P

POPAYATO - LEMITO
Confirmed Gold Copper Mineralization
POTENTIAL

Regional Reconnaissance Mapping Result

Popayato & Lemito Area, Pohuwato Regency – Gorontalo Province

Authored by: MIKHEL DASERONA, JULY 2017

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Executive Summary
The initial site visit and mapping activities, conducted at the Popayato-Lemito area in
Pohuwato Regency, Gorontalo, have unequivocally confirmed the widespread presence of near-
surface gold and copper mineralization. This foundational discovery extends beyond isolated
occurrences, as the findings strongly indicate the potential for larger, economically viable
deposits, encompassing multiple significant mineralization across the region.

Key prospect areas have demonstrated compelling evidence of substantial mineral potential.
The Milangodaa River area has been identified as a “critical zone" of mineralization, featuring a
342-meter-wide outcrop of substantial mineralization at Air Jatung, which is strongly suspected
to be a key indicator of significant mineralization. Similarly, the Humuo River, located 900 meters
west of the Milangodaa River, is a strong indicator of the lateral extent of the mineralized zone
and indicates significant potential. Furthermore, the Gaharu River shows strong evidence of
significant copper.

While the presence of mineralization has now been confirmed, further targeted exploration
is essential for the transition from geological discovery to measurable economic value. The next
phase of work is crucial to precisely define the size and grade of this deposit, ensuring it meets
stringent criteria for viable economic exploitation. This systematic, data-driven approach will be
crucial in de-risking the project and unlocking its full economic potential. The initial confirmation
of mineralization serves as strong validation, indicating that the project is ready for a strategic
shift from simply identifying the presence of minerals to rigorous demonstration of its economic
scale. The type of mineralization identified, associated with ore deposits formed by hydrothermal
fluids associated with volcanic activity, typically on or near the seafloor, is typically associated
with large, long-lived deposits, suggesting that surface findings are strong indicators of a much
larger resource base. This reframes the initial discovery as strategic validation of significant
economic potential, rather than simply a geological observation.

The explicit designation of Milangodaa River as the "critical mineralization zone" for the
Lemito and Popayato area is more than a geographical description; it implies a unified, larger-
scale mineral system rather than disparate, isolated occurrences. This interconnectedness
suggests a regional mineralizing event or pervasive structural control affecting the entire area.
This indicates that the project is not just a collection of individual prospects but potentially a
contiguous, district-scale resource play, which significantly enhances its overall strategic value
and resource estimation potential.

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Introduction: Unveiling a District-Scale Gold and Copper Opportunity in
Popayato-Lemito

An initial, comprehensive reconnaissance program at the Popayato-Lemito project in

Gorontalo, Indonesia, has unequivocally confirmed the presence of widespread, near-surface
gold and copper mineralization. The results of this foundational fieldwork, which covered a
substantial 67.63 square kilometers, have validated the region's high prospectivity, transitioning
the project from a conceptual target to a tangible asset with significant, district-scale potential.

The exploration program has successfully identified three primary prospect areas—
Milangodaa, Gaharu, and Humuo—each providing compelling and complementary evidence of a
large, interconnected mineralizing system. The Milangodaa River has emerged as a "critical
zone," anchored by the discovery of a remarkable 342-meter-wide mineralized outcrop at Air
Jatung, which is believed to be a key indicator of a primary mineralizing source for the entire
district. This is supported by findings at the Gaharu River, which exhibit the classic diagnostic
signature of a copper-rich Volcanic Massive Sulfide (VMS) system, and at the Humuo River, which
displays the high-temperature alteration patterns characteristic of a system's core, or "feeder
zone".

The strategic implication of these findings is profound. The discoveries are not viewed as
isolated pockets of mineralization but as the surface expression of a unified, robust mineral
system operating on a district-wide scale. The identification of a VMS-style setting is particularly
significant, as these systems are globally renowned for hosting large, long-lived, polymetallic
deposits rich in copper, gold, zinc, lead, and silver. This geological context elevates the project's
potential, aligning it with established models for major mineral belts known for world-class
resources.

This report provides a comprehensive overview of these foundational discoveries. It

deconstructs the geological evidence from the initial mapping and sampling program, presents a
detailed genetic model for the VMS system identified at the Milangodaa outcrop, and translates
these scientific findings into a clear assessment of economic potential. With mineralization now
confirmed, the project is at a pivotal juncture, ready to shift from a phase of discovery to one of
rigorous economic quantification. This document concludes by outlining a strategic, data-driven
exploration plan designed to define the size and grade of the deposits, charting a clear path
toward unlocking the full value of the Popayato-Lemito mineral district.

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1. Project Overview: A Strategic Look at Popayato-Lemito

The Popayato-Lemito Project is strategically situated within the Pohuwato District,

Gorontalo, Indonesia. The initial site visit and quick mapping activities, which form the foundation
of this report, were systematically conducted by Mikhel Daserona from mid-January to June
2017. This initial phase covered a substantial area of 67.63 square kilometers.

The program’s core objectives were twofold: first, to define the geological and stratigraphic
framework of the region, and second, to follow up on prior recommendations specifically aimed
at identifying gold mineralization targets across the area. This approach highlights a deliberate,
multi-stage exploration process, where initial geological understanding provides the basis for
targeted mineral search.

The scope of the initial fieldwork involved extensive geological mapping, covering 15,851
meters, and the collection of 165 rock samples, comprising 157 rock chips and 8 rock floats. These
samples were collected from key prospect areas, including Lemito, Milangodaa, and Humuo
(Popayato). This methodical, phased exploration strategy, where initial mapping and rock
sampling serve as foundational prerequisites for subsequent, more detailed geochemical work,
is a positive indicator for project management. It suggests a well-managed project that builds
understanding incrementally, reducing geological uncertainty with each phase. This implies that
the initial work was not random, but a targeted effort based on pre-existing geological rationale.

The sheer scale of this initial "quick mapping" effort covering 67.63 square kilometers,
involving 15,851 meters stream-based mapping, and collecting 165 rock samples is noteworthy.
Such an extensive first-stage field program for a reconnaissance-level report suggests that prior
desktop studies or preliminary reconnaissance must have indicated substantial prospectivity.
This implies a higher level of confidence in the area's potential from the outset, moving beyond
basic curiosity to a more focused, resource-driven exploration. The following table provides a
concise summary of the initial exploration activities and their scope.

Table 1.1: Summar of mapping activities in Popayato – Lemito District

Activities Unit Amount

Mapping sqm 67,63
Rock Chip Sampling pcs 157
Rock Float Sampling pcs 8

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 Figure 1.1. Map showing sampling locations covering the Milangodaa, Gaharu River and Humuo River
areas. The yellow dashed circles highlighting the location of gold-copper anomalies.

