43-101 2008 Technical Report On The La Fortuna Project, Durango ...

Mineral reserves for this study were reported using a 0.15g/tonne Au operating cut-off grade. Blocks
within the optimum pit with grades less than 0.15g/tonne Au would have to be mined, but would be
considered as waste.
14.2.5.1 Reserve Cut-off Grades
There are several different types of cut-off grades. During the pit design process when one is determining
whether a block will be mined and processed, an operational cut-off grade is used. This is the grade at
which revenue exceeds mining and processing costs. For the base case, $625 gold price scenario, the
operational cut-off grade was 0.22 grams Au per tonne.
Once the pit limit has been decided, it follows that everything within the pit must be mined. In other
words, mining costs are sunk and the decision shifts to whether a mined block will be sent to the mill or to
the waste pile. The processing cut-off grade is the grade at which revenue exceeds only the processing
costs. For the base case, $625 gold price scenario, the processing cut-off grade was 0.15 grams per tonne.
The following tables are the undiluted reserves results of the pit optimization based on various gold prices:
Undiluted Reserves at $550 per Ounce Gold
Overburden Tonnes 12,100,000
Oxide Below 0.15 g/tonne* 11,100,000
Subtotal, Waste Rock 23,200,000
In-Pit Proven and Probable Reserves
In-Pit Inferred Resources
Cut-off Tonnes Average Cut-off Tonnes Average
Grade Above Grade Grade Above Grade
(g/tonne) Cut-off (g/tonne) Ounces (g/tonne) Cut-off (g/tonne) Ounces
0.15 40,000,000 0.53 680,000 0.15 35,000 0.32 400
Undiluted Reserves at $575 per Ounce Gold
Overburden Tonnes 12,800,000
Oxide Below 0.15 g/tonne* 11,800,000
Subtotal, Waste Rock 24,600,000
In-Pit Proven and Probable Reserves
In-Pit Inferred Resources
Cut-off Tonnes Average Cut-off Tonnes Average
Grade Above Grade Grade Above Grade
(g/tonne) Cut-off (g/tonne) Ounces (g/tonne) Cut-off (g/tonne) Ounces
0.15 42,400,000 0.52 707,000 0.15 41,000 0.32 400
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