Caballo Blanco Gold Project | Candelaria Mining Corp.

Veracruz, Mexico

Caballo Blanco

Candelaria Mining Corp. owns a 100% interest in the Caballo Blanco project, located on the eastern coast of Mexico in the State of Veracruz, approximately 65 kilometres northwest of the City of Veracruz.

The licence area comprises approximately 19,650 hectares across 14 contiguous mining claims. La Paila is the most advanced project within the licence area, together with additional high-priority exploration targets in the Northern and Highway Zones.

The Company is currently evaluating strategic alternatives for Caballo Blanco while maintaining the property and preserving its ability to advance the project.

Mineral Resource Estimate

La Paila mineral resource

The most recent mineral resource estimate for La Paila is contained in the technical report titled "Technical Report – Caballo Blanco Project, Resource Update – La Paila Zone, Veracruz State, Mexico", dated April 20, 2017, with an effective date of March 20, 2017 (the "2017 Technical Report"), prepared by Jim Cuttle, B.Sc., P.Geo., and Gary H. Giroux, M.A.Sc., P.Eng. The Company has not updated the estimate since that date.

Category	Tonnes	Gold grade	Silver grade	Contained gold	Contained silver
Indicated	31.22 Mt	0.52 g/t Au	2.16 g/t Ag	521,000 oz	2.17 Moz
Inferred	8.63 Mt	0.34 g/t Au	2.14 g/t Ag	95,000 oz	590,000 oz

Notes: 1) Mineral resources are not mineral reserves and do not have demonstrated economic viability. 2) Mineral resources are constrained within a conceptual open pit based on metal prices of US$1,150/oz gold and US$21/oz silver, and are reported at a cut-off grade of 0.11 g/t Au. 3) The mineral resource estimate was prepared by Gary H. Giroux, M.A.Sc., P.Eng., of Giroux Consultants Ltd., an independent Qualified Person as defined by NI 43-101, in accordance with the CIM Definition Standards (May 2014). No measured mineral resources were estimated. 4) Inferred mineral resources have a lower level of confidence than indicated mineral resources and must not be converted to mineral reserves. 5) Tonnes and contained metal are rounded.
The estimate reflects metal prices, costs and other assumptions as at its effective date. Changes in these factors since 2017 could materially affect the estimate. The estimate may also be affected by permitting, environmental, title, socio-political and other factors, including the status of the Company's outstanding drilling permit application. Readers should refer to the 2017 Technical Report, available on SEDAR+ and on this website, for full details.

Project Background

Advanced gold project with district-scale exploration potential

La Paila was the subject of a Preliminary Economic Assessment completed in 2012 for a previous owner of the project. The Company does not consider that assessment to be current, and it should not be relied upon. Following its acquisition of Caballo Blanco, Candelaria completed further geological and exploration work, including the April 2017 updated pit-constrained mineral resource estimate.

Exploration work has identified additional narrow-vein gold targets west of La Paila and improved the geological understanding of the broader licence area. Re-evaluation of the district geophysical dataset has also identified potential porphyry copper-gold targets adjacent to and beneath the known epithermal mineralization.

Property Status

Permitting & property maintenance

The Company's application for an exploration drilling permit at Caballo Blanco remains outstanding, and the Company cannot predict whether or when the permit will be granted.

The Company's current expenditures at Caballo Blanco are focused on permitting and on maintaining the mining concessions in good standing. The Company is not currently conducting exploration fieldwork on the property.

Any future exploration program, including drilling, would depend on receipt of the required permit, the availability of financing and the outcome of the Company's review of strategic alternatives.

Underlying Royalties

Royalty commitments

Caballo Blanco is subject to two underlying royalty commitments:

Almaden Minerals Limited — 1.5% net smelter return royalty.

Arm's-length third party — sliding-scale NSR of 1.25% up to 1,000 tonnes per day; 1.00% from 1,001 to 1,500 tonnes per day; 0.75% from 1,501 to 10,000 tonnes per day; and 0.50% at 10,001 tonnes per day or more.

Geology & Exploration

Technical gallery

Technical Reports

NI 43-101 disclosure

The April 2017 NI 43-101 Technical Report is the Company's most recent technical report for Caballo Blanco. The project was also the subject of a May 2012 NI 43-101 Technical Report and Preliminary Economic Assessment prepared for Goldgroup Mining Inc., a previous owner of the project. That report is historical and is not considered current by the Company.

Qualified Person
The scientific and technical information on this website relating to the Caballo Blanco Project has been reviewed and approved by Jim Cuttle, B.Sc., P.Geo., a Qualified Person as defined by NI 43-101, who is independent of the Company. Mr. Cuttle is a co-author of the 2017 Technical Report. The La Paila mineral resource estimate was prepared by Gary H. Giroux, M.A.Sc., P.Eng., as described in the 2017 Technical Report.

Data verification, sampling, analytical procedures and quality assurance/quality control measures relating to the data underlying the mineral resource estimate are described in Sections 11 and 12 of the 2017 Technical Report. Mr. Cuttle has not carried out further verification of the data since the effective date of the 2017 Technical Report.

Caballo Blanco Technical Report — April 2017PDF ↗Candelaria public filings on SEDAR+↗