FMN.V · 2019-04-29 12:00:00

Fidelity’s Implementation of Strategic Project Generator Model Accelerating with Acquisition of Two Significant Projects

Mergers & Acquisitions Property Options & Staking

Fidelity’s Implementation of Strategic Project Generator Model

Accelerating with Acquisition of Two Significant Projects

• The extent of major transactions at both the project & corporate level in the Andean

mineral belt of Peru & Ecuador have markedly increased since early 20181.

• Fidelity Minerals is ideally positioned to transact via implementation of the Strategic

Project Generator (SPG) business model.

• Two significant acquisitions in La Libertad district of Northern Peru include:

1) A 100% interest in a Porphyritic Copper Project with multiple high-quality

targets with extensive copper anomalism (to >1% Cu).

2) Initial 25% interest in a project company which holds 6 concessions, one of

which hosts a prospective Polymetallic Project (200 tonne bulk sample returned

grades* of up to 14.5 oz/T Ag, 1.1g/T Au, 13.7% Zn and 10.4% Pb, in 2018).

* The grades outlined above have been derived from historical sampling and have not been verified by Fidelity Minerals

Vancouver, BC, April 29, 2019 – Fidelity Minerals Corp. (TSX-V: FMN | FSE: S5GM | SSE:

MNYC) (“Fidelity Minerals” or “the Company”) is pleased to provide the following corporate

update, including details in relation to the acquisition of two significant projects:

• A 100% interest in a Porphyritic Copper Project (1,200Ha) in La Libertad, Northern Peru.

• An initial 25% interest in a project company that holds a portfolio of project concessions

(3,500Ha) also in La Libertad, including an advanced stage Polymetallic Project.

As an early mover into Northern Peru following the emergence of Ecuador as a world-class mineral

exploration region, Fidelity Minerals is well placed to become a key player in this highly prospective

region flanked by world -class projects to the south and frantic corporate activity to the no rth in

Ecuador. The relevance of the Company’s Strategic Project Generator model has been validated by

recent corporate transactions, including numerous project-level transactions in Ecuador and

Southern Peru where the majors are aggressively acquiring large-scale copper and gold targets. For

further details on recent corporate activity, refer to Figure 1.

In light of th is unprecedented recent interest in high quality projects in the world -class mineral

provinces of the Northern Andes, Fidelity Minerals has moved to rapidly evaluate a large number

of proprietary opportunities which are not readily available to the major min ers. The significant

acquisitions announced today reflect the Company’s initial success in rapidly implementing its

recently announced Strategic Project Generator model.

Since BHP’s investment in late 2018 in SolGold (the operator of the Alpala project in Northern

Ecuador), BHP has announced a transaction with Luminex Resources where BHP has the right to

earn up to a 70% interest in Tarqui, a relatively early stage copper exploration project in Southern

Ecuador, through the staged investment of up to US$82 million (on March 19, 2019). Together with

1 A summary of recent transactions is outlined in Figure 1..

other recent transactions, the implied value of the Luminex -BHP deal highlights the demand and

the relatively high valuations realisable for quality projects in this region, even at a relatively early

stage of appraisal.

Fidelity Minerals is positioned to immediately benefit from the increased appetite for prospective

projects in northern Peru through the origination and acquisition of proprietary opportunities at low

cost. Fidelity Minerals will immediately add value and endeavour to secure farm-out commitments

with the majors that are actively participating in regional transactions. By way of comparison, the

acquisition of the Porphyritic Copper Project announced today by Fidelity Minerals , whilst at a

relatively early stage of exploration, does not appear dissimilar to the Luminex-BHP Tarqui project.

Figure 1: Map Outlining Recent Corporate Activity

The above Map of the North Andean World -Class Mineral Provinces and the superimposition of

recent corporate activity has been prepared by the Company for general illustrative purposes.

A large poster-sized version of the above Map of North Andean World-Class Mineral Provinces is

available by clicking on the above map or at the Fidelity Minerals website, by clicking here.

