Peru

Apoquindo Minerals Inc. has optioned the Zafranal Porphyry Cu-Au Deposit in the Department of Arequipa, Peru from Teck Resources Limited (TCK.B:TSX).

HIGHLIGHTS:

• Discovered by Teck Cominco in 2003 within the northern segment of the Paleocene Porphyry Copper Belt, Peru
• Mega deposit potential. Best mineralization defined over a 1200m x 250m area with a 100m thickness
• In the vicinity of several known mega-deposits:
  • Cuajone - 1.2Bt @ 0.64% Cu
                 - 61Mt @ 0.49% Cu oxides
  • Cerro Verde - 1.0Bt @ 0.51% Cu
  • Toquepala - 770Mt @ 0.74% Cu
  • Quellaveco - Secondary Sulphides: 213Mt @ 0.94% Cu, 0.014% Mo, 1.74g/t Ag
                      - Primary Sulphides: 761Mt @ 0.57% Cu, 0.23% Mo, 2.32g/t Ag
• Drilling to date: 36 holes (performed by Teck in 2003) Select assays include:
  • 110m of 1.02% Cu
  • 77m of 1.80% Cu & 0.21 g/t Au
  • 70m of 1.08% Cu & 0.25 g/t Au
• Acquired the Sicera Norte Mining Property, within Zafranal
• Reported full geochemical results from the completed surface sampling program at the Sicera Sur Zone
• Granted surface access rights by Autodema, a state agency that owns all surface rights in the Zafranal Property
• Aggressively exploring five excellent porphyry copper-gold prospects which exist within the property boundary

Location and Access

Zafranal is located 90 km NW of the city of Arequipa in Southern Peru. Access to the property is excellent on a 41.5km dirt road from the Panamerican highway. The road access has been upgraded and drill roads have been completed for the upcoming drilling campaign.

The property under option totals 24,499.6 hectares (ha) and consists of 27 claims, totaling 19,799.6 ha, which are 100% owned by Teck, and 4,700 ha which are subject to a 1.5% capped NSR to a third party. Property elevation ranges from 2,300 m to 2,900 m with moderate to steep relief and scarce vegetation.

In addition to the Zafranal porphyry, several other prospective porphyry copper prospects have been recognized within the property boundary, including the Sicera Sur, Sicera Norte, Campanero and Ganchos targets.


2009-2010 Exploration Program



An aggressive 40,000m drill program is being launched, consisting of infill, step-out and exploratory drilling to test the mineralization at depth. The program also includes extensive geological mapping and sampling, geophysical surveying, and additional metallurgical studies.

Drilling to date has shown the best copper mineralization comes from an enriched blanket defined over a 1200m x 250m area with a thickness of approximately 100m. This east-west trending area averages approximately 0.9% Cu, consisting principally of chalcocite and covellite replacing chalcopyrite. Additional twinning of the previously drilled RC holes by diamond drilling is planned.

In addition to the Zafranal prospect, the drilling program includes exploratory drilling on surrounding satellite targets within the Zafranal Property boundary. These addition targets include the Sicera Sur, Sicera Norte, Campanero and Ganchos copper-gold porphyry prospects.

Field crews have continued remapping the Zafranal Main Zone, where they completed a systematic surface rock sampling program (100 meter grid). Assay results obtained from rock sampling completed to date show a distinct copper anomaly in the leach capping overlying the enriched zone identified by Teck in its 2004 and 2005 drilling campaigns.

Field work has also been conducted on some of the satellite prospects within the project, including work at the Sicera Sur, Sicera Norte and Ganchosprospects, where extensive areas of phyllic alteration and leached capping are similar to that observed at the Zafranal Main Zone.

The company completed a surface sampling program on the Sicera Sur zone, and announced the full geochemical results on November 5th, 2009. This zone is located 6.5 km west of the Zafranal Main Zone.

The Sicera Sur zone is marked by a 3 km by 1.8 km zone of phyllic alteration exhibiting a well-developed leached capping, typical to porphyry copper prospects in the area. The leached capping occurs within a sequence of Mesozoic limestone, shale and sandstone units intruded by diorite and minor quartz-diorite dykes and plugs. Sicera Sur lies along an east-west structural trend, which includes the Zafranal Main Zone. This structural trend is a splay of the Incapuquio Fault system, controlling the location of both the supergene-enriched Zafranal Main Zone and Sicera Sur targets. Field crews sampled the Sicera Sur zone, focusing along access roads built by previous operators. A total of 223 samples were collected, of which 14% (31 samples) yielded copper values over 0.1% Cu and 50% (112 samples) were higher than 300 ppm. The significant portion of samples with plus 300 ppm copper suggests that a significant supergene enriched blanket, such as the one in the Zafranal Main Zone, may exist at Sicera Sur.

