PROJECTS

OUR

PROJECTS AND OPERATIONS

El Bagre

Soma's El Bagre Gold Mining Complex is located approximately 167 km north-northeast of Medellín in the Department of Antioquia, Colombia. Soma produced 23,115 ounces of gold at its El Bagre Mill in 2022 - an increase of 30% from the previous year. Soma’s production forecast for 2023 is a further 50% increase to 35,500 ounces of gold produced.

The increased gold production will be driven by:

Increased throughputs as mechanized mining is implemented at the Cordero Mine.
Higher average gold grades as our legacy La Ye and Mangos Mines are mined out, and substantially all 2023 ore will be sources from the higher-grade Cordero Mine.

The El Bagre Mill processes approximately 450 tonnes per day (tpd) when running at full capacity and is permitted for up to 1,000 tpd. The mill historically achieves gold recoveries of ~87% and silver recoveries of ~81%. The plant consists of the following main circuits:

- Three-stage crushing

- One-stage grinding

- Flash coarse rougher flotation in the grinding circuit

- Gravity concentration and intensive cyanide leaching

- Flotation, thickening, and clarification

- Regrinding and cyanidation

- Filtration and cyanide detoxification

- Merrill Crowe gold recovery

- Smelting

- Reagent preparation

- Tailings disposal

El Limon

In addition to its operating El Bagre Mill, Soma owns the 225 tpd Limon Mill which is located 47 km south of the El Bagre Mill. The Limon Mill has been on care and maintenance since 2020 but is available to be restarted when production from the Cordero Mine exceeds the capacity of the El Bagre Mill.

The Limon Mill operates similarly to the El Bagre Mill with two-stage crushing, ball milling, gravity concentration, flotation, cyanidation, Merrill Crowe precipitation, and smelting to produce doré. The mill was upgraded in 2017 to a capacity of 225 tpd and is permitted for up to 400 tpd.

Soma has formalized agreements with three of the (formerly illegal) small miners near the El Limon Project and anticipates formalizing additional miners in the future. This allows them access to modern mining and processing technologies, including eliminating the need to use mercury to extract gold. It is anticipated that these small miners will provide some of the feed for the El Limon mill when it is restarted.

Resources and Preliminary Economic Assessment (PEA)

Soma recently released an independent NI 43-101 Technical Report updating the resources at its Cordero and Nechí Projects. The Technical Report was prepared by SLR Consulting (Canada) Ltd. and has an effective date of December 31, 2022. Total inclusive indicated and inferred resources at the Company’s Cordero mine increased by 18% and 1,093% respectively since 2018.

Total inclusive Indicated and Inferred Mineral Resources on the Company’s properties in Antioquia, Colombia are as follows:

The Technical Report also outlined robust project economics for the development of the Cordero Mine:

Using a base-case metal price of US$1,700 per ounce of gold and CAD/US$ exchange rate of 0.75, the project has a pre-tax NPV of $94.6 million and an after-tax NPV of $55.9 million, both using an 8% discount rate.
Average annual gold production over the life of mine is estimated at 44,376 ounces per year from 2023 to 2025.

Cordero Mine

The Cordero Mine is part of the Company’s El Bagre Gold Mining Complex. Development of the Cordero mine began in September of 2020 and commercial production was achieved as of January 1, 2023. Soma’s legacy mines, La Ye and Los Mangos, have been mined out and are being decommissioned in early 2023. Going forward, Cordero will be supplying the mill feed for the El Bagre Mill and, as mine production warrants the restart of the Limon Mill. This should have a significant positive impact on gold production, as La Ye and Mangos ore has averaged ~4.5 g/t gold in recent years, while Cordero’s resources are grading 6.9 g/t and 7.9 g/t for indicated and inferred resources respectively.

The production rate of 84 thousand tonnes (kt) in 2022 is scheduled to ramp up to a peak mining production rate of 248 kt (680 tpd) in 2024. Achieving the planned peak production rate of 248 kt per annum would allow the Company to restart its previously operating El Limon Mill, with feed from Cordero in late 2023.

Based on the results of the PEA, the current Life of Mine (LOM) plan for Cordero is just over three years, ending in early 2026. However, it is anticipated that our current drill program, with both surface and underground drilling underway, will add new resources to materially extend Cordero’s mine life.

Soma has purchased its own fleet of new Sandvik underground mining equipment and is now self-performing all mining and sustaining development work.