Acquisition 1 – Porphyritic Copper Project Overview (FMN: 100%)

The Porphyritic Copper Project comprises three contiguous concessions covering 1,200Ha, located

in an active mining and development district in La Libertad, Northern Peru. The project hosts near

surface manifestations of visible copper mineralization (Figure 2), as well as small -scale artisanal

workings developed for the purposes of producing small tonnages of gold bearing ore. A recent

assessment of the “Upper” and “Lower” Zones has identified similarities in the type of

mineralization hosted at the two zones that are situated approximately 4,000m apart. Both the zones

of interest are in each case located immediately adjacent to a major regional (+60km) fault structure

that is regionally associated with known copper projects. Encouragingly, at both the project and the

PERUECUADOR

Trujillo

Machala

100 km

PERU

ECUADOR

COLOMBIA

BRAZIL

Lima

Trujillo

Machala

250 km

Fidelity Minerals Corp. Properties

Recent Porphyry/Epithermal Cu-

Au-Polymetallic Project

Deals & Announcements

Significant Porphyry/Epithermal

Cu-Au-Polymetallic Deposits

Projects & Deposits

Polymetallic VMS / MVT /

Skarn / Carbonate Hosted

Mineralised Belts

Epithermal / Mesothermal

Gold-Silver

Porphyry Copper-Gold / IOCG

Mineralisation Corridor

Porphyry/Skarn Cu-Au

and Epithermal Au-Ag

TSX-V: FMN

FSE: S5GM

SSE: MN YCL

Map of the North Andean World-Class Mineral Provinces 29 April 2019

Peru Focused

Strategic

Project Generator

Major Shareholders

Newcrest and BHP have

acquired 15.2% and 11% of

SolGold, respectively, the majority

owner of the Cascabel project.

Major Transactions

- Newcrest agrees to earn-in to

two Cornerstone projects.

- Luminex JV’s to AAL, FM & BHP.

Recent Corporate Activity in

Ecuador

Recent Corporate Activity in

Southern Peru

DISCLAIMER - The information contained herein has been compiled by Fidelity Minerals Corp. and is presented for

general illustrative purposes only. Fidelity Minerals Corp. does not provide any warranties or assurances regarding

the accuracy of the information contained herein. This publication does not constitute any form of investment advice.

PERU – A World-Class Mining Jurisdiction

Peru is currently Latin America’s largest gold

producer, the second largest copper and silver

producer, and is on track to be the world’s largest

and lowest cost copper producer, in the near future.

Ø Region A – Established Mining Province

Southern Peru hosts several world-class mines

including MMG’s recently commissioned Las

Bambas (1,048Mt @0.67% Cu) and Freeport-

McMoRan’s recently expanded Cerro Verde mine

(4,000Mt @0.37% Cu). Recent JV activity in play.

Ø Region B – Emerging Mining Province

The discovery of the world-class Alpala deposit in

northern Ecuador, has confirmed the metallogenic

Andean mineral belts of Chile and southern Peru

indeed extend further north than was previously

believed. As these mineral belts host approximately

half the world’s known copper resources, global

mining companies have been frantically transacting

in project interests to secure positions in this

emerging and highly prospective mining province.

The vigour with which Newcrest Mining and BHP

are attempting to control the $1 billion capped

SolGold (AIM: SOLG majority owner of Alpala),

demonstrates the quality of the Alpala deposit. At

the same time, SolGold is attempting to take-over

its joint-venture partner at Alpala, Cornerstone.

On March 19, 2019 Luminex Resources (TSX-V:

LR) secured an earn-in JV with BHP for the Tarqui

project in southern Ecuador. Given the relatively

early stage of exploration at Tarqui, the scale of the

commitment made by BHP (up to US$82 million) to

acquire up to a 70% interest, highlights the extent

of demand for projects in this region.

Ø Region C – Underappreciated Mining Province

Northern Peru presents an opportunity to revisit the

additional prospectivity of this region which already

hosts several world-class resources with fresh

thinking, given recent developments in Ecuador.

FIDELITY MINERALS CORP. – Building a Portfolio of Proprietary Opportunities

§ Greater Las Huaquillas project – an epithermal gold deposit flanked by two large Cu porphyries.

§ Polymetallic project – a large polymetallic Ag, Zn, Pb project with near term development potential.

§ Porphyritic Copper project – two Cu porphyry targets, interpreted to be part of a larger structure.

§ Business Development – a pipeline of proprietary opportunities is being advanced by Fidelity.

Glencore-BHP-Teck-Mits

One of the largest Cu-Zn

mines in the world

2,500Mt Cu @ 0.90%)

Barrick, 9Moz Au

Southern Copper

1,150Mt Cu @ 0.63%)

Newmont-Buenaventura

>50Moz Au

Gold Fields

8Moz Au

110Mt Cu @0.41%

Rio Tinto

8Moz Au

2,770Mt Cu @ 0.51%

Lundin Gold, 13Moz Au

Zijin Mining

1,257Mt Cu @ 0.57%

Recent Entrants

Building strategic positions.

Strategic Investment

Newcrest invests US$250

million to acquire 27.1%.

Under Takeover Offer

Acquisition by Titan Minerals.

Notable Transactions

Earn-in JV’s into early stage projects in mature province.

