Ecuador can be subdivided into a number of tectonostratigraphic terranes that were accreted onto the Amazon Craton from Late Jurassic to Eocene. The Quimsacocha project is located in the western Cordillera of the Andes, in the southwest part of Chaucha terrane. Quimsacocha is regionally located in the continental area of Chaucha that is bound by the Bulubulo Fault system to the north, the Girón Fault to the southeast and the Jubones Fault to the southwest.

The local Quimsacocha geology is dominated by Upper Miocene volcanics and volcaniclastics, including the Turi, Turupamba, Quimsacocha and Tarqui Formations. The property is located between two major faults, the Gañarin and Girón Faults. A caldera with a diameter of four kilometres lies along the Gañarin fault, 400 metres west of the Quimsacocha deposit. The Turi Formation is comprised of tuffaceous breccias, conglomerates and sandstones and underlies rhyolitic to dacitic tuffs and minor lapilli tuffs of the Turupamba Formation. The overlying Quimsacocha Formation comprises banded lava flows and andesite tuffs and breccias. The Quimsacocha Formation and upper parts of the Turi Formation are the principal host lithologies.

Mineralization

The Quimsacocha Deposit is a high sulphidation epithermal gold-copper-silver deposit. Mineralization is associated with a NNE striking structural feature and is hosted by coarse-grained tuffs or at lithological contacts between flows and tuffs. The alteration system covers an area of approximately twelve kilometres N-S by six kilometres E-W and is typical of high sulphidation systems with a nucleus of vuggy and massive silica, and more laterally, alunite, kaolin, dickite and pyrophyllite surrounded by a halo of argillic alteration represented by illite and smectite clays. Mineralization zones are characterized by multiple brecciation and open-space filling events and sulphides such as pyrite, enargite, covellite, chalcopyrite and luzonite or, at lower sulphidation states, tennantite and tetrahedrite. The principal area of economic interest is a flat lying mineralized zone that strikes N-S for approximately one kilometre, extends east-west for at least 300 metres and ranges in thickness from 10 metres to 100 metres (Main Zone). Gold mineralization is found, for the most part, in one of the following mineralogical assemblages: (i) Vuggy silica plus fine grained pyrite and enargite; (ii) Massive pyrite, including a brilliant arsenical pyrite; (iii) Vuggy silica with grey silica banding, sulphide space-filling and banded pyrite.