2. Key Discoveries: Unveiling Gold and Copper Prospects

The initial site visit and mapping activities have yielded significant geological observations
and confirmed mineralization across three primary prospect areas: Gaharu River, Milangodaa
River, and Humuo River. Each area presents distinct characteristics contributing to the overall
prospectivity of the Popayato-Lemito project.
2.1. Milangodaa River: Crucial Part & Clues to Submarine Volcanism and VMS
Mineralization

Geological work in Milangodaa River, including its branches (Cabang Kiri and Cabang Kanan),
identified multiple mineralized outcrops exhibiting strong silica sulfide- massive silica and
pervasive sericitic alteration. At west branch Milangodaa, mineralized volcanic rhyodacite was

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found with intense quartz-pyrite-hematite-chalcopyrite stringers and veinlets, accompanied by
magnetite dissemination within a strongly oxidized silica sulfide-silica massive wall rock and
mineralized breccia. Outcrops in east branch Milangodaa River displayed a porphyritic texture
with intense sericite-quartz alteration, where quartz-sericite veinlets stockwork became
progressively more fractured outwards into volcanic units showing intense fractures filled with
strong copper oxidation staining.

Figure 2.1. The Milangodaa outcrop clearly shows rounded, bulbous, or pillow-shaped structures, which are
characteristic features of pillow lavas (image A, B and C). The rock (image D) exhibits angular fragments
embedded within a finer-grained matrix, which is a characteristic feature of Volcanic breccias, which can form
from the shattering of solidifying lava during eruptions, resulting in alloclastic volcanic breccia.

The Milangodaa outcrop displays distinctive rounded, bulbous pillow lavas, formed as
molten rock rapidly cooled underwater. Their varied coloration-particularly the reddish-brown
and greenish hues-signals significant hydrothermal alteration and mineralization (image 2.1-B).
Reddish tones typically indicate iron oxide deposition, common in submarine volcanic settings,
while darker areas likely represent less altered basalt. Angular rock fragments, embedded within
a finer matrix (image 2.1-D), reveal a brecciated texture. This volcanic breccia resulted from
quench fragmentation during eruption. The dense, dark clasts are consistent with basaltic lava
flows. Therefore, the unit is classified as "intensely quartz-sericite altered pillow lavas" (image
2.1-A & D). This denotes pervasive hydrothermal alteration where hot fluids replaced original
minerals with fine-grained sericite mica and silica. Such intense alteration is a key indicator of
potential volcanogenic massive sulfide (VMS) mineralization systems.

A one meters sized float boulder with intensely quartz veinlet stockwork shows strongly
oxidized and open spaced quartz altered and containing spotted pyrrhotite floating nearby
rhyodacite outcrops. This outcrop which are approximately 235m length and 20m high is found

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not far from the main branch of the Milangodaa River. Further downstream along the main
Milangodaa River downstream from the location of Air Jatung waterfall, extending 30 meters
widespread blockfield of in-situ boulders was identified. These boulders showed silica sulfide
with lesser sulfide alteration and intense stockwork quartz-hematite-limonite-pyrite, all hosted
in volcanic rock-breccia with strong oxidations.

A 750m approximately width of intensely stockwork zone and 250m width of hydrothermal
breccia (milled fluidized breccia) outcrops have recently been found in the Milangodaa River, in
the middle area between Air Jatung and Batu Sarungan site. This mineralised outcrop seems to
have strong relationship with diorite porphyry intrusion have been mapped in the Batu Sarungan
waterfall site. The stockwork veinlets zone are suspected to host gold mineralisation, similarly to
outcrop were sampled at Humuo River. Further downstream, a 30-meter high rhyodacite outcrop
was mapped, displaying lesser stockwork-like fractures filled with quartz-hematite-limonite
within a 5 to 10-meter sheeted silica massive-silica sulfide alteration zone.

Figure 2.2. Milangodaa mineralization outcrop: a diverse range of alteration and mineralization styles:
silica sulfide-silica massive, sericitic alteration, quartz-pyrite-hematite-chalcopyrite stringers, magnetite
dissemination and strong copper oxidation staining.

The detailed descriptions for Milangodaa include a diverse range of alteration and
mineralization styles: silica sulfide-silica massive, sericitic alteration, quartz-pyrite-hematite-
chalcopyrite stringers, magnetite dissemination, porphyritic texture, and strong copper oxidation
staining. The breccia, characterized by angular fragments cemented together (image 2.2.B) giving
reddish and greenish hues visible in the rock with strong magnetic property indicate the presence
of copper mineralization and silica, which often manifest in such colours due to oxidation and
alteration processes. This heterogeneity, particularly the co-occurrence of silica sulfide and
breccia textures associated with copper and gold, suggests a multi-mineral resource. Such
complexity, although difficult to unravel, often leads to very large and rich mineral districts where

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multiple economic mineral deposits can occur side by side and contribute to the overall resource
potential.
Crucially, the Milangodaa River has been explicitly identified as a “critical zone” for Lemito
and Popayato. A particularly significant discovery is a 342-meter-wide outcrop at the Air Jatung
site, which is considered crucial evidence of potential primary mineralization for the entire
Popayato-Lemito project. This outcrop contains intense quartz-pyrite-chalcopyrite and quartz-
pyrite-sphalerite stockworks, enveloping a quartz stockwork breccia core. This specific stockwork
vein zone is strongly suspected to be the primary host for gold-copper mineralization in the
project area. The repeated emphasis on the Milangodaa River as a critical zone demonstrates
that Milangodaa is not just another prospect, but potentially a key and crucial part of the overall
mineral system. This implies that the presence of a large hydrothermal system is shaping
widespread mineralization across the wider project area, making it a priority target for more
intensive exploration in the future.

Figure 2.3. Milangodaa mineralization outcrop: a diverse range of alteration and mineralization
styles: quartz-sericite and quartz-pyrite veins, magnetite dissemination and strong copper
oxidation staining.

2.2. Gaharu River: Indicators of Copper-Rich Systems

A quick geological mapping of the Gaharu River, an important western branch of the Lemito
River, revealed an east-west to east-southeast trending stream that intersects almost
perpendicularly with the suspected mineralized structure, a circular rim of a dome structure. This
perpendicular intersection is geologically significant because rivers often exploit zones of
structural weakness. When a river cuts perpendicular to mineralized structures, it effectively
creates a natural cross-section, exposing multiple mineralized zones that might otherwise be
hidden. This enhances the prospectivity of the area by providing excellent natural exposure for