Core Focus Region

Fidelity Minerals is

evaluating a number

of proprietary

opportunities in

this highly

prospective region in

northern Peru to

further expand the

project portfolio.

Building a portfolio of

Proprietary Projects

Au, Ag, Cu, Zn, Pb

REGION

www.fidelityminerals.com

regional copper projects, the mineralization is associated with variably altered monzodiorite(s)

displaying copper sulphide (including bornite) and copper oxide mineralization.

Historical sampling at the project indicates grades 2 of 0.36% - 0.66% Cu at the Upper Zone and

higher grades at the Lower Zone including >1% Cu. Selected sampling results are outlined below.

Area Sample # Generalized Area

Description

(ppm)

Upper

Zone

221 To be disclosed 1.49 <0.2 3,640 1,600.0

222 To be disclosed 8.81 1.3 6,620 17.7

223 To be disclosed 1.42 0.2 4,070 306.0

Lower

Zone 224 To be disclosed >100 3.7 >10,000 270.8

During due-diligence activities relating to the acquisition of the project, Fidelity Minerals identified

additional prospective geological features that extend beyond the current project area . In order to

secure a larger footprint surrounding the project, the Company is in the process of acquiring

adjoining concessions. Until such time that the Company has s ecured the adjoining concessions,

additional details including the name of the project or the specific location will not be released.

Figure 2: Porphyritic Copper Project - Sampling Photos

(a) Malachite, azurite, weathering on a monzodiorite

piece containing chalcopyrite and bornite.

(b) Onsite sample from opening to a small artisanal

working in the project area.

monzodiorite.

(d) Typical freshly broken faces in the monzodiorite

containing disseminated chalcopyrite and pyrite.

In 2018 the project vendor commissioned a QP based in Canada to prepare a geological report3 in

order to summarise the geological prospectivity of the project. The data relating to the project

2 ALS Method Code ME -MS41. The laboratory location, chain of custody record, use of blanks and standards by the Vendor is not

recorded or independently verified by a Qualified Person. The Certificate of Assay / Analysis has not been independently verified for

Fidelity Minerals Corp.

3 Draft NI43-101 Report: not finalized or published.

presented in this release has been largely taken from this geological report with the consent of the

vendor. In th e geological report, the QP states that “there is the distinct possibility that the two

mineralized locations at the Project represent two exposed areas of mineralization that form part

of a typical Cu-Mo Porphyry Copper System. The mineralogy, host rock type and texture, plus the

presence of a skarn -type mineralized zone at the Low er Location, are very much the same

characteristics to be seen at the Magistral Cu-Mo-Ag Porphyry Deposit in Ancash Province.”

Fidelity Minerals considers the similarities of the Porphyritic Copper Project to the Magistral project

to be highly encouragin g as the Magistral project owned by Minera Milpo hosts significant

mineralization with published mineral resources of 232 Mt @0.55% Cu, 0.05% Mo, 3.2g/t Ag.

Next Steps

The Company intends to perform an initial assessment of the prospectivity of the project by

commencing with detailed geological mapping and a systematic surface sampling program to better

define the extent of the surface manifestations of the interpreted zones of mineralization.

Acquisition Terms

Fidelity Minerals is acquiring a 100% interest in the Porphyritic Copper Project. The acquisition

consideration consists of the issuance of 4,000,000 common shares in Fidelity Minerals to the

vendor. At completion of the acquisition, a cash payment of US$7,000 is payable to the vendor.

The acquisition of the Porphyritic Copper Project remains subject to the satisfaction of customary

conditions before closing, including exchange approval for the issuance of Consideration Shares.

Acquisition 2 – Polymetallic Project Overview (FMN: 25%, initially)

The Polymetallic Project comprises of 6 concessions covering 3,500Ha, located in an active mining

and development district in La Libertad, Northern Peru . Fidelity Minerals has acquired a 25%

interest the Polymetallic Project by acquiring a 25% interest in Norsemont II Resources Inc 4.

(“Norsemont”), the project company that holds the 6 concessions including the advanced stage

Polymetallic Project, previously referenced by the Company in a Press Release dated March 13 th,

2019.

The Polymetallic Project is proximal to Barrick’s Lagunas Norte mine (9Moz Au resource) with

both projects located within a proven mineralized belt that hosts several world-class precious metal

projects, including Newmont’s Yanacocha mine (>50Moz Au resource). For regional context, refer

to the map outlined in Figure 1.

Mineralization at the Polymetallic Project is interpreted to be controlled by a series of ENE-striking

polymetallic (Ag/Pb/Zn) veins which are understood to have extensive vertical and lateral

continuity.

