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AQM Copper Inc. AQM Copper Inc. is a Canadian-based company, exploring and developing copper deposits in Southern Peru with a focus on the Zafranal property. AQM Copper is listed on the TSX-Venture and BVL exchanges, trading under the symbol "AQM".

AQM is the operator of a 50/50 joint venture with Teck Resources. Under the terms of the Joint Venture Agreement, Teck has the option of becoming the operator of Zafranal after a construction decision is made by the partners. The Zafranal Property is located in the resource rich district of the Southern Peru Porphyry Copper Belt, and is ideally situated amongst some of the world's largest operating copper mines. The Company has undertaken an extensive stakeholder relations program in an effort to fully consult with the local communities and regional authorities. There are no communities located on the Zafranal Property and the Property lies outside of agricultural activity.

On August 15, 2013, AQM Copper Inc. announced the completion of a transaction whereby Mitsubishi Materials Corporation ("MMC") invested US$22.60 million and committed an additional US$15.07 million to acquire a 40% interest in the Company's subsidiary, Minera AQM Copper Perú S.A.C. ("MAQM"). MAQM owns the Company's share of the Zafranal Project of a 50/50 joint venture company, Compañia Minera Zafranal, between MAQM and Teck Resources Limited. This investment results in MMC and AQM having indirect interests of 20% and 30% respectively, in the Zafranal Project in southern Peru.

The PEA Update (prepared by Tetra Tech) was commissioned to examine opportunities to develop a smaller, less capital-intensive project that would incorporate an alternative water source to desalinated seawater, while using the same long-term forecasted copper (Cu) and gold (Au) prices as those used in the January 2013 PEA, US$3.00/lb and US$1,274/oz, respectively.


The PEA Update released on September 12th, 2013 including a new resource estimate based on a revised geological model of the Zafranal Main and Victoria Zones, which incorporates 39 additional drill holes. The resource estimate included in the PEA Update pertains to the Main and Victoria Zones, whereas the January 2013 PEA also included resources from the Sicera Norte and Sicera Sur Zones. Sicera Norte and Sicera Sur Zones were excluded from the updated resource estimation, as these deposits were deemed uneconomical given their tonnage and grade of mineralization and distance from the proposed process facilities. A summary of the mineral resource for the PEA Update at a 0.2% copper cut-off grade appears in the following tables:

Zafranal Main and Victoria Zones Kriged Resource at 0.2% Copper Cut-off
DESCRIPTION
TONNAGE
Cu
(%)
Au
(g/t)
Zafranal Main Measured
185,431,844
0.45
0.09
Victoria Measured
27,303,116
0.29
0.04
Total Measured
212,734,960
0.43
0.09
Zafranal Main Indicated
340,207,216
0.35
0.08
Victoria Indicated
68,000,158
0.26
0.03
Total Indicated
408,207,374
0.34
0.07
Total Measured & Indicated
620,942,335
0.37
0.08
Zafranal Main Inferred
36,692,919
0.27
0.11
Victoria Inferred
12,539,388
0.26
0.04
Total Inferred
49,232,307
0.26
0.09


The PEA Update was completed by Tetra Tech, and contains production parameters, capital costs, operating costs, pre-tax and post-tax financial projections for an open pit mine processing 44,000 t/d of mill feed, producing an average of 54,556 t/a of copper in concentrate and a heap leach and electrowinning process expected to yield an average of 5,949 t/a of copper cathode.
The Project is projected to yield the following financial results:

Summary of Financial Results(1)
Description
Pre-tax Post-tax(2)
Initial Capital Cost (US$ million)
1,122
1,122
Net Cash Flow (US$ million)
3,592
2,068
Net Present Value at 5% discount rate (US$ million)
1,855
988
Net Present Value at 8% discount rate (US$ million)
1,261
616
Net Present Value at 10% discount rate (US$ million)
971
435
Payback (years)(3)
2.6
3.2
Internal Rate of Return (%)
25.4
18.2

AQM's Management and Directors include members with extensive experience working for the world's largest copper and gold producers in South America and the investment community

Notes:
  1. Valuation based on 100% Project and 100% Equity. The Zafranal Project is owned through a 50/50 corporate joint venture between Teck Resources Limited and the Company's operating subsidiary, Minera AQM Copper Peru S.A.C. ("MAQM"). MAQM is owned 60% by the Company and 40% by Mitsubishi Materials Corporation. As such, the Company has a 30% beneficial ownership interest in the Zafranal Project.
  2. Includes mining royalty, special mining tax, corporate income tax and workers' profit sharing
  3. From the start of mill operations