The 20,000 tpd project requires a water supply of up to 24 l/s. The Fenix Gold Project has access to water via a contract signed with Nueva Atacama, formerly known as Aguas Chañar S.A., the major water supplier to the town of Copiapo, to supply up to 20 l/s of treated town wastewater from its Piedra Colgada treatment facility located to the north of Copiapo. Additional water requirements will be topped up from the Lince water bore 5 l/s. The original plan, outlined in the 2014 PFS, was to build a pipeline with associated power line from the Nueva Atacama facilities to Fenix Gold along the existing main road, international road CH-31, from Copiapo to Argentina which passes within 20 km of the Project. This plan is still being considered for the future expansion of the Project and discussions are ongoing with infrastructure companies who are interested and able to finance and build the pipeline and other mining companies who may wish to share in the benefit of the pipeline project. The capital costs, operating costs and cost of water for the larger water solution are set out in the 2014 PFS.

The water for the 20,000 tpd project will be transported by 30 tonne capacity water tankers, loading from the Nueva Atacama facility and discharging to the process plant located at the Project, a distance of approximately 158 km. The water transport route will be via international road CH-31 which passes within 20 km of the mine site.

Water costs are estimated to be $1.56 per tonne of ore processed for the first four years of production and decrease to $1.51 per tonne for the remaining life of the project. The water cost includes the purchase price and transportation of the water to site.

The Company is currently reviewing a number of additional water options involving permitted, unused water rights which are closer to the planned mining operations with the objective of improving the economics of the water supply to the Project.