The project hosts near surface manifestations of visible polymetallic mineralization (Figure 3), as

well as relatively small -scale underground development for the purposes of producing small

tonnages of high -grade ore. An access tunnel has been driven into the primary vein system

confirming the downdip continuity of mineralization encountered from surface outcrop.

4 Norsemont holds six (6) concessions totalling 3,500Ha, all located in the Alto Chicama mining district of La Libertad, Northern Peru.

Historical s ampling at the project confirms the presence of high grades5 of polymetallic

mineralization. Selected higher grade sampling results are outlined below.

Area Sample

Generalized Area

Description Ag (oz/T) Zn

(%)

(g/T)

Gallery P

Mine Sample

M5-L Gallery Face 20.78 8.22 12.53 Not Reported

M5-1 Gallery Face 27.68 3.84 2.90 Not Reported

Gallery M

Bulk Sample PB062 Bulk Sample (2018) 14.47 13.71 10.42 1.12

Preliminary studies on samples taken from the 2018 bulk sample (PB062) outlined above have

indicated that high metallurgical recoveries (>95% for Ag, Zn and Pb) are likely to be achievable.

Figure 3: Polymetallic Project - Sampling Photos

(a) Recent gallery developed by Norsemont for the

purposes of resource appraisal and small-scale

resource exploitation.

(b) Ore sample (M5-L) taken from Gallery P, with

assay grades reported as 20.78 oz/T Ag, 8.22%

Zn & 12.53% Pb.

Next Steps

The core concession that hosts the high-grade mineralization has been granted a small-scale mining

permit, so it is possible small-scale production could occur in the near -term, as part of a larger

resource appraisal program. There are also additional opportunities to contemplate a much larger

operation based on integration with regional infrastructure, which may also present an opportunity

for Fidelity Minerals to consolidate ownership of the project.

Fidelity Minerals is in the process of developing an appraisal program in order to guide potential

development discussions with the majority owner of the Polymetallic Project. As Fidelity Minerals

is currently exploring a number of strategic initiatives in relation the project , additional details

including the name of the project will be released in due course.

Acquisition Terms

Fidelity Minerals is acquiring an initial 25% interest in the Polymetallic Project by acquiring a 25%

interest in Norsemont II Resources Inc., a private Ontario project company that holds the six

concessions minerals concessions in La Libertad, Northern Peru.

The acquisition consideration consis ts of the issuance of 3,000,000 common shares in Fidelity

Minerals to the vendor. Fidelity Minerals is also required to make a number of staged cash payments

5 G&S Laboratory SRL (August 2018). The laboratory location, chain of custody record, use of blanks and standards by the vendor is

not recorded or independently verified by a Qualified Person. The Certificate of Assay / Analysis has not been independently verified

for Fidelity Minerals Corp.

totalling US$84,000. Total cash payments made to the vendor to date total US$28,000, with a final

cash payment of US$56,000 payable to the vendor, at completion of the acquisition.

The acquisition remains subject to the satisfaction of customary conditions before closing, including

exchange approval for the issuance of Consideration Shares.

Management Commentary

Proactive Investors Interview

Director & CEO of Fidelity Minerals, Mr. Ian Graham has given an interview with Steve Darling

of Proactive Investors where he discusses the acquisitions announced today by Fidelity Minerals.

The interview can be accessed by visiting: https://youtu.be/e-iFtLw-fls

Director & CEO of Fidelity Minerals, Mr. Ian Graham commented: “The two acquisitions we

announce today are the culmination of an extensive project origination, evaluation and acquisition

effort that has been ongoing for some time. Whilst the two projects are quite different, they each

provide Fidelity Minerals with a clear pathway to near-term value creation. The Porphyritic Copper

Project is an exciting opportunity as we are acquiring 100% of this highly prospective project;

we’ve moved quickly to make efforts to further expand the footprint of the project owing to its

potential to host big copper of a scale that would interest the majors. In addition, we are acquiring

an initial minority interest in the Polymetallic Project as this project provides Fidelity Minerals

with great optionality. In addition to possibly delineating a sizeable Ag -Zn-Pb resource, and

potentially commencing small-scale mining in the relatively near -term, we see this project as a

platform for access to a number adjacent or synergistic opportunities with material scale. As we

integrate these two acquisitions into the growing Fidelity Minerals portfolio, we continue to

advance our assessment of the Greater Las Huaquillas project which has generated significant

industry interest: we expect to have established a project dataroom around July this year.”

