of the Bayaguana district is dominated by the Los Ranchos Formation which includes basalt flows, dacitic domes and volcanolastic/sedimentary sequences. The Formation is defined by a series of volcanic centres, and coeval sedimentary basins. Large high sulphidation fluid systems carrying metals, principally gold and copper, developed in the vicinity of the volcanic centres. Dacite dome complexes are surrounded by pyroclastic aprons of coarsely fragmented heterolithic tuff breccias and interbedded finer-grained tuffs. In some areas, these volcanic/volcanoclastic sequences grade into carbonate-rich sedimentary sequences.The Bayaguana district is considered to be the largest and most important high sulphidation hydrothermal system discovered in the Los Ranchos Formation, outside of Pueblo Viejo. Sulphidic silicification is centred on dacite domes and extends locally into the dacitic tuffs and, occasionally, into the sedimentary units. Argillic alteration (quartz, pyrite and kaolinite assemblage) is largely confined to pyroclastic blankets surrounding the dacite domes. Prophylitic alteration (quartz, pyrite, chlorite, calcite assemblage) is zoned around the argillized and silicified dacitic core and is largely confined to basalts. Copper/gold mineralisation is mainly associated with the argillic alteration zones. New silcification/sulphide alteration zones have been recognized in sedimentary and volcanoclastic sequences along near-vertical northwest-trending fractures.

property potential and exploration

The current exploration program is focused on the Trinidad Concession and the eastern part of the Rincón Abajo Concession with the objective of identifying gold/silver mineralisation similar to Pueblo Viejo in the Guaimarote volcano-sedimentary sequence located in the eastern segment of the Bayaguana District. The copper-rich Doña Loretta, Doña Amanda and Cerro Kiosko deposits, have been evaluated by Perilya in prior exploration programs.

guaimarote basin

Recent geological mapping in the Trinidad and Rincón Abajo Concessions on targets in the Guaimarote volcano-sedimentary basin has established the presence near surface of epiclastic and sedimentary rocks in an area previously thought to be underlain by deep colluvium. These new exposures add several square kilometers to an area which is stratigraphically equivalent to the volcano-sedimentary basin infill units of the Pueblo Viejo district. The sedimentary sequence in the Guaimarote Basin includes epiclastic, carbonaceous and carbonate sediments and is overlain by massive limestones of the Hatillo Formation.

Near the western margin of the Guaimarote basin, a number of mineralized hydrothermal feeder structures have been recognized and traced into the basin sediments. The current program includes detailed geologic mapping focused on the hydrothermal conduits and their relationship with the adjacent epiclastic sediments, and an induced polarisation survey to identify zones of strong silicification and sulphide replacement within the hydrothermal corridors. The exploration model is based on the geology of Pueblo Viejo and assumes that gold-bearing hydrothermal fluids rose along near-vertical conduits and then spread along shallow conformable contacts into the overlying epiclastic sedimentary section.

doña loretta

In 2004, Doña Loretta was identified as a large scale copper porphyry system. The mineralisation consists mainly of chalcopyrite and chalcocite in breccia pipes within quartz-feldspar porphyry. The mineralisation appears to be confined to the breccia pipes, and to the porphyry between breccia pipes, with very limited dissemination into the surrounding porphyry systems. The system is open in all directions and at depth.

The deposit is located 5 kilometers to the east of Doña Amanda. Doña Loretta may represent the eastern extension of the Managuá volcanic system. The two areas are separated by a 4-kilometer wide valley, covered by marine sediments, which effectively mask geophysical and geochemical signatures. Drilling at Doña Loretta was carried out by Falconbridge (1990 and 1999), and by Perilya in 2003/04. In the Perilya program, the best drilling intersection (CC-01) returned 64 meters grading 2.0% copper, while its twin hole (CC-07) returned 53.4 meters grading 1.2% copper. In 2004, detailed mapping was carried out by Perilya over a large induced polarisation anomaly with co-incident elevated copper in soils over a 3.5 kilometer by 800 meter area. An area of over 1 square kilometer in the southern part of the Doña Loretta system showed anomalous gold in soils overlying the previous drill successes. In mid-2004, 8 drill holes were completed. The best results were obtained in the area of the southern anomaly where hole CC-08 intersected 98 meters grading 0.6% copper. Drilling in the northern part of Doña Loretta did not result in anomalous intersections. The induced polarisation anomalies extend north-westwards from the identified mineralisation at Doña Loretta under the masking alluvium, indicating that mineralisation may extend in that direction.

Future exploration will include deep induced polarisation surveys and additional drilling in order to further define the mineralisation.

doña amanda

The Doña Amanda copper deposit is located on the Rincón Abajo Concession where copper occurs in a zone of supergene enrichment above a lower grade protore. The host rock is a dacitic dome with strong phyllic and sulphidic alteration in a pyroclastic tuff breccia apron. This is cut locally by pyrite- and chalcopyrite-bearing quartz stockworks. The hydrothermal alteration continues westwards onto the Managuá Concession. The enrichment blanket was discovered by drilling and is known to exist between a minimum depth below surface of 10 meters and a maximum of 150 meters. The deposit was drilled by Falconbridge prior to acquisition by Perilya. The longest intersection in the Falconbridge drilling was in hole DA 06 which returned 117 meters grading 0.41% copper. The highest grade intersected was in the lower part of hole DA 03, where 24.6 meters averaged 0.65% copper and 0.30 grams per tonne gold. Separated by an 8-meter barren section, mineralisation higher in the same hole showed 34.9 meters grading 0.45% copper and 0.18 grams per tonne gold.

A geophysical program by Perilya identified a series of induced polarisation anomalies, running 4,000-meters north from the known mineralisation coincident with copper and zinc in soil anomalies. These anomalies were drilled in a 7 hole program in 2002, but without significant results. In 2003, a further 19 holes were drilled and representative samples were sent for metallurgical testing at SGS Lakefield Research in Canada. It was demonstrated that the material may be amenable to solvent extraction/electrowinning for copper.

In 2004, two step-out holes were drilled and an intersection of 21.3 meters grading 0.51% copper was returned some 300 meters to the northwest of the known deposit.

In 2007, a large well-defined electromagnetic/magnetic anomaly was identified at Doña Amanda by a Fugro HeliGEOTEM® airborne survey. Inversion work shows a highly conductive deep core system underlying the southern portion of the Doña Amanda enrichment blanket. The interpretation of the anomaly suggests the conductor may be at a depth of 180 meters, at least 400 meters by 150 meters in size (along a north-south trend) and continues below the detection depth of the airborne geophysical equipment. The anomaly was tested with 2 drill holes in 2007 with no relevant results. Further drilling needs to be completed to fully test this deep geophysical target.

cerro kiosko

The Cerro Kiosko zone lies to the west of the Managuá volcanic centre which, although in a different geological setting, is likely to be related to the same metallogenic source. The Cerro Kiosko zone is located in the southwest corner of the Managuá Concession and consists of a system of crustiform banded, chalcedonic to microcrystalline, milky quartz veins with moderate to high sulphide content. The zone is controlled by northwest-striking normal faults dipping around 60° to the southwest. Drilling to date has shown that the vein system varies from 1.25 to 22 meters in thickness and has been traced 1,100 meters along strike and to a depth of 400 meters. Cerro Kiosko is open along strike and at depth.