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TARON OUTCROP PHOTO LOOKING SOUTH EAST

THE OUTCROP AREA SHOWN IS ONLY A FRACTION OF THE DEPOSIT AND SHOWS A RELIEF OF 70 METRES FOR SCALE. THE WHITE SPOTS SEEN AT THE MID-LATITUDE ARE GRAZING SHEEP.

The following document is a summary report on the Taron cesium deposit by D.L. Trueman, Ph.D., P.Geo, on the Taron cesium deposit and includes Cascadero Copper’s plans going forward:

Introduction

Cesium (chemical symbol Cs) is a rare metal best known for its extreme chemical reactivity. Its principal use is as cesium formate (CsCHO2), a high density solution and low-viscosity used to control formation pressures and temperatures in drilling of oil and natural gas wells. Cesium formate is the largest volume component of the global cesium market as a dense medium, cesium formate is also used to separate DNA and in metallurgical testing. A large potential end use is that of coal cleaning.

Cesium is well known for artificially produced radioactive isotopes used to treat various types of cancer. Cesium compounds and chemicals are used in photo-emissive devices, experimental magneto-hydrodynamic electricity generation, atomic clocks, catalysts, specialty glasses, ion propulsion motors, and petroleum refining. Cesium catalysts are rapidly increasing in popularity as they promote lower temperature reaction in many industrial manufacturing processes.

Conventionally, cesium is won from granitic sources from the minerals pollucite and lepidolite. The Tanco Mine in Canada, the Bikita Mine in Zimbabwe, and the Yichun granite in the PRC, are recognized as significant sources of cesium. Lesser and non-systematic production is seen from Namibia and other African countries. The extent of Bikita’s pollucite or lepidolite resources are unknown, but have likely been depleted over 65 years of lithium production. The Yichun granite has a low-grade resource. Cesium deposits, especially large mineable deposits, are rare in nature and replacing mined out reserves is problematic for the industry as a whole.

The Tanco Mine is owned by Cabot Corporation (NYSE:CBT) who markets the cesium formate through its Specialty Fluids division. The mine is essentially a monopoly producer and supplier of cesium formate. Estimates of current production vary, but in 1997, Tanco’s commissioned name plate capacity for cesium formate production was 12,000 barrels per year. Production in 1997 was reported at 500 barrels a month and expanded in 1999 to 700 barrels per month.

In 2010, the Tanco Mine suffered a “fall of loose ground” which was followed in 2013 by a second fall of loose ground. These occurrences have curtailed pollucite production from the mine and sterilized parts of their main cesium ore bodies. A separate smaller orebody has been developed but, as last reported by the company, was placed on care and maintenance.

The Taron cesium deposit in Salta Province, Argentina is a newly recognized type of deposit that has been formed from very hot epithermal fluids circulating in a shallow geological environment, forming a variety of minerals, colloids, glasses and clays collectively termed ”geyserites”.

Metallurgical testwork conducted by SGS Lakefield Research on two bulk samples in 2006 demonstrated amenability to inexpensive processing with >78% cesium recoveries. Cesium solubility was excellent in both acid and caustic leaches, however, no attempt was made by SGS to further separate, purify or sequester the other elements in solution. This program was terminated in 2007 by a lack of funding, but was re-initiated by Cascadero in 2015 when the company decided to fund an extensive hydrometallurgical study at UBC.

Widely spaced drilling and trenching show a potentially large resource of cesium occurs at Taron and that this deposit may show a nearly seven-fold abundance of the contained cesium over the pre-production resources of the Tanco Mine.

Geography of the Taron Cesium Deposit

The Taron cesium project is located in Salta Province in north western Argentina as shown in Figure 1,below. It is located about a 6 hour drive north west of the City of Salta and three hours from the town of San Antonio de los Cobres. It is readily accessible by roads that lead to a number of former, small, manganese mines and producing borax mines which pre-date the discovery of the cesium deposit in 2004.



Figure 1: Location map of the Taron Project, NW Argentina

The Taron property consists of six Mineral Tenures„ approximating 10,179 hectares in area as shown in Table I. The Tenures are 100% owned by Cascadero Minerals S.A; a subsidiary of Cascadero Copper Corp.

Table I: Property descriptions and ownership of the Taron deposit

CONCESSION NAMETENURE NUMBERUNITSHECTARESPROVINCECMSA INTEREST
Incamayo18-11020 2,000 Salta100%
La Intermedia18-16015 1,425 Salta100%
La Pacha I18-1615 465 Salta100%
La Pacha II20-1143 300 Salta100%
Taron17-84630 2,998 Salta100%
Tarón Sur18-08330 2,991 Salta100%
TOTALS6103 10,179

The property is about 50 kms south of the village of Pocitos on the rail line between Antofagasta, Chile and the City of Salta in Argentina. A major electrical transmission line between Argentina and Chile passes near the town of San Antonio de los Cobres and a gas pipe line deadheads at Pocitos. It services the FMC Hombre Muerto lithium mine operation to the south. There are open cast borax mines within 25 kms of the Taron property, including the former Rio Tinto Sijes borax mine now owned and operated by Orocobre Limited.