Executive Chairman of Fidelity Minerals, Mr. Bahay Ozcakmak added: “In December 2018,

when we announced the acquisition of an interest in the Greater Las Huaquillas project, we noted

the increased industry interest to our immediate north in Ecuador. Since this time, the number and

scale of transactions in both Ecuador and Southern Peru has only accelerated. In light of this

increased interest by the majors to enter prospective projects, particularly copper focused projects,

even at a relatively early stage, we decided to leverage our extensive in-country experience and to

rapidly position Fidelity Minerals to opportunistically take advantage of this new interest. It is our

expectation that as the realisation sets-in that the metallogenic belts of Chile and Southern Peru in-

fact extend much further north than previously interpreted, we expect the regional transaction

activity to spill -over into Northern Peru, a region that alread y hosts numerous truly world -class

projects, but which has been overlooked in recent times . In order to benefit from this emerging

interest, Fidelity Minerals is implementing what we are calling our Strategic Project Generator

model. Through this strategy Fidelity Minerals is assembling a high-quality portfolio of proprietary

project opportunities in Northern Peru, at attractive valuations , at a time when the global majors

are frantically acquiring projects to backfill their depleted project pipelines. With the announcement

of two significant project acquisitions today, our Strategic Project Generator model is already

starting to bear fruit. We look forward to providing further updates on the composition of our

project portfolio, in the near future.”

About Fidelity Minerals Corp.

Fidelity Minerals Corp. is assembling a portfolio of high -quality mining assets in Peru through the

implementation of our Strategic Project Generator (SPG) model. The project generator model

involves the identification and acquisition of appraisal stage opportunities with near-term valuation

catalysts, including potential for high -impact M&A. The company is backed by an experienced

management team with diverse technical, market, and commercial expertise and is supported by

committed and sophisticated investors focused on building long term value.

On behalf of the Board of Fidelity Minerals;

Ian Graham

CEO and Director

Tel: +1.604.671.1353

Email: [email protected]

Investor Contact:

Bahay Ozcakmak

Executive Chairman

Tel: +61.3.9236.2800

Email: [email protected]

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES

PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE

EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF

THIS NEWS RELEASE.

Disclaimer & Forward -Looking Statements: This news release contains forward -looking

statements. Forward-looking statements are statements that relate to future events or future financial

performance. In some cases, you can identify forward-looking statements by the use of terminology such

as “may”, “should”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “project”,

“predict”, “potential”, or “continue” or the negative of these terms or other comparable terminology.

These statements speak only as of the date of this news release. This news release may also contain

inferences to future oriented financial information (“FOFI”) within the meaning of applicable securities

laws. The information in this news release has been prepared by our management to provide a context

for the project acquisition and to provide the reader with an outlook for our future activities and

anticipated key projects and may not be appropriate for other purposes. Forward-looking statements in

this announcement include, (but are not limited to) advancing certain key project activities that could

represent important milestones which the Company expects may represent material valuation catalysts,

such as the design of a suitable geo logical or geophysical program; and that through the Strategic

Project Generator model Fidelity Minerals is positioning itself to be a beneficiary in this environment

of increased appetite for prospective projects in this region. The reader is further cautioned that certain

sampling data has been referenced: however, the collection of samples was not supervised by an

independent QP on behalf of the Company, and from the information supplied to the QP who prepared

the unreleased NI43-101 report on behalf of the Vendors, there are four grab samples that were taken

for assay, three at the Upper Location, and One at the Lower Location. The amount and weight of each

sample is not known, nor is there any sketch or record of the precise location of each sample. Wi th

regard to Sample Preparation Analysis and Security it is not known whether any particular collection

and preparation and security was taken by the field crew, but it is expected that they would have followed

the normal protocols that are followed with i nitial sample collection, whereby each sample was taken,

secured, and kept secured, without tampering, until it’s final delivery to the laboratory. Although the

specific ALS laboratory used is not known, it is expected that they would follow the normal in dustry

protocol in the preparation and assay procedures of the samples. With respect to Data Verification, only

an individual representing the Vendor was on site, to verify the samples as they were taken, and no check

or duplicate samples were taken. In addition, the Company has reported certain grades for the

Polymetallic Project, taken from certain underground workings, including certain samples taken from

a 200-tonne bulk sample from a selected Gallery. There has been no independent verification of the

sampling protocols or analytic methods on behalf of Fidelity Minerals, and there were no duplicate or

control samples used in the process. Further, forward-looking statements in this release include that the

Company believes that r ecent project -level t ransactions in both Peru and neighbouring Ecuador

provides evidence that high quality projects in the Northern Andean Copper Belt could deliver excellent

potential transaction-based outcome s for the Company, and that t hrough the Strategic Project

Generator model the Company is positioning itself to be a beneficiary in this environment of increased

appetite for prospective projects in this region.

← Back to feed