LA.V · 2023-02-23 12:00:00

Los Andes Copper Announces Positive PFS for Vizcachitas with a US$2.77 Billion Post-Tax NPV and 24% IRR

Economic Studies

Los Andes Copper Announces Positive PFS

for Vizcachitas with a US$2.77 Billion Post-Tax

NPV and 24% IRR

Vancouver, British Columbia--(Newsfile Corp. - February 23, 2023) - Los Andes Copper Ltd. (TSXV:

LA) (OTCQX: LSANF) ("Los Andes" or the "Company") is pleased to announce the results of a positive

Pre-Feasibility Study ("PFS") at its 100% owned Vizcachitas Project ("Vizcachitas" or the "Project"), a

world class porphyry copper project, located 150 km north of Santiago. The PFS has been prepared by

Tetra Tech Sudamérica S.A, a leading international engineering firm. A conference call and webcast to

discuss these results will be held on Friday, February 24, 2023, at 12.00 p.m. Eastern Standard Time.

To register please contact

[email protected]

whereafter the webinar details will be sent to you.

All values in this release are reported in US dollars.

To view a 3D VRIFY presentation of the PFS results, click on the following

link:

https://vrify.com/decks/12765

Vizcachitas PFS Highlights

Robust Economics

A $2.8 billion post-tax net present value ("NPV") using an 8% discount rate and an internal rate of

return ("IRR") of 24% at $3.68/pound ("lb") copper, $12.9/lb molybdenum and $21.79/ounce ("oz")

silver.

Pre-production capital cost of $2.4 billion, with a construction period of 3.25 years.

Payback period of 2.5 years from initial production.

World-Class Resource

Proven & Probable Reserves of 1.22 billion tonnes at 0.36% copper, 136 ppm molybdenum, 1.1

g/t silver, which equates to a copper equivalent ("CuEq") grade of 0.41% (Proven Reserves of 302

million

tonnes at 0.41% copper, 135 ppm molybdenum, 1.2 g/t silver; and Probable Reserves of

917 million

tonnes at 0.34% copper, 136 ppm molybdenum, 1.1 g/t silver).

Measured & Indicated Resources increased by 16% to 14.8 billion lbs CuEq (Measured Resource

2.605 billion lbs copper, 84 million lbs molybdenum and 11 million oz silver, and Indicated

Resource

of 10.416 billion lbs of copper, 442 million lbs of molybdenum, and 43 million oz of silver)

and Inferred

Resource increased by 130% to 15.4 billion lbs CuEq (13.747 billion lbs copper, 495

million lb

molybdenum, 55 million oz silver) with respect to the June 2019 Preliminary Economic

Assessment

("PEA").

Long-Scale, Long-Life, High-Margin Production

Average annual production of approximately 183,017 tonnes of copper at a C1 cost of $0.93/lb

copper (net of by-products) for the first 8 years.

Initial Project Life of Mine ("LOM") 26 years producing 8.763 billion lbs copper, 273.3 million lbs

molybdenum, and 32.7 million oz silver.

Realized CuEq metal price (net of smelter return and selling expenses) of $3.50/lb copper sold,

yielding a 44% all-in-sustaining margin.

Low strip ratio (waste:ore) of 1.54:1 for first 8 years, and strip ratio 2.33:1 for LOM.

Favourable metallurgy including low levels of clay, resulting in high copper recoveries (average of

91.1%) and supporting the use of filtered tailings.

Sustainable and Responsible Mining

Signed letter of intent for desalinated water, eliminating the need to draw on continental water.

Reduced water consumption by approximately 50% (from previous design) through use of dry-

stacked filtered tailings.

Reduced power consumption by 25% (from previous design) through use of high pressure grinding

rolls ("HPGR") technology.

CO2 emissions Scope 1 projected at 1.02 h CO2e / t CuEq, and Scope 2 at 0.

Future Opportunities

Potential opportunities to meaningfully improve the Project include: (i) drilling to upgrade inferred

resources and bring them into the mine plan potentially increasing the LOM, reducing operating

expenses, capital expenses and strip ratio; and, (ii) further drilling to define the extent of

mineralization, deposit currently open at depth, east and west.

An independent technical report for the PFS, prepared in accordance with NI 43-101, will be available

under the Company's SEDAR profile within the next 45 days.

Los Andes Copper' CEO, Santiago Montt, commented on the PFS:

I am extremely pleased to announce the results of the Pre-Feasibility Study for the proposed

Vizcachitas mine in Chile. It shows that Vizcachitas is clearly a Tier 1 asset that has the potential to

join the ranks as one of the largest and most profitable copper mines in Chile.