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mapping and sampling, suggesting a broader, structurally controlled mineral system rather than
just isolated pockets.
Samples collected predominantly from the contact and peripheral areas of intrusions and
volcanics exhibit high alteration. The dominant rock types include highly altered breccia, basaltic-
andesitic pillowed lava, and pelagic sediments such as siltstone, shale, and chert.
Veins observed in Gaharu River are predominantly sheeted and stockwork quartz veins,
typically white to grayish white, fine-grained, and displaying a granular silica texture. Critical
mineral associations within these veins include quartz-sericite-pyrite, quartz-pyrite-chalcopyrite-
sphalerite. The combination of sheeted and stockwork quartz veins with these specific mineral
associations within highly altered breccia and basaltic-andesitic lava, alongside a significant
copper presence, forms a classic diagnostic signature for Volcanic Massive Sulfide (VMS) systems.
VMS deposits are large-tonage, medium-to-high grade deposits typically associated with volcanic
rocks. This suggests a specific, potentially large-scale, and economically significant deposit type,
implying a deeper, magmatic-hydrothermal source for mineralization.
A strong indicator of copper mineralization is the widespread presence of significant
amounts of bluish-green rock floats scattered along the river. These floats are associated with
sericite-quartz altered boulder floats, which themselves contain quartz-pyrite and quartz-
sericite-pyrite stockwork veinlets, collectively suggesting a robust copper anomaly in the area.
2.3. Humuo River: Pathways to Core of Mineralization
Humuo River, also known as North Branch of Popayato River, was already recognized for
containing significant gold and copper within a small window of highly altered, oxidized-silicified
dacitic-andesitic lava and granodiorite-hosted stockwork quartz-sulfide veinlets. Recent sampling
activities focused on identifying further mineralization indicators.
An intermediate intrusive outcrop (sill) has been mapped 162 meters upstream from the
known gold and copper occurrence (Sample PPO-05: 0,8ppm Au). This sill exhibits strong
oxidation, intense silicate alteration with illite-kaolinite, and contains intense stockwork-like
veinlets with open-space quartz textures. Resampling of the stockwork outcrop of mineralized
quartz veins confirmed the presence of quartz-sulfide veins within the intrusive granodiorite and
oxidized-silicified andesite lava.
An intrusive granite outcrop was identified at KM 19 Humuo, approximately 100 meters west
of the fly camp site. This unit displays strong sericite/muscovite alteration and epidote veinlets.
Abundant float boulders of strongly sericite-biotite-chlorite altered granodiorite-diorite were
also observed in the creek bed, with some showing moderate copper oxidation staining and
chlorite-sericite veining.
Two distinct outcrops exhibiting argillic (kaolinite-illite) alteration and silica-pyrite alteration
were found, separated by 625 meters along an East-West strike. Limonite-jarosite-hematite
filling fractures were also observed on sub crops and large boulders scattered in the riverbed
between these outcrops. Furthermore, the strongly altered intrusive granodiorite, observed to
have intruded into the volcanic unit forming a drag and sheared structure at the contact,
alongside the altered float boulders, thus it can be said that the dominant alteration assemblage

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of the area is chlorite-quartz, which reflects the highest temperatures of the hydrothermal
system, typically above 300-350°C. This alteration forms through the complete destruction of
primary mafic minerals and feldspars in the volcanic host (dacite-rhyolite) by the hot, magnesium
and iron-rich hydrothermal fluids. Geochemically, this process represents significant
metasomatism, characterized by a strong enrichment in MgO and FeO and a profound depletion
of Na2O and CaO. The sulfide veins within the stockwork are characteristically rich in
pyrite/pyrrhotite and chalcopyrite, establishing the feeder zone as the copper-rich core of the
VMS system. The table below provides a concise, comparative overview of the key geological
findings across the three main prospective areas, highlighting the specific indicators of
mineralization and alteration.
Table 2.1: Comparative overview of the key geological findings across Popayato
– Lemito Area

Key Primary
Key Rock Dominant
Area Vein/Mineralizatio Metals
Types/Host Alteration
n Types Indicated
Gaharu River Diatreme Highly altered, Sheeted/stockwork Copper,
breccia, sericite-quartz, quartz veins (Qz- Molybdenu
basaltic- quartz-sericite- Ser-Py, Qz-Py-Sp, m, Gold
andesitic lava, pyrite Chalcopyrite), (trace)
pelagic bluish-green
sediments copper floats
Milangodaa Volcanic Silica sulfide- Qz-Py-Hem-Cpy Gold,
River rhyodacite, silica massive, stringers/veinlets, Copper, Iron
diatreme sericitic, magnetite
breccia, sericite-quartz, dissemination, Qz-
andesite strong oxidation Ser veinlets
porphyry, stockwork, strong
granodiorite Cu oxidation
staining, Qz-Hem-
Lim-Py stockwork,
Qz-Py-Bornite, Qz-
Py-Mo stockwork
Humuo River Dacitic-andesitic Oxidized- Stockwork Qz- Gold,
lava, silicified, illite- sulfide veinlets, Copper, Iron
granodiorite, kaolinite, open space-toothy
intermediate sericite/muscovi Qz, epidote
intrusive (sill), te, argillic, veinlets, Lim-Jar-
granite, sericite-biotite- Hem filling
granodiorite- chlorite fractures, Cu
diorite oxidation staining

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3. The Milangodaa Outcrop: A VMS System in a Submarine Volcanic
Setting
The Milangodaa outcrop presents a striking geological tableau, a preserved fragment of a
dynamic, ancient submarine world now exposed to the elements. The landscape is dominated by
bulbous, interlocking masses of rock, their rounded forms stacked one upon the other in a chaotic
yet orderly fashion. These are classic pillow lavas, their very shape a testament to their birth,
where molten rock met the chilling embrace of deep-water hundreds of millions of years ago.
Between these pillows, and in discrete layers, lie angular, chaotic breccias—sharp-edged
fragments of volcanic glass and rock that speak to more violent episodes of fragmentation, where
thermal shock shattered the cooling lava flows.

Pervading this volcanic architecture is subtle but significant color variations. The dark, mafic
hue of the primary basalt is overprinted by zones of pale, greenish-grey and patches of rusty,
iron-stained gossan. These are not mere superficial weathering effects; they are the indelible
chemical fingerprints of a powerful hydrothermal system that once permeated these rocks.
These alterations halos-foreshadow the presence of a significant mineralizing event,
transforming the outcrop from a simple volcanic pile into a geological puzzle of immense
scientific and economic interest.

Figure 3.3. Milangodaa pillow lava outcrop: a diverse range of alteration styles: silica sulfide-silica
massive, sericitic alteration, quartz-pyrite-hematite-chalcopyrite stringers, magnetite
dissemination and strong copper oxidation staining.

This report provides an exhaustive geological synthesis of the Milangodaa outcrop. Its
purpose is to deconstruct this puzzle, moving from the regional tectonic setting that governed its
formation to the microscopic textures that record its history. The analysis will detail the primary
volcanic lithologies, decipher the complex sequence of hydrothermal alteration and
mineralization, and culminate in a comprehensive genetic model for the system. Ultimately, this
report will assess the outcrop's economic significance as a Volcanogenic Massive Sulfide (VMS)
prospect and provide a framework of key exploration vectors to guide the search for similar,
potentially undiscovered, deposits in the surrounding region.