No permanent habitations are located within 50 km of the Taron prospect and no cultivated land exists in the area. Sheep and llama are pastured locally but no infrastructure exists, other than access roads to the Taron deposit, former manganese mines adjacent to the Taron deposit, and currently producing borax and lithium mining operations in the surrounding area

The topography is subdued to moderately rugged and vertical relief above the local datum is about 80 metres. The climate is arid with annual rainfall in the summers of 200 to 400 mms. Mid-summer high temperatures range from 14 - 210 C with overnight lows of 60 C. Mid-winter temperatures range to -80 C with extremes of -150 C.

Geology and Mineralogy

The Taron deposit forms a broad, gently west sloping plateau about 4,250 metres above sea level and the regional geological setting of the Taron deposit is shown in Figure 2 below. The oldest rocks in the area are the PreCambrian orbicular granites of the Faja Eruptiva. These are overlain unconformably by the late Precambrian to early Cambrian Puncoviscana Formation; best described as an olistostrome or mélange.

The Faja Eruptiva and Puncoviscana Formation have been stacked by over thrust faulting and display protocataclastic to cataclastic fabrics which predate the epithermal mineralizing event. The epithermal event, of Miocene age, metasomatized those pre-existing rocks forming assemblages of cryptocrystalline silica, colloids, gels, manganates, arsenates, and oxides, collectively termed “geyserites” and travertine, as identified in Table IIbelow.

The clastic rocks at Taron are friable, poorly lithified and may lend to open cast mining methods employing bulldozers, rippers, trucks, and front end loaders. Some secondary blasting or a rock hammer might be necessary.

Figure 2: Geology of the Taron area, Salta Province, Argentina.

Table II: Manganates, silicates and arsenates in the Taron cesium deposit

PsilomelaneBa • (H2O)Mn3+5O10
CoronaditePb1.1Ba0.1Mn4+7.2Mn2+0.5V5+0.2Al0.1016
HollanditeBa0.8Pb0.2Na0.1Mn4+6.1Fe3+1.3Mn2+0.5Alo.2Si0.1O16
RomanechiteBa0.7Mn3+4.8Si0.1O10 • 1.2(H2O)
CryptomelaneKMn4+6Mn2+2O16
LudlockiteFe2+0.95Pb0.05As2O6
WallkilldelliteCa4Mn2+6 As4O16 (OH)8 • 18(H2O)
PharmacosideriteKFe3+4(AsO4)3(OH)4 • 7(H2O)
YukoniteCa7Fe11(AsO4)9 • 24H2O
PharmacosideriteKFe3+ (AsO4)3(OH)3 • 6H2O
Cesian opal(Cs)SiO2n H2O
ChalcedonySiO2

Previous Work and Economic Development

Manganese was mined on a small scale at Taron from the adjoining Ochaqui mine. This work began in the Second World War and continued into the middle 1950s.

Regional exploration by geologists working for Argentine Frontier Resources Inc. (AFRI), a private Vancouver based exploration Company, recognized the association of manganese with silver deposits in the area, and routine geochemical sampling led to the discovery of the Taron cesium deposit in 2004. AFRI was subsequently acquired by Cascadero Copper in June 2009.

In 2005 and 2006, 5,600 metres of hand and mechanized trenching were completed, sampled and assayed.

In 2006, SGS Lakefield Research was retained for beneficiation studies of the Taron mineralization. This work demonstrated that the mineralization was soluble in both hot acid and alkali and that it showed excellent recoveries in both cases.

All of the work conducted on the Taron property was financed by MI SWACO, a related company to Schlumberger Ltd., under an option to acquire an interest in the deposit. This option was dropped in 2007 when Chemetall GmbH. may have expressed concerns to MI SWACO about the arsenic content of the Taron deposit.

In May and June of 2009, Cascadero completed seven HQ diamond core holes in 908 metres of drilling. All of the trenches and drill holes have since been reclaimed.

In 2014, Cascadero decided to renew work on the Taron property and in 2015 awarded a contract to the University of British Columbia to demonstrate the viability of producing cesium hydroxide and cesium formate from the Taron deposit. This work was completed successfully in December of 2015 and has now been taken to patent. The two principal products that Cascadero has now made, cesium hydroxide and cesium formate, assayed < 3 ppm arsenic and < 3 ppm Tl.

A Non-compliant Resource

This section is conjectural and the resource discussed is not NI 43-101 compliant.