The new mine design incorporates a number of optimizations including expanding access works,

allowing for a faster ramp-up of production and minimizing uphill material movement and haulage

distances. This has reduced the OPEX and led to a shorter payback further strengthening the

economics of the Project.

Our new sustainable and responsible design considers the use of HPGR to

reduce energy consumption, dry-stacked filtered tailings to reduce water consumption and footprint,

and desalinated water.

Vizcachitas benefits from being situated in a country with an established mining industry and in close

proximity to existing infrastructure including power, roads and ports. All of these factors have enabled

the Project to meaningfully reduce its initial CAPEX requirement

. There is also

a skilled labor force in

the nearby towns and cities of Putaendo, San Felipe and Los Andes.

The Project is economically robust with the potential for considerable upside through further drilling to

upgrade the Inferred Resource to Measured and Indicated, thereby bringing them into the mine plan

Los Andes Copper' Chairman, Eduardo Covarrubias, commented on the PFS:

"The lack of new discoveries of this scale over the last 10 years and the increasing demand for copper

highlights the importance of projects like Vizcachitas. The PFS demonstrates a robust, economically

attractive project with long mine life and potential for significant further upside.

The study focused on ensuring Vizcachitas would lead the way in sustainable mining, and we are

delighted to announce that our three key targets: to reduce water usage, power consumption and the

footprint of the Project have all been met, allowing us to deliver a mine that minimizes its impact on

the environment.

Project Description

The Vizcachitas Project is located in the Andes Mountains, in the Province of San Felipe, Fifth Region of

Chile, approximately 150 km northeast of Santiago, Chile, and 46 km northeast of Putaendo, San Felipe

Province. The Project is 100% owned by Los Andes Copper Ltd., a company based in Vancouver and

listed on the TSX Venture Exchange. The Project is located at just 1,950 m.a.s.l., in proximity to other

world-class copper-molybdenum porphyries that belong to the same metallogenic belt.

The Vizcachitas Project is a mineralized copper-molybdenum porphyry system associated with a

complex of hydrothermal breccias and porphyries within Miocene volcanic rocks. The Vizcachitas

Project contains Measured and Indicated Resources of 14.801 billion pounds CuEq (Measured

Resource of 2.605 billion lbs copper, 84 million lbs molybdenum and 11 million oz silver, and Indicated

Resource of 10.416 billion pounds of copper, 442 million lbs of molybdenum, and 43 million oz of silver)

and Inferred Resources of 15.444 billion pounds CuEq (13.747 billion lbs of copper, 495 million lb of

molybdenum, and 55 million oz of silver).

It is one of the largest undeveloped copper projects in South

America not controlled by a major mining company.

The PFS contemplates that Vizcachitas would be mined using conventional open pit methods. From the

open pit the ore would be trucked to a concentrator designed to process 136,000 tonnes per day of ore.

The ore would be fed into a three-stage crushing plant using HPGR technology as the tertiary crusher.

The ore would be crushed to 240 microns, and sent as a slurry to the flotation stage located further down

the valley. The flotation stage would produce a clean copper and silver concentrate and a separate

molybdenum concentrate. The tailings produced in the flotation stage would be thickened and filtered to

15% moisture. The filtered tailings would then be co-mingled with the mine waste rock and deposited in

a combined tailings/waste rock facility.

The Vizcachitas Project is designed to use desalinated water, supplied by a third-party consortium.

Power would be supplied via 60km line connecting to the national grid. Concentrate would be

transported in rotainers (sealed rotating containers) by truck 145km to the Port of Ventanas with the

Ports of Valparaiso and San Antonio as additional options. There are 35km of existing roads that would

require upgrading between Vizcachitas and Putaendo. Rail transportation from San Felipe to any of the

three ports is a further alternative to be evaluated.

Social & Environmental

The PFS was designed to adopt the latest proven sustainable mining technologies. The focus was on

securing a desalinated water supply and reducing water consumption, power consumption and the

footprint

of the Project.

All of these targets have been met. The Company has signed a letter of intent with a desalinated water

consortium to secure a water supply for the Project removing any concerns over the use of continental

water in an area that has been heavily impacted by drought. The plan under discussion with the

consortium also includes providing water at preferential rates to community groups along the pipeline

route in the Putaendo and Petorca valleys.