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4. Regional and Local Geological Setting

4.1. Tectonic Framework

The geological assemblage at the Milangodaa outcrop—characterized by submarine pillow
lavas and associated VMS mineralization—provides unequivocal evidence of its formation in a
subaqueous, extensional tectonic regime. Such settings are typically associated with oceanic
spreading centers, back-arc basins, or rifted continental margins, where crustal thinning
facilitates high-level magmatism and the development of robust hydrothermal systems. The
presence of both mafic (basalt) and felsic (rhyolite-hosted alteration) components suggests a
bimodal volcanic association, a hallmark of arc-related rifting environments.

Figure 4.1. Schematic diagram showing volcanogenic massive sulfide deposits in divergent (mid-
ocean ridge and back-arc basin) and convergent (subduction related island arc and continental
margin arc) plate tectonic settings (Schmincke (2004) and Galley and others (2007))

Based on global analogues, the Milangodaa system can be classified within the spectrum of
VMS deposit types, which are grouped by their host-rock associations. These classifications, such
as bimodal-mafic or felsic-siliciclastic, are not merely descriptive but have profound implications
for the deposit's metal endowment. The specific tectonic setting dictates the composition of the
underlying crust that is leached by hydrothermal fluids. Primitive, mafic-dominated oceanic crust,
as seen in Cyprus-type deposits, typically yields ores rich in copper and sometimes cobalt. In
contrast, more evolved arc or continental margin settings, with a significant component of felsic
volcanic rock in the footwall, are the source for the world's major zinc-lead-silver-gold-rich VMS
deposits, such as those of the Kuroko district in Japan or the Bathurst camp in Canada. The
evidence at Milangodaa, particularly the intense quartz-sericite alteration indicative of a felsic
precursor, points towards a more evolved, bimodal-felsic or felsic-siliciclastic setting (Figure 4.2),
suggesting strong potential for a polymetallic ore system rich in zinc, lead, and precious metals
in addition to copper.

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 Figure 4.2. Volcanogenic massive sulfide deposits model showing lithostratigraphic and
grade–tonnage information for Canadian VMS deposits. Modified from Galley et al.
(2007).

4.2. Structural Controls

VMS deposits do not form randomly; their location is fundamentally controlled by geological
structures. The extensional tectonics that define the regional setting manifest as a series of
synvolcanic faults, grabens, and fissures. These structures are critical, as they provide the high-
permeability pathways necessary for the deep circulation of seawater and the focused upflow of
hot, metal-bearing hydrothermal fluids. The Milangodaa deposit and its associated feeder system
were almost certainly localized along such a fault or fault intersection, which acted as the primary
conduit for the ore-forming fluids from the deep reaction zone to the seafloor. The geometry of
these fault-bounded basins also creates the depressions on the seafloor where thick sequences
of volcanic rocks and the resulting massive sulfide lenses can accumulate and be preserved.

4.3. Post-Depositional History

It is crucial to recognize that the present-day geometry of the Milangodaa outcrop and its
contained mineralization may not reflect its original morphology. Most ancient VMS districts
have been subjected to subsequent tectonic events, typically compressional deformation
associated with the closure of the basin in which they formed. This can result in significant
folding, faulting, and shearing of the orebodies. Such deformation can structurally thicken ore in
fold hinges, creating zones of exceptionally high grade, while attenuating and thinning it on the
fold limbs. Understanding this post-depositional structural overprint is essential for accurately
modeling the orebody's dimensions and for predicting its down-plunge continuation during
exploration drilling.

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5. Lithological Architecture of the Milangodaa Outcrop
The rocks of the Milangodaa outcrop are the products of submarine volcanism, recording a
history that ranges from quiescent lava effusion to explosive fragmentation. A detailed
examination of their characteristics, from outcrop scale to microscopic texture, reveals the
eruptive dynamics of the ancient volcanic system.
5.1. The Volcanic Foundation: Pillow Basalt Sequences
The most voluminous and visually distinctive rock type at the outcrop is pillow basalt. These
sequences are composed of closely packed, bulbous to tubular lobes of lava, typically ranging
from 0.5 to 1.5 meters in diameter. Their formation is indicative of relatively low effusion rates,
where slowly extruded lava develops a flexible, chilled skin that inflates with fresh magma before
rupturing to bud off a new lobe.
These structures provide invaluable information about the original depositional
environment. The pillows exhibit a distinct morphology that serves as a reliable "way-up"
indicator: upper surfaces are characteristically convex and rounded, while the bases are often
concave or tapered where the hot, pliable new pillow has sagged and molded to the shape of the
cooler, solidified pillows beneath it. At the microscopic level, the pillows record the rapid cooling
inherent to their submarine birth. The outer margins, or rinds, are defined by an aphanitic or
even glassy texture, where the lava quenched too quickly for crystals to form. In contrast, the
pillow interiors, insulated by the outer rind, cooled more slowly and developed a more crystalline,
fine-grained (aphanitic to phaneritic) texture composed of interlocking laths of plagioclase
feldspar and grains of pyroxene. Vesicles, or fossilized gas bubbles, are common and are often
concentrated in the upper portions of individual pillows, providing another robust way-up
indicator and a clue to the magma's volatile content and the paleowater depth at the time of
eruption.
5.2. Products of Fragmentation: A Spectrum of Volcanic Breccias
Interspersed with and genetically related to the pillow lavas are various types of volcanic
breccia, fragmental rocks that testify to more energetic or complex eruptive processes.
a. Hyaloclastite and Quench Fragmentation
Commonly found filling the cuspate voids between pillows and in thicker, discrete layers is
hyaloclastite. This is a type of volcaniclastic breccia formed by the non-explosive, quench
fragmentation of lava as it comes into contact with cold seawater. The immense thermal shock
causes the brittle, glassy outer surface encounters, sand- to gravel-sized shards of basaltic glass
(sideromelane). Over time, these glassy fragments readily react with water, altering to a
characteristic yellow, waxy mineraloid known as palagonite. The formation of hyaloclastite is
favored over pillows by higher lava viscosity or steeper flow fronts, where the rate of stress
accumulation from cooling exceeds the lava's ability to deform plastically.

b. Autoclastic Flow Breccias

Also present at Milangodaa are autoclastic breccias. While also composed of angular
fragments, their origin is mechanical rather than thermal. These breccias form by the internal

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 friction and grinding of a lava flow that has become partially solidified. As the viscous, slow-
moving flow advances, its thick, brittle crust is fractured, broken, and re-incorporated into the
still-molten interior, creating a monolithologic breccia where the clasts are of the same
composition as the flow itself. The presence of autoclastic breccia points to periods of highly
viscous, sluggish lava extrusion, perhaps near the end of an eruptive pulse or closer to the
volcanic vent.

c. Lithofacies Associations
These different volcanic products are not randomly distributed but occur in predictable
patterns known as lithofacies associations. A common sequence involves a core of coherent
pillow lavas that grades outwards and upwards into pillow-fragment breccias and hyaloclastites.
This represents the natural evolution of a submarine lava flow, from its effusive center to its
fragmenting, advancing front. The relationship between these facies provides a powerful tool
for reconstructing the volcanic architecture and eruptive history of the Milangodaa system. The
relative abundance of pillows versus breccias is a direct proxy for the physical properties of the
erupting magma. A predominance of pillow lavas indicates fluid, low-viscosity basalt, whereas
an abundance of hyaloclastite and autoclastic breccia signals a more viscous, sluggish, and
potentially more evolved magma composition.