Cascadero management believes the Taron deposit in Argentina is a world class cesium occurrence. It has been widely sampled in three dimensions through trenching and drilling, and has a demonstrated capability to make cesium intermediates and final products.

Although a large cesium resource is indicated, it is based on widely spaced trenching and even more widely spaced drilling. From inspection of the trench and drill core assays, there is variability in cesium values, both vertically and horizontally, which may reflect the original geometry of the epithermal plumbing system when it was active. There is no documented experience with epithermal cesium deposits and hence no optimum drill or sample spacing information is available. Enough sampling has been done in the drill and trenching programs that a geostatisical model can be developed for establishing a drill pattern to optimise drilling to delineate an indicated NI 43-101 compliant resource as defined by Canadian Institute of Mining & Metallurgy standards. Geological modelling and resource studies are currently underway.

Given the successful metallurgical demonstration from Taron the deposit, and given the indicated size, further drilling is warranted. The areal extent of the Taron mineralization encompasses at least 1,600,000 m2 or 160 hectares. Given a depth of 70 vertical metres and an arbitrary specific gravity of 2.5, this equates to approximately 280 million tonnes or about 4,000,000 tonnes per vertical metre.

Within the 1050 x 800 x 70 metre area of the drilling and trenching, one can conjecture a 147,000,000 tonne resource, or 2,100,000 tonnes / vertical metre. The assays of the composite used in the UBC metallurgical study demonstrated a head grade of 0.47% cesium and an overall recovery of 91% Cs, it suggests the deposit may contain a resource of over 600,000,000 kgs of cesium. Geological modelling and specific gravity studies are underway to refine the parameters of the conjectural resource.

By comparison, Tanco’s published preproduction resources of 400,000 tonnes grading 24% Cs2O approximate 90,000,000 kgs of cesium. The Tanco tonnage and grade figures have since been considerably reduced as a result of further drilling and in 2008 the Manitoba Government stated there were 10 years of reserves left. Since then, the Tanco resources have been compromised by rock falls and part of the resource has been sterilized from mining. The Tanco ore bodies have been mined exclusively for pollucite since 1996, which activity would clearly further decrease its reserve base.

Current Planning

Cascadero is focused on determining that Taron will be the lowest cost producer of Cesium hydroxide in the marketplace. Cesium Hydroxide was chosen as it is the base or substrate for all other cesium compounds, including a suite of pharmaceutical products.

The UBC hydrometallurgical progress report received by the Company in December 2015 achieved a 91% recovery of cesium from a straight forward leaching flow sheet using off-the-shelf chemicals. Both Cesium hydroxide and Cesium formate were successfully produced.

Subsequently, the Company has:

  • retained a consultant to input the property data to create a geological model of the deposit and develop a conjectural cesium resource in kilograms of cesium with a range of estimates of grade in ppm,
  • undertaken community consultation, a baseline environmental study and permitting,
  • subsequent to receipt of a geological model, further trenching is planned to focus on determining the extent and trend of higher-grade cesium zones that are present in several areas of the deposit,
  • conducted further metallurgical work and
  • will conduct a core drilling program to delineate a NI 43-101 compliant inferred resource

The Company has also:

  • retained consultants to review and critique the UBC flow sheet
  • estimate the cost of chemicals and energy consumed by the process flow sheet to determine areas of potential to refine the flow sheet and reduce costs
  • completed a size particle analysis and assays to determine the distribution of the cesium mineralization

The Company will:

  • update and revise the existing conceptual mine and comminution circuit and leaching concentration process and engineering
  • update equipment, Capex and Operating expenses
  • identify Argentine mining engineer and chemical engineer to manage the project
  • identify Argentine contractor to design and build the mine
  • determine operating and shipping expenses, and
  • retain one of two consulting groups who has hands on experience and current knowledge of the industry.

A financial plan/pre-feasibility (PEA) report will be presented on receipt of the out-standing engineering work.

Footnote – USGS Cesium Reserve Comments

In 2015, according to the United States Geological Survey (USGS), resources of cesium are contained in 210,000 tons of pollucite: in Canada 120,000 tons, Namibia 30,000 tons, Zimbabwe 60,000 tons and China, which has very low grade cesium deposits of pollucite and lepidolite in the Yichun apogranite in Jiangxi Province. As the grades of the cesium deposits are not reported, it is difficult to assess the accuracy of these resource analyses; i.e. the USGS resource estimates may not have a legitimate economic potential as the description of the deposits, in terms of cesium grades, mineralogy, and metallurgy, are not described.

Cesium bearing geothermal systems exist in Germany, India, and Tibet, and cesium is associated with lithium-bearing pegmatites on a global basis, but economic cesium deposits have not been identified in the Western hemisphere other than at Tanco or elsewhere in South American brine deposits.

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