Batero Gold Corp. announced the results of the Mineral Resource update and the preliminary economic assessment ("PEA") of its 100% owned La Cumbre project located in the department of Risaralda, Colombia. Three intrusive centers have been identified within the mining property: Dos Quebradas, Mandeval-Centro and La Cumbre.

They are copper-poor gold porphyry-type systems in which the intermediate argillic conclusion locally overprints an early potassic assemblage and stockwork of quartz veins, where gold is found in altered dioritic intrusions and contact zones. The Dos Quebradas and Centro-Mandeval intrusives were verified with some drilling, pending their characterization and development of the filling program to determine their mining potential. Additionally, to the south of the property, epithermal-type mineralized structures and the presence of mineralized breccias have been found.

Batero has been acquiring surface property that is within the area of influence of the pit and mining infrastructure. To date, it has 67 properties corresponding to 250.51 Ha, which fully cover the area of influence of the pit and the area of influence of the deposit of organic and waste material located north of the pit and, partially, the areas corresponding to the stockpile and plant. The pending properties are under evaluation of the state of titles and commercial appraisals.

The La Cumbre Project contemplates a two-phases mine plan, the first phase reflects a 6-year mine life. Phase II extends the mine life to 14 years through an expansion to the sulphide zone by gravimetry and flotation. Phase I contemplates average annual production of up to 75.4 koz Au and 96.4 koz Ag over a 6-year mine life.

Phase II contemplates an expansion of the processing facilities which would increase average annual production upto 131.7 koz Au and 230.1 koz Ag. over the remaining life of mine. The total operating cost including mining, processing, site G&A, treatment and refining adds to a total of $1,113 million.

The C1 cash cost on a by-product basis over the life-of-mine totals $684/oz of gold or $12.90/t milled. 21. The estimate for phase one capital expenditure includes a contingency of 12.8% and totals $169.5 million of initial capital while phase two includes a contingency of 25% and totals $248.3 million for the expansion.

The first stage, designed to treat the ore from the oxide and transition zones at a rate of 15,000 tons per day, has as its principal process the extraction of gold by leaching with cyanide solution in dynamic pads with estimated recovery of 85.5% in 18 days of spraying. The second stage, designed to treat 30,000 tons per day of ore from the primary zone, aims to concentrate the gold-bearing ore by gravimetric and flotation processes, with laboratory tests estimating a recovery of 84.9% between the two concentrates. Subsequently, the concentrates are leached by the CIL process, where a recovery of 95% is estimated, giving an overall recovery of 80.6% gold.

With the inclusion of phase II and assuming a gold price of $1,750 per ounce, the pre-tax net present value of the total project using a 5% discount rate is $730 million; the IRR is 47.5%, and payback period is 1.9 years. On a post-tax basis, the NPV discounted at 5% is $481 million, the IRR is 32.1%, and the payback period is 2.5 years. According to the tables 1 and 2 the valuation metrics are highly sensitive to the gold price and at a price of $1,925 per ounce, the post-tax net present value of LOM, using a 5% discount rate, increases to $609 million and the internal rate of return in LOM increases to 38.4%.