Table 5.1: Lithological Characteristics of the Milangodaa Outcrop. This table summarizes the key diagnostic
features of the primary volcanic rock types, facilitating comparison and highlighting the genetic links between
them.

Key Key
Scale of Genetic
Unit Name Morphological/Structural Textural/Mineralogical
Observation Interpretation
Features Features
Pillow Basalt Macroscopic Bulbous, ellipsoidal, or Aphanitic to glassy rinds; Subaqueous
tubular lobes (0.5-1.5 m); fine-grained crystalline effusive eruption
convex tops and interiors; vesicular tops; of low-viscosity
concave/tapered bases; primary mineralogy of basaltic lava at a
distinct chilled margins. plagioclase, pyroxene, relatively low
olivine. effusion rate.
Hyaloclastite Macroscopic Angular, sand- to gravel-sized Composed of glassy Brittle quench
clasts; often fills interstices sideromelane shards; often fragmentation of
between pillows; can form altered to yellow lava due to
thick, bedded units. palagonite; clastic texture. thermal shock
from rapid
cooling in
seawater.
Autoclastic Macroscopic Monolithologic, angular Clasts show same igneous Mechanical
Breccia clasts; fabric ranges from texture as source lava; fragmentation
jigsaw-fit to chaotic; forms matrix may be finely due to internal
layers within or at the comminuted version of the friction and
top/base of lava flows. same rock. grinding within a
viscous, semi-
solid lava flow.

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6. The Imprint of a VMS Hydrothermal System: Alteration and
Mineralization
The volcanic rocks of the Milangodaa outcrop did not remain pristine. They became the host
and reactant for a large-scale, high-temperature hydrothermal system that fundamentally
transformed their mineralogy and chemistry, ultimately leading to the formation of a VMS
deposit. The resulting alteration zones are not random; they form a predictable, zoned pattern
around the orebody that serves as a detailed map of the ancient fluid-flow pathways.

6.1. The Feeder System: Footwall Stockwork and Proximal Alteration

Beneath the main massive sulfide body lies the fossilized plumbing system of the deposit: a
discordant, pipe-like zone of intense alteration and veining known as the footwall stockwork or
stringer zone. This zone marks the primary conduit through which hot, metal-rich hydrothermal
fluids ascended towards the seafloor. It is characterized by a dense network of anastomosing
quartz-sulfide veins cutting through pervasively altered host rock. The mineralogy of this zone
reflects the highest temperatures of the hydrothermal system, typically more than 300-350°C.
The dominant alteration assemblage is chlorite-quartz, which imparts a dark green to black color
to the rock. This alteration forms through the complete destruction of primary mafic minerals
and feldspars in the host basalt by the hot, magnesium- and iron-rich hydrothermal fluids.
Geochemically, this process represents significant metasomatism, characterized by a strong
enrichment in MgO and FeO and a profound depletion of Na2O and CaO. The sulfide veins within
the stockwork are characteristically rich in pyrite/pyrrhotite and chalcopyrite, establishing the
feeder zone as the copper-rich core of the VMS system.

6.2. The Phyllic Halo: Pervasive Quartz-Sericite Alteration

Moving outwards from the intense chloritic core, the alteration transitions into a broader,
more pervasive halo of phyllic alteration. This zone is defined by the mineral assemblage quartz
+ sericite + pyrite. Sericite, a fine-grained variety of white mica (muscovite), replaces the primary
feldspars, giving the rock a characteristic pale grey or yellowish, bleached appearance and often
a silky sheen on fracture surfaces.
Phyllic alteration is the product of hydrogen-ion metasomatism, occurring as the ascending
hydrothermal fluids cooled slightly and became more acidic (lower pH) through interaction with
the surrounding rock and entrained seawater. The acidic fluids aggressively attacked and
destroyed the primary feldspars (both plagioclase and K-feldspar) and any remaining mafic
minerals. The chemical reaction involves the addition of potassium (K) and hydrogen ions (H+) to
the rock, which combine with aluminum and silica from the breakdown of feldspars to form
sericite, while sodium (Na), calcium (Ca), and magnesium (Mg) are leached out and carried away
by the fluid. The significance of this alteration zone cannot be overstated; it often forms a
footprint many times larger than the economic orebody itself and serves as one of the most
robust and widely used vectors in exploration for VMS and porphyry-style deposits.

16
6.3. The Massive Sulfide Lens: The Heart of the Orebody
At the stratigraphic top of the system lies the economic prize: the massive sulfide lens. This
is a stratabound, concordant body composed of more than 40% sulfide minerals that was
deposited at or just below the ancient seafloor. Its morphology can vary from a distinct mound,
representing a fossilized black smoker complex, to a more tabular or sheet-like body, particularly
where mineralization occurred via sub-seafloor replacement of a permeable rock layer. The
internal textures of the massive sulfide record its depositional history, ranging from massive and
structureless, to brecciated (representing collapsed chimneys or hydraulic fracturing), to finely
laminated, which reflects the episodic pulsing of hydrothermal vents and the settling of sulfide
particles from the plume.
The mineralogy is dominated by iron sulfide (pyrite and/or pyrrhotite), but the economic
value resides in the variable concentrations of chalcopyrite (copper), sphalerite (zinc), and galena
(lead). These minerals are typically zoned, reflecting the temperature-dependent solubility of the
metals in the hydrothermal fluid. A classic VMS deposit exhibits a hot, copper-rich (chalcopyrite)
core immediately above the feeder zone, which grades outwards and upwards into a cooler, zinc-
lead-silver-rich (sphalerite-galena) margin. Gold is often concentrated in the cooler, upper parts
of the massive sulfide body or associated with the zinc-rich facies. This predictable zonation is a
critical concept in both exploration and mine planning.
The distinct alteration zones are not isolated phenomena but are intrinsically linked,
representing a snapshot of a large-scale chemical processing plant. The hot, ascending
hydrothermal fluid acts as a chemical conveyor belt. Deep in the system, in the high-temperature
reaction zone, the fluid leaches a cocktail of elements—including K, Na, Ca, Fe, Mg, Cu, and Zn—
from a vast volume of footwall rock. As this pregnant fluid ascends and cools, it deposits its
mineral cargo in a predictable sequence based on temperature and chemistry. The least soluble
metals at high temperatures, primarily copper, precipitate first within the feeder zone, enriching
the stockwork in chalcopyrite. The fluid, still carrying other elements, continues to rise and
interact with the wallrock. The potassium leached from deep in the system is now deposited as
the fluid cools and reacts with feldspars, forming the broad sericitic (phyllic) halo around the
feeder pipe. This process releases sodium and calcium, which are flushed out of the system.
Finally, upon reaching the cold, oxygenated, and alkaline environment of the seafloor, the fluid
undergoes a catastrophic chemical shock. This triggers the rapid precipitation of its remaining,
more soluble metals—zinc and lead—to form the main massive sulfide lens. Thus, the alteration
zones are a chemical ledger of this process: the chloritic zone remains after the metals and alkalis
have been leached, and the phyllic zone is where some of those leached alkalis (potassium) are
redeposited. This integrated view transforms alteration mapping from a descriptive exercise into
a powerful, predictive tool for understanding the plumbing and metal budget of the entire
mineralizing system.

17
Table 6.1: Zonal Characteristics of the Milangodaa Hydrothermal System. This table provides a comparative
summary of the key geological and geochemical features across the different zones of the VMS alteration system.
AI = Ishikawa Alteration Index, 100*(K2O+MgO)/(K2O+MgO+Na2O+CaO); CCPI = Chlorite-Carbonate-Pyrite Index,
100*(MgO + FeO)/(MgO+FeO+Na2O+K2O).

Dominant Geochemical Key

Position Relative to
Zone Mineral Key Textures Signature Alteration
Ore
Assemblage (Gains/Losses) Indices
Proximal Core/Feeder Zone; Chlorite + Cross-cutting Gains: Fe, Mg, S, High CCPI,
Footwall Discordant, Quartz + stringer veins, Cu. Losses: Na, Low AI
(Stockwork) beneath massive Pyrite + pervasive Ca, K, Si.
sulfide Chalcopyrite replacement,
brecciation.
Distal Enveloping the Quartz + Pervasive, Gains: K, Si, H+. High AI,
Footwall stockwork; Sericite + commonly texture- Losses: Na, Ca, Low CCPI
(Phyllic Halo) Discordant to Pyrite destructive, Mg.
semi-conformable bleached
appearance, silky
sheen.
Massive The Orebody; Pyrite + Massive, Massive Gains: N/A
Sulfide Lens Concordant, Sphalerite + laminated, Fe, S, Cu, Zn, Pb,
stratabound Chalcopyrite ± brecciated, Au, Ag, Ba.
Galena colloform banding.
Hanging Stratigraphically Weak Sericite Less intense, may Variable; may Variable
Wall above massive / Albite / Clay be subtle or show distal
sulfide / Carbonate absent; can be enrichment in
semi-conformable. elements
leached from
below (e.g., K,
Na, Mn, Ba).

7. Synthesis: A Genetic Model for the Milangodaa VMS Deposit

The formation of the Milangodaa VMS deposit can be reconstructed as a multi-stage process,
integrating the tectonic, volcanic, and hydrothermal events detailed in the preceding sections.
This genetic model provides a cohesive narrative for the creation of the observed geological
architecture.
1. Initiation: Tectonic Rifting and Magmatism. The geological history of Milangodaa began
with crustal extension in a submarine volcanic arc or back-arc setting. This rifting created
deep-seated, crust-penetrating faults and allowed for the emplacement of a high-level
magmatic body, which served as the crucial heat engine to drive the subsequent
hydrothermal activity.
2. Volcanic Construction. Lava erupted onto the seafloor along these rift-related faults. The
interaction of this molten rock with cold seawater produced the thick foundational pile
of pillow basalts, pillow breccias, and hyaloclastites that now constitute the footwall and
host rocks of the deposit. The volcanic pile needed to be sufficiently thick and permeable
to support a long-lived hydrothermal system.

18
3. Establishment of Hydrothermal Convection. The presence of a potent heat source
beneath a permeable volcanic pile saturated with seawater inevitably led to the
establishment of a large-scale hydrothermal convection cell. Cold, dense seawater was
drawn down into the crust through fractures and permeable zones, kilometers away from
the future deposit site.
4. The Reaction Zone and Metal Leaching. As this down-welling seawater approached the
magmatic heat source, it was heated to temperatures exceeding 350°C. This
transformation turned it into a buoyant, chemically aggressive, slightly acidic, and
reducing fluid. In this deep "reaction zone," the hot fluid reacted extensively with the
surrounding volcanic rocks, leaching vast quantities of base metals (Cu, Zn, Pb), precious
metals (Au, Ag), sulfur, potassium, and other elements from the rock mass.
5. Focused Upflow and Feeder Zone Formation. Now metal-rich and buoyant, the
hydrothermal fluid ascended rapidly, its pathway focused by the high-permeability
synvolcanic fault zones. As the fluid rose and began to cool conductively, it precipitated
its least soluble metals, primarily copper and iron, as chalcopyrite and pyrite within the
fault conduit and adjacent wallrock. This process formed the discordant, vein-filled
stockwork zone and its associated intense chlorite-quartz alteration halo.
6. Sub-seafloor Mineralization and Alteration. As the fluid continued its ascent into the
cooler, upper parts of the volcanic pile, it began to mix with entrained, colder seawater
within porous rock layers like volcaniclastic breccias. This mixing and cooling caused
further chemical changes, triggering the deposition of quartz and sericite to form the
broad phyllic alteration halo. Modern VMS models emphasize that a significant portion,
if not the majority, of the massive sulfide ore is formed at this stage through sub-seafloor
replacement processes. The metal-rich fluids permeate porous and permeable units (e.g.,
hyaloclastite or autoclastic breccia), replacing them with massive accumulations of sulfide
before the fluids ever reach the seafloor.
7. Seafloor Exhalation and Mound Formation. Any hydrothermal fluid that successfully
reached the seafloor would have vented directly into the cold ocean water, forming "black
smoker" chimneys. The abrupt and extreme drop in temperature and change in chemistry
(pH, oxidation state) caused the instantaneous precipitation of the remaining dissolved
metals. Fine-grained sulfide particles (pyrite, sphalerite, galena) rained out of the
hydrothermal plume, accumulating around the vent to form a stratiform mound or lens
of massive sulfide ore.
8. Waning Stage, Burial, and Preservation. Eventually, the magmatic heat source cooled, or
the fluid pathways became sealed, and the hydrothermal system waned. Subsequent
volcanic eruptions or the slow deposition of marine sediments buried the newly formed
deposit, protecting it from oxidation and physical erosion on the seafloor and preserving
it in the geological record.

19
8. Economic Prospectivity and Recommendations for Exploration
The geological and genetic synthesis of the Milangodaa outcrop provides a robust framework
for assessing its economic potential and for designing effective strategies to explore for related
deposits in the district.

8.1. Evaluation of Mineral Potential

The Milangodaa outcrop represents a classic VMS mineral system with significant economic
potential.