The Cordero mine is proposed to be approximately 1,280 m on strike and 300 m deep, with veins dipping from 30 degrees to 45 degrees. The LOM plan envisions a mixture of both traditional and mechanized mining. In the central portion of the Mineral Resource area, mining will be carried out by a narrow, near vertical, non-mechanized cut and fill mining method. Production work in this area is done by teams using pneumatic handheld drilling equipment. Mechanized overhand cut and fill mining is planned for the deeper and north-south extents of the Cordero mine, using equipment owned and operated by Soma. The introduction of mechanized mining will allow Soma to materially increase production and mill throughput to warrant restarting the El Limon Mill.

Nechí Project

The underground Nechí Project (Nechí) is located approximately 350 km from the city of Medellín, in the department of Antioquia, Colombia. The municipality is bordered to the South by the municipality of El Bagre, Soma's primary base of operations.

Nechí consists of the El Catorce, Santa Elena, and Santa Maria deposits. Test mining has been performed at both El Catorce and Santa Elena with underground sampling along the levels and in raises driven up the dip of the veins. Material from the test mining was successfully processed at the El Bagre Mill, and the Nechí deposits have the potential to both increase the throughput and extend the life of the Company’s El Bagre Gold Mining Complex.

Exploration

To the south of El Limon, the Company owns 100% of the Zara Exploration Project (“Zara”). Zara is contiguous with the El Bagre and El Limon Projects, and together they form a highly prospective concession package totaling over 29,000 Ha.

The Company has outlined a number of high priority exploration targets on its Zara properties based on the existence of historical and existing artisanal mining operations. These include (north to south):

Estrella
Limon
Alacran-Diamantina
Primavera
Limoncita
Cañon de Rojas

For 2023, the Company is planning on completing 20,000m of surface diamond drilling, in addition to underground drilling at Cordero. Approximately ~50% of the drilling is planned for initial target evaluation at our high-priority Zara targets with the other 50% planned for at or near the Cordero Mine.

Soma has also planned a robust program of grass roots exploration to identify additional targets for future drilling. This work is to include an airborne magnetic, radiometric, and topographic survey, prospecting, mapping, and soil and stream sediment sampling.

Regional Geology

The OTU fault corridor, consisting of the OTU, Pericos and El Bagre faults hosts multiple high-grade gold mines. The area between Nechí and Segovia has produced over 18M ounces of gold without considering informal mining which is estimated to be 2-3 times the formal production. It is one of the most prolific and under-explored land packages in the world.

Soma's projects lie within the Central Cordillera of the Andes Mountains. In the Bagre-Nechí gold mining district the vast majority of historical gold production to date has come from alluvial deposits within river basins, including the Nechí River.

In addition to alluvial gold, structurally controlled mesothermal gold-silver and sulphide-bearing quartz vein lode deposits are hosted within intrusive rocks. Nechí and El Bagre are two examples of such mineralization. The mineralized veins at Nechí are hosted within the Mesozoic-aged Segovia batholith and mineralized veins at El Bagre are hosted within the Carboniferous aged El Carmen intrusive. The veins average approximately one metre in thickness and extend for up to five kilometres.

At El Bagre, the veins of La Ye, Mangos, and Cordero are hosted in shear zones with fragile ductile deformation within carboniferous granite rocks of the El Carmen stock. At the regional level, the main structure to the west is the sinistral Otú fault system which trends north-south to north-northwest near the municipality of Zaragoza. El Limon and the bulk of Soma’s Zara concessions are on the Otú fault. This fault which brings into contact carboniferous plutonic rocks from the El Carmen stock with metamorphic Permo-Triassic rocks grouped regionally as the Cajamarca Complex.

The Otú fault is the most northern expression of the Otú-Pericos fault system. To the east is the El Bagre fault, interpreted regionally as an overrun fault, which brings the Segovia batholith into contact with Precambrian metamorphic rocks grouped in the San Lucas Gneiss. To the southeast are volcano-sedimentary deposits of Segovia and to the north are the sedimentary rocks of the Caucasia Formation, the Tarazá Formation, and the recent deposits of the Nechí and Tiguí rivers, which mask the trace of the Otú fault and cover discordantly the granite rocks of the Segovia batholith and El Carmen stock.

Qualified

Person

Chris Buchanan, P.Geo., Soma's VP of Exploration and a Qualified Person as defined by National Instrument 43-101, is responsible for the technical information contained on this website.

Brazil

The Company also owns 100% of the copper/gold Tucuma Exploration Project located in the Carajas metallogenic province in the State of Pará, Brazil.

The Tucuma Project is currently under option to Ero Copper Corp.