In late May, Equus announced a discovery with the potential to revolutionize mining in southern Chile.

The numbers are remarkable: 3.81m @ 20.4g/t Au and 55.5g/t Ag at 109m from the surface, including 1.06m @ 62.58g/t Au and 129.3g/t Ag at 112m. These are the main results of the exploration campaign that Equus concluded at Droughtmaster, a target on the company’s Cerro Bayo property in the Eleventh Region, near Chile Chico and conveniently close to Equus’ Los Domos and Cerro Diablo projects. Equus signed a threeyear option agreement for Cerro Bayo with Mandalay Resources in June last year, and immediately began exploration that yielded the results featured in this note. Mr. Damien Koerber, COO at Equus, said “The three year option allows Equus time to assess both the vast brownfields and greenfields potential whereby there is no

minimum expenditure requirements and with the benefit that, for at least the first 18 months, all our expenditure is money being spent in the ground on exploration.” Cerro Bayo is located within a mining district in southern Chile that was operated between 1995 and 2017. Much of the functional infrastructure is still in place and has been maintained by Mandalay Resources, so Equus intends to benefit from this when it restarts mining, according to Mr. Koerber. This also allowed Equus to focus on the exploration campaign as its top priority: Mr. Koerber added “As part of a district scale target generative review by Equus in Septermber-October 2019, the company identified the Droughtmaster Prospect as being highly prospective based on its enhanced Landsat

alteration signature, favorable structural setting along a major WNW to NW fault corridor which hosts historic mines. The main Percheron Vein target at Droughtmaster, although extensive in scale, has a subtle surface exposure and geochemical signature and had received very limited previous exploration which also made it very attractive.”

The deposit and the project’s outlook

Mr. Koerber confirmed “We are confident that we are well positioned to be able to establish sufficient resources from our dual track strategy of brownfields and greenfields exploration to justify executing the option and providing a solid case for restarting the Cerro Bayo mine.” Equus controls many of the historic properties in the sector, such as the Marcela mine, which is located a few kilometers from Droughtmaster and has a measured and indicated remaining 

resource of 21.8 Koz Au.

How did you identify the deposit and what makes you so confident about its characteristics? 

Limited reconnaissance drilling by Equus to date at the Percheron Vein at the Droughtmaster Prospect has intersected at shallow depths a wide (i.e. +120m) corridor of stockwork quartz veining and hydrothermal brecciation that we have interpreted to correspond to the upper levels of a very productive epithermal system which hosts high precious metal grades.  We are excited about the depth and along strike extensions of this veining in lithologies that are more optimal for vein development, more favorable steeper host fault angles and in portions of the epithermal system where we believe precious metal deposition was enhanced. 

Will logistics be problematic considering Chile Chico’s relative isolation?

Not at all. As a product of Chile Chico´s isolated geographic location and via good management by local government and adoption of good practices by the local community, the Chile Chico community is one of the few areas in Chile that have had minimal corona infection cases. We have a highly experienced epithermal exploration team and also the ability to tightly manage strict protocols that were put in place in response to the coronavirus issue, which has allowed us to continue drilling and generate exciting exploration results

Which project development options are you evaluating?

 We see good potential for a future development scenario involving exploitation and blending of open pittable and higher grade underground precious metal mineralization from both current remnant resources and resources that will evolve via success of our greenfield exploration programs. Upon execution of the option agreement, relatively seamless restart options should be facilitated with the well maintained 1,500 tpd flotation plant, which is currently under good care and maintenance by Mandalay Resources, and most of the mine and infrastructure equipment. 

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