❖ Commodity Suite: The deposit is polymetallic, with demonstrated potential for copper
(Cu) and zinc (Zn) as primary commodities.16 The observed metal zonation, with a Cu-rich
stockwork and a Zn-rich massive sulfide lens, is typical of many productive VMS deposits.
Furthermore, VMS deposits of this type are significant global sources of precious metal
by-products, particularly silver (Ag) and gold (Au), which are often concentrated with the
zinc-lead mineralization. There is also potential for economically significant
concentrations of critical metals such as cobalt (Co), indium (In), tin (Sn), selenium (Se),
and tellurium (Te), which are increasingly sought after for green technologies and are
known to be enriched in certain VMS systems.

❖ Grade and Tonnage Potential: While a definitive resource cannot be estimated without
drilling, comparison with global VMS districts provides a guide to potential scale. VMS
deposits often occur in clusters, with districts containing one or two large, high-grade
deposits surrounded by numerous smaller satellites. The average size of a VMS deposit
globally is around 12-17 million tons, but the median size is much smaller, at
approximately 2 million tons. However, giant deposits like Kidd Creek (Canada) or those
in the Iberian Pyrite Belt exceed 100 million tons. The intensity and scale of the
hydrothermal alteration system observed at Milangodaa are encouraging indicators of a
potentially large and long-lived system capable of forming an economically significant
deposit.

❖ Exploration Risks and Challenges: Despite the strong potential, VMS exploration is
attended by specific risks. The principal challenge is size; most VMS occurrences are sub-
economic, and the discovery of a truly world-class deposit is rare. The fine-grained and
often complexly intergrown nature of the sulfide minerals can present metallurgical
challenges during processing. Furthermore, VMS ores can contain deleterious elements
like arsenic, mercury, or antimony, which may incur financial penalties from smelters if
present in high concentrations. Exploration in ancient, deformed terranes also carries the
risk that orebodies may have been structurally dismembered or deeply buried, increasing
discovery difficulty and cost.

20
8.2. Key Exploration Vectors for the Milangodaa District
A successful exploration program in the region surrounding the Milangodaa outcrop should
employ an integrated, multi-disciplinary approach based on the genetic model. The following
geological, geochemical, and geophysical vectors are considered paramount.
a. Geological Vectors:

❖ Favorable Stratigraphy: Exploration should focus on identifying and mapping the

specific stratigraphic horizon associated with the Milangodaa deposit. This "ore-
equivalent" horizon often represents a hiatus in volcanism, marked by the presence of
fine-grained chemical or clastic sediments (exhalites) between major volcanic cycles.19

❖ Proximal Volcanic Facies: The presence of felsic dome complexes, cryptodomes, and
associated coarse volcaniclastic breccias are key indicators of proximity to a volcanic
center, which is often the locus for VMS mineralization.

❖ Alteration Mapping: The hydrothermal alteration halo is the single most important
geological vector, as it presents a much larger target than the orebody itself.
Systematic mapping of the alteration zones—from the distal, weak sericite-albite halo
to the proximal, intense quartz-sericite (phyllic) and chlorite-quartz zones—can
effectively vector towards the center of a hidden mineralizing system.

b. Geochemical Vectors:

❖ Lithogeochemistry: A program of systematic whole-rock geochemical sampling is

essential. Calculating alteration indices, such as the Ishikawa Alteration Index (AI) and
the Chlorite-Carbonate-Pyrite Index (CCPI), from assay data allows for the quantitative
mapping of alteration intensity and zonation.

❖ Pathfinder Elements: While base metals (Cu, Zn, Pb) form relatively tight anomalies
around a deposit, more mobile pathfinder elements can create much broader
geochemical halos. Elements such as barium (Ba), thallium (Tl), antimony (Sb), arsenic
(As), and manganese (Mn) are particularly useful for detecting the distal footprint of a
VMS system in rock, soil, or till samples.

c. Geophysical Vectors:

❖ Electromagnetics (EM): EM methods are the primary geophysical tool for direct
detection of VMS deposits. The high concentration of conductive sulfide minerals in
the massive sulfide lens creates a strong anomaly that can be detected by airborne
(e.g., VTEM) and ground-based (e.g., TEM) surveys. Borehole EM is critical for detecting
off-hole conductors during drill testing.

❖ Gravity: The massive sulfide body, with its high density (4.0-5.0 g/cm³) relative to the
host volcanic rocks (2.7-2.9 g/cm³), should produce a discrete positive gravity anomaly.

21
 This method is excellent for direct targeting and can help estimate the tonnage of a
potential deposit.

❖ Magnetics: Magnetic surveys are useful for mapping geological structures (faults) and
identifying magnetic minerals associated with the VMS system, such as pyrrhotite or,
in some cases, magnetite. The feeder zone is often associated with a magnetic anomaly
due to the presence of pyrrhotite.

Table 8.1: Economic Mineralogy and Metal Zonation of the Milangodaa VMS System. This table links specific
minerals to their economic metals and spatial position within the deposit, providing a practical guide for ore
characterization and metallurgical planning.

Primary Economic Common Gangue

Zone Key Metals
Minerals Minerals
Core / Stockwork Chalcopyrite, Pyrite, Copper (Cu), Gold (Au) Quartz, Chlorite
Zone Pyrrhotite
Main Massive Sphalerite, Chalcopyrite, Zinc (Zn), Copper (Cu), Lead (Pb), Quartz, Barite,
Sulfide Zone Galena, Pyrite Silver (Ag), Gold (Au) Anhydrite
Distal / Hanging Hematite, Chert, Manganese (Mn), Barium (Ba), Silica, Carbonates
Wall Apron Manganese Oxides Iron (Fe)

9. Conclusions
The geological investigation of the Milangodaa outcrop reveals a remarkably well-preserved
Archean or Proterozoic Volcanogenic Massive Sulfide (VMS) system. The lithological architecture,
dominated by submarine pillow basalts and associated volcanic breccias, confirms its formation
in a subaqueous, extensional tectonic setting, most likely a volcanic arc or back-arc rift
environment.
The key to the outcrop's significance lies in the superimposed hydrothermal system. A
classic, zone alteration pattern is evident, comprising a discordant, high-temperature, copper-
rich chlorite-quartz stockwork (the feeder zone), enveloped by a broader halo of pervasive
quartz-sericite (phyllic) alteration. This alteration assemblage culminates in a stratabound,
polymetallic massive sulfide lens, which represents the primary economic target. The systematic
mineralogical and geochemical changes across these zones provide a clear record of the chemical
evolution of the ore-forming fluids and serve as powerful vectors for exploration.
The genetic model for the Milangodaa deposit is consistent with modern seafloor
hydrothermal processes. It involves the establishment of a large-scale seawater convection cell
driven by a subvolcanic magmatic heat source, the leaching of metals from the footwall volcanic
pile, and the focused discharge of these metal-rich fluids along synvolcanic faults, leading to
sulfide precipitation both at and below the ancient seafloor.
The economic potential of the Milangodaa prospect is considered high. It exhibits the
geological hallmarks of a significant VMS system, with potential for zinc, copper, lead, silver, and
gold. Future exploration in the surrounding district should prioritize an integrated approach.
Geological mapping should focus on identifying the favorable ore-equivalent stratigraphic
horizon and mapping the extent of the phyllic alteration halo. This should be coupled with

22
systematic lithogeochemical surveys to detect both proximal base metal anomalies and distal
pathfinder element halos. Finally, a combination of electromagnetic and gravity geophysical
surveys is strongly recommended as the most effective method for the direct detection of
additional, non-outcropping massive sulfide bodies. The successful application of these vectors
offers a high probability of discovering further mineralization within the broader Milangodaa
district.

