NEXT STEPS

1. Engineering & Metallurgical Studies

Metallurgical test work and engineering studies are underway to complete a Pre-Feasibility Study (PFS).

To date, two main phases of preliminary metallurgical work have been completed (see Engineering & Metallurgy section). Results from the leach test work indicate that gold is readily recoverable using a cyanide leach process with good kinetics. At the same time, the flotation test work indicates that copper can be recovered to a saleable grade concentrate from the Copper and Gold Zone material.

The Company has now completed a geological re-logging program to assist in the refinement of the 3D models that will allow for a better understanding and quantifying of the resource defined at surface. The best economic method to exploit this relatively higher grade gold-silver mineralization is being studied. Mining is anticipated would be by conventional open-cut, while metallurgical test work is currently being reviewed to evaluate the potential processing options to best exploit the fast cyanide leaching characteristics of this material. 

A series of preliminary pit outlines have also been completed (see Engineering and Metallurgy section) which indicate that potential pits already contain a significant resource (97% M&I) and have a very low strip ratio of 0.44.

Collection of baseline environmental data and plans for expanison of land ownership are also underway to assist in more detailed planning of the proposed project infrastructure. All of this background work should help shorten the permitting timeline in the future.

The Company has also completed a systematic soil sampling program to determine if other deposits exist within the 12.5kmē alteration halo that surrounds Cerro del Gallo. A total of 10 geochemical anomalies have been identified. Three other large zones of clay alteration similar to Cerro del Gallo have yet to be tested.

A high density regional stream sediment BLEG sampling program has also been completed throughout the San Anton Property. In total 12 gold anomalies greater than 4ppb Au, not associated with known historic mine workings, were defined and will require furher investigation.

Work has also commenced on some of the other higher grade exploration raegets elsewhere on the San Anton Property. The main target is the Carmen-Providencia vein system, a north-northwest trending low sulphidation epithermal silver-gold system located approximately two kilometers west of Cerro del Gallo and traceable on surface for three kilometers. First pass drilling designed to test the upper levels of the epithermal vein systems is now completed with encouraging results from the Dolores and Empalizada prospects including 4.6m grading 428g/t Ag and 3.52g/t Au, 1.5m grading 590g/t Ag and 3.40g/t Au, 7.6m grading 168g/t Ag and 1.51g/t Au, and 3.6m grading 359g/t Ag and 1.51g/t Au.

^{NOTE: The Company has temporarily suspended any further drilling and other regional exploration efforts within the San Anton Property and will solely focus on advancing the technical studies on the Cerro del Gallo deposit.}