Full ownership of the Sicera Norte zone was purchased for a one-time payment of US$50,000 . There has been no previous drilling in the core area of this prospect, although Teck completed a hole in the propylitic zone to the west. Teck never had control of the main Sicera Norte mineralization.

Further sampling, mapping and exploration drilling is planned for most of these porphyry prospects.

Exploration History

Zafranal was first discovered by Teck in early 2003 as part of a generative exploration program within the northern segment of the Southern Peru Porphyry Copper Belt. Exploration efforts by Teck to date include detailed mapping, rock sampling, 5km of AMT geophysical surveying over four lines, and orientation EM geophysical surveying.

36 holes (32 RC holes, 4 diamond) were drilled between 2004 and 2005 totaling 11,805m. The main deposit was drilled at wide drill spacings of 250m-400m. Limited diamond drilling by Teck returned higher copper grades than RC drilling in the same location.

Several other excellent prospective porphyry copper-gold prospects (Sicera Sur, Sicera Norte and Campanero) have been recognized within the Zafranal property boundary, with very little exploration carried out to date on most of them. Work at the Campanero and Sicera prospects included AMT and gradient-array IP surveys (50 line-km total) and 18 exploratory RC drill holes totaling 4,899m.

Zafranal Drilling Highlights from 2003-2005
Supergene: Chalcocite, Covellite



Technical Geological Information

Geological mapping of the main deposit has outlined an east-west trending, funnel-shaped zone of strong phyllic-alteration over a 4500m x 500m-1500m area. This altered zone is hosted by a strongly foliated, fine-grained volcano-sedimentary unit of Jurassic age cut by several generations of porphyritic diorite to stocks and dykes of dacitic composition with weak to moderate phyllic alteration and moderate to strong biotite alteration. Geological interpretation of drill hole data indicates that the Copper-Gold rich porphyry system is associated with a multiphase biotite-altered quartz diorite to diorite stock located at the center of the Zafranal alteration system.

Drilling at Zafranal has shown that mineralization and alteration have a well-zoned pattern consisting of a leached zone, an immature enriched supergene blanket and a much lesser explored hypogene sulphide zone. The best copper mineralization comes from an enriched blanket defined over a 1200m x 250m x 100m (thickness of blanket) east-west trending area which averages approximately 0.9% Cu consisting of chalcopyrite replaced by chalcocite and covellite. The mineralization is open to the west for at least 300m, to the east and at depth.

Mineralization at surface includes disseminated pyrite within distal areas and abundant "D" and rare "B" veins in the core of the zone. Copper oxides observed include malachite, chrysocolla, azurite, and atacamite in the form of veins, fracture fillings, disseminations and stains. The system is not strongly leached and systematic outcrop sampling returned anomalous copper and molybdenum values (2,147 ppm Cu average).

Mineralization in the enriched blanket consists of chalcocite as rims or total replacements of chalcopyrite as well as chalcocite coatings over pyrite grains. Covellite is also present but in lesser quantities. Most chalcocite/covellite is disseminated or vein-controlled as it follows the distribution pattern of chalcopyrite-pyrite. The nature of the leached zone (0.1-0.2% Cu), the presence of malachite and azurite and the mix of chalcocite with chalcopyrite and pyrite in the enriched zone are characteristics of an immature blanket with moderate enrichment. Company geologists expect the primary ore to be relatively high grade in order to produce an enrichment blanket grading over 0.9% Cu. The fact that high-grade primary copper mineralization was intercepted near the bottom of hole RC-08 18m @ 0.88% Cu, 0.18 Au g/t suggests the presence of a high grade porphyry Cu-Au-Mo system in potassic alteration at depth which has not been adequately tested. The shallow secondary copper mineralization seen at Zafranal is open to the east and west and the primary copper-gold zone is open at depth.

Metallurgy

Minera KoriTambo will perform metallurgical testing in the first year of the work program under the direction of an independent qualified person.

Deal Structure

Apoquindo has four years to exercise its initial option to acquire a 51% interest in the Zafranal property by:

1. Making cash payments totaling US $5,000,000;
2. Incurring work expenditures totalling US $7,500,000 (of which $2,225,000 of expenditures are considered a firm commitment) and;
3. Issuing an aggregate of 1,500,000 common shares, all by May 31, 2013

Teck may exercise a back-in right at any time prior to Apoquindo exercising its first option for 51%. The back-in right is for 11% (resulting in a 60% Teck interest and 40% Apoquindo interest) by making a cash payment of up to US $2 million and incurring additional expenditures based on the amounts contributed by Apoquindo at the time the back-in right is exercised. If Teck does not exercise its back-in right, Apoquindo will have the option of increasing its interest in the Zafranal property to 60% by paying Teck US $5,000,000, following which, if Teck elects not to participate in funding its 40% interest, Apoquindo will have the option of acquiring a 100% interest in the Zafranal property, subject to a 1% net smelter return royalty payable to Teck, by paying Teck an additional US $15,000,000 as an advance against the royalty.