10. Strategic Implications: From Geology to Economic

Opportunity
The mapping program has unequivocally proven the presence of near-surface gold and
copper mineralization across the Popayato-Lemito project area. This mineralization is
consistently associated with silicic-phyllic altered oceanic basalts and basaltic-andesite, often
exhibiting massive to pillowed structures, and found alongside related pelagic sediments
(siltstone, shale, chert) and bedded diatreme breccia. This widespread occurrence suggests a
robust and extensive mineralizing system.

A key strategic implication is the identification of intensely altered dacitic-andesitic volcanics

on the periphery of intrusions. These volcanics display characteristic clay-sericite-quartz and clay-
chlorite-quartz alterations, which are considered strong indicators of Volcanic Massive Sulphide
(VHMS) mineralization. VHMS deposits are globally significant sources of base metals (copper,
zinc, lead) and often contain economic concentrations of precious metals, representing a distinct
and valuable target.

Multiple lines of compelling evidence converge to suggest the presence of larger deposit.
The River Milangodaa area, designated as a critical "connection zone," features a 342-meter-wide
outcrop at Air Jatung with intense stockwork mineralization. This zone is a prime suspect for
hosting significant gold mineralization at depth. In Humuo River, the observed illite-kaolinite and
open-spaced, toothy-textured quartz veinlets are indicative of deep-seated intrusive-related
mineralization, alongside the potential for epithermal systems. The discovery of a strongly
altered intrusive granite (with sericite/muscovite alteration and epidote veinlets) that intrudes
volcanic units, forming a drag structure, further substantiates the presence of a significant, active
hydrothermal system. Additionally, altered granodiorite-diorite floats with copper staining
reinforce this interpretation.

The confluence of confirmed near-surface mineralization with strong geological indicators

for VHMS dramatically enhances the overall prospectivity of the Popayato-Lemito project. This
demonstrates the potential for not just isolated, small-scale deposits, but a large district-scale
deposit, significantly enhancing the project's resource potential, resilience, and long-term
economic viability. The explicit identification of VHMS's multi-mineralization potential alongside

23
confirmed gold represents a crucial strategic advantage. If one deposit type proves challenging
or less viable, the presence of other deposits can offset it, spreading the geological and economic
risk. This demonstrates a robust geological setting capable of producing multiple types of
mineralization, significantly enhancing the overall resource potential and the district's
attractiveness for investment.

The geological descriptions, with common massive to pillowed structures oceanic basalts
and basaltic-andesitic including adjoining related pelagic sediments for VHMS, paint a picture of
a dynamic magmatic arc environment. Such geological settings are globally renowned for hosting
large, economically significant VHMS deposits. This broader geological context elevates the
findings from mere local anomalies to indicators of a potentially district-scale opportunity,
aligning with established models for major mineral belts and suggesting a higher probability of
discovering world-class resources.

11. Recommendations: Charting the Path to Economic

Viability
Despite the confirmed presence of near-surface gold and copper mineralization, the report
unequivocally concludes that further exploration work is necessary. This is a critical next step to
translating geological promise into quantifiable economic value. The primary goals for this
subsequent exploration phase are to precisely define the size of the deposit and the grade of gold
and copper mineralization. This detailed quantification is essential for moving the project
towards feasibility. All future work must be strategically aligned to meet the target for viable
economic exploitation. This emphasizes that exploration is not merely scientific but driven by a
clear commercial objective. The report's conclusion is not a generic call for "more work" but a
specific directive to define "size" and "grade" for "viable economic exploitation." This signifies a
critical transition in the project's lifecycle from early-stage reconnaissance and discovery to a
more advanced phase focused on quantifying the resource. For an investor, this means the
project is maturing towards a stage where economic feasibility can be rigorously assessed, which
is a significant de-risking step. It implies that the initial findings are robust enough to justify the
next, more capital-intensive phase of exploration.

To achieve these objectives and unlock the full economic potential of the Popayato-Lemito
project, the following next steps are proposed:

❖ Detailed Geological Mapping and Structural Analysis: Conduct higher resolution mapping to
refine the understanding of structural controls and alteration zonation, particularly focusing
on the identified “centers zone" at Milangodaa River. This will help pinpoint specific drill
targets by identifying the precise pathways of mineralizing fluids.

24
 ❖ Systematic Geochemical Surveys: Initiate the pending soil sampling program across the
identified prospective areas, especially geochemical anomalies delineated from initial rock
chip samples. Consider infill and extension stream sediment sampling to expand regional
targeting and identify new areas of interest.

❖ Targeted Geophysical Surveys: Implement ground-based geophysical surveys, such as

Induced Polarization (IP) to detect disseminated sulfide and alteration, and magnetics to
map mineralization bodies and structural features. These surveys are crucial for identifying
blind (non-outcropping) subsurface mineralization and defining optimal drill targets,
particularly for VHMS which may not have direct surface expressions.

❖ Targeted Trenching and Pitting: In areas where surface outcrops are limited but strong
indicators exist, conduct targeted trenching or pitting to expose bedrock. This will allow for
more detailed sampling, geological logging, and a better understanding of near-surface
controls on mineralization.

❖ Prioritized Drill Program Planning: Integrate all geological, geochemical, and geophysical
data to prioritize and design an initial diamond drilling program. This program will aim to:
• Test the vertical and lateral extent of known near-surface mineralization, providing
three-dimensional understanding.
• Evaluate the newly identified potential for VHMS and deep-seated intrusion-related
systems, targeting the inferred source of the widespread mineralization.
• Obtain representative core samples for detailed geological logging, comprehensive
assaying to determine grades, and preliminary metallurgical testing to understand
recovery characteristics, which are vital for economic assessment.

❖ Preliminary Resource Estimation Scoping: Begin the foundational work required for a
maiden mineral resource estimate. This includes developing preliminary geological models
and understanding the potential economic cut-off grades that would define a viable
resource, providing early indications of the project's scale and value.

The explicit objective "to meet target for a viable economic exploitation" frames these
recommendations as a clear business imperative rather than just a technical necessity. This
reinforces the analytical and persuasive tone of the report, demonstrating that the proposed next
steps are directly linked to transforming the proven mineral potential into a quantifiable,
economically attractive asset. This approach aligns with the needs of a business-oriented
audience, emphasizing return on investment and strategic growth.

25
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