The use of dry-stacked filtered tailings reduces the water consumption of the Project by approximately

50%, (compared to thickened tailings). It also reduces the footprint of the Project by 500 hectares

compared to the PEA and is now designed to be situated in only one valley.

The introduction of HPGR technology has reduced power consumption by 25% vs a SAG circuit that was

previously considered in the PEA.

The Company has projected low CO2 emissions. Scope 1: 178,389 t CO2e/year, or 1.02 t CO2 per t

CuEq produced; potential to have Scope 2 at zero as long as the power market continues to have

renewable availability for the full energy supply of the Project. The Company will continue to look for

opportunities to further reduce Scope 1 emissions.

Communication with the local communities and public authorities has continued throughout the PFS with

the Community and Corporate Affairs team working closely with all interested parties.

Summary of Vizcachitas PFS Economic Results

Pre-Tax NPV (8%) & IRR

$4.0 billion NPV

29% IRR

Post-Tax NPV (8%) & IRR

$2.8 billion NPV

24%

Undiscounted Post-Tax Cash Flow (LOM)

$9.5 billion

Payback Period from Start of Operations

2.5 years

Economic Assumptions*

$3.68/lb Cu

$12.9/lb Mo

$21.79/oz Ag

Initial CAPEX

$2.441 billion

C-1 Cash Costs (net of by-products)

First 8 years

LOM

$0.93/lb Cu

$1.25/lb Cu

AISC

First 8 years

LOM

$2.13/lb Cu

$2.35/lb Cu

Mill Throughput

136,000tpd

Average Annual Production

First 8 years

LOM

183,017 t Cu

152,883 t Cu

Strip Ratio (waste:ore)

First 8 years

LOM

1.54

2.33

Initial LOM

26 years

* The NPV is based on long-term consensus copper and silver prices as calculated by a leading Canadian bank and molybdenum

long-term forecast price

from CRU.

The Project's Post Tax Cash Flow is shown in the following chart.

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/916/155910_44e725f4942f2b7c_002full.jpg

Copper contributes 88% of the net revenue, followed by molybdenum with 10%, and the balance being

silver credits in copper concentrate.

NPV Sensitivities

The sensitivity analysis provides a range of outcomes for the Project when the key parameters are

varied from their base-case values. The NPV estimate is most sensitive to the copper price, followed by

the discount rate applied and the total operating costs.

The Post-tax NPV ranges from $822 million to $5.498 billion as the applied copper price is varied

between $2.75/lb Cu and $5.00/lb Cu.

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/916/155910_44e725f4942f2b7c_003full.jpg

The Post-tax NPV ranges from $1.778 billion to $4.332 billion as the discount rate is adjusted between

11% and 5%. The Post-tax NPV remains positive in all isolated sensitivity scenarios presented.

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/916/155910_44e725f4942f2b7c_004full.jpg

The sensitivity of the post-tax NPV and IRR to changes of molybdenum price, initial CAPEX and OPEX

are illustrated in the three following figures:

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/916/155910_44e725f4942f2b7c_005full.jpg

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/916/155910_44e725f4942f2b7c_006full.jpg

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/916/155910_44e725f4942f2b7c_007full.jpg

CAPEX and OPEX

The initial capital, expensed over the first four years of the Project, amounts to $2.4 billion. The deferred

and sustaining capital over the remainder of LOM amounts to $1.5 billion. A breakdown of capital is

presented in the tables below.

Total Initial Capital Expenditures ($ '000)

2 440 955

Total Direct

1 640 403

Mine

436 050

Plant & Infrastructure

1 204 353

Indirect

454 104

Contingencies

346 449

Total LOM Capital Expenditures ($ '000)

3 934 646

Total Initial Capital Expenditures

2 440 955

LOM Deferred & Sustaining CAPEX (excluding closure costs)

1 493 691

Closure Costs ($ '000)

264 107

Operating costs

The associated operating costs are summarised in the table below.

Total Operating Costs ($/tonne)

11.11

Mining cost

5.02

Processing cost

3.90

Infrastructure

1.20

Indirect cost

0.30

Stockpile rehandling

0.70

Initial Vizcachitas Mineral Reserve Statement

The Initial Proven and Probable Mineral Reserves for the Vizcachitas Project are 10.889 billion lbs of

CuEq (9.623 billion lbs copper, 365 million lbs molybdenum and 43.6 million oz silver). These reserves

are contained within a 26-year mine life open pit and processed in a plant with a throughput of 136,000

tonnes per day. The Initial Mineral Reserve estimate for Vizcachitas, shown below, has an effective date

December